Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2018 Earnings Conference. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Peter Trpkovski. Please go ahead.

Thank you, Tania. Good afternoon everyone and welcome to the conference call. I'm joined today here by Mike Bless, Century's President and Chief Executive Officer; Craig Conti, Executive Vice President and Chief Financial Officer; and Shelly Harrison, 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 1, 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 the Mike.

Thanks very much Pete. And thanks to all of you for joining us late this afternoon. If we can turn to Slide 3 please we'll get going. Just I’ll make a couple of quick comments about the macro environment before we get into the quarter and some of the other information. Commodity markets in general obviously continue to look for direction. This is certainly true of our markets. The issues in our market are generally consistent with all the other factors you're seeing out there in terms of the global economic uncertainty, whether it's slowing growth in China caused by trade tensions or other factors, geopolitical uncertainty, and we've got Brexit, Middle East, Iran, other factors, again all this. And the direction of U.S. interest rates, of course, the pronounced knock on impact they have on commodities prices. Recent trends on these matters have been generally positive as you've read over the last couple of weeks. That said, I think we can all agree the situation is highly changeable. And in that respect we're managing the company with what we feel is an appropriate degree of caution. Pete in just a minute will give you some more specific trends in our sector, but in a nutshell, the fundamental conditions are encouraging. The 2019 global deficit in primary metal will be at least 1.5 million tonnes, that's similar to the 2018 deficit. The forecast backing up that deficit assume only nominal demand growth in China and in the rest of the world. So we see more upside risk to that deficits and downside. The supply growth remains muted and inventory inventories continue to come down throughout the supply chain. It's especially important during these uncertain times that we maintain the stability of our plants. And our operations people have done a…

Thanks Mike. If we can move on to Slide 4 please, I'll take you through the current state of the global aluminum market. The cash LME price averaged $1,968 per tonne in the fourth quarter, which reflects a 4% decrease from Q3. Aluminum prices have averaged approximately $1,850, five zero per tonne thus far in 2019 and are currently sitting just north of that. In the fourth quarter regional premiums average approximately $0.195 per pound in the U.S., down 6% quarter-over-quarter and approximately $130 per tonne in Europe, a 16% decrease from prior quarter. Spot premiums are around $0.194 per pound in the U.S. and $0.130 per tonne in Europe. In the fourth quarter of 2018 global aluminum demand grew at a rate of 1% as compared to the year ago quarter. The primary driver of this is the slowing growth in China, just 2%, as compared to the year ago quarter. Global production growth was up a modest 2% in the fourth quarter versus the same period last year. This was driven entirely by increases in China, which was up 4% year-over-year despite slowing growth and additional winter heating season cuts. As a result of these supply and demand trends, for the full year 2018, the global aluminum market recorded a deficit of approximately 1.5 million tonnes. Looking forward, for the full year 2019 we expect to see a similar global supply deficit of approximately 1.5 million tonnes. As Mike mentioned, the main difference we are seeing is the balance China market and the rest of the world supply deficit of 1.5 million tonnes. This continued supply should result in continued docking of inventories and support LME prices over the long-term. With that, I'll turn the call back to Mike.

Great Pete thanks. If we could just turn to Page 5 please, a couple of quick comments as promised on the operations before I turn you over to Craig. Safety performance first and foremost, as I said, generally was very good over the last couple of months and into 2019. Again one more time especially noteworthy is the performance Hawesville. This performance was a result of a huge amount of forethought and planning before the project began. The team deconstructed all of the processes and identified the high risk areas. They significantly expanded the training program, especially for new hires and they really did maintain rigorous attention to detail during the implementation. The results have been really gratifying. We suffered no serious injuries during the year and the few incidents we did have, immediate action was taken and the plant ended the year on a high note, which has continued into 2019. Moving down the page, production volumes, as you can see, evidence of a stable operation. You see the return of Sebree to full production for the entire quarter. As you remember, we completed the restart of that third potline in August. You see the significant growth coming on at Hawesville due to the restart. Obviously to put Hawesville’s status in perspective, if you were to take the December monthly volume and annualize it, you get an annual run rate of about 150,000 metric tonnes. So you'll see another quarter meaningful growth at Hawesville. And as I said, we do need to decide when we start the rebuild of the line we intend to take down very shortly. Production metrics, as you can see, all stable. We had nice improvement in current efficiency and power efficiency at each of Grundartangi and Sebree during the quarter. And lastly, we had really good performance of controllable expenses. The operations teams I can say are doing a really responsible job on keeping a tight control of their costs. At Grundartangi that improvement came mostly in the areas of labor and maintenance Sebree, what you see there is largely the result of the volume coming back to full production. Remember these are per metric tonne data, so you will get a denominator impact there I guess I'd say rather than a numerator impact. Same factors as part of the story of Hawesville, you see the production volume in essence catching up to the necessary building, labor and other controllable costs that we had to put in earlier in 2018 as we began the restart. And in Mt. Holly that was a decided action after the finalization of the power contracts, we made a conscious decision to catch up on some deferred maintenance items in several important areas of the plant. Strategy here is to invest in Mt. Holly where possible, to maintain that plant for the eventual day when we can restart the second potline. With that, I'll turn it over to Craig.

Thanks Mike. Let's turn to slide 6 and I'll take you through the high level results for the fourth quarter. On a consolidated basis, growth in shipments up 9% quarter-over quarter driven by the return of Sebree’s full production and Hawesville restart as Mike detailed earlier. Realized prices were down 7% as a result of lower-lagged LME prices. Looking at operating results, adjusted EBITDA was a loss of $18 million this quarter and we had an adjusted net loss of $41 million or $0.43 a share. In Q4 the primary adjusting items were $4.3 million related to the Sebree equipment failure and $29.1 million for net realizable value inventory adjustments. Let me give you a little detail on the Sebree adjustment. As a reminder, we expect a fully recover of all losses from our Q2 line outage from our insurance policies net of f$7 million deductible. As we mentioned in last quarter, we will continue to call out the associated P&L impacts and cash receipts as they occur. In Q4 we incurred about $4 million of Sebree restart related costs. We also received about $8 million worth of initial payments on our overall insurance claim, netting to the $4.3 million adjusting impact for the quarter. Our liquidity remains strong with $196 million of funds available via a mix of cash on hand and revolving credit facilities. As expected during Q4, our cash balance decreased by $34 million primarily as a result of continued investment in the Hawesville restart. I will share more Q4 detail on the cash bridge shortly. Availability under our revolving credit facilities is solid at $157 million. This is down $14 million from Q3 to Q4 primarily as a result of some additional borrowing at year-end and a seasonal increase in power letters of credit as we…

Thank you. [Operator Instructions].And we will go to the line of Jeremy Kliewer with Deutsche Bank. Please go ahead.

Hi guys, how is it going?

Hi Jeremy.

Hi Jeremy.

Just a couple of questions on your 2019 guidance. With regards Iceland, it looks like your plant cash cost have come down about $100 per tonne, this being Q2 to Q4. And you guys are largely using the same kind of assumptions that you were using last year. So I was just wondering what the big moving pieces are for that $100 per tonne change roughly $30 million of annual savings at your Grundartangi plant?

So Jeremy, let's make sure I understand the question that's from Q1 to Q2 to Q4?

No your Q2 to Q4 of your 2018 guidance was roughly $1,950 to $2,000 per tonne of plant cash costs and your 2019 guidance for the same time period is $1,850 to $1,900. So your plant cash cost has dropped about $100 per ton. However, your major inputs alumina and your carbon cost and stuff like that have largely remained the same. So I was just wondering, what is the other big moving pieces there?

It’s truly a handful of things. So we do have alumina down just a little bit. In Iceland, we did purchase carbon anodes. We bake them at our facility in Europe. It's a little bit different exposures there than in the U.S. So we did see some improvement in carbon prices as well. There was also a labor component that we saw improvement year-over-year and then one other thing that I would note is that Grundartangi power prices are LME dependent and the LME in the prior-year forecast was higher than what's in today's presentation.

Alright, thank you for the clarification. And then with regards to Sebree, you announced, I guess, the additional billet casting and some of the secondary melting towards the end of last year. So why isn't I guess the additional production coming through in 2019? It’s about 70,000 of the 90,000 tons of billet should be there and then only about 5,000 tons of the remelt capacity appears to be there.

No, remember – a good question there, maybe you guys are misunderstanding Jeremy of the release that we put in a couple months ago. So that was 90,000 tons of incremental billet production, but taking away that was an increase in 90,000 tons in the final production of the plant. It was a much smaller number basically based on the remelt, before the remelt, which is a small number a couple 10s of thousands. It's simply a replacement of standard products with billet. So it's just an upgrading of the plants, product mix I guess I would say.

Alright, thanks for the clarification.

Sure.

Thank you. [Operator Instructions] Next we will go to the line of Lucas Pipes with B. Riley FBR. Please go ahead.

Hey, good afternoon everyone.

Good afternoon, Lucas.

I wanted to follow-up a little bit on the 2019 guidance and you provided us cash flow breakeven estimate of $1,800 per ton. And kind of just triangulating off of that figure, then I think you used $1,900 price assumption elsewhere. Is it fair to kind of conclude roughly $150 million EBITDA run rate or so for Q2 through Q4 again annualized run rate or which you maybe say my math is off somewhere. Thank you for your thoughts.

Lucas, thanks. So let's just before I answer – we'll answer your question in a second. Just to make sure everybody is understanding the basis of presentation of the various numbers, so the breakeven is a little bit different, but the breakeven is a number that as you correctly said is sort of bottom, bottom line and it's meant, I guess if I were looking at it as a financial analyst to do a very quick, how many tones do they produce and where would the breakeven in essence be on directly LME equivalent basis. If you want to answer your question the way you would do it is you would build it up, so you would take Peat's and Craig took you through it. Cash cost estimates for the US and Iceland, you’d use whatever LME assumption you like and you calculate, I guess I’d call it an EBITDA for each of Iceland and the U.S., from that you subtract SG&A, and if you go all the way to cash flow, CapEx, interest blah, blah, blah and there you get your the number, I think, you are seeking that’s the EBITDA number. To answer your question, if you were to crank using your number of $1,900 and the assumption that we have in there, if you've had a chance to look in the appendix we're using assumption just for this purpose of $350 for average API aluminum price for the quarter, you get something a little bit shy of the $150 that you cited, but in that zip code.

Got it, okay. No that's very helpful. Maybe after we have some of the modeling out of the way, I appreciate all the color there and the clarifications. Can you share your thoughts on the direction of the market? There has been a lot of commentary in the industry about kind of global overcapacity and a lot of smelters losing money, especially in China, when would you expect to see a supply response on the aluminum side and why haven't we seen more as of as of today? Thank you.

Thank you for the question. We completely agree with you. We've been waiting to see it. And you're quite right, we haven't seen tangible or very much evidence of it yet. And so our thesis has been exactly what you're suggesting, which is the price has fallen reasonably meaningfully over the last, let's call it three months. Why that is, is anybody's guess. I think most people would attribute it to the same reasons that financial markets in general and certainly risk assets in an oversized inspection field in the latter stages of 2018 is let's just call it macroeconomic concerns slowing, the economy is trading blah, blah, blah. And you saw metal really taking that risk assets including base metal taken outsized hit. That's starting to come back now as you've seen over the last couple of weeks, including today. You have seen some, as I said we haven't seen it tangibly. You've seen some capacity coming out, production coming off around the edges, I guess, we would say, Western Europe some in Spain, some in Germany not meaningful. You saw an announcement a quite significant one the other I guess it was just perhaps yesterday, that day prior from one of the largest individual smelters in the non-China world in South Africa. About a significant portion of the employee population, 40% of the employee population coming out, there was no related announcement on production capacity, but given our knowledge of how these plants are run, even if a plant is, let's say, not the most efficient one from a labor productivity standpoint, it's hard to imagine how one takes out 40% of the employees and maintains production. So I guess with apology for that long-winded answer, you're seeing a little bit of it, but not the wholesale or more meaningful response, economic response. And I guess the reason for that if you were to ask for a speculation frankly, it's the same reason we've been pointing to Lucas as with the problem here is that, as higher this production is buttressed by let's call it non-economic actors, ultimate share owners or other people providing risk capital, that don't have the same outlook or attitude towards that kind of thing that a quoted companies like ourselves would have. And so this is the problem. And I'll say it one more time that OECD report, which really is a very, it's quite detail, but think it has an executive summary at the beginning of it and it really couldn't have done a better job of setting forth the data and then the conclusion that we've been talking about over the last couple of years.

That's very helpful. Thank you for that.

Thank you.

And on the alumina side, I know this is in your slide deck just an assumption of $350 what is your kind of gut feeling on the alumina price in terms of market direction and what are some of the catalysts that you're keeping an eye on? Thank you.

Yes, that's a great question. So right now we think it's basically sideways for the time being. It's going to trade and it has as you saw, you have a very large fall from $500, as Pete said is where it's going to – alumina that we purchased months ago, obviously that cash is already out the door. We've suffered the indignity of that. And that's going to flow through our financial statement in Q1, but that's behind us. And so you've seen it – since that fall, you've seen it kind of trade up and down within a relatively tight for alumina recently, a relatively tightening like $15 band give or take. We strongly believe, strongly believe with evidence that up our beliefs, so I'll get to that in a moment, that the fair value today basis the current aluminum price would in the very low 300's. We know that because we've been counter – we are counterparty to reasons transactions that have occurred with obviously sophisticated sellers, all the sellers in this market are sophisticated, that have priced the material on an LME percentage basis for later in this year at a price that at the current LME would equate to that kind of price, i.e. very, very low $300 a ton. And I think if you ask most industry participants obviously before the tragedy, the terrible human tragedy that occurred in Brazil, a couple weeks ago where people believe it was fairly headed – fairly valued and headed, people would have said low 300s to probably through 300s for a period of time. And so that's kind of a wide range between what we very strongly feel is the fair value and where it sits today. And obviously the catalyst to which you refer, I’m sure you – perhaps you're asking a loaded question is whatever development when they have out of Brazil and really the market's expectation more importantly for – when not if but, I think, when that might come. For now, the market is supplied on a physical basis, but of course, the marginal unit with that capacity out, significant capacity out, the marginal unit comes at a higher cost and therefore a higher price that's what moves the index up.

Yes. Very helpful I appreciate all of the color and best of luck.

Thank you for your questions.

Thank you. Next we, go to the line of Paretosh Misra with Berenberg. Please go ahead.

Hi. Yes, thanks for taking my question. Can you talk about the production progression at Hawesville during the year from Q1 to Q4? When do you expect to hit the full production rated?

Sure. Thanks. So, where we are right now is as we said as Craig and I each said we are within quite frankly weeks – not week but certainly within the weeks of concluding the restart of the line one which is the last of the three potlines that were curtailed in late 2015. And so at that point in time, you'll have a fine pipeline operation. As we said at the beginning of the restart project when we announced it last year as soon as we finished rebuilding and restarting those three lines, we have to turn our attention and restart and rebuild pardon me, the two lines that are well past their prime and have been for some time. Those lines haven't been rebuilt in many of those eight, nine and 10 years. As I think you know there's normal economic in service life of a reduction cell is, let's call it 1,800 to 2,000 days, so their way past their prime. So we'll take down the first line in the month of March and then what we haven't decided on yet and that's why the forecast that we gave you is just assuming that the line, just to make it simple right now, assuming just theoretically illustratively that the line was down for the entire year. That's what that production forecast at Hawesville assumes that 190x thousand tonnes assumes that you took it down and then didn't restart it and so of course that's not going to happen. We haven't yet, as I said decided on an exact rebuild schedule yet. We'll be making that decision over the coming weeks, if not months. So we'll be in a better position. Paretosh, to tell you exactly how that extra capacity will come back on but if you're modeling out what's in our slides right now, it's pretty straightforward. You're at a four – in essence of four line operation to make it simple, Craig and I guess for the entire second, third and fourth quarters.

That's right.

Just the reason we wanted to give you the most; A, conservative estimates, i.e. assuming that the line was down for the full year. That's just theoretical and B, from a modeling standpoint, make it easier to I suppose add from there rather than subtract from something else that we would give you, if that makes sense. Craig, you have anything else?

No, I would say, I mean, so we have on Page 11, that's a 195,000 tonnes for the year in 2019. And just to fill in the math that filling in from 117,000 tonnes of output in 2018. And as you recall, we started the restart midway through 2018, so you're not getting a full-year of restart in there. The 78,000 incremental tonnes is what we're showing you today for 2019.

And we'll have an update on this for you when we certainly by the time we announce, I guess something another two months, certainly by then.

Got it, that's very clear. I appreciate that.

Great.

And then your cash flow breakeven aluminum price at $1,800 versus $1,875, that's what it was last year, at least in the last three quarters. So just in terms of what has improved, it seems like the cash tax is a bit lower and then you get the benefit of higher volumes at Hawesville, also some better fixed cost absorption. Alumina and maybe Iceland power cost lower is there any other thing big?

You did pretty well there, but I'll let Craig.

We got two or three biggest drivers. So you got the increased tonne, right, and that's the major driver coming out of Hawesville what you talked about, cash taxes year-over-year are reduction that we expect there and I think the larger one of all the ones that you mentioned, is actually you didn't mention, the largest would be the Midwest premium increase year-over-year. So we did see a significant increase from where we were last year.

Even though, of course, the Midwest started to build early in 2018, you see obviously it’s there for the full year as you'll see when you look at the appendix our forecast or that estimates that we're using to buildup these cost estimates and breakeven, its below the spot Midwest just for some conservatism, but you do have a favorable year-over-year comparison.

Got it, guys. Thank and good luck with everything.

Thank you.

Thanks for the questions.

Thank you. Next, we go to the line of Jeremy Kliewer with Deutsche Bank. Please go ahead.

Just a quick follow-up. On your views for alumina, have you thought about backward integration or going for more contracted prices similar to what you announced back in 3Q?

Yes. So absolutely and it’s not that we're thinking about it, which we continue to think about even and look at various options both perhaps Jeremy what not to read your words too closely, but in terms of actual ownership of assets and structural backward integration in various means or at least mitigation of the volatility of the index pricing and as we've told you, we've continued to fancy words. As we told you – we told you we intended to, we have continued to synthetically create the way the market used to price itself 100% which is LME referenced alumina, the two methods, one is direct contracting with counterparties who are still interested in selling LME percentage. And then the second is, as we've told you taking partial contracts that are priced in fixed dollars, not index, floating index, but fixed dollars and through simple derivatives i.e. forward selling of aluminum. It's not modest quantities and converting those to LME percentage. So that's a long-winded again answer to your question, yes. And we continue to believe that despite the fact that we blinders on over the last year, it’s almost a year ago to the day that Alunorte was forced to curtail half of its production. With blinders on you, you want to conclude, you want to be 100% captive backward integrated with whatever vernacular you want to use, we think the truth is somewhere in between, like in those things from a risk mitigation standpoint, you want some exposure to it, but we clearly and as I described in the past, this is one of our major strategic objectives here is to increase our ownership structurally or synthetically of alumina.

That's great color. Thank you. And then further 200,000 tonnes or so of alumina that's kind of linked to the LME. Is that a sliding scale, so in 2020, when you pick up production or perhaps pick up production at Hawesville of another 50,000 tonnes or so, will that increase proportionately or is it kind of that 200,000 tonnes, is what it is in the remaining alumina supply will be linked.

Yes, good question. Is that is what it is for 2019. For 2020, we are still constructing 2020, so I actually, A, would be speculating how it's going to come out in 2020. In 2020, I would think it would be at least that much. We're certainly not shooting for below, but I wouldn't speculate it at this point in time. We've got is – as we've told you some already done for 2020, in terms of the long-term five-year contract. And we've got more to go, so we'll update you on that, but clearly I hope you get the sense that we are focused on and working towards that end.

Yes, that helps definitely. All right. Good luck guys.

Thanks, Jeremy.

Thank you. Next we'll go to the line of Lucas Pipes with B. Riley, FBR. Please go ahead.

Yes, good afternoon, again. Most of my follow-up questions have been asked at this point, but maybe I'll sneak a quick one in. The $150 million, slightly less than $150 million EBITDA that was referenced earlier, was that kind of Q2 through Q4 annualized or?

Yes, yes.

Perfect. Okay, great, I really appreciate it. Thank you.

Thank you. And next we'll go to the line of John Tumazos with John Tumazos [ph]. Please go ahead.

Thank you for taking my question.

Hi John.

How are you?

How are you, sir?

Good, good. Chinese outputs have been hard to figure out.

Yes.

They produced 9.5% more aluminum metal in the fourth quarter in a year ago. Alumina Limited on their call last night theorized that the Chinese produced more because of the trade dispute from the U.S. to bargain from a different position. In January, the Chinese output fell from last year, maybe due to lower aluminum prices by 0.8% and world output fell by 1.1%. Do you think aluminum prices as of January already fell enough to cut supply and turn the market around?

Yes, that's a great question. I mean you saw it bounce pretty reflectively when it went through $1,800 and started to toy with $1,780, $1,770, I forget what the low point was. I mean, John, that's a tough one. On China, we agree the data seem to be all over the place. We obviously watch them, the U.S. – tough imports coming to the U.S. which are down, which tells us that something is working out there. But we tend to – the month-to-month production figures coming from China. I don't know, maybe it's easy for me to just to dismiss it, it's hard to discern, it's a reliable

Their exports in January were one-third more than a year ago.

Yes.

Full year last year rose 21% to another record.

Yes, that's all downstream, that's all coming from downstream.

They don't need the metal they're producing.

There is no question. If you're looking for a fight on that, you're not going to get it here. There's no question. John, I will share some data for you.

Thank you and good luck.

Yes, thank you sir.

Thank you. [Operator Instructions] And speakers, we have no questions in queue. I'll turn it back to you.

Again, thanks very much for the excellent questions and your attention and we look forward to speaking with you over the coming months. Take care all.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.