Slide 1: 2nd Quarter Earnings
nd 2 Quarter Earnings Alcoa Corporation July 19, 2023 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 This presentation contains reference to certain financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). Alcoa Corporation believes that the presentation of thes
Slide 4: Roy Harvey
Roy Harvey President and Chief Executive Officer 4
Slide 5: Continued focus on operations amid market challenges
Continued focus on operations amid market challenges Key takeaways for 2Q23 2Q23 Takeaways ▪ One serious injury (FSI-A) year to date ▪ Financial results for 2Q23 − Net loss attributable to Alcoa of $102 million; Adjusted net loss of $62 million − Adjusted EBITDA excluding special items of $137 milli
Slide 6: Molly Beerman
Molly Beerman Executive Vice President and Chief Financial Officer 6
Slide 7: 2Q23 EPS of $(0.57), Adjusted EPS of $(0.35)
2Q23 EPS of $(0.57), Adjusted EPS of $(0.35) Quarterly income statement summary 1Q23 2Q23 Change Third Party Realized prices ($/mt) Realized primary aluminum price $3,079 $2,924 $(155) Realized alumina price $371 $363 $(8) Income statement highlights (millions, except per share amounts) Revenue $2,6
Slide 8: Metal prices and Alumina segment costs are key impacts
Metal prices and Alumina segment costs are key impacts Sequential changes in Adjusted EBITDA excluding special items, $M 240 (9) 5 1Q23 2Q23 Change 24 (9) 20 Alumina1 $103 $33 $(70) (21) (70) Aluminum1 184 110 (74) 33 137 Transformation (8) (17) (9) (76) Intersegment (8) 31 39 eliminations Other cor
Slide 9: Taxes, capital expenditures, working capital are top cash uses
Taxes, capital expenditures, working capital are top cash uses Key financial metrics and cash flow information, 2Q23 and YTD Key financial metrics 2Q23 YTD Cash flow information, $M 871 40 Other 2Q23 Days 31 Pension/OPEB2 2023 YTD Return on equity 36 working capital Cash dividend 50 Interest payment
Slide 10: Working capital change now a source of cash
Working capital change now a source of cash 2Q23 sequential quarter cash flow information 3/31/23 to 6/30/23 Cash changes, $M 2Q23 Commentary 20 137 ▪ Cash income taxes of $155 million 1,138 included $115 million of prior year taxes; (155) 32 prior year tax payments predominantly 35 990 (115) (46) c
Slide 11: Key input prices continuing to decline
Key input prices continuing to decline Key raw material global market prices for refining and smelting, 2Q22 to 2Q23 Average market prices of key raw materials1 -44% -30% 0% 766 789 1,296 1,291 552 431 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Caustic, $/dmt Coke, $/
Slide 12: 2023 Outlook
2023 Outlook FY23 Key metrics as of June 30, 2023 Income statement excl. special items impacts Cash flow impacts 2Q23 YTD Actual FY23 Outlook 2Q23 YTD Actual FY23 Outlook Alumina shipments (Mmt) 6.0 12.7 – 12.9 Pension / OPEB cash funding $37M ~ $75M Aluminum shipments (Mmt) 1.2 2.5 – 2.6 Stock repu
Slide 13: Roy Harvey
Roy Harvey President and Chief Executive Officer 13
Slide 14: Maintaining focus on key performance drivers
Maintaining focus on key performance drivers Update on operations Western Australia Alumina ▪ Mine plan approval process ongoing ▪ Alumar refinery conveyer outage resolved and production reestablished; other major maintenance work finishing in 3Q23 ▪ Providing additional data, implementing enhanced
Slide 15: Improvement expected over time; Alcoa producer of choice
Improvement expected over time; Alcoa producer of choice Global aluminum market dynamics and Alcoa’s position Mixed current market; improvement expected Alcoa commercial position Current status Future expectation ▪ Alcoa to remain a primary aluminum producer of choice Supply − Domestic producer of c
Slide 16: Positioned well for future opportunities in aluminum and alumina
Positioned well for future opportunities in aluminum and alumina Alcoa levers for future improvement Operations, commercial Production levels Technology innovations improvements ▪ Optimize Australia bauxite ▪ In process: ▪ ELYSISTM mining and return to improved − Alumar smelter restart − Zero carbon
Slide 17: Focused on improvement
Focused on improvement 2Q23 Summary ▪ Financial: Net loss attributable to Alcoa of $102 million; Adjusted net loss of $62 million; Adjusted EBITDA excluding special items of $137 million; Cash of $1.0 billion ▪ Operations: Focused on improved operating performance throughout the portfolio and contin
Slide 18: Appendix
Appendix 18
Slide 19: Maximizing value creation through balanced uses of cash
Maximizing value creation through balanced uses of cash Capital allocation framework and value creation considerations Capital allocation framework Maximize value creation Return cash to stockholders Maintain strong balance sheet through the cycle ▪ 2Q23 dividend payments totaled $18 million Transfo
Slide 20: Quarterly income statement
Quarterly income statement Quarterly income statement for 2Q22, 1Q23 and 2Q23 Prior Year Sequential Millions, except realized prices and per share amounts 2Q22 1Q23 2Q23 Change Change Realized primary aluminum price ($/mt) $3,864 $3,079 $2,924 $(940) $(155) Realized alumina price ($/mt) $442 $371 $3
Slide 21: Special items
Special items Breakdown of special items by income statement classification – gross basis Millions, except per share amounts 2Q22 1Q23 2Q23 Description of significant 2Q23 special items Net income (loss) attributable to Alcoa Corporation $549 $(231) $(102) Earnings (loss) per share1 $2.95 $(1.30) $(
Slide 22: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items for 2Q22, 1Q23 and 2Q23 Prior Year Sequential Millions, except realized prices and per share amounts 2Q22 1Q23 2Q23 Change Change Realized primary aluminum price ($/mt) $3,864 $3,079 $2,924 $(940) $
Slide 23: 2Q23 Financial summary
2Q23 Financial summary Three months ending June 30, 2023, excluding special items Intersegment Other Alcoa Millions Alumina3 Aluminum3,4 Transformation eliminations corporate Corporation Total revenue $1,291 $1,792 $4 $(407) $4 $2,684 Third-party revenue $894 $1,788 $2 - - $2,684 Adjusted EBITDA1 $3
Slide 24: 2Q23 Segment Adjusted EBITDA drivers
2Q23 Segment Adjusted EBITDA drivers Segment Adjusted EBITDA sequential changes, $M Segment Segment Adjusted Adjusted EBITDA Metal Raw Production EBITDA 1Q23 Currency prices API materials Energy Price/mix Volume costs Other 2Q23 Alumina $103 (1) 0 24 11 27 (7) (30) (90) (4) $33 Aluminum $184 (10) (7
Slide 25: Aluminum value chain
Aluminum value chain 2023 YTD Alcoa shipments by product type Bauxite Alumina Aluminum 21.9 Mdmt shipments 6.0 Mmt shipments 1.2 Mmt shipments Intersegment Third party 0% 17% Intersegment 33% 67% 83% Third party 100% Intrasegment Third party 25
Slide 26: Composition of alumina and aluminum production costs
Composition of alumina and aluminum production costs Alcoa 2Q23 production cash costs Alumina refining Bauxite Input Inventory Pricing FY23 annual cost 20% cost flow convention sensitivity Conversion 37% Caustic soda 5 - 6 Months Quarterly, Spot $9M per $10/dmt 19% Quarterly, 91% with Caustic Natura
Slide 27: 2023 Business information
2023 Business information Estimated annual Segment Adjusted EBITDA sensitivities $Millions 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 + $100/mt 0.671 4.961 1.341 1.091 137.541 10.691 Alumina 103 (23) 8 (
Slide 28: Currency impacts on Segment Adjusted EBITDA
Currency impacts on Segment Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities impact ($M, except currencies) AUD BRL CAD EUR ISK NOK Total 6/30/23 currencies 0.66 4.86 1.33 1.09 136.44 10.75 2Q23 currency avg. 0.67 4.96 1.34 1.09 137.54 10.69 2Q23 Balance sheet revaluation
Slide 29: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA and Adjusted net income for 3Q23 Expected sequential impacts on Adjusted EBITDA excluding special items, excluding indexed sales prices or currency impacts: ▪ In the Alumina segment, we expect $10 million unfavorable impact
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 June 30, 2023 equity earnings ELYSIS Limited Partnership Canada Aluminum smelting technology 48.235% Ma’aden Aluminium Com
Slide 31: Alcoa sustainability goals
Alcoa sustainability goals Alcoa strategic long-term sustainability goals, baseline and progress Goal Description 2015 Baseline 2022 Progress Zero fatalities and serious injuries (life-threatening, life-altering injury or 5 fatal or serious 0 fatalities and 1 serious Safety illness) injuries/illness
Slide 32: Production and capacity information
Production and capacity information Alcoa Corporation annual consolidated amounts as of June 30, 2023 Alumina refining, kmt Aluminum smelting, kmt Facility Country Capacity Curtailed Facility Country Capacity Curtailed Kwinana Australia 2,190 438 Portland Australia 197 49 Pinjarra Australia 4,700 -
Slide 33: Valuation framework key considerations
Valuation framework Valuation framework key considerations LTM ending 6/30/23 Adj. EBITDA excl. special items Economic value using market multiple of: i. AWAC joint venture, minus small portions of AWAC JV in Aluminum and + Alumina segment Transformation $264M ii. Ownership in certain mines and refi
Slide 34: Adjusted EBITDA reconciliations
Adjusted EBITDA reconciliations Millions 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Net income (loss) attributable to Alcoa $549 $(746) $(395) $(123) $(231) $(102) Add: Net income (loss) attributable to noncontrolling interest 125 (23) (25) 161 (1) (19) Provision for income taxes 234 40 180 664 52 22 Other (inco
Slide 35: Free cash flow reconciliation
Free cash flow reconciliation Millions 2Q22 3Q22 4Q22 FY22 1Q23 2Q23 Cash provided from operations $536 $134 $118 $822 $(163) $(13) Capital expenditures (107) (128) (171) (480) (83) (115) Free cash flow 429 6 (53) 342 (246) (128) Contributions from noncontrolling interest 37 67 64 214 86 36 Distribu
Slide 36: Net debt reconciliations
Net debt reconciliations 2Q22 1Q23 2Q23 Alcoa Alcoa Alcoa $M Cons. NCI Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $75 $30 $45 $25 $- $25 $10 $- $10 Long-term debt due within one year 1 - 1 1 - 1 1 - 1 Long-term debt, less amount due within one year 1,725 - 1,725 1,806 32 1,774 1,808
Slide 37: DWC working capital and Days working capital reconciliations
DWC working capital and Days working capital reconciliations Millions 2Q22 3Q22 4Q22 1Q23 2Q23 Receivables from customers $898 $749 $778 $753 $702 Add: Inventories 2,556 2,400 2,427 2,395 2,400 Less: Accounts payable, trade 1,752 1,590 1,757 1,489 1,491 DWC working capital $1,702 $1,559 $1,448 $1,65
Slide 38: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of June 30, 2023 Millions 1H22 1H23 (Net Loss/Income Attributable to Alcoa + Special Items1) Numerator: ROE % = X 100 Net income (loss) attributable to Alcoa Corporation $1,018 $(333) (Total Assets – Total Liabilitie
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
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