Slide 1: 1st Quarter Earnings
st 1 Quarter Earnings Alcoa Corporation April 20, 2022 1
Slide 2: Cautionary Statement regarding Forward-Looking Statements
Cautionary Statement regarding Forward-Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inclu
Slide 3: Important information
Important information Non-GAAP Financial Measures Some of the information included in this presentation is derived from Alcoa Corporation’s consolidated financial information but is not presented in Alcoa Corporation’s financial statements prepared in accordance with accounting principles generally
Slide 4: Roy Harvey
Roy Harvey President and Chief Executive Officer 4
Slide 5: Adjusted EBITDA excluding special items of $1.07 billion
Adjusted EBITDA excluding special items of $1.07 billion Alcoa values, strategic priorities, and key takeaways for 1Q22 1Q22 Takeaways ▪ Continued focus on safety initiatives and eliminating serious injuries ▪ Solid performance despite volatile markets and logistics challenges − Net income attributa
Slide 6: William Oplinger
William Oplinger Executive Vice President and Chief Financial Officer 6
Slide 7: Adj. EBITDA excl. special items tops $1 billion for first time
Adj. EBITDA excl. special items tops $1 billion for first time Quarterly income statement highlights Prior year Sequential M, Except per share amounts 1Q21 4Q21 1Q22 change change Income statement highlights Revenue $2,870 $3,340 $3,293 $423 $(47) Net income (loss) attributable to Alcoa Corporation
Slide 8: Favorable metal prices drive higher Adjusted EBITDA
Favorable metal prices drive higher Adjusted EBITDA Adjusted EBITDA excluding special items sequential changes, $M 219 7 116 138 1,072 (64) 4Q21 1Q22 Change 896 (64) (142) (15) Bauxite $49 $38 $(11) (19) Alumina 503 262 (241) Aluminum 523 713 190 Segment total 1,075 1,013 (62) Transformation (10) (1
Slide 9: Margins remain strong
Margins remain strong Alcoa Alumina and Aluminum segment cash costs and realized prices 1Q21 – 1Q22 Alumina Aluminum 3,861 500 4,000 3,382 407 3,124 375 2,753 308 312 282 2,308 0 0 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 Raw materials Bauxite and other costs Raw materials Alumina, casting
Slide 10: Return on equity 50.4%, 1Q22 cash balance of $1.55 billion
Return on equity 50.4%, 1Q22 cash balance of $1.55 billion Key metrics and March 31, 2022 YTD cash flow information Key financial metrics YTD Cash flow information, $M 1,332 1Q22 Days 1Q22 YTD 121 All other working capital (DWC) Return on equity 28 Environmental/ARO 74 Capital expenditures 1,072 49
Slide 11: Working capital increased with prices, logistics challenges
Working capital increased with prices, logistics challenges Days working capital (DWC) levels, days of inventories, and key drivers Days working capital and aluminum pricing Key drivers of sequential DWC change $3,861 $3,382 $2,753 $3,124 ▪ Inventory (14 days): $2,308 25 26 29 29 49 26 − Price impac
Slide 12: 2022 Outlook
2022 Outlook FY22 Key metrics as of March 31, 2022 Income statement excl. special items impacts Cash flow impacts 1Q22 YTD Actual FY22 Outlook 1Q22 YTD Actual FY22 Outlook Bauxite shipments (Mdmt) 10.9 46.0 – 47.0 Pension / OPEB required cash funding $18M ~ $75M Alumina shipments (Mmt) 3.2 14.2 – 14
Slide 13: Roy Harvey
Roy Harvey President and Chief Executive Officer 13
Slide 14: Volatile market conditions push 1Q22 market pricing higher
Volatile market conditions push 1Q22 market pricing higher Aluminum and alumina price environment and market commentary Alumina prices ($/tonne) Aluminum prices ($/tonne) 700 4,500 W. Australia FOB LME 600 4,000 SHFE China Ex-works 3,500 500 $3,289 2022 YTD avg $422 3,000 400 2022 YTD avg 2,500 $2,4
Slide 15: Navigating today's unstable world; positioned for the future
Navigating today’s unstable world; positioned for the future Challenges of volatile markets and why Alcoa is prepared Meeting current challenges Prepared for the future ▪ Raw materials and energy inflation ▪ Organization is lean and cost-focused; first quartile cost positions in bauxite and alumina,
Slide 16: Delivering today and excited for tomorrow
Delivering today and excited for tomorrow 1Q22 Summary ▪ Delivered outstanding results amid volatile markets Adjusted EBITDA of $1.07B and return on equity of 50% during continued stable operations; unrestricted cash of $1.55B ▪ Progressed strategic actions Strengthened the portfolio with restart ac
Slide 17: Appendix
Appendix 17
Slide 18: Maximizing value creation through balanced uses of cash
Maximizing value creation through balanced uses of cash Capital allocation framework considerations Capital allocation framework Maximize value creation Return cash to stockholders: Maintain strong balance sheet ▪ Paid quarterly cash dividend of $0.10/share in 4Q21 and 1Q22 through the cycle ▪ Repur
Slide 19: Quarterly income statement
Quarterly income statement Quarterly income statement Prior Year Sequential M, Except realized prices and per share amounts 1Q21 4Q21 1Q22 Change Change Realized primary aluminum price ($/mt) $2,308 $3,382 $3,861 $1,553 $479 Realized alumina price ($/mt) $308 $407 $375 $67 $(32) Revenue $2,870 $3,34
Slide 20: Special items
Special items Breakdown of special items by income statement classification – gross basis M, Except per share amounts 1Q21 4Q21 1Q22 Description of significant 1Q22 special items Net income (loss) attributable to Alcoa Corporation $175 $(392) $469 Diluted earnings (loss) per share $0.93 $(2.11) $2.4
Slide 21: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items Prior Year Sequential M, Except realized prices and per share amounts 1Q21 4Q21 1Q22 Change Change Realized primary aluminum price ($/mt) $2,308 $3,382 $3,861 $1,553 $479 Realized alumina price ($/m
Slide 22: 1Q22 Financial summary
1Q22 Financial summary Three months ending March 31, 2022, excluding special items Intersegment Other Alcoa $M Bauxite Alumina Aluminum3 Transformation eliminations corporate Corporation Total revenue $213 $1,273 $2,395 $7 $(595) - $3,293 Third-party revenue $43 $855 $2,388 $3 - $4 $3,293 Adjusted E
Slide 23: 1Q22 Adjusted EBITDA drivers by segment
1Q22 Adjusted EBITDA drivers by segment Adjusted EBITDA excluding special items sequential changes by segment, $M Adjusted Adjusted EBITDA Metal Raw Production EBITDA Segment 4Q21 Currency prices API materials Energy Price/mix Volume costs Other 1Q22 Bauxite $49 (2) 0 0 0 (1) 2 (17) (1) 8 $38 Alumin
Slide 24: Aluminum value chain
Aluminum value chain 1Q22 Alcoa product shipments by segment Bauxite Alumina Aluminum 10.9 Mdmt shipments 3.2 Mmt shipments 0.6 Mmt shipments Third Party Intersegment 7% 0% Intersegment 29% 71% 93% Third Party 100% Intersegment Third Party 24
Slide 25: Composition of alumina and aluminum production costs
Composition of alumina and aluminum production costs Alcoa 1Q22 production cash costs Alumina refining Bauxite Input Inventory Pricing FY22 Annual Cost Cost Flow Convention Sensitivity Conversion 23% 33% Caustic Soda 5 - 6 Months Quarterly, Spot $10M per $10/dmt 15% Quarterly, 85% with Natural Gas 1
Slide 26: 2022 Business information
2022 Business information Estimated annual Adjusted EBITDA sensitivities $M AUD BRL CAD EUR ISK NOK LME API Midwest Europe Japan + 0.01 + 0.10 + 0.01 + 0.01 + 10 + 0.10 Segment + $100/mt + $10/mt + $100/mt + $100/mt + $100/mt 0.721 5.251 1.271 1.121 128.181 8.851 Bauxite (4) 2 Alumina 123 (16) 5 (1)
Slide 27: Currency impacts on Adjusted EBITDA
Currency impacts on Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities ($M, except currencies) Balance sheet revaluation impact Currency annual sensitivity and actual impact +0.01 +0.10 +0.01 +0.01 + 10 +0.10 AUD BRL CAD EUR ISK NOK Total AUD BRL CAD EUR ISK NOK Total 1Q21 r
Slide 28: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA for 2Q22 For the second quarter, based on today’s prices, we expect both alumina and aluminum realized third party prices to be higher than the first quarter, with that benefit partly offset by ~$115 million of higher energy
Slide 29: Pension and OPEB summary
Pension and OPEB summary Net pension and OPEB liability and financial impacts Net liability as of March 31, 20221 Estimated financial impacts, $M Expense impact 2022 ROW Pension Segment pension $15 $0.2 Total $0.2B Segment OPEB 5 Corporate pension & OPEB - Total adj. EBITDA impact 20 Non-operating 6
Slide 30: Investments summary
Investments summary Investments listing and income statement location Ownership Carrying Value as of Income Statement Location of Investee Country Nature of Investment4 Interest March 31, 2022 Equity Earnings ELYSISTM Limited Partnership Canada Aluminum smelting technology 48.235% Ma’aden Aluminium
Slide 31: Alcoa sustainability goals
Alcoa sustainability goals Alcoa strategic long-term sustainability goals, baseline and progress Goal Description 2015 Baseline 2020 Progress Zero fatalities and serious injuries (life-threatening, life-altering injury or 5 fatal or serious Safety 1 fatal or serious injury/illness illness) injuries/
Slide 32: Production and capacity information
Production and capacity information Alcoa Corporation annual consolidated amounts as of March 31, 2022 Bauxite production, Mdmt Alumina refining, kmt Aluminum smelting, kmt 2021 Mine Country Production Facility Country Capacity Curtailed Facility Country Capacity Curtailed Darling Range Australia 34
Slide 33: Valuation framework
Valuation framework Valuation framework key considerations LTM ending 3/31/22 Adj. EBITDA excl. special items + Bauxite Economic value using market multiple of: i. AWAC joint venture, minus small portions of AWAC JV in Aluminum and $151M Transformation + Alumina ii. Ownership in certain mines and re
Slide 34: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation $M 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Net income (loss) attributable to Alcoa $175 $309 $337 $(392) $429 $469 Add: Net income attributable to noncontrolling interest 44 41 33 23 141 84 Provision for income taxes 93 111 127 298 629 210 Other income, net (24) (105) (18) (298)
Slide 35: Free cash flow reconciliation
Free cash flow reconciliation $M 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Cash (used for) provided from operations $6 $(86)1 $435 $565 $920 $34 Capital expenditures (75) (79) (83) (153) (390) (74) Free cash flow (69) (165) 352 412 530 (40) Contributions from noncontrolling interest - - 8 13 21 46 Distributions
Slide 36: Net debt reconciliation
Net debt reconciliation 1Q21 4Q21 1Q22 Alcoa Alcoa Alcoa $M Cons. NCI Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $77 $31 $46 $75 $30 $45 $75 $30 $45 Long-term debt due within one year 745 - 745 1 - 1 1 - 1 Long-term debt, less amount due within one year 2,214 - 2,214 1,726 - 1,726 1
Slide 37: Days working capital reconciliation
Days working capital reconciliation $M 1Q21 2Q21 3Q21 4Q21 1Q22 Receivables from customers $587 $644 $769 $757 $952 Add: Inventories 1,417 1,547 1,702 1,956 2,495 Less: Accounts payable, trade 1,284 1,392 1,482 1,674 1,645 DWC working capital $720 $799 $989 $1,039 $1,802 Sales1 $2,551 $2,833 $3,109
Slide 38: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of March 31, 2022 $M 1Q21 1Q22 (Net Loss/Income Attributable to Alcoa + Special Items) Numerator: ROE % = X 100 Net (loss) income attributable to Alcoa Corporation $175 $469 Add: Special items1 (25) 108 (Total Assets
Slide 39: Glossary of terms
Glossary of terms Abbreviations listed in alphanumeric order Abbreviation Description Abbreviation Description % pts Percentage points FOB WA Freight on board Western Australia 1H## Six months ending June 30 FY## Twelve months ending December 31 1Q## Three months ending March 31 GAAP Accounting prin
Slide 40: 40
40