Good afternoon. Thank you for attending the Century Aluminum Company Fourth Quarter 2023 Earnings Conference Call. My name is Matt, and I'll be your moderator for today's call. [Operator instructions]. I will now like to pass the conference over to our host Ryan Crawford with Century Aluminum. Ryan, please go ahead.

Thank you operator. Good afternoon everyone and welcome to the conference call. I'm joined here today by Jesse Gary, Century's President and Chief Executive Officer. Jerry Bialek, Executive Vice President and Chief Financial Officer. And Peter Chipskovsky, Senior Vice President of Finance and Treasurer. After our prepared comments, we will 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 one, please take a moment to review the cautionary statements shown here with respect to forward looking statements and non-GAAP financial measures contained in today's discussion. And with that, I'll hand the call to Jesse.

Thanks, Ryan. Thanks to everyone for joining. I'll start today by quickly reviewing our 2023 performance. Before turning to the current macro environment and some dynamic operating conditions we are working through in Q1. Jerry will then take you through the details of the fourth quarter results and Q1 outlook. And then I'll finish with an update on the Inflation Reduction Act, potential further benefits that we expect to receive. Turning to slide three, market conditions remain volatile last year, reflecting a seemingly new normal we've experienced post-COVID, where a broadly balanced global supply and demand picture for aluminum is paired with historically low levels of inventories; tight global inventories, along with rising and dynamic geopolitical tensions, has created a market where small changes in market conditions are driving outsized effects on aluminum prices. Despite this continued volatility, Century produced adjusted EBITDA of $120 million in 2023, including $57 million of adjusted EBITDA in Q4, reflecting the impact of our 2023 Inflation Reduction Act advanced manufacturing credit. Jerry will give you the full details here in a bit. Our team completed several strategic projects last year, including the acquisition of our 55% share in Jamalco, completing our long-held ambitions to secure a captive supply of high-quality alumina and bauxite for our smelters to create a more balanced, consistent, and robust operational footprint and better position us to deliver strong performance through commodity cycles. Returning this asset to its full potential will continue to be one of our main priorities in 2024. Finally, we continue to focus on our most important priority, to return our employees home safely at the end of each and every day. While we will never be satisfied until we achieve zero workplace injuries, our team should be proud to have reduced injuries by 20% over 2022…

Thank you, Jesse. Let's turn to slide 8 to review fourth quarter results. On a consolidated basis, fourth quarter global shipments were nearly 174,000 tons, up 1% sequentially. Realized prices, however, decreased substantially versus prior quarter, due primarily to significantly lower lagged LME prices and delivery premiums, resulting in net sales of $512 million, a 6% decrease sequentially. Looking at Q4 operating results, adjusted EBITDA attributable to century was $57 million, an improvement of $48 million compared with the third quarter. During the period, we recorded a full year benefit of $59 million related to the Inflation Reduction Act Advanced Manufacturing Credit, Section 45X. Adjusted net income was $40 million, or $0.39 per share. The major adjusting items were add-backs of $7 million in costs related to the Jamalco equipment failure, $3 million for the unrealized impacts of forward contracts, and $1 million for share-based compensation. We had strong liquidity of $312 million at the end of the quarter, consisting of $89 million in cash and $223 million available on our credit facilities. Turning to slide 9 to explain the $48 million fourth quarter sequential improvement in adjusted EBITDA. In total, adjusted EBITDA for the fourth quarter was $57 million. Realized lagged LME prices and delivery premiums were significantly lower in the quarter. Realized LME of $2,182 per ton was down $55 versus prior quarter, while realized U.S. Midwest premium of $425 per ton was down $68, and European delivery premium of $280 per ton was down $44. Together, these factors amounted to a $19 million headwind in the quarter. Power costs increased by $1 million. Realized alumina cost was $382 per ton, $13 lower on a sequential basis. Realized coke prices decreased 9%, and realized pitch prices decreased 5%. Remember, there is a three to four month lag for…

Thanks, Jerry. If you turn to Page 12, I'd like to finish with some additional discussion regarding Section 45X and our expected benefits there under. As we discussed in December, the proposed regulations clarified many aspects of the law, but Treasury asked for comments on several others, while specifically highlighting the important role that critical minerals, like aluminum, play in the renewable energy and energy storage industry. First and foremost, the proposed regulations confirmed the application of Section 45X to substantially all of Century's primary aluminum production in the United States. The proposed regulations also clarified that eligible costs that qualify for the 10% credit are to be construed broadly to include all costs incurred by the producer and the production of the critical minerals other than certain direct and indirect material costs. Importantly, the Treasury Department also specifically notes that it is still considering adding direct and indirect material costs as eligible costs under Section 45X and requested comments regarding how such costs should be treated for purposes of the critical minerals tax credit. We are discussing with Treasury the essential nature of these materials and the significant associated costs as indeed, it would not be possible to produce U.S. aluminum without materials like alumina and carbon anodes. Our position is in line with a broad set of industry participants, ranging from the critical mineral producers to our downstream customers, including automotive companies seeking to ensure stable domestic supply chains. Overall, there seems to be broad consensus amongst industry and consumers. Such costs should be eligible for the tax credit, and we are very hopeful that they will ultimately be included as eligible costs. Importantly, Senator Manchin, along with several of his colleagues recently submitted comments to Treasury, noting that their intent as drafters was for the direct and indirect material costs to be eligible and they called on Treasury to expeditiously revise the regulations accordingly. If direct and indirect material costs are ultimately added in its eligible costs under 45X, we'd expect to recognize an additional annual benefit of $50 million to $55 million for 2023 and similar annual amounts for 2024 and going forward. Any potential increases in future production would also be eligible for the production tax credit and would be expected to increase our annual benefit on a roughly pro rata basis to the amount of increased production. We will continue to update you as we receive more guidance from the Treasury Department. We look forward to your questions today, and we'll turn the call over now to the operator.

[Operator Instructions] First question is from the line of Lucas Pipes with B. Riley. Your line is now open.

Thank you very much, operator. Good afternoon, everyone. My first question is following up on the 45X commentary. And specifically, I understand there's a process for the review of the direct and indirect costs and including that in the benefit. But I wondered if you could maybe elaborate on kind of what the process looks like from here? What's the potential time line? What is the IRS looking for to make a determination on those?

Sure, Lucas. First of all, I'd just like to say, we're very thankful for the program and the proposed regulations clearly have a material benefit for Century and also for U.S. aluminum production. To your point on process, we are working with Treasury on the proposed regulations, which, as I mentioned in my comments, included several questions for industry and other participants about which costs should be included as eligible. There's obviously been a lot of support coming in from industry and also from some of the drafters of the bill, which is obviously important to the ultimate intent of the law. So we do think there's good potential for more benefit to come, but it will obviously depend on the process. So these regulations, as we call them, are proposed regulations. And the process will be there's a comment period, which a number of comments have already been submitted. And there also will be a hearing. And then after that, Treasury and the IRS will take that feedback back and will ultimately issue either another set of proposed regulation or a set of final regulations. There is no prescribed time line there. So we'll just have to wait and see when we see the next set of proposed or final regulations.

And do I remember it right that some of the hearings are tomorrow? And do you have a view on -- or do you know when the comment period might close?

Yes. The initial comment period is already closed, Lucas, and the hearing is, in fact, tomorrow.

Very helpful. And then I wanted to ask about Hawesville. I'm curious kind of if you could share your views on where that asset could sit on the U.S. cost curve with lower energy prices more broadly with the 45X credit. There was a recent announcement about a curtailment of the smelter in the Midwest. So kind of curious what might be similar or different in Hawesville compared to that asset that's idled or maybe again, more broadly on the cost curve.

Sure, Lucas. Good question. Yes. So we were very sad to see the announcement of the New Madrid smelter in New Madrid, Missouri closed earlier this year. But obviously, each and every smelter in the U.S. has its own mix of costs and circumstances. And it's difficult to really make broad generalizations or comparisons across them. And with respect to Hawesville specifically, we have obviously seen power prices in the Midwest return towards attractive levels, mainly driven by the low price of natural gas, but also as additional renewable energy is built in the grid, it's actually quite rewarding to see just how green the overall Midwest power environment has become. So with respect to Hawesville specifically, I think as we said before, it will be a holistic decision based on many factors. Obviously, the power price situation is helpful. And when we have final guidance on the IRA credits, that will also be very helpful towards making that decision. But we'll evaluate all factors at the time, including our corporate allocation of capital, power supply, LME outlook and restart costs. Of course, our first priority, as we said before, will be restarting at Mt. Holly. And as I mentioned, we continue to work on that and make some progress.

I'll try to squeeze one quick one in on Jamalco. First, could you provide some color as to the contributions of Jamalco to Q1 EBITDA on an attributable basis and then the $10 million to $15 million CapEx for 2024, is that kind of a good steady-state number for your interest in the asset?

Yes. So obviously, as we continue to work on Jamalco and bringing it back to its full potential, which, as I said before, we're quite confident over time, we will return the asset to producing in the second quartile of the global cost curve. But we did have a few headwinds in Q4 and into Q1 when there were some delays in the restoration of some of the high efficiency boilers. And we continue to have a little instability coming out of the energy-related disruptions we had towards the end of Q3. So we now expect some of those production and cost efficiencies that we've previously talked about to be achieved in Q2 rather than Q1. But we do expect Jamalco to be roughly breakeven on an EBITDA basis in Q1. Obviously, there's some of the quarter to go still. And then as we see the production efficiency improvements take hold, we think that that EBITDA generation will improve in Q2 and beyond. Sorry. And then to your CapEx question, Lucas. Yes, $10 million to $15 reflects some of those restoration projects that we have in place and the powerhouse that we've talked about before. So there's a little bit of mix of investment and sustaining CapEx in there, Lucas. So we'll just have to watch that, and we'll continue to guide you as we go forward on that CapEx breakdown in future periods.

I really appreciate all the color. I'll turn it over. Best of luck.

Next question comes from the line of John Tumazos with Very Independent Research.

With spot natural gas well under $2 in the Henry Hub recently, $0.025. How are long-term electricity prices behaving? Have long-term prices falling? Is this an opportune time to contract wind or solar renewable energy from Mt. Holly or Sebree. And if there ever was a time to think about Hawesville, I would think it's when natural gas is almost free.

Thanks, John. It's a good question. Unfortunately, natural gas isn't quite free yet. Though, I agree that would be a good environment. There's a few things going on in your question. So on Midwest and U.S. power prices generally, bringing aside the cold snap we had in January, they have been very constructive in both back half of last year and now certainly in the first quarter of this year, putting aside that brief week of very cold weather. So you've got the range right. You've seen them trading with low gas prices in the high-20s and low-30s over the balance of 2024. And you have seen the near part of the curve come in and reduce back towards sort of pre-pandemic levels in the Midwest. On the renewable side, however, you continue to see renewable supply chains be very stretched and renewable prices remain well above pre-pandemic pricing levels for renewables. So it's pretty dynamic out there. There's a lot of things going on. It's kind of hard to make broad generalizations of the overall energy environment. But certainly, it is a bit more constructive for Sebree as we continue to operate there.

If I can ask another with your 5% demand growth estimate for last year from China, does that mean Chinese exports fell last year?

Yes. When you look at -- and you can sort of take a broader look and look at imports level, we saw about 1 million -- 1.3 million tons of aluminum going into China. So the window was certainly open for most of the year. And largely, that was based on very strong demand for EVs and renewable energy applications within China. So then your corresponding question on exports is a bit more complex because you did see a lot of that demand to go into not semis exports, which are easier to track, but more complete downstream demand applications, and it's a bit harder to say exactly. But what we can see is that the drivers are those long-term demand drivers for aluminum we've long talked about, which is increasing aluminum intensity in electric vehicles and increasing aluminum intensity in renewable energy and renewable energy transmission applications.

There are currently no further questions registered. [Operator Instructions] There are no additional questions waiting at this time. So I'll pass the call back to the management team for any closing remarks.

Okay. Thanks, everyone, for joining, and we look forward to talking to you after Q1. Thanks a lot.

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.