Alcoa Inc. (NYSE:AA) Q4 2019 Earnings Conference Call Transcript
Jan 16, 2019 • 05:00 pm ET
Good afternoon, everyone, and welcome to the Alcoa Corporation Fourth Quarter and Full Year 2018 Earnings Presentation and Conference Call. All participants will be in listen-only mode. (Operator Instructions) And please note that today's event is being recorded.
And now I would like to turn the conference over to James Dwyer, Vice President of Investor Relations. Please go ahead.
Thank you, William, and good day, everyone. I'm joined today by Roy Harvey, Alcoa Corporation President and Chief Executive Officer; and William Oplinger, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Roy and Bill.
(Forward-Looking Cautionary Statements)
In addition, we have included some non-GAAP financial measures in this presentation. Reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. Any reference in our discussion today to EBITDA means adjusted EBITDA.
Also a note on our financial statements. Consistent with our three previous 2018 earnings presentations, all comparative prior periods have been updated in accordance with the Financial Accounting Standard Board's recent change to the presentation of non-service pension and OPEB costs. This change resulted in Alcoa moving such costs out of EBITDA and into other income/expense.
Finally, as previously announced, the earnings release and slide presentation are available on our website.
With that, I'll turn it over to Roy.
Roy C. Harvey
Thank you, Jim, and thank you to everyone for joining today's earnings call.
Our fourth quarter and full year 2018 results reflect our determination to accelerate the strengthening of Alcoa. Despite sequentially weaker markets, we had a strong fourth quarter with higher profits in our Bauxite and Alumina business units. And with the help of higher market prices earlier in the year, we increased annual profits, addressed liabilities, significantly strengthened our balance sheet and began to return cash to stockholders.
We've built upon the progress we've made since our launch, and by executing our strategic priorities to reduce complexity, drive returns and strengthen the balance sheet we're better positioned to thrive through market cycles. But as we turn to 2019, markets have trended lower and there is increased uncertainty surrounding global trade. This has created a dynamic environment for input pricing and product pricing. Our businesses, however, are ready for these challenges, and we are determined to drive improved operations, react smartly and with urgency to changing market conditions and to further strengthen our Company's foundation.
With that, let's get started with an overview of the fourth quarter. We reported net income of $43 million or $0.23 a share. On an adjusted basis, excluding special items, net income was $125 million or $0.66 a share. On an adjusted EBITDA basis, excluding special items, we generated $749 million and reported solid cash generation.
Turning to our businesses, and beginning with safety. The fourth quarter was free of serious injuries. We're very happy with this achievement and we look forward to building upon it as the year progresses. Operationally, in Alumina, our Pinjarra refinery in Western Australia, one of the