Slide 1: 4th Quarter Earnings
th 4 Quarter Earnings Alcoa Corporation January 18, 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 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: Flexible and safe operations amid varying market conditions
Flexible and safe operations amid varying market conditions Alcoa values, strategic priorities, and key takeaways for 4Q22 4Q22 Takeaways ▪ No fatal or serious injuries (FSI-As) in the quarter ▪ Financial results for 4Q22 − Net loss attributable to Alcoa of $374 million; Adjusted net loss of $123 mi
Slide 6: William Oplinger
William Oplinger Executive Vice President and Chief Financial Officer 6
Slide 7: 4Q22 EPS of $(2.12), Adjusted EPS of $(0.70)
4Q22 EPS of $(2.12), Adjusted EPS of $(0.70) Quarterly and full year income statement summary Millions, except per share amounts 4Q21 3Q22 4Q22 FY21 FY22 Income statement highlights Revenue $3,340 $2,851 $2,663 $12,152 $12,451 Net (loss) income attributable to Alcoa Corporation $(392) $(746) $(374)
Slide 8: Adjusted EBITDA reflects lower sales prices and cost pressures
Adjusted EBITDA reflects lower sales prices and cost pressures Adjusted EBITDA excluding special items sequential changes, $M 44 3Q22 4Q22 Change 210 Bauxite $15 $24 $9 Alumina 69 27 (42) (82) Aluminum 152 31 (121) (16) 9 1 0 Segment total 236 82 (154) (33) (31) Transformation (19) (22) (3) Interseg
Slide 9: 4Q22 cash stable with working capital release
4Q22 cash stable with working capital release 2022 and sequential quarter cash flow information 2022 Cash flow information, $M 9/30/22 to 12/31/22 Cash changes, $M 2,675 86 192 All other 150 31 CO2 credits 53 Pension/OPEB1 97 Interest 1,432 29 2,224 (171) 139 Environmental/ARO (68) 5 1,363 (46) 165
Slide 10: Continuing working capital improvement remains a focus
Continuing working capital improvement remains a focus Key financial metrics for FY22 and DWC working capital changes Key financial metrics 4Q22 DWC working capital changes, $M 27 29 4Q22 Days 1,559 FY22 Return on equity working capital (DWC) 17.2% 50 Days 1,448 (167) FY22 Capital returns to 4Q22 Pr
Slide 11: Strong cash and debt profiles provide financial stability
Strong cash and debt profiles provide financial stability Summary of cash, liquidity, positions and cash uses Year end cash balance, $M Debt maturity profile and Key cash outflows, 2017 to available credit, $M 2022, $M 1,814 2,000 Revolving credit (no borrowings) Returns to stockholders Environmenta
Slide 12: 2023 Outlook
2023 Outlook FY22 and FY23 Key metrics Income statement excl. special items impacts Cash flow impacts FY22 Actual FY23 Outlook FY22 Actual FY23 Outlook Bauxite shipments (Mdmt)1 43.0 N/A Pension / OPEB required cash funding $72M ~ $75M Alumina shipments (Mmt) 13.1 12.7 – 12.9 Additional pension fund
Slide 13: Roy Harvey
Roy Harvey President and Chief Executive Officer 13
Slide 14: Volatile prices, high materials costs; 2022 markets end balanced
Volatile prices, high materials costs; 2022 markets end balanced 2022 Key market information Alumina Aluminum Alumina index prices, $/tonne Aluminum index prices, $/tonne 600 4,000 China Ex-works SHFE 500 W. Australia FOB 3,500 LME 3,000 400 2,500 300 2,000 200 1,500 100 1,000 4Q21 1Q22 2Q22 3Q22 4Q
Slide 15: Market trends expected to support continuing improvement
Market trends expected to support continuing improvement Comparison of key positive market factors, 2016 – 2023 Decarbonization trends in transportation and Chinese capacity cap and lower global inventories packaging expected to continue driving demand expected to constrain aluminum supply Global ma
Slide 16: 2022 Actions addressed current needs and future opportunities
2022 Actions addressed current needs and future opportunities Highlighting notable 2022 actions ✓ Curtailed San Ciprián smelter in Spain; ✓ Partially curtailed San Ciprián refinery Mitigated impacts of challenging market signing restart power contracts in Spain (800kmtpy) ✓ Partially curtailed Lista
Slide 17: Focused on further development and improvement in 2023
Focused on further development and improvement in 2023 Key areas of focus for 2023 Cost and Financial Technology and Operational Excellence Management Sustainability Opportunities ▪ Address Western Australia ▪ Sharpen cost focus throughout ▪ Continue ELYSIS full scale bauxite quality and gas supply
Slide 18: 2022 displayed aluminum cycle; long term fundamentals remain
2022 displayed aluminum cycle; long term fundamentals remain FY22 Summary ▪ Favorable market dynamics in 1H22 led to Adjusted EBITDA of ~$2.0B, stockholder returns of $387M, and ending cash balance of $1.6B; Challenging market dynamics in 2H22 led to Adjusted EBITDA of $0.2B, stockholder returns of
Slide 19: Appendix
Appendix 19
Slide 20: 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 ▪ FY22 dividend payments totaled $72 million through the cycle ▪ FY22 stock repurchases t
Slide 21: Quarterly income statement
Quarterly income statement Quarterly income statement Prior Year Sequential Millions, except realized prices and per share amounts 4Q21 3Q22 4Q22 Change Change Realized primary aluminum price ($/mt) $3,382 $3,204 $2,889 $(493) $(315) Realized alumina price ($/mt) $407 $371 $342 $(65) $(29) Revenue $
Slide 22: Special items
Special items Breakdown of special items by income statement classification – gross basis Millions, except per share amounts 4Q21 3Q22 4Q22 Description of significant 4Q22 special items Net (loss) attributable to Alcoa Corporation $(392) $(746) $(374) Loss per share1 $(2.11) $(4.17) $(2.12) Special
Slide 23: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items Prior Year Sequential Millions, except realized prices and per share amounts 4Q21 3Q22 4Q22 Change Change Realized primary aluminum price ($/mt) $3,382 $3,204 $2,889 $(493) $(315) Realized alumina p
Slide 24: 4Q22 Financial summary
4Q22 Financial summary Three months ending December 31, 2022, excluding special items Intersegment Other Alcoa Millions Bauxite Alumina Aluminum3 Transformation eliminations corporate Corporation Total revenue $232 $1,185 $1,834 $2 $(595) $5 $2,663 Third-party revenue $68 $756 $1,832 $2 - $5 $2,663
Slide 25: 4Q22 Adjusted EBITDA drivers by segment
4Q22 Adjusted EBITDA drivers by segment Adjusted EBITDA excluding special items sequential changes by segment, $M Adjusted Adjusted EBITDA Metal Raw Production EBITDA Segment 3Q22 Currency prices API materials Energy Price/mix Volume costs Other 4Q22 Bauxite $15 3 0 0 0 1 1 4 1 (1) $24 Alumina $69 9
Slide 26: Income statement information
Income statement information FY21 and FY22 Annual income statement FY21 FY22 Adjusted excl. Adjusted excl. Millions, except realized prices and per share amounts Reported Special items special items Reported Special items special items Realized primary aluminum price ($/mt) $2,879 $2,879 $3,457 $3,4
Slide 27: FY22 Financial information
FY22 Financial information FY22 Highlights and annual change inputs Full year financial highlights Adjusted EBITDA excl. special items bridge, $M FY21 FY22 287 Realized primary aluminum price ($/mt) $2,879 $3,457 639 Realized alumina price ($/mt) $326 $384 188 (757) 2,763 275 Revenue, $M $12,152 $12
Slide 28: Aluminum value chain
Aluminum value chain FY22 Alcoa product shipments by segment Bauxite Alumina Aluminum 43.0 Mdmt shipments 13.1 Mmt shipments 2.6 Mmt shipments Third party Intersegment 8% 0% Intersegment 30% 70% Third party 92% 100% Intersegment Third party 28
Slide 29: Composition of alumina and aluminum production costs
Composition of alumina and aluminum production costs Alcoa 4Q22 production cash costs Alumina refining Bauxite Input Inventory Pricing FY23 annual cost Conversion cost flow convention sensitivity 23% 32% Caustic soda 5 - 6 Months Quarterly, Spot $9M per $10/dmt Quarterly, 91% with 17% Natural gas 1
Slide 30: 2023 Business information
2023 Business information Estimated annual 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 + $100/mt 0.661 5.261 1.361 1.021 143.641 10.231 Bauxite (4) 3 Alumina 103 (1
Slide 31: Currency impacts on Adjusted EBITDA
Currency impacts on Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities ($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 4Q21 r
Slide 32: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA and Net income for 1Q23 ▪ Expected sequential impacts on Adjusted EBITDA excluding special items, excluding indexed sales prices or currency impacts: − In the Alumina segment, we expect the approximately $25 million higher c
Slide 33: Pension and OPEB summary
Pension and OPEB summary Net pension and OPEB liability and financial impacts Net liability as of December 31, 20221 Estimated financial impacts, $M Pension Total Expense impact 2023 U.S. $0.1B $0.1 Segment pension $10 Segment OPEB 5 Corporate pension & OPEB - Total adj. EBITDA impact 15 Non-operati
Slide 34: 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, 2022 equity earnings ELYSIS Limited Partnership Canada Aluminum smelting technology 48.235% Ma’aden Aluminium
Slide 35: Alcoa sustainability goals
Alcoa sustainability goals Alcoa strategic long-term sustainability goals, baseline and progress Goal Description 2015 Baseline 2021 Progress Zero fatalities and serious injuries (life-threatening, life-altering injury or 5 fatal or serious 0 fatal or serious Safety illness) injuries/illnesses injur
Slide 36: Production and capacity information
Production and capacity information Alcoa Corporation annual consolidated amounts as of December 31, 2022 Bauxite production, Mdmt Alumina refining, kmt Aluminum smelting, kmt 2022 Mine Country Production Facility Country Capacity Curtailed Facility Country Capacity Curtailed Darling Range Australia
Slide 37: Valuation framework
Valuation framework Valuation framework key considerations FY22 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 $82M Transformation + Alumina ii. Ownership in certain mines and refineries outsid
Slide 38: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation Millions 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 Net (loss) income attributable to Alcoa $(392) $429 $469 $549 $(746) $(374) $(102) Add: Net income (loss) attributable to noncontrolling 23 141 84 125 (23) (25) 161 interest Provision for income taxes 298 629 210 234 40 180 6
Slide 39: Adj. net income (loss) attributable to Alcoa reconciliation
Adj. net income (loss) attributable to Alcoa reconciliation FY17 FY18 FY19 FY20 FY21 FY22 Millions Net income (loss) attributable to Alcoa $279 $250 $(1,125) $(170) $429 $(102) Special items: Restructuring and other charges, net 309 527 1,031 104 1,128 696 Other special items (9) 39 50 (103) (301) 5
Slide 40: Free cash flow reconciliation
Free cash flow reconciliation Millions 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 Cash provided from operations $565 $920 $34 $536 $134 $118 $822 Capital expenditures (153) (390) (74) (107) (128) (171) (480) Free cash flow 412 530 (40) 429 6 (53) 342 Contributions from noncontrolling interest 13 21 46 37 67
Slide 41: Net debt reconciliation
Net debt reconciliation FY16 FY17 FY18 FY19 FY20 FY21 FY22 Alcoa Alcoa Alcoa Alcoa Alcoa Alcoa Alcoa Cons. NCI Cons. NCI Cons. NCI Cons. NCI Cons. NCI Millions Prop. Prop. Prop. Prop. Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $1 $- $1 $8 $- $8 $- $- $- $- $- $- $77 $31 $46 $75 $30
Slide 42: Days working capital reconciliation
Days working capital reconciliation Millions 4Q21 1Q22 2Q22 3Q22 4Q22 Receivables from customers $757 $952 $898 $749 $778 Add: Inventories 1,956 2,495 2,556 2,400 2,427 Less: Accounts payable, trade 1,674 1,645 1,752 1,590 1,757 DWC working capital $1,039 $1,802 $1,702 $1,559 $1,448 Sales $3,340 $3,
Slide 43: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of December 31, 2022 Millions 2021 2022 (Net Loss/Income Attributable to Alcoa + Special Items) Numerator: ROE % = X 100 Net income (loss) attributable to Alcoa Corporation $429 $(102) (Total Assets – Total Liabiliti
Slide 44: 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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