Slide 1: 4th Quarter Earnings
th 4 Quarter Earnings Alcoa Corporation JANUARY 19, 202 2 v
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: Finishing a very strong year with a productive fourth quarter
Finishing a very strong year with a productive fourth quarter Alcoa values, strategic priorities, and key takeaways for 4Q21 4Q21 Takeaways ▪ Continued focus on safety initiatives and eliminating serious injuries ▪ Net loss attributable to Alcoa of $392 million, Adjusted net income of $475 million a
Slide 6: William Oplinger
William Oplinger Executive Vice President and Chief Financial Officer 6
Slide 7: Quarterly Adjusted EBITDA excluding special items of $896M
Quarterly Adjusted EBITDA excluding special items of $896M Quarterly and full year income statement highlights M, Except per share amounts 4Q20 3Q21 4Q21 FY20 FY21 Income statement highlights Revenue $2,392 $3,109 $3,340 $9,286 $12,152 Net (loss) income attributable to Alcoa Corporation $(4) $337 $(
Slide 8: Favorable alumina, metal prices drive Adjusted EBITDA higher
Favorable alumina, metal prices drive Adjusted EBITDA higher Adjusted EBITDA excluding special items sequential changes, $M 243 49 3Q21 4Q21 Change (52) (3) (71) 896 Bauxite $23 $49 $26 (23) 105 (76) Alumina 148 503 355 728 (4) Aluminum 613 523 (90) Segment total 784 1,075 291 Transformation (10) (1
Slide 9: Continued strong cash flows support capital returns
Continued strong cash flows support capital returns Sequential quarterly and 2021 cash flow information 9/30/21 to 12/31/21 Cash changes, $M 2021 Cash flow information, $M 1,924 4,222 Other 110 Debt offering 3,908 493 82 proceeds Environmental/ARO 118 Cash income taxes 169 607 157 251 169 Capital re
Slide 10: Return on equity 33%, Proportional adjusted net debt $1.1B
Return on equity 33%, Proportional adjusted net debt $1.1B Key financial metrics and days working capital Key financial metrics Days working capital and aluminum pricing 30 29 29 $3,500 FY21 Days FY21 Return on equity 26 $3,382 working capital (DWC) 25 $3,000 25 $3,124 29 Days 33.4% 20 $2,753 $2,500
Slide 11: U.S. pension gross liability declines 42% in FY21
U.S. pension gross liability declines 42% in FY21 Summary of annuitizations and other impacts on U.S. qualified pension plans Annuitization process U.S. pension metrics (12/31/20 to 12/31/21) ▪ Transferred $1.5 billion in U.S. gross pension U.S. gross pension liabilities, $B U.S. pensioners, 000s li
Slide 12: 2022 Outlook
2022 Outlook FY21 and FY22 Key metrics Income statement excl. special items impacts Cash flow impacts FY21 Actual FY22 Outlook FY21 Actual FY22 Outlook Bauxite shipments (Mdmt) 48.1 48.0 – 49.0 Pension / OPEB required cash funding $137M ~ $75M Alumina shipments (Mmt) 13.9 14.2 – 14.4 Additional pens
Slide 13: Roy Harvey
Roy Harvey President and Chief Executive Officer 13
Slide 14: Higher prices reflect structural shift in fundamentals
Higher prices reflect structural shift in fundamentals Aluminum and alumina price environment and market commentary Aluminum prices ($/tonne) Alumina prices ($/tonne) 4,000 650 LME 600 W. Australia FOB 3,500 SHFE 550 China Ex-works 500 3,000 450 2,480 400 2,500 329 ‘21 avg 350 ‘21 avg 300 2,000 1,79
Slide 15: 2022 deficit projected as European smelters cut production
2022 deficit projected as European smelters cut production Primary aluminum market fundamentals 2nd consecutive year of deficits, stocks remain low High power prices driving European smelter cuts3 Analysts’ view – mean global balance,1 Mmt Global stocks, days of consumption2 Total projected 2021 202
Slide 16: Reached agreement on future of San Ciprián smelter
Reached agreement on future of San Ciprián smelter Details of San Ciprián smelter curtailment agreement and Spanish power market Key points of curtailment agreement Spanish electricity market dynamics 400 ▪ Two year curtailment of smelter with restart in January 2024 Spanish electricity market price
Slide 17: 2021 Accomplishments position us well for the future
2021 Accomplishments position us well for the future Highlighting notable 2021 actions OUR VALUES Act with Integrity Operate with Financial Excellence ▪ Closed debt offering for $500 Care for People million of 4.125% notes due Future-oriented R&D in 2029 Lead with Courage ▪ Redeemed $750 million of
Slide 18: Key initiatives in 2022
Key initiatives in 2022 Key operational, commercial, financial and technology initiatives in 2022 Operational, commercial and financial Overview of future-oriented R&D programs ▪ Restart Alumar smelter (Alcoa share 268 ELYSISTM kmt/year); first metal expected 2Q22; restarted inert anode solution 252
Slide 19: Capital allocation framework refreshed in November 2021
Capital allocation framework refreshed in November 2021 Capital allocation framework and considerations Strong balance sheet: Maintain strong balance sheet through the cycle ▪ Keep cash balance and net debt at comfortable levels ▪ No long-term debt maturities until 2027 Capital expenditures to susta
Slide 20: A transformative year; positioned for more success
A transformative year; positioned for more success FY21 Summary ▪ Profiting from long position in all three segments Made highest Alcoa Adj. net income and highest Aluminum segment Adj. EBITDA; spot price now ~ $3,000 per tonne ▪ Strengthening the company while providing capital returns Drive result
Slide 21: Appendix
ry Alcoa Appendix
Slide 22: Strengthening the Company
Strengthening the Company Actions to improve Alcoa, 2017 – 2021 2017 – 2020 2021 Operating Safely and Efficiently Optimizing the Portfolio ▪ Issued $500 million aggregate principal amount of 4.125% senior notes due 2029; redeemed in full ▪ Revitalized safety program; maintained ▪ Restarted Lake Char
Slide 23: Quarterly income statement
Quarterly income statement Quarterly income statement Prior Year Sequential M, Except realized prices and per share amounts 4Q20 3Q21 4Q21 Change Change Realized primary aluminum price ($/mt) $2,094 $3,124 $3,382 $1,288 $258 Realized alumina price ($/mt) $268 $312 $407 $139 $95 Revenue $2,392 $3,109
Slide 24: Special items
Special items Breakdown of special items by income statement classification – gross basis M, Except per share amounts 4Q20 3Q21 4Q21 Description of significant 4Q21 special items Net (loss) income attributable to Alcoa Corporation $(4) $337 $(392) Diluted (loss) earnings per share ($0.02) $1.76 $(2.
Slide 25: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items Prior Year Sequential M, Except realized prices and per share amounts 4Q20 3Q21 4Q21 Change Change Realized primary aluminum price ($/mt) $2,094 $3,124 $3,382 $1,288 $258 Realized alumina price ($/m
Slide 26: 4Q21 Financial summary
4Q21 Financial summary Three months ending December 31, 2021, excluding special items $M Intersegment Other Alcoa Bauxite Alumina Aluminum3 Transformation eliminations corporate Corporation Total revenue $258 $1,465 $2,327 $1 $(711) - $3,340 Third-party revenue $83 $935 $2,322 $1 - $(1) $3,340 Adjus
Slide 27: 4Q21 Adjusted EBITDA drivers by segment
4Q21 Adjusted EBITDA drivers by segment Adjusted EBITDA excluding special items sequential changes by segment, $M Adj. Adj. EBITDA Metal Raw Production EBITDA Segment 3Q21 Currency prices API materials Energy Price/mix Volume costs Other 4Q21 Bauxite $23 3 0 0 0 (1) 1 4 7 12 $49 Alumina $148 (1) 0 3
Slide 28: Income statement information
Income statement information FY20 and FY21 Annual income statement FY20 FY21 Adjusted excl. Adjusted excl. M, Except realized prices and per share amounts Reported Special items special items Reported Special items special items Realized primary aluminum price ($/mt) $1,915 $1,915 $2,879 $2,879 Real
Slide 29: FY21 Financial information
FY21 Financial information FY21 Highlights and annual change impacts Full year financial highlights Adjusted EBITDA excl. special items bridge, $M FY20 FY21 401 Realized primary aluminum price ($/mt) $1,915 $2,879 (95) 69 1,818 49 16 2,763 (296) (23) Realized alumina price ($/mt) $273 $326 (124) Rev
Slide 30: Aluminum value chain
Aluminum value chain FY21 Alcoa product shipments by segment Bauxite Alumina Aluminum 48.1 Mdmt shipments 13.9 Mmt shipments 3.0 Mmt shipments Third Party Intersegment 0% 12% Intersegment 31% 69% 88% Third Party 100% Intersegment Third Party 30
Slide 31: Composition of alumina and aluminum production costs
Composition of alumina and aluminum production costs Alcoa 4Q21 production cash costs Alumina refining Input Inventory Pricing FY21 Annual Cost Bauxite Cost Flow Convention Sensitivity 25% Conversion Caustic Soda 5 - 6 Months Quarterly, Spot $10M per $10/dmt 41% Quarterly, 85% with 11% Natural Gas 1
Slide 32: 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 + $100/mt 0.731 5.581 1.261 1.141 129.941 8.731 Bauxite (4) 2 Alumina 123 (16) 5 (1)
Slide 33: Currency impacts on Adjusted EBITDA
Currency impacts on Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities ($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 4Q20 r
Slide 34: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA for 1Q22 Alcoa anticipates Adjusted EBITDA and Adjusted net income levels for the first quarter of 2022 to be similar to the fourth quarter of 2021 based on current pricing. Alcoa expects that current metal index price benef
Slide 35: Pension and OPEB summary
Pension and OPEB summary Net pension and OPEB liability and financial impacts Net liability as of December 31, 20211 Estimated financial impacts, $M Expense impact 2022 Pension ROW Total Segment pension $15 $0.2 $0.3B Segment OPEB 5 Corporate pension & OPEB - U.S Total adj. EBITDA impact 20 $0.1 Non
Slide 36: 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 December 31, 2021 Equity Earnings ELYSISTM Limited Partnership Canada Aluminum smelting technology 48.235% Ma’aden Alumini
Slide 37: 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 38: Production and capacity information
Production and capacity information Alcoa Corporation annual consolidated amounts as of December 31, 2021 Bauxite production, Mdmt Alumina refining, kmt Aluminum smelting, kmt 2021 Mine Country Production Facility Country Capacity Curtailed Facility Country Capacity Curtailed 2 Darling Range Austral
Slide 39: Valuation framework
Valuation framework Valuation framework key considerations FY21 Adj. EBITDA excl. special items Economic value using market multiple of: + Bauxite i. AWAC joint venture, minus small portions of AWAC JV in Aluminum and $172M Transformation + Alumina ii. Ownership in certain mines and refineries outsi
Slide 40: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation $M 4Q20 FY20 1Q21 2Q21 3Q21 4Q21 FY21 Net income (loss) attributable to Alcoa $(4) $(170) $175 $309 $337 $(392) $429 Add: Net income attributable to noncontrolling interest 21 156 44 41 33 23 141 Provision for income taxes 20 187 93 111 127 298 629 Other (income) expen
Slide 41: Segment Adjusted EBITDA reconciliation
Segment Adjusted EBITDA reconciliation $M FY17 FY18 FY19 FY20 FY21 Net income (loss) attributable to Alcoa $279 $250 $(1,125) $(170) $429 Add: Net income attributable to noncontrolling interest 329 643 272 156 141 Provision for income taxes 592 732 415 187 629 Other expenses (income), net 27 64 162
Slide 42: Adj. net income (loss) attributable to Alcoa reconciliation
Adj. net income (loss) attributable to Alcoa reconciliation FY17 FY18 FY19 FY20 FY21 $M Net income (loss) attributable to Alcoa $279 $250 $(1,125) $(170) $429 Special items: Restructuring and other charges, net 309 527 1,031 104 1,128 Other special items (9) 39 50 (103) (301) Discrete tax items and
Slide 43: Operational tax reconciliation
Operational tax reconciliation $M 4Q20 FY20 1Q21 2Q21 3Q21 4Q21 FY21 Provision for income taxes $20 $187 $93 $111 $127 $298 $629 Tax on special items 1 13 - (3) 2 (5) (6) Discrete tax items 25 26 2 - (1) (102) (101) Interim tax impacts1 (19) - - - - - Operational tax provision $27 $226 $95 108 128 1
Slide 44: Free cash flow reconciliation
Free cash flow reconciliation $M 4Q20 FY20 1Q21 2Q21 3Q21 4Q21 FY21 Cash (used for) provided from operations $38 $394 $6 $(86)1 $435 $565 $920 Capital expenditures (111) (353) (75) (79) (83) (153) (390) Free cash flow (73) 41 (69) (165) 352 412 530 Contributions from noncontrolling interest - 24 - -
Slide 45: Net debt reconciliation
Net debt reconciliation FY19 FY20 FY21 Alcoa Alcoa Alcoa $M Cons. NCI Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $- $- $- $77 $31 $46 $75 $30 $45 Long-term debt due within one year 1 - 1 2 - 2 1 - 1 Long-term debt, less amount due within one year 1,799 31 1,768 2,463 - 2,463 1,726 -
Slide 46: Days working capital reconciliation
Days working capital reconciliation $M 4Q20 1Q21 2Q21 3Q21 4Q21 Receivables from customers $471 $587 $644 $769 $757 Add: Inventories 1,398 1,417 1,547 1,702 1,956 Less: Accounts payable, trade 1,403 1,284 1,392 1,482 1,674 DWC working capital $466 $720 $799 $989 $1,039 Sales1 $2,105 $2,551 $2,833 $3
Slide 47: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of December 31, 2021 $M 2020 2021 (Net Loss/Income Attributable to Alcoa + Special Items) Numerator: ROE % = X 100 Net (loss) income attributable to Alcoa Corporation $(170) $429 (Total Assets – Total Liabilities – N
Slide 48: Annualized Return on Capital (ROC)
Annualized Return on Capital (ROC) ROC Reconciliation and calculation information as of December 31, 2021 $M 2020 2021 (PBT + net interest3 + special items1) x 4/3 x (1 – fixed tax rate4) ROC % = X 100 Numerator: (Total assets – cash5 – current liabilities + short-term debt) Net (loss) income attrib
Slide 49: 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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