Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2017 Earnings Call. At this time all lines are in a listen-only mode, later we’ll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, today’s conference is being recorded. I’d now like to turn the conference over to your first speaker, excuse me, Peter Trpkovski. Please go ahead.

Thank you, Ryan. Good afternoon, everyone, and welcome to the conference call. I’m joined today by Mike Bless, Century’s President and Chief Executive Officer; and Shelly Harrison, our Senior Vice President of Finance and Treasurer. After our prepared comments, we’ll take your questions. As a reminder, today’s presentation is available on our website at www.centuryaluminum.com. We use our website as a means of disclosing material information about the company and for complying with Regulation FD. Turning to Slide 2 of today’s presentation please take a moment to review the cautionary statement shown here with respect to forward-looking statements and non-GAAP financial measures contained in today’s discussion. With that, I’ll hand the call to Mike.

Thanks, Pete. And thanks everybody for joining us this afternoon. We know it’s a busy week. So let’s get right to it. If we could turn to Page 4 please, I’ll take you through at high level overview of over the last couple of months. We’re pleased with the company’s performance in the fourth quarter and also into the early part of 2018. Safety performance was good across the board with most plans improving quarter to quarter. Our focus on the identification of hazards and the prevention of life altering events and significant injuries continues to pay dividends for us. At Grundartangi, we’ve seen a reinvigorated focus on the entire safety culture and their systems and processes that back it up and this from a base of an already strong safety environment at that plant. Plant operating metrics reflected the stability of the operations throughout the quarter and again into 2018. And this coupled with very good management of controllable costs pretty strong financial performance. If you had a chance to look, you’ve seen adjusted EBITDA was $60 million for the quarter and this includes some impact of raw material price increases as well as increased logistics cost due to the continuing problems on the Ohio River, if remember we talked about that situation last quarter. Cash flow is strong other than the impact of the purchase of raw materials at much higher prices during the fourth quarter. This will go the other way beginning in the first quarter of this year and Shelley will explain that. As we predicted in October, we’ve seen a meaningful fall in raw material prices over the last few months. So we’re still not quite back to what we would consider to be a normal environment. In Q1 we’ll see the worst impacts of…

Thanks Mike. If we can move onto Slide 5 please, I’ll take you through the current state of the global aluminum market. The cash aluminum price averaged approximately $2,100 per ton in Q4, which reflects a 4% increase over Q3. The aluminum price on a two month basis was up quarter-over-quarter almost 10%, and averaged $2,087 per ton. Since the beginning of a 2018, aluminum prices that average approximately $2,200 per ton and are currently sitting right around that level. In the fourth quarter, regional premiums averaged approximately $0.095 per pound in the U.S. and $160 per ton in Europe. However, spot premiums are significantly up and are currently, approximately $0.145 per pound in the U.S. and $170 per ton in Europe. In the fourth quarter 2017, global aluminum demand grew at a rate of almost 6% as compared to the year-ago quarter. We saw 7% year-over-year demand growth in China, 4% growth in Europe and 2% growth in North America. Global production growth was 3% in Q4 versus the same period last year, driven almost entirely by increases in production in China, which increased 5% year-over-year despite the announced capacity curtailment program. As a result, for the full year 2017, the global aluminum market recorded a modest deficit of approximately 90,000 tons. Since the U.S. has taken specific action the WTO trade case and launching the Section 232 investigation last year, we have begun to see some initial positive supply responses from China. The first response announced shortly after the WTO case was filed in January, is the winter heating season curtailment program. Under this program, aluminum producers as well as alumina and petroleum coke producers, in certain provinces in China will require to curtail 30% of their production during the winter heating season. As a result of this…

Thanks, Pete. If we can turn to Slide 6 please, just make a couple of quick comments about the operations and then I’ll let Shelly take you through the quarter and the year. Starting with safety, obviously, as always, as I said, we’re satisfied with the company’s safety performance this quarter. Mt. Holly and Grundartangi had terrific quarters and into 2018, no recordable safety incidents between those two plants. We saw a good quarter-to-quarter improvement at Hawesville as we see a slight downturn at Sebree, but I’d note, that plant is still at very good levels and had just an outstanding full year 2017. Turning to operating performance, Hawesville has had a strong last couple quarters and you saw last quarter quarter-to-quarter nice production increase that was on improving operating metrics. This the way the plans have been performing so well recently is an important underpinning of any decision we make to begin restarting capacity there. So we’re really pleased to see that. It gives us really good days to go forward. Sebree continues to operate in a consistent and stable manner, we see good incremental growth in tonnage there on stable operating metrics and similarly, Mt. Holly and Grundartangi, both consistent in operations during the quarter and into 2018. Couple of comments on conversion costs is generally favorable across the plants, as you can see, what we’re looking at year is really good management of control the costs, offsetting some very significant increases largely in carbon costs, I’ll take you through that in a moment. Remember these are conversion costs, of course, so they exclude alumina, and Shelly, just in a couple of moments, will comment on the impact of the alumina costs in both Q4 and our forecast for the first quarter this year. A couple of comments, just to give you a sense of the expense of the increases. As you can see, Hawesville’s overall conversion cost improved a couple points. That was in the phase of the 44% increase in carbon costs. Same storage Sebree flat in and all, offsetting a 30% or again, I should say a 30% increase in carbon costs. Not only same thing, cost down a little bit in the phase of 21% increase in carbon costs. And lastly, at Grundartangi, you can see cost of 4%, if you take out the impact of the power price increase, of course, as you know, our power price there is 100% linked to LME price. So it’s just LME price impact. We took that out, it would be a 2.5% increase and all of that 2.5% increase – 2.5% partly increase was due to carbon on the one hand and an increase potline expense on the other hand. With that, I’ll give you over to Shelly, who will take it through the quarter and the year. Shelly?

Thanks, Mike. Let’s turn to Slide 7. I’ll take you through high-level of results for fourth quarter and the full year. On a consolidated basis, global shipments were up 2% quarter-over-quarter, reflecting a 2% increase in production at Hawesville, as well as from the impact from timing of shipments at our other facility. Looking at operating results, adjusted EBITDA was $59 million this quarter, and we had adjusted EPS of $0.26 per share. Adjusting items for Q4 include $7 million in non-cash gain related to the termination of certain legacy contractual obligations. We also had a $3 million non-cash charge for lower cost of market inventory adjustments and a $7 million adjustment, related to final settlement of our 2017 LME hedges. Turning to liquidity, our cash balance remained relatively flat and higher EBITDA was offset by a significant investment in working capital. The working capital increase was driven by extremely high raw material prices at the end of year. I’ll talk about that more in a couple of slides. Availability under our revolving credit facilities increased by $23 million on the back of the higher working capital balances that I just mentioned. Okay, let’s go to Slide 8, and I can walk you through our Q-to-Q bridge of adjusted EBITDA. During Q4, we produced $60 million of EBITDA, as compared to $48 million in Q3. The $12 million increase was driven by a $30 million improvement of from LME and regional premiums, partially offset by the $21 million in raw material price increases that we forecast on our last call. Alumina costs for Q4 were based on a realized undelivered price of $338 a ton, which is then in line with a three-month lagged index price. This is up significantly from the Q3 realized price of $269 a ton. However,…

Thanks, Shelly. Pardon me. If we can turn to – excuse me Slide 11. I’ll take you through the company’s expectations for financial measures in 2018. Sebree and Grundartangi continue to run at full capacity, while Hawesville and Mt. Holly running at 40% and 50%, respectively. As Mike said, we are getting closer to a decision on rebuilding pots of our existing production at Hawesville where we have been cannibalizing pots and deferring pot realigning spend. In addition, a decision on a potential restart of Hawesville’s curtailed production could be coming soon. Until either decision can be made, we have not yet included any deferred cell realigning cost or restart costs in these 2018 items. As many of you know, our selling price is comprised of LME prices, regional premium and value-added product premiums. We give you the tools to sensitize for your own LME and regional premium in the appendix of our presentation. As in prior years, we give you our expectation for the premium we receive on value-added products over standard grade aluminum. We estimate approximately $190 per ton over the LME and regional premium on average, over just our value-added tons, not our weighted average overall times. Now moving on to our key cost components and cash costs, we’ve broken our cost between Q1 and Q2 to Q4, so you can see the impact of the lag accounting in Q1 versus our expected performance for the rest of the year. As Shelly discussed, our Q1 cost will reflect the extremely higher raw material cost we saw towards the end of last year and higher power prices in the U.S. so far this year based on a couple of cold weeks in January. Our Q2 to Q4 cost reflects more current levels. You will notice our gross plan…

Thanks, Pete. We want to get right to your questions. Just a couple of last thoughts, as I said, we really constructive about the future of the company at this point and including especially the U.S. operations, as Pete and Shelly both summarized, Q1 will be an anomaly as we’ve got to the higher cost running through the income statement. To reiterate again what Shelly said, the cash spend has already been spent in the fourth quarter. Pete will give you the cost structure after the first quarter. As he said, those estimates still include what we believe to be abnormally high raw material pricing and wanting to come on the conservative side there. In addition, we need some investments to address, as I said, two years of deferred maintenance and other spending in the U.S. plants. If you take a step back, you probably have a chance to work with these estimates yet. But if you take these, the cost structure that Pete took you through and the other estimates and you were to use current spot prices both for costs, commodities and of course, LME and premiums, you’d get an annualized EBITDA, just to give you a sense of around $300 million. We get the same answer if you took Q4, adjusted it for spot prices versus the realized prices that we had in Q4 and put in the increase in investments for the catch-up deferred spending at the plants. As Pete said, this is before any cell rebuild activity at Hawesville. In that respect, let me just walk you through quickly what the economics of potline restart at Hawesville would look like now and focusing on those three curtailed potlines. So the first line, as we made a decision within the next couple of weeks, we could…

[Operator Instructions] Our first question will come from the line of Novid Rassouli with Cowen and Company. Please go ahead.

Thanks. Thanks for taking my questions. So Mike, on the restart of Hawesville. Can you just walk us through as far as maybe incremental demand for high purity relative to maybe non-high purity aluminum? And how much do you think the market could absorb of that if we do get something positive on the Section 232? And perhaps maybe I don’t know if how to do with the fact that potline four and five have incrementally more EBITDA or not? But if you could maybe help us frame that as that’s definitely been – I know a stress of your guys in the past several months as far as Section 232, and I think Ross actually stressed as well in his recent conference call.

Yes. It’s a great question. Thank you and I’m probably glad to point somehow. Then yes, Secretary Ross has discussed many times, including in his press conference on Friday. So the first is a factual point. In that incremental EBITDA that we gave you in that calculation, there’s no incremental purity assumed. We want to be conservative as to what the incremental product would be. And so we think there may be some purity demand incremental that we could get later this year, and we might eventually put an element of that in it. But generally, there’s very little, if any, purity assumed in those numbers. Number two is that on a broader scale, in the real world, we do think, obviously, Hawesville came ramp back up to 100,000 tons of annual purity production, this is 0404 and better, a large portion of it is 0202 and 0303. And again, you cited it correctly, a significant component of the Commerce Department spot set in the recommendations to the President, as he read in that report have to do with reserving the high purity capacity at Hawesville, which, of course, is the only purity producer in volume in the U.S. So we do believe that going forward, assuming that the market is adjusted appropriately, that we will have opportunity to re-enter the purity market, but we didn’t want to make a lot of assumptions that, for example, a whole potline or a majority of the whole potline would be able to capture purity immediately. The other thing I would note is that from just a technical perspective, it will take another couple further month, not many, but another month or two to make sure that the pots are in appropriate operating configuration to make the purity. You need to be really, really stable potline, especially to make the 0202.

Very helpful. And then just sticking on that, would you be able to comment on the incremental EBITDA above and beyond just non-type purity aluminum relative to the high-purity lines? And then what percentage of the market currently, is served by imports for high-purity? I’m just trying to get a sense of what the opportunities here for you guys in the future.

I’ll answer your last question first because it’s an easy one, 100%. We’re not making any purity today. So after the – and we haven’t since, let’s see, we quit it since – we haven’t for the last two years, and so after or 21 months, I would say. So after the market was saturated with product from two regions, in particular, these are called out, of course, in the Commerce Department’s report, the Persian Gulf and Russia, as well, well, well below our established market prices. We stop purity production at Hawesville, it didn’t make any sense to us. So the answer is 100%. I’m not sure, Novid, I’ll try to answer what, I think you were asking in the first part of your question, but you redirect me please or come back if I’m not exactly on point. So that incremental EBITDA, again, assumed very little incremental purity, just a smidge. As I said, Hawesville has proven that it can produce up to 100,000 tons. So if you assume that we did bring up the fourth and fifth potlines which again, is our strong intention, assuming the 232 order makes sense to us and can correct the market. We believe that there could be a good chunk of that second 50,000 tons and the third 50,000 tons that could be high-purity. As I think you know, I mean,, the typical market over time for 0202 has been well, well, well over $200 a ton, approaching $300 a ton and more, we make a little 0101 as well, which can be $500 a ton to $800 a ton. And even 03 and 04 traded $0.04 or $0.05, $0.06 I’m sorry, $100, $150 a ton. So there’s good incremental opportunity there for just pure incremental cash flow. As we told you in the past, it doesn’t cost us significant additional operating expense to make the purity. You just need to amend those potlines with experienced people who know how to attend those sales, and you are limited somewhat in your alumina choices. There’s maybe six to seven or eight aluminas to which you’re limited. But that’s won’t narrow our current supply base at all. So I’ll stop talking now and you tell me if I got it or didn’t.

That’s great, Mike. Thank you for very thorough answer. I appreciate it.

Thank you very much.

And our next question will come from the line of John Tumazos, [John Tumazos Very Independent Research, LLC]. Please go ahead.

Thank you very much, Mike. Has Ravenswood have been bulldozed, could it be brought back? Or with appropriate regulatory reform could there be a possibility of a new smelter in the U.S. as opposed to Iceland?

That’s a great question, John. So the sad answer is, I don’t know if Ravenswood have been bulldozed, maybe my colleagues, we sold it, it closed a year ago or two years ago, I can’t even recall now. And to my knowledge, although I haven’t followed the situation closely, the buyer intended to use – to in fact bulldoze, as you say and take the plant down and use the site for a different industrial purpose. Pete or Shelly, do you know, because I don’t?

Yes. Not that specific, but you are right, it was a year ago when we sold it.

Yes. Okay, January of 2017. John, an answer to your – the second part of your question, we’re hearing more and more talk about just that now. I think it’s interesting to note that you hear a lot about power prices and a lot of people, especially going back to the 232, who say, people obviously on the opposing side of this who’d say, why support an industry that can’t be competitive. John, as you know, you follow the industry closely and you’ve seen all the data from the industry “experts” and consultants out there. The U.S. average is wholesale electric power price now is about 10% below the world medium. And so by no means is the U.S. disadvantage in power prices. And so I guess, a couple of years ago, we would deem each other crazy to even be having this discussion, I suppose. But now, I guess, you could envision with power prices where they are. If someone were willing to, of course, as you know, John, it takes a couple of decades, 15 to 20 years, to earn back the investments on our brand-new Greenfield, that’s we done in on Greenfield smelter. So you’d have to have a power supplier on who is willing to fix the price based on current prices. But as I think you know also, I’m going to stop my answer here in a moment. Forward power prices to the extent of forward curves go, forward streams to go out are flat or even in a slight of backwardation. Five, six years from now, you can buy in the whole power for the same price where you can buy it tomorrow. So that’s a long-winded answer I’m saying. We don’t know, if any efforts that are actually information, but we hear lots of people talking about it.

I was thinking, Mike, $3 to $3.5 long-term for the gas and $0.04 or less for electricity.

Yes, John. I would say for an operating smelter on the one hand, clearly – or a partially curtailed smelter where you’re going to bring back some capacity, something like a low-30s power price, like I said, where we need to get to it Mt. Holly, if at full access to market power payment to transmission rates, that dog hunts. I would say, based on our calculations and expected returns and all that kind of good stuff, to build the Greenfield plant. I think you need something closer to spot gas prices or even a bit below, kind of like mid $2 to gas and kind of high $20s power before you get to the kind of IRR that’s going to get people interested on a couple of billion-dollar investment, that’s what our math says.

Thank you.

[Operator Instructions] Currently, we have no one in queue for questions. Looks like, we have no further questions in queue.

Okay. Then, thank you, Ryan. We very much appreciate everybody’s interest and time this afternoon. And again, we look forward to speaking to you again…

Mike, sorry to interrupt. I just saw, on the monitor, operator Ryan, I think we have another question just with queue, last minute?

One moment, I may go back there. And from Macquarie, we have David Lipschitz. Please go ahead.

Can you hear me, okay?

Yes, David. You’re good. How are you?

Just a quick question with regards to the 232, how do you guys feel about investing, if the government can peel it back at pretty much anytime? Mike, how do you look at that from that perspective that if you a new President comes in or you decide to change is up in a year or two? How do you work around that?

Great question. And to your point, they can change at any time. I believe, the Secretary of Commerce, Secretary was asked that question, if I recall during the press conference. It might have been in a different venue. So they can change it any time. We would feel confident if the initial remedy makes sense to us, David, because to us, they clearly get it. If you read the report, as I said, it sounds like you have, there thesis in line with ours, the objective of the remedy wherever the remedy – whatever structure they choose comes down is in line with ours. And what they’ve said, we take them at their word is that the only reason they would ever change it or withdraw it is if in their strong opinion, the market have been adjusted successfully, i.e., the conditions had been created for the U.S. industry to be viable and competitive, not just viable over the long term. And so we believe they’ve got it right, thus far, and we would, in essence, put ourselves in their hands that if they determine that things could change, and they changed it or do it or whatever, and then the situation reversed again, they would take further action. If they’ve taken strong action, it took longer to get to, and we might have liked, but that is what it is, these things are complicated, and we get that. And so in terms of a new administration, that’s not something that we can even think about. We’re happy to be working with this administration, and we’re going to be happy to bring this capacity back on soon as we get that order that’s in line with what was in this Commerce Secretary’s report.

Thanks. And then quick – just quick last one and maybe I missed it during the call. Give a nice a little frame with your cost for 2018. Is there anything you have for the cost for 2017? What they were versus just a comparison of 2017 versus 2018?

Let’s see. Pete, you want to take that one? I could comment, but you go ahead. There’s nothing in that format, I guess, Pete. But do you have for David, off the cuff, sort of quick guide as to how he might go about it.

Sure. And maybe, David, you could tell me specifically what you’re looking for. LME, as I said, on a two months like basis, was up 10% for the quarter. But for the year, the two-month lag LME was about $1,909. For full year 2017, premiums, two-month lag. I’m doing everything on two-month lag basis because that’s what the results, about $83.25 per pound in the U.S. The European pay premium two-month lag was $1,433 per ton, that’s on the revenue side. On the alumina side in 2017, you can go to the two to three month lag, but you’re talking $320, $330 per ton power prices are above. Just I hear on your $30 for U.S. and Midwest, and under $3 per MMBtu for natural gas. Coke and pitch prices were significantly raise in 2017 versus 2018 guidance, as we’ve been saying.

So Pete, take you through all the data assumptions and we can take a look at what we have in the Appendix to the presentation, and you can see how it compared to the 2018 assumption. And then we’ve also got the sensitivities, and then I’ll give you a sense of how that 2017 numbers match up with what we have for 2018.

I think, David, what you’re going to find, what you’re maybe after back to the comment that Pete made in his remarks is that the costs are up, no doubt about it, they’re up because of the increase in commodities, alumina and then Coke and pitch, carbon, as we say, in jargon, and the incremental investments about, which I talk and catching up on some of the deferred maintenance that we’ve been avoiding just to keep the plants going. But all, as Pete said, more than all of that increase is explained by the commodity cost increases. So we think we are doing a reasonable job of offsetting those, enabling us to invest in the plants in an even catch up in some of the investments. And still keep things going. I would say, again, we’ve reflected current commodity coke and pitch and alumina prices at just, obviously, they could continue to go – they could go back up, but our view is there are going to continue to fall. We’ve put in basically the spot prices just to air on the conservative side, we would hope to be able to take those down as the year progresses, but time will tell, of course.

And it looks like we have no further questions in queue.

Okay, again, thanks everybody. As I was saying, we look forward to talking with you when we report our first quarter and even more optimistically, hopefully, when we see a copy of the President’s final order over the coming weeks. And we’ll let you know if we have something to say at that time. Thanks again for your time.

And ladies and gentlemen, that does conclude today’s conference. Thank you for your participation for using AT&T Executive Conference. You may now disconnect.