Good day ladies and gentlemen and welcome to the Fourth Quarter 2014 Alcoa Earnings Conference Call. My name is Tia and I will be your operator for today. As a reminder today’s conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Kelly Pasterick, Vice President of Investor Relations. Please proceed.

Thank you Tia. Good afternoon and welcome everyone to Alcoa’s fourth quarter 2014 earnings conference call. I'm joined by Klaus Kleinfeld, Chairman and Chief Executive Officer; and William Oplinger, Executive Vice President and Chief Financial Officer. After comments by Klaus and Bill, we will take your questions. Before we begin today, I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the Company's actual results to differ materially from these projections listed in today's press release and presentation and in our most recent SEC filings. In addition, we have included some non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, in the appendix of today's presentation and on our website at www.alcoa.com under the Invest section. Any reference in our discussion today to EBITDA means adjusted EBITDA, for which we have provided calculations and reconciliations in the appendix. And with that, I'd like to turn it over to Klaus Kleinfeld.

Well, thank you Kelly and welcome everybody on the phone. So let me in the usual fashion summarize this quarter for you. I would say the transformation of delivering results of profitability is up year-over-year. So talking about the operational performance, I think there is only one word, strong operational performance, starting with the downstream 19th consecutive quarter, year-over-year profit growth is excluding [indiscernible] midstream, profitability up substantially, more than 200% upstream, improved performance 13 consecutive quarters. Look at the Alumina segment. Profitability stands at 178 million; primary metals, profitability of 267 million. Look at the fourth quarter cash from ops $1.5 billion, highest in the history. The fourth quarter of free cash flow, highest quarter since the fourth quarter of 2010. Look at the full year productivity that we've been able to generate at 1.2 billion and it’s really coming from all across the Company and all segments, all functions. And then when you look at the free cash flow, we’ve been able to generate $455 million, 18% improvement versus the year before. And if you look at the second point here is the accelerated portfolio transformation. When we put the slide together, actually it was – and listed what had been going on in the fourth quarter, we had surprised ourselves on that -- that that all fell into the fourth quarter. It almost had too few days to get that all done. And so we closed the first week a $3 billion acquisition. We announced the TITAL acquisition. We expected to close this one in this quarter, first quarter of the year. We unveiled the Micromill, exciting where this was most advanced aluminum alloys that are allowed. I think [indiscernible] I'll talk more about it later. We finalized the sale of our three European rolling mills. We safely executed the Australian rolling mills closures. We sold the Jamalco interest in Jamaica. The Saudi Arabia refinery is now fully operational. It's making first alumina from Saudi Arabian bauxite. That is a historic first in Kingdom and really fantastic achievement by the whole team there. And we sold the stake in our Mt. Holly smelter to Century. So those are the highlights. And with this, why don’t we go straight Bill, over to the numbers so that you can guide everybody through this.

Sure, thanks Klaus. Let’s quickly walk through the income statement. Revenue increased $138 million on a sequential quarter basis. On a year-over-year basis revenue increased over $790 million or 14% on higher sales in our mid and downstream businesses, the inclusion of Firth Rixson in the quarter, higher pricing in the upstream and favorable energy sales. Versus last year we recorded strong revenue growth in all of our segments. Cost of goods sold percentage decreased by 60 basis points sequentially and was down over 6% compared to a year ago quarter basis, both driven primarily by productivity gains, better prices and a stronger U.S. dollar, somewhat offset by cost increases. Overhead costs are up versus both periods, primarily driven by the addition of Firth Rixson. EBITDA was over a $1 billion for the second consecutive quarter, resulting in EBITDA of $3.6 billion for the year, $1 billion higher than 2013. Full year 2014 net income was $268 million. Our effective tax rate for the quarter is 51% and for the full year it's 64%. These rates are higher than our expected operational rates, primarily due to discrete charges related to tax rate changes and the fact that of some of our special items had little or no tax benefits associated with them. Our operational tax rate for the year was 31%. Looking forward we estimate our operational tax rate for 2015 to be at that same level. Overall results for the quarter or net income, up $0.11 per share, but excluding special items we have net income of $0.33 per share, $0.02 higher than the third quarter and $0.29 higher than the fourth quarter of last year. Let’s take a closer look at the special items. Included in net income is an after tax charge of $273 million or $0.22…

Thank you very much Bill. So let’s talk about our end market. So what do we expect in our major end markets for 2015? On aerospace, we do believe that there is going to be a growth in this market in 2015 between 9% to 10%. Actually in large commercial aircraft, we believe the second is even going to grow above that with 15%. And why we believe so? Because if you look at the strong commercial jet order book coming in now stands at eight years of production at the increased 2014 delivery rates. And also if you look at the airline fundamentals, we are taking here the IATA expectations. What they expect for this year is 7% increase of passenger, a 4.3% increase of cargo demand. Airline profits are supposed to go up to a level of $25 billion for the airlines. That’s pretty amazing. This has a reflection also when you look at the jet engine autobook where there are now 23,800 engines on firm order. We’re also seen outside of the large commercial aircraft segment, the retail jets have been rebounded, and we believe that this growth is going to continue. With 8.7% they have already to be the highest order book in five years. So next segment automotive, probably best to go through it by different regions. North America we believe we’re going to see a growth between 1% to 4%. That’s a pretty big range. Mary Bara, the CEO of GM last week came out with her estimate of roughly 3%. So that’s in that range. And this is obviously on top of the 2014 goals. In 2014 we’ve seen the USA is up 5.8%, 16.4 million vehicles. Production also strong than the 15.7 million vehicles. All of those numbers are year to date…

[Operator Instructions] The first question comes from the line of Brian Yu with Citigroup. Please proceed.

First, a question on the engineered product segment. You’ve given your guidance there. Would you breakout for us, how much to that HOI [ph] growth is for existing operations and then how much is the Firth Rixson contributing?

Yes Brian, I think we -- just to make sure you’re clear, we got it to a 0% to 5% increase in year-over-year profitability, and we are just now really getting starting to see the Firth Rixson profitability kick in. And so we have not broken out and we’re not planning on breaking out the profitability of Firth Rixson at this point for this quarter.

That’s correct but you saw, and I think you showed it in one of your slides that the impact in the fourth quarter was a negative…..

Sure, it was a negative 12, with the biggest piece of that being associated with the write up of the inventory, right. So when you buy a company and write the inventory to fair value and as you sell it, sell that inventory, you don’t recognize any margin on it. So that’s the preponderance of that 12 million.

Yes, I think the other point Brian that I think you should have in mind is the $1.6 billion in 2016, that’s revenue, that at $350 million profitably, that gives you an idea on where we see this going all right? And this was more reality of the closing and so.

Yes, I know, there's just a wide gap and that’s why I was hoping maybe you guys could provide a little bit more detail. Then just the other question is just on the target of 500 million free cash flow for this year minimum, is there an underlying aluminum price that’s embedded in there to get that $500 million number?

Yes, and we typically don’t provide what that is other than to say that it’s very similar to the market fundamentals that we have today and all things including the LME, premiums and currencies also. So it’s similar to the market situation that we have today.

The next question comes from the line of Josh Sullivan with Sterne Agee. Please proceed.

Just given your place in the aerospace industry, can you talk about the impact of slide in fuel costs? Do you see demand destruction for new efficient aircraft at a certain for crude or do you think the increase in passenger traffic, extended backlogs, even the airlines holding the economic benefit of the new planes enough to sustain demand levels?

That’s a very good question, and in fact we should have put the slide in there also. We addressed a similar one and that’s why we put the slide there in automotive. And if you look at what’s been driving the demand on the aerospace side, there's has really been two main factors. One is the increase of the middle class and the increase of more available money, mainly driven from the growth in Asia. This is going to stay. Nothing has changed there I would actually argue with the -- given that many of those places are big importers of oil, that with oil price having come down so much, what you see at that level that the available income goes up but certainly not going to negatively affect. So that’s been one big driver. The second big driver was the increase of efficiency on the planes, and you typically see that new planes on new re-engine models; if you look at on average the claim buy Boeing and Airbus is that they give you 25% increased efficiency and that’s also not going to go away. And if you look at another indicator, what we have seen recently, have we seen anything? The price has been coming down over the last half year and Boeing just announced their order book and I think everybody was pretty impressed by the quality of the order book. So we haven’t yet received the final Airbus numbers but you’ve seen our prediction for this year is actually we believe that the growth is not only going to continue but continue to be strong, Josh.

Okay, great. And then just with the strong free cash flow coming through here, what are the priorities for cash deployment going forward?

It’s pretty simple. The first set of priorities is to sustain the assets that we have and we talked about sustaining capital numbers 725. We have a number of organic growth opportunities that we’re pursuing and a lot of those have already been announced. So you’ve heard about or talked about LaPorte. You heard us talk about the fixed weight structure in global rolled products. So we have those. And the other one is we’ll spend about $500 million on the pension plan again next year. Beyond that, cash that's generated after that, we'll have to make a determination of whether we pay down debt or continue to grow in the downstream.

The next question comes from the line of Jorge Beristain with Deutsche Bank. Please proceed.

I guess maybe my question first is for Klaus. Could you walk us through how you think right now about the alumina price holding up, given that fuel oil is such an important component of that industry’s cost, and to your earlier point about moving down the cost curve, do you think that into 2015, 2016 we could see a structural shift down in the cost curve of alumina globally because of cheaper oil? That’s my first question.

Well, let’s start with the second part of the question. Yes that is possible. Now keep in mind that not everybody uses oil. You saw some of those things by the way happening. Then you have another factor that you didn’t talk about, you have an ethics movement also. So that’s going to negatively impact the refineries that are in the U.S. So that’s clearly going on. You would see that reflected in the cost curve. The other thing on in regards to the alumina price, all of you know, the alumina price is not a function of the cost, it’s a function of supply and demand, and much more than what we see in the LME, because luckily we see today the alumina pricing index -- the biggest equivalent, the biggest indicator for the alumina pricing and that fortunately is more a function of the supply and demand because it does not allow for -- the financialization that is strongly seen entering the LME and impacting the LME pricing and taking it so far away from the supply and demand and allowing the regional premium to come in. So that’s the reason why you don’t see this strange things happening in alumina. In alumina I think the biggest -- I cannot predict where it’s going to go. It’s impossible to predict that. I think we gave a lot of guidance. One thing that Bill showed in his summary there is this more than $2 million surplus. I think Bill also was very clear that you have to put that into relative perceptive. First of all, you know us and others know us too. We are very conservative when it comes to projections, and I think Bill said it, when it came last year, we’re looking at, we’re almost seeking a fast face value announcement about people that are saying we’re going to bring capacity up and that year we started with $2 million and I think we ended with $400,000 and that’s in a market that has 100 million. So that’s my best guess on this, Jorge.

And since I got here quickly, could I just also get your view on the $500 million free cash flow target you have? I'm assuming that is before pension possible contributions this year?

No. That’s after pension contribution, Jorge. So that -- the 500 million of pension contributions is baked into that number.

Great. And then where do you stand on the pursuit of going back to investment grade? Is this something that’s a priority for Alcoa or will you just kind of take it as it comes over the next few years?

We’re committed to getting back investment grade I think and I know some of the rating agencies who're probably listening, but we did generate well in excess of over $3 billion of EBITDA this year, which I know some were very interested in seeing us do and as you see, it’s the first year in a number of years that we set a positive free cash flow target. So we’re fully expecting to generate positive free cash flow in 2015. So it is a priority for us to get back to investment grade and I think we’re doing all the right things to get there.

The next question comes from the line of Sal Tharani with Goldman Sachs. Please proceed.

I have a couple of questions on Micromill. What is the scale of this mill you're talking about? Usual BIW lines are 100,000 tons. Is this like a quarter of everything? And then also how far you think you are in supplying a commercial quantity of this product? And lastly is this technology you're going to be keep to yourself or are you thinking of licensing overtime?

In terms of the mill size, we haven’t published that but I think if you put the numbers together, you’ll get there. So in regards to the question of where do we stand with this, before we announced that we actually had a customer test right. So we were confident that this works and fulfils the very stringent requirements of our customers. We are now going through the qualification for some of those materials for specific platforms right. And so that’s where we stand. So this is nothing. You know that this is not for a substantial amount in 2015. This is the thing that needs a little while, but its all breakthrough that we are very, very confident that this will be meaningfully contributing to it. And then on last part of your question, do we want to keep it for ourselves? We are not decided on this but I think directionally, we are open to thinking of licensing this out. We do however believe -- and that’s a function of -- we are lucky to have a portfolio that allows us to have many options and many business. So we don’t need to base it all on Micromill technology. And as I said in my remarks, we have focused on automotive because we believe that that's where it's going to create a lot of value. But that is just the first application. I think there is many more applications that we will see where it also creates value. And we are focusing currently on getting the qualification done with our customers. And once we know that, we will also then decide on the commercialization strategy right. So that’s where we are. So we are leaning towards not keeping it to our sales but licensing it out.

That’s great. And my last question is Bill you mentioned the Brazilian impact of $45 million on the power sale and you have given the full year of 100 million. So should we just consider that the first quarter will be much higher than the rest of the three quarters combined?

Yes, because we’re coming off -- the 45 million is in relation to the fourth quarter. So yes, but we actually said that we would overcome all of that in productivity gains in the quarter. But 100 million is spread over the course of the four.

Including 55 plus 45? Is that the way we should look at it?

Yes.

The next question comes from the line of Timna Tanners with Bank of America Merrill Lynch. Please proceed.

I just wanted to summarize and make sure I was clear on kind of your overall view on the impact of lower energy prices, because it's been such a hot topic. So as I understood fuel efficiency, still intact as a thesis for customer demand in both auto and aerospace, and then on Alumina some benefits on fuel oil. But there's some concern that this could flatten the cost curve for aluminum. Is that a worry do you think? You think there is lot of your other producers that use energy like nat gas or oil?

Timna, on aluminum I am not concerned at all because typically on aluminum, if I look at the structure of our energy portfolio, you typically -- either you self-own it, or -- and then it’s a cost game and that determines where you are on the cost curve. Or you have 20 to 30 year long-term contract and many of those have some kind of LME impact built in there, so an LME variable built in there, and not in oil price. There is going to be shift. I think more important is the shift on the FX side, which I mentioned before. Obviously everybody who is sitting in places where the FX is going down, where just a dollar is benefiting and everybody else of going to go up. So for us it means some challenges. For instance I mean for those smelters that we still have here and the one refinery that we have here in the U.S. But overall, as you've seen in the numbers, the strength of the dollar has a positive impact. But one thing that I don’t think I mentioned is because you asked on the oil sensitivities, we actually -- I think I said last time -- the direct impact that Alcoa has outside of the industry impact here, for every $10 per barrel, up or down it means for us 40 million pre-tax profitability impact. That’s after minority interest. And that basically comes to two factors. One is the two oil based refineries that we still have in the portfolio. One is [indiscernible] and the second one is the transportation cost, simply the transportation cost. So that’s the direct impact.

So I was asking about on aluminum a little bit, because there's some concern among people that this will help lower -- flatten out the cost curve for some of the other producers. I'm just wondering on your thoughts on that.

Aluminum you said?

Yes.

That’s what I meant. Aluminum, I cannot feel how this is going to happen, because the oil price reduction is not going to impact most people's energy prices. Because most people have long-term energy contract or sell all energy. In both of those cases the oil prices is not -- it's usually -- if it’s indexed to anything, it's indexed to LME.

And then you changed you're forecast a little bit for the aluminum outlook, instead of being a deficit to being more balanced. Is there a there risk that you took back into over supply globally? Are you overly concerned about Chinese supply?

I don’t think so. I really don’t think so. Frankly there's a whole host of moving pieces in this whole supply demand side. I don’t -- the Chinese, the Chinese have no interest to -- first of all they have not been exporting -- the Chinese government has no interest for anybody to export. You basically see the 15% export tech or whatever they call it there, export tax for aluminum -- primarily aluminum. It's still in place and we double checked recently. There's no intention for them to drop it. So I don’t think so. They are going to continue to move to close facilities in the high cost area, which is mostly on the eastern seafront and they are going to continue to increase the production on the western side, which is along the line of what they have been doing right. So no concern. What I said before on alumina that at the beginning of the year, with the look we take is probably a very conservative look. On the Western side we also look at who has announced that they will be increasing capacity and therefore those capacity increases are building there and Kelly is just giving me the numbers here. So we have -- in the rest of the world we have an increase of 716,000 tons, and also that’s a moving piece, which is by no means clear. I don’t know Bill, whether you have what number we had at the beginning of 2014, kind of comparable to this?

At the beginning of 2014 we were pretty accurate as far as going into the year on the deficit. So we were actually on the side that we would see a fairly significant deficit in 2014, and that deficit did play out during the course of 2014. And I guess to be clear Timna, while we are showing the market in balance, we’re pretty upbeat on the overall metal market. The demand picture is still in place, 7% demand growth again this year. We had 7% in 2014. The warehousing situation and the inventory situation has improved. The premiums are still very strong and we see the dynamics for the premiums to continue to be strong. And tangoes are back in the market. So there is an incentive to finance metal. So I guess overall, even though we’ve brought our supply demand into, balance we’re pretty upbeat.

Yes, and you always have to look at what the total size of the market -- there are really I mean small numbers.

If I could just ask one last housekeeping question. I just didn’t follow the tax rate that you are guiding to for next year, flat with an adjusted number. What was that value again?

31%. So we’re guiding to an operational effective tax rate of 31%.

The next question comes from the line of David Gagliano with Bank of Montreal. Please

I just wanted to ask one question regarding the body and weight story. Obviously this time last year it was the topic of the day and nothing has changed at all, but it does seem to have faded a bit from a demand perspective or from an incremental announcement perspective and yet nevertheless all months we’ve seen quite a bit of new announcements on the supply side. So my questions, I have two of them. One, at what point are you or would you get a bit concerned that there is too much supply coming on, i.e. if you build that they will come and it will come? And then number two, what’s a reasonable EBITDA per ton assumption year-over-year over time for that business?

Look on the first one, there's a whole host of answers on this. This is one of the reasons Dave, why we put in this one slide -- that explains more what is really going on likely being and where -- which I would [indiscernible] whatever, one that says light weighting OEMs needed and consumers like it, because keep in mind -- that the driver is CAFE regulations, plus from two more preferences. So I'm relatively optimistic that it's going to stay that way and that’s the first thing. The second thing is -- I have said multiple times and that time I think when I got asked at the Investor conference, why are you guys not building more capacity as there is more demand, and frankly the good news is that we have more optionality and I think it became hopefully clear to you what I meant with my comments there when we announced the Micromill technology and the Micromill material. So for us the whole idea is to have -- to avoid the commoditization of anything, and the only way how you do it is by constantly innovating, constantly coming out with stuff that nobody else had and that substantially allows the customers to benefit and when the customers benefit we also benefit. So our intention clearly is to -- that this in our view is the next step in automotive that we will be going and also keep in mind, as the Davenport automotive expansion has been in ramp up more so far, so the first time when you see it in full -- and full operation financial impact is going to be 2015 and then by mid-2015 we are bringing on our Tennessee automotive mill. So that stood quite a bit that you will be seeing. But we have no intention at this point in time to do something same old - same old again here.

And then on the second part of the question, what’s a reasonable margin per ton assumption or EBITDA….

As you know, we’re not giving margins, but I think we said before that on the relative scheme -- it's a somewhere -- what we said actually?

Well we said the actual target is around $344 a metric ton in 2016 for GRP in total and clearly the automotive business will be accretive to that. Because of the closeness of the relationships with the customers we’re not disclosing the actual EBITDA levels.

The next question comes from the line of Andrew Lane with Morningstar. Please proceed.

First of all regarding your smelting operation, it looks like since 2007 about two-thirds of the capacity you've offline has been permanently closed and the balance has been curtailed, but one of your competitors who also has curtailed a great deal of capacity indicated that LME spot prices would have to increase above $2,500 per metric ton before they'd even considered bringing some capacity back online. I'm curious what LME spot price or what all in price you'd need to see before you'd consider doing the same?

To get the numbers right, I think you said it, but just to be sure it's 31% of all total smelting capacity that has been curtailed, closed or sold, basically since the start of the price. And when you take those type of sensitivities, those sensitivities are never correct for portfolio, because you have to look both smelter by smelter and specific -- and because the situation is very specific there, you have site specific ramp-up cost. It all depends on what contracts you have, typically NRG contracts, what optionality you have, as you know and you've seen the benefits in the 2014 numbers. We currently have purchased most of the smelting capacity in Brazil because we are selling the NRG that we sell into the market and that’s very beneficial I think to everybody and certainly to our shareholders. And also at this point in time Andrew, just to give you an idea, we have no intention to bring capacity that has been curtailed back on line. However, we are very happy that the ramp-up of our Saudi Arabia joint venture has been going so well because it's a lowest on the cost curve and as Bill pointed out it has nicely contributed to the profits in the fourth quarter as well as in the third quarter and also for the first time you would see the full impact this year in 2015.

Thanks Klaus. And then also you’re guiding to $750 million of growth capital in 2015, which marks a pretty sizeable increase from 2014 levels. So, now that all four of your reporting segments are firing all cylinders and investments related to the Saudi Arabian JV are coming to an end or winding down, I'd be interested to hear where you’re going to allocate that capital if you could provide just some additional color as to the major projects that might come in, the lion's share of that to that total?

Sure. And let me just try to clarify that just a little bit. That is what we’re calling return seeking capital. So it has three components to it. It’s got a growth component, it’s got a cost savings component and it still has the remaining of the Saudi spend. So it is not directly comparable to the growth spend that we had projected this year, I should say 2014, which is around $500 million. So where is that spend going? I listed in my comments some of the bigger areas. We’re investing in LaPorte in the EPS business and that’s in the airfoil business. We’re investing in a thick plate stretcher in our rolled products business. In our rolled products business we have some fairly large investments on upgrading the capacity and the capability of some of the facilities there. So the majority, the vast majority of that growth capital and according [indiscernible] I did not -- we'll be finishing -- I should have mentioned that. We’ll be finishing the automotive expansion in Tennessee, which is the other big component of it. So the vast majority of that capital will be spent in the mid and the downstream business. From a growth perspective, limited capital going into the upstream again in 2015.

We have -- on the upstream we have LaPorte and I mean those…

In the downstream…

In the downstream before them.

Your next question comes from the line of Tony Rizzuto with Cowen & Company. Please proceed.

My first question is just a follow up on China. Klaus, you indicated that you’re not concerned about Chinese exports of primary aluminum. So we continue to hear more reports that China is becoming more active in trade of semi-finished products, and I wonder if you could -- fabricated parts -- I wonder if you could just elaborate on this a little bit? Do you see this as a growing concern?

Yes, that’s a good point. And I think I’ve said that. I think we already talked about that before. We are monitoring this obviously very, very closely and we have seen an increase on semis, but at the current -- I have [indiscernible] a number yet the current U.S. share is around 7%. 7% of the total consumption of semis here in the U.S. And it increased a bit from 2013 to ’14 right, but it’s pretty much been staying on that level. I'm not sure how much of that is really intended. We have to look at it, particularly because there this 13% rebate that you get in China, cut off every subsidy, if you export semis. And this has become already a pretty critical issue in discussions between China and Europe, and that’s where we are monitoring it and seeing whether it gets to that same level. Obviously, we don’t want to have an unfair cost advantage. All four level playing field competition, we love it in fact but we don’t like if anybody receives unfair incentives. To say that I find a little concerning also is something that we equally strongly monitor is these what I call fake semis. And they pop up here and there. There's all kinds of numbers flowing around and I think we said -- half a year ago I thought -- we saw this warehouse in Mexico that had enormous amounts of so called semis that actually received this 13% rebate, but in reality it’s fake stuff that cast into some off shape and declared semi but in reality it's remail. That is purely scams and those ones are clearly illegal and we have maybe experienced whatever we brought that to the attention of the Chinese authorities, they are extremely fast in closing the operation down. So that’s clearly something that is also not in line with what they want. But we watch it.

Absolutely, and we’re seeing them make some changes in other product categories. That's why I asked and I appreciate your insight there. And the second question I have is with regard to market premiums. And as it relates to your ability to pass through to the customer, and I was wondering if you guys are making further progress in your contracts with European customers?

Don’t even get me going on this Tony. The answer is mildly and with some relapse, because somewhere in the -- I think you have [indiscernible]. What we have in Russia, Russia we didn’t have a regional premium for the last years and now [indiscernible] has been allowed by the antitrust authorities by end of last year to be able to charge the regional premium that maybe charging European regional premiums, whereas our contract at this point in time do not allow us to pass through this, because at that time there was no regional premium. That's obviously not acceptable. And we are in this discussions as we speak with the customers and also and I believe that you're going to see some progress on that but currently that's where that stands. I find it very hard to understand how this cannot be a pass through, very, very hard to understand and you pointed out, Tony, correctly here in the U.S. an accepted practice. I think it's a good practice and it's very hard to understand why in Europe the practice is different, very hard to understand.

The next question comes from the line of Sam Dubinsky with Wells Fargo. Please proceed.

Can you guys give some thoughts on recent supply disruptions in the can sheet market, given the competitor outage? Do you think there will be any material benefit to your business or the market as a whole? And I have a follow up.

Yes. In fact you're referring to a Logan [ph] mill outage, I assume, right?

Yes. Right.

Well as you know that had gone down I think it was December 30. We are working -- since then there is pretty much a frenzy going on in the industry. Everybody has been scrambling. We are very actively working with our customers to find a way out to the system with this supply shortage. We expect that -- and we have had some success, but it's not yet fully done. We expect to pick up some additional volume in this quarter and the first quarter. And this is kind of included in the outlook that Bill has given in his overview.

And just a follow up in terms of Brazilian power sales, do you know what's the duration of the new rate caps and how often does rates ever get reopened? Maybe just give us an overview of how the Brazilian power market works?

Well I think that I think that the -- it's more a political decision. You see that the cap -- the spot price down from what was BRL822 and now the cap is BRL388. So I would actually say that -- and you seen that this was -- this is not something that legally binding. It's basically a political decision, where do they think -- where do they think that prices should be. And so that's how I think about it.

Is this a duration of a year or is that reopened?

This is the -- yeah the BRL 388 is the current status of the cap for 2015, but all --

Well I mean it's a largely a political decision and subject to change. And the best that we can see today and the guidance that we gave you, which was $100 million impact in 2015 was based on the fact that that BRL388 cap is in place.

That is all the time we have for today. I would now like to turn the call back over to Mr. Kleinfeld for closing remarks.

Okay. Well very good and thank you for staying online and following us. I hope that you also see that fourth quarter really capped a pivotal year where we significantly accelerated our core transformation. We continue to restlessly optimize our portfolio, divest in closing assets that don’t match our profitability criteria and we're building out our footprint in highly attractive growth markets, that's what you seen. We're reshaping the Company so that it is fundamentally stronger and we seen here, it delivers results, best full year operating results since 2008. And as we enter 2015, we believe we are on solid footing. Obviously a lot of volatility in the market, but we are poised for continuing our transformation and continuing to generate whatever the external environment allows us to do, right. So thank you very much. Stay tuned to the station. Looking forward to talking to and meeting you soon again. Thank you.