Welcome to the 2014 first earnings conference call. (Operator Instructions) I'd now like to turn the conference over to our host, Mr. Peter Trpkovski. Please go ahead.

Thank you, Joseph, and good afternoon everyone, and welcome to today's call. Today's presentation is available on our website www.centuryaluminum.com. We use our website as means of disclosing material information about the company and for complying with Regulation FD. I would like to remind you that today's discussion will contain forward-looking statements related to future events and expectations, including our expected future financial performance, results of operations and financial condition. These forward-looking statements involve important known and unknown risks and uncertainties, which could cause our actual results to differ materially from those expressed in our forward-looking statements. Please review the forward-looking statements disclosure in today's slides and press release for a full discussion of these risks and uncertainties. In addition, we've included some non-GAAP financial measures in our discussion. Reconciliations to the most comparable GAAP financial measures can be found in the appendix to today's presentation and on our website. Now, I'd like to introduce Mike Bless, Century's President and Chief Executive Officer.

Thanks very much, Pete, and thanks all for joining us this afternoon. If we could just turn to Slide 4 please, I'd like to give you a brief rundown on what's been going on in the company since we talked to you, I guess it was just about two months ago in late February. During that time, we've seen our markets in the U.S. and in Europe continue to strengthen. We believe the strong premiums for value added products are function of both present and future expected demand coupled with a limited onshore supply in these key product areas. In addition, regional delivery premiums have firmed during the last month or two as you've seen. Bottomline, we think the sentiment may finally determine in these markets. That having been said, we think the price is being held back by a number of factors. Chief amongst them obviously are geopolitical concerns, obviously that are dominating the news and the uncertain trajectory of China's economy in capital markets. I'll cover our view of the markets here in more detail in just a couple of minutes. We've had a busy last two months in the Kentucky power markets. As a reminder, we've received a positive order from the Kentucky Public Service Commission on Sebree's power contract in late January. And in that respect, we've been buying market based power since the February 1. Energy prices at both plants were obviously considerably higher in January and February than normal due to the weather. That having been said, the power cost for the quarter came in generally consistent with the forecast that we provided to you in late February. There was a substantial cost impact because of cold weather during the quarter as we would expect, and Shelly will give you some good detail on…

Thanks Mike. If you could turn to Slide 7, please, I'll take you through the company's financial performance for the quarter. Our U.S. shipments were down 4% in Q1, and this was largely due to slightly lower production as well as a temporary inventory build at Mt. Holly and few fewer days in the quarter. In Iceland, we had direct shipments of approximately 37,000 tons in Q1. It was a significant increase over Q4, due to the tolling contract expired at the end of 2013. Total volume for Grundartangi was down 6% and mainly due to low water levels impacting power availability and fewer days in the quarter. As a reminder, the reduced water levels were driven by unusually low rainfall and lower temperatures causing less snow melt on the glaciers. For Q1, reduced power availability impacted production by about 1,500 ton. At this point we expect an additional 2,000 ton to 3,000 ton to be lost in Q2, before we return to full production level. We also build out 2,500 tons of finished goods inventory at Grundartangi related to the shift from tolling to direct shipment. As Mike mentioned, under our tolling arrangements, all finished goods are owned by our tolling counterparty, but with greater direct volume we expect to carry a small finished good balance going forward. So, overall, global shipments were down 5% quarter-over-quarter. On a one month lag basis, the average cash LME price was down about 3% in Q4 to Q1. When you look at our realized unit prices in the U.S., they were up 5% as a result of the significant increase in the Midwest premium. In Iceland, our realized unit prices were up 23% primarily due to shift from tolling volumes to direct sales. Our net sales were up 5% quarter-over-quarter, again due…

Thanks, Shelly. If we could just turn to Slide 10, please, we'll conclude before taking your questions, by just talking about some of the major things on which we've been working and will be working over the next couple of months. First, we recently engaged a major energy marketing firm to represent us in the MISO market. This change will take place during the next couple of months, and it will increase our option significantly relating to how we purchase energy in the market, and we're now looking at a broad range of alternatives with these outside experts. We're also spending significant effort, analyzing methods, to mitigate the transmission related risks about which we've talked. As expected, our obligation to pay the cost of the power station next to Hawesville ends at the end of this month. And as I mentioned earlier, this should mitigate any price impact from any future congestion issues. As a reminder, we've entered into agreements at both Hawesville and Sebree, which should require us to shed load under a range of unlikely, but possible series of events in the local transmission grid. And under the worst circumstances, these could be material to either plant's operational stability. We can't operate over the long-term with these risks, however remote they may be. Especially, as the events, which could produce a worse case scenario aren't under our control. Of course, they may be subject to acts of nature and also to the actions of other parties. So in that respect, we're working really hard on a range of alternatives. Moving along, we continue to believe there should be a solution to Mt. Holly's post-2015 power requirements, a solution that would keep the plant viable and be acceptable to all the key stakeholders. That having been said, we've yet…

Thanks Mike. Joseph, could you please take the first question in queue.

(Operator Instructions) The first question comes from Sal Tharani from Goldman Sachs.

I wanted to understand at Mt. Holly you are a partner with Alcoa over there. And obviously you have to -- I think you have now delayed the termination notice or whatever the notice, as of June of next year?

June of this year, Sal, so the notice itself provides cancellation of the service after December of 2016, but that notice must be given by June 30 of this year, i.e. 18 months before the termination date.

And Alcoa has been aggressively shutting down smelters or curtailing around the world as the electricity contracts are coming up for renewal. I was just wondering, if you don't get the power contract from the local utility company and you have to go that route, which you did at Sebree and Hawesville, and Alcoa doesn't want to participate in that kind of route, would you be willing to buy their portion?

We certainly wouldn't discuss something like that on this call, Sal, as you know.

Is it a viable, what you call plan?

The thing about Mt. Holly is, the answer is absolutely yes, it is amongst, and we've always said -- and Alcoa would say the same. It is number one, as I think you know, it's the only non-union smelter in the USA. And two, if you look at all measures of efficiency, most importantly energy usage per kilogram or metric ton of aluminum produced, it's the best or if not the best, one of the very best in the USA. So the plant with a reasonable cost absolutely survives. There is no doubt in our minds.

And the transmission issues which could be a problem you mentioned in the Kentucky area. And you say you're looking for alternatives. What kind of alternatives can you have? Is there other transmission company you work with?

The wires are owned by whom they are owned, so there are a bunch of things that could happen, Sal. There are upraise, which we wouldn't pay for directly, most likely, which would be paid by system operators and then amortized into power crises for the whole region of, let me take a step back, this system is only as good as its weakest link. And so what the studies do is they isolate the weakest line in the grid and model various contingencies based on that line being out another line, surrounded being out. And so short answer to your question is, is one thing that could be done is that weakest link could be upgraded to the reasonably investments, in addition to our other things. There is a whole panoply of other things we're looking at, nothing is close right now, but we've got a lot of -- a bunch of things in our book.

Next question comes from David Olkovetsky from Jefferies.

So just a couple quick questions here. The first one, as I'm sure you guys are aware, there is a another vertically integrated -- or I should say a vertically integrated producer that's making some noise, trying to get better rates from their power supplier. And it appears that a conclusion to that case is fairly imminent, within the next two months or so. They've indicated that if they don't receive the kind of rates they'd like, they might shut that down. I realize it's a negotiating tactic, et cetera. I'm just wondering if you've done anything to position yourself to potentially take that business at medium levels, contract in that business or potential business.

Sure, we're obviously familiar with the situation to which you're referring. We are in, David, as you obviously know, some of the same markets in the Midwest, billet to be specific, it goes with that saying that if that production went away, the market, which is already short would be even shorter, so one would think that all else being equal, I suppose producers who remain would benefit, but there's a lot of production that comes from that plant. It couldn't easily be made up. As you know, our plants operate at full capacity, above their design capacity. But of course, we were interested in what's going on there. And like most industry participants in the U.S. are following it.

I guess just sort of maybe to follow-up a little bit, the question, I was sort of alluding to Mt. Holly specifically, if this decision would come out at the end of the line, you have to give notice in June. So I'm wondering if there's any way to extend the Mt. Holly drop-dead date.

No, I think there are two separate issues, because Mt Holly is viable and profitable and can make good cash on cash, good cash returns at the right power price. I don't think there's an increase that you could conceivably and realistically see in billet and other value-added product premiums that could make the plants at an unrealistic or bad power price, let's say, all of a sudden viable. It wouldn't flip that digital switch there. I think those are, if I'm getting your question right now, I think there two separate issues.

Really what I was getting at was when Ormet shut down, I mean pretty soon afterwards we saw a robust premium spike pretty dramatically, and if you experience that sort of thing, and the gross premium goes to say $0.30.

The June 30 termination notice, Dave, is just that, it's a date by which we have to provide notice, to terminate service 18 months later. There's nothing there, it's just I mean I suppose maybe now I understand why you started drawing analogy to what we did in Kentucky. We gave that termination notice as you well remember in August of 2012. And then proceeded to get down to business and negotiating there agreement with power provider that finally culminated nine or so months later. And so there's nothing to that prevents us, if we and our partners at Alcoa felt we had to give this termination in June. There's nothing that plant would most likely almost certainly continue to run number one. There's nothing would prevent us from finding a solution in the ensuing months.

And then if I could just switch gears quickly to Grundartangi. You mentioned the expansion project there. I'm just wondering if that implies a reduction in production.

In absolute reductions, David or a reduction versus what the expectations otherwise would have been?

Yes, if you don't undertake that project, would you reduce your production?

I'm sorry.

I mean like in a state where you don't undertake this project, do you increase your -- I'm phrasing this horribly, if you were to not take this project on, would you decrease your production?

Maybe you're mixing up two things. So we are currently engaged in the hot metal production expansion project at Grundartangi. It's started a couple of years ago. It's on phase where we are at or above ahead of plan. The only plan you had in the Grundartangi of course is as Shelly referred to is the short-term year in Q1 and Q2, lots of production due to the power shortage, due to lower reservoir levels. And perhaps you referring to the expansion of the anode facility in the Netherlands that you were talking about?

I'm sorry, I must have misheard.

So that's the no go decision, that there is no impact there at all on Grundartangi's expansion capacity. We're buying the anodes now from our 40% owner affiliate in BHH. We can scale up there. So there is no impact to Grundartangi's production whether and when -- I should really just say when, because we're going to do it when we choose to double the productive capacity at the anode plants in the Netherlands.

The next question comes from Brett Levy from Jefferies.

Sorry, if it seems like Jefferies is trying to monopolize.

You guys are ganging up on us, Brett.

I'll be brief. First off, can you make the case that the current Midwest premium is the new normal given warehouse policies and the tightness of supply and capacity shutdowns and that sort of thing. What do you see as the threats to the Midwest premium going back to a single-digit number as it has historically been? And then like I said, makes the case for the current situation being the status quo.

I mean your former and your latter, that's a tough case to make. We don't think as we've been saying. We don't think the old normal of say $0.06 to $0.08 give or take is supported anymore. Just given the increasing costs, given the dearth of onshore supply, given the freight cost, you know all the, we'll call it the fundamental factors that go into the market assessment of what the regional, the local delivery agreement ought to be, and so then it gets hard. If you are now in the double-digits, cents per pound, of course, what's the right equilibrium level and a lot of that your partner their asked the question about -- I think it was David, not Sal before about supply coming on road.

We haven't merged or I missed the memo.

No. I didn't mean that. That would be interesting. But in a market that's already short, marginal tons coming up as the reference was absolutely right. We saw it when the Hannibal smelter own by Ormet came up. That had intangible impact. So there's a lot of factors there. I'm probably going to punt to be honest, if you look at for example at, Shelly, at third-party forecasts you've got CRU at least for the balance of the year in sort of the mid-teens. There is one reference point, time will tell whether that's good one or not. And then you've got all the extraneous, let's call them factors, Brett, to which you refer as well. It's hard. As we told you before you've seen it in the forecast that we provided during February. Our business plan isn't based on the kind of levels, spot levels, at which we're sitting today I suppose is the way I should probably just stop.

And then in terms of your discussions with Iceland, I know sometimes there could be an unreasonable situation. But doubling of Grundartangi, starting up at Helguvik, I mean at some point do they just say listen, power costs should be -- I mean, at Grundartangi, if you double production, is there any change in your power costs from kind of where you are now to like what you would require if you double production? And can you just sort of walk into somebody's office and say, you know what, it's six of one, half a dozen of another, at the end of the day, you should let both happen -- or I don't know, it feels like reasonable people should agree.

Just a couple of distinctions. No doubling of capacity at Grundartangi. That would be a nice concept. The hot metal capacity that we announced two years ago is that in 40,000 to 45,000 tons. So based on that rich phase, we're going to pick out at the end of 325,000 to 330,000 tons. And we believe we've got the power for that and the small amount of incremental power that we'll need in addition to the power that we have contracted for that now, will come at around the same levels as give or take as we're currently paying. Again, I think that the double productions, which you're referring is the anode plant.

But I mean, honestly it would be something actually to propose to them. Add more product lines at Grundartangi and let them sort of leave Helguvik and sort of a scale up.

I mean, Brett, that's been something that has been talked about. We've never talked about it as we've talked in Iceland. We think Helguvik is the right side for a new plant for a whole host of reasons. That's how the project was conceived. That's how the power contracts were assigned. That's how the operating permits were given and it was based as you know on the original concept of both power being available and made available by the owners of that power in the region. And of course on the creation of jobs in the region of Iceland, which is needed and still needs them in the north, that's the Reykjanes peninsula in the southwest part of the country. And so that's where we're still heading here. We think we can do both? Yes, I mean it's a reasonably modest expansion at Grundartangi and Helguvik still stands as an independent project as long as you'd saw the digital problem of getting power, that kind of chunk of power at the right terms. But yes, we think both can be done. We are plowing ahead at Grundartangi, regardless of when we get Helguvik off the drawing board.

The next question comes from Timna Tanners from Bank of America.

Long day, so I think we're getting a little confused. I know I am. So I might have some basic questions here. Sorry. A couple of things. On SG&A, you're still targeting $34 million for the year?

We are. And that's just corporate SG&A. So if you look at this quarter we were about $10 million total SG&A, back off about $2 million for plant SG&A, that gets you right in line with $34 million for the year.

And then there seems to be a lot of things in play, right, that are being negotiated and kind of being worked on. But I just wanted to drill down into Grundartangi a little bit. First of all, into the second quarter, is it going to be, do you think a similar amount of curtailments because of the weather as the first quarter or is it still playing out?

You're talking about in Iceland?

Because of the power conditions, yeah.

So 1,500 in Q1, 2,000 tons to 3,000 tons additional in Q2.

And you kind of didn't give us a lot of details and I assume there's a reason for that. I just wondered if you had anything else for us to kind of grasp onto in terms of how to think about what it's going to take for Ravenswood, what it's going to take for Helguvik. Those have been kind of out there for a while. Has there been any progress? Are there any upcoming kind of deadlines that we should be watching for or things that will help us know whether or not this is going to move ahead?

No, in answer to the latter part of your question, Timna, no, specific deadlines at either of those. So it's not Mt. Holly where we can point to specific deadlines and say, look, watch and see if we get that termination notice, we and Alcoa -- when I say we, I mean ourselves and our partner prior to 30 June here. Discussions are ongoing in West Virginia. I would say they're ongoing even as we speak. There is a meeting next week with the power company. But there is no sort of nearing event or date or deadline to which we could point to. I would say it's very much the same in Iceland. Discussions there are continuing. There are various developments, but there's nothing tangible to which we could point you to say, watch this data and watch this space and watch this as an indicator. I think I understand what you're seeking, regrettably the answer is no.

And the only last thing, it sounded like you were alluding to some possibilities of further value add. Do you mean like processing, do you mean value add in terms of the aluminum ingots you make or what did you mean by that? If you could give us a little more detail?

Good question. Thanks for that, because we probably should have provided a better distinction. So we're not talking about processing downstream, as the industry generally goes. What we'll be talking about is further development of either value added primary products that we currently produce at foundry, ingot, billet, et cetera, et cetera, or some new primary products, various mixtures, alloying on metals, et cetera, et cetera. That kind of thing. But that's a good question, and thank you. This is not a move to go into what people generally refer to as a downstream space.

The next question comes from David Gagliano from Barclays.

Mt. Holly, just a quick one. What was the profit contribution from Mt. Holly in the quarter?

We don't give plant profit contribution, David, you know that.

How about this? Obviously, we've been talking about the run up in Midwest premiums, the LME price, not so much, but a little it of a bounce. But anyway, when you add the two together, the realized price for your existing assets, not plant-by-plant, but overall what percent of our production was positive on sort of EBITDA basis in the quarter?

Let's talk about it this way. Basis, current cash LME plus basis, we'll talk about the U.S., basis current spot, maybe it's a bit redundant, basis spot Midwest premium and adding on the net product per net casting premiums, we get obviously the premium net of the incremental casting cost are casting something other than an ingot or a cell. An easy answer is that at current power prices, i.e., not the average for the quarter including the spikes, all of the plants would be cash EBITDA positive for sure.

And I'll even add on to that, at first quarter power prices at today's metal price are up from where it was in Q1, but the rate what we're seeing has already run out, they would all be positive as well.

Even including those power prices.

Yes.

And can you remind me again, where does Century sit on the global cost curve?

So with normalized power costs, we would be sitting right around at the midpoint of the cost curve for our U.S. facilities and in Grundartangi we'd be down in that cortile.

As you remember, two, three years ago the U.S. facilities were up and sort of on the border between third and fourth cortiles. And as Shelly said, Grundartangi is, it moves based on the metal price.

Next question comes from John Tumazos.

Could you update us on your aluminum arrangements and how far out they go, how many years whether you only book the current operating smelter without anything for Ravenswood or Helguvik? And where the bauxite feeds, the refineries go, and as much as you can about the tolling arrangements or if anything as a fixed price?

We don't currently have anything insight for the non-operating facility. But we do have insights for all operating facilities is the product taking it out through 2017 under percentage LME based contract. But the only real exception for that being, the Grundartangi for this year about half of the alumina under our direct shipment is spot price rather than percentage LME.

The next question comes from Sal Tharani from Goldman Sachs.

Can you tell us what was that increase in the legal reserve at Grundartangi you were talking about?

Sure, Sal. So that has to do with one of the original Helguvik contracts. In a take or pay provision in that contract, we're obviously now using that power to fuel the extension at Grundartangi. The issue is the -- I guess I'll call it a historical one in there, if there is a liability there and I'll address that in a moment, it's fixed because we're now using power that's at or above the take or pay level. So there is no even claim by the supplier that any issue would be growing. Most importantly, we think we have no liability there. And if they were to make a formal claim, which they haven't, we would aggressively defend it. But again, it has to do going back to those original Helguvik power contracts.

Couple of things, which I think you have already said, but I just want to just confirm that. In Iceland, the production curtailment will be, because of the power issue, will be 2,000 to 3,000 ton additional to 1,500 tons? It's like 3,000 to 4,500? Is that the way we should look at it?

That's right, in total for the two quarters.

So the 1,500 is history. And the 2,000 to 3,000 will be incremental there, 1,500 in Q2.

And alumina you mentioned price in the U.S. are linked to the LME prices at the moment?

Yes.

And until 2017?

Yes.

And when will this, whatever the link is, is that a contract? Since when do you have that contract?

There's two. There is one that's been in place for a long-term that expires here over the next year or two. And then the new ones, we talked about this I think in the fourth quarter. We signed up sometimes during the fourth quarter, so I can't remember exactly when. And as we've said, as normal for this industry, they are at a range there that put/call range. So you agree on a min/max and then each year the supplier and the buyer negotiate to try to find a place within that min/max and if you can't, each go their separate ways for that one calendar year. It's very standard in the industry.

Next question comes from Paretosh Misra from Morgan Stanley.

I just wanted to go back to your comments about you're not interested in owning downstream assets. Is that because of capital requirements? Are you thinking the market is not big enough? Because you used to own Ravenswood rolling mill facility, right?

Yes. Quite a15 years ago, the company sold it. And so it's a very straightforward answer to your question, we think they are very fine markets. But the two businesses are very, very different. My background pre-Century is in manufacturing. And those businesses are really manufacturing businesses. Ours is a process commodity business, and the two really have no linkage other than the very obvious fact that one provides a raw materials for the other. But other than that to me all you're doing, unless you have a particular competency in the manufacturing business, all you're doing is vertical integration. In our opinion vertical integration surely, for the sake of it can lead you down to very bad path. So we think they're fine markets, many of them with good returns, and of course they require capital. It's just this company, we don't think brings anything special to its share, for its shareowners in those markets.

And then within your product portfolio, especially within the U.S., is there anywhere where you see any risk from imports coming from China or other places just because the premiums here in the U.S. are quite attractive?

Yes, great question. Not just China and other places. So from China, we've been seeing for some time, Paretosh, the industry refers to them as semi-fabricated products. They've traditionally been showing up here more to get around the duty in taxation regime in China, which is much more favorable to our product that has value added content to it than for primary metals. So people take an ingot and change it in that very minor way unless their economics improve. But the backend of your question perhaps, we're now starting to see because of the premium, increased material coming in from places like Russia. And while we're fencing for the last couple of years, material coming in from the Persian Gulf, we've seen increases coming in from that region as well.

And my last question. Just wanted to confirm that the guidance that you provided for the U.S. cash costs for second quarter, $1,550 to $1,600, is that still okay to use?

Yes. The guidance that we gave in February is unchanged.

The next question comes from David Olkovetsky from Jefferies.

I just want to apologize to the operator. There seems to be a lot of difficult names today. Except for Brett, he's got the easiest one of all, right? So as I'm looking at Chart 8, and quite frankly I'm a little surprised that none of the equity guys are honing in on this one. It looked like your 2Q power prices are sort of right in that spot, mid-30s. So I'm looking at this top chart, and almost as if I could just add $40 million to your EBITDA? I know you're not going to give guidance to what EBITDA is going to be in the second quarter, but is there, aside from the small adjustments, pension, the incremental $2,000 to $3,000 fund reduction in Grundartangi, and I do mean Grundartangi this time. The other factor that I need to think about and is that kind of a good way to look at the second quarter?

Yes, I mean David, I think you nailed it. All we're saying here that based on a lot of assumptions, and we tried to footnote this chart, and also that people could follow all the assumptions, all we're saying here is that, and then I'll answer the last part of your question, in Q1, if power prices had been at this level rather than including the spikes that we saw due to the weather, David, it not wouldn't have been this much higher. And then to answer your question, Shelly, I'll ask you, there is nothing else in Q2 over Q1 that's kind of a change -- no change in the other cut, other than what you referred to David, it ought to be roughly the same.

There are no further questions at this time.

We appreciate again everybody's time this afternoon. And we look forward to speaking with you in July. Take care.