Now, I would like to turn it over to Chuck.Chuck McLane Okay. Thanks Matt, and we appreciate everyone taking the time to join us today. We got a fairly clean quarter, so let me run through it. Our increased performance this quarter reflects continuing improvement in our key end markets, as well as strong performance in our cash sustainability initiatives. We were able to generate positive free cash flow, and we maintained a strong liquidity position. Now, let us move to the next slide and I will highlight the financial results for the quarter. Income from continuing operations in the quarter was $137 million or $0.13 per share compared with a first-quarter loss from continuing operations of $194 million or the loss of $0.19 per share. Remember first quarter 2010 results included restructuring and special charges of $295 million or $0.29 per share. We generated EBITDA of $724 million, a 14% EBITDA margin, which is the highest since the third quarter of 2008. Higher volumes in most end markets and continued benefits from our cash sustainability initiatives drove this bottom-line performance. Free cash flow in the quarter was $87 million in debt to capital stood at 38.4%. Lastly, our liquidity remains strong with 1.34 billion of cash on hand. Let us move to the next slide, which illustrates the revenue change by market. Revenues in most of our markets improved sequentially. Aerospace rose as destocking activity begins to slow and orders rise in the investment castings business. New customers and seasonal increases drove packaging sales higher, while commercial transportation benefited from increased global economic activity. Higher third-party alumina shipments helped drive sales in that business up 10% sequentially. While many markets are up significantly year-over-year, let us remember that these improvements are relative to a very weak period in 2009.
Now, let us move on to the income statement. Third-party revenues rose 6% sequentially on higher third-party shipments in the upstream and improved demand in almost every end market. COGS as a percent of sales fell to 81.2% driven through continued progress on our cash sustainability initiatives. These activities also help to improve SG&A as a percent of sales by almost a full percentage point. We have a tight focus on spending as market activity increases, operating more effectively and minimizing rehires where possible. Let me remind you that we have reduced headcount by approximately 37,000 since the downturn began in late 2008.Our cash sustainability initiatives drove a reduction of 17,000, while divestitures were responsible for the remainder. We’re not only holding headcount levels, but are also driving restructuring this quarter that will result in further reductions. Lastly, our operational tax rate for the quarter was 25%. For your reference, we have attached an appendix to help guide you through the tax rate. Included in the tax rate this quarter are discrete items totaling 16 million. Going forward we expect our operational ETR to be approximately 32%, however, we will continue to experience swings in the rate given the volatility in our profit drivers, and overall profitability in each tax jurisdiction. Now, let us review the restructuring of special items in the quarter. This slide provides you with an overview of the restructuring and special items in the quarter and their location in the financial statements. As you can see, these items had no impact on our overall results. Yet, they do impact specific line items on the income statement. We have therefore included this detail to enable a clear analysis of our results. First, restructuring was $20 million and relates primarily to further headcount reduction. Discrete tax items totaled a favorable $16 million. Non-cash mark-to-market benefits on derivatives in several power contracts totaled $22 million, and the negative decision in a lawsuit related to (inaudible) negative impacted results by $7 million.
Lastly, we reached a mutually beneficial agreement with United Steelworkers, which helped sustain our competitive position in the US. We are very pleased that our employees ratified the agreement in late June. Preparation cost for a potential strike and a one-time signing bonus for employee totaled $13 million this quarter.Let us now move to the sequential bridge. This slide bridges our income from continuing operations, excluding restructuring and special items. Lower realized aluminum pricing and higher LME link cost, particularly energy, were more than offset by higher volumes in every business. Performance benefited from a rise in the US dollar and favorable non-LME linked energy rates. Productivity gains related to our cash sustainability initiatives continued to enhance bottom line performance and account for approximately 60% of the sequential improvement. Read the rest of this transcript for free on seekingalpha.com