Slide 1: 3rd Quarter Earnings
rd 3 Quarter Earnings Alcoa Corporation October 19, 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: Addressing current challenges, well positioned for long term
Addressing current challenges, well positioned for long term Alcoa values, strategic priorities, and key takeaways for 3Q22 3Q22 Takeaways ▪ No fatal or serious injuries (FSI-As) in the quarter ▪ Financial results for 3Q22 − Net loss attributable to Alcoa of $746 million; Adj. net loss of $60 millio
Slide 6: William Oplinger
William Oplinger Executive Vice President and Chief Financial Officer 6
Slide 7: EPS negative on pension annuitization charge and lower prices
EPS negative on pension annuitization charge and lower prices Quarterly income statement summary Prior year Sequential M, Except per share amounts 3Q21 2Q22 3Q22 change change Income statement highlights Revenue $3,109 $3,644 $2,851 $(258) $(793) Net income (loss) attributable to Alcoa Corporation $
Slide 8: EBITDA lower; sales prices decline while input costs rise
EBITDA lower; sales prices decline while input costs rise Adjusted EBITDA excluding special items sequential changes, $M 23 913 2Q22 3Q22 Change Bauxite $5 $15 $10 Alumina 343 69 (274) Aluminum 596 152 (444) (367) Segment total 944 236 (708) (149) Transformation (11) (19) (8) (58) 0 (68) (2) Interse
Slide 9: Key raw material costs much higher as percentage of revenue
Key raw material costs much higher as percentage of revenue Key raw material costs as % of realized third party sales prices, FY17 – FY21, 3Q22 Carbon materials cost as % of Caustic cost as % of realized third realized third party aluminum price party alumina price $455 $3,204 $2,879 $371 $2,484 3Q2
Slide 10: Cash returns to stockholders of $555 million 2022 YTD
Cash returns to stockholders of $555 million 2022 YTD Key financial metrics for 3Q22 and cash returned to stockholders, 2016 – 3Q22 YTD Key financial metrics 3Q22 DWC working capital changes, $M 1,702 162 1,559 3Q22 YTD 3Q22 Days (149) Return on equity working capital (DWC) (156) 25.9% 50 Days 6/30/
Slide 11: EBITDA and working capital release provide cash flow
EBITDA and working capital release provide cash flow 3Q22 YTD and sequential quarter cash flow information YTD Cash flow information, $M 6/30/22 to 9/30/22 Cash changes, $M 2,577 145 228 All other 210 57 Pension/OPEB 2,195 60 Interest (168) 78 CO2 credits 1,638 93 Environmental/ARO (128) (56) (31) 1
Slide 12: 2022 Outlook
2022 Outlook FY22 Key metrics as of September 30, 2022 Income statement excl. special items impacts Cash flow impacts 3Q22 YTD Actual FY22 Outlook 3Q22 YTD Actual FY22 Outlook Bauxite shipments (Mdmt) 32.4 43.0 – 44.0 Pension / OPEB required cash funding $57M ~ $75M Alumina shipments (Mmt) 9.9 13.1
Slide 13: Roy Harvey
Roy Harvey President and Chief Executive Officer 13
Slide 14: Energy, decarbonization, drive positive aluminum fundamentals
Energy, decarbonization, drive positive aluminum fundamentals Expected long term impacts of energy and decarbonization on aluminum fundamentals Energy driving aluminum demand Energy constraining aluminum supply mt CO2e/mt primary aluminum produced2 Aluminum content in N. American passenger vehicles,
Slide 15: Energy crisis driving current market
Energy crisis driving current market Historical global supply, demand, and inventories Historical trends, 2006 – 20221 Market commentary Days Mmt Inventories (days consumption) ▪ 2022 market 70 120 114 Demand (Mmt) 110 − Demand still growing, at slower rate, while energy shocks 105 104 65 101 Supply
Slide 16: Alcoa taking action to reduce European spot energy exposures
Alcoa taking action to reduce European spot energy exposures Lista smelter and San Ciprián refinery situation and actions Lista smelter 2022 aluminum cost curve1 Mitigation actions Background information $/t ▪ Curtailed one potline in September; remaining 4,000 capacity of ~60 kmtpa ▪ Located in sou
Slide 17: Continuing action to maintain and improve operating position
Continuing action to maintain and improve operating position Summary of key operating actions in 3Q22 in addition to Lista and San Ciprián activity Key actions across the globe and segments ▪ Continuing targeted smelter restarts ▪ Plan to improve Australia refinery performance − Alumar: 268 kmt (Alc
Slide 18: Navigating the current market, taking actions for tomorrow
Navigating the current market, taking actions for tomorrow 3Q22 Summary 3.8 3.8 Maintained strong balance sheet 3.3 3.3 3.4 555 55 ▪ Proportional adjusted net debt at $1.3B with cash at $1.4B 169 1.3 500 50 1.1 19 ▪ Provided capital returns in form of quarterly dividend and share 50 150 buybacks FY1
Slide 19: Appendix
Appendix 19
Slide 20: Remain well positioned across three product segments
Remain well positioned across three product segments Alcoa portfolio cost curve position and key factors, 2022 Bauxite Alumina Aluminum 1st Quartile 1st Quartile 2nd Quartile ▪ World’s second largest bauxite ▪ Largest third party alumina ▪ Low CO2e intensity producer, miner with assets across four p
Slide 21: 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 ▪ Declared fifth consecutive quarterly cash dividend of $0.10/share, payable November 18,
Slide 22: Quarterly income statement
Quarterly income statement Quarterly income statement Prior Year Sequential M, Except realized prices and per share amounts 3Q21 2Q22 3Q22 Change Change Realized primary aluminum price ($/mt) $3,124 $3,864 $3,204 $80 $(660) Realized alumina price ($/mt) $312 $442 $371 $59 $(71) Revenue $3,109 $3,644
Slide 23: Special items
Special items Breakdown of special items by income statement classification – gross basis M, Except per share amounts 3Q21 2Q22 3Q22 Description of significant 3Q22 special items Net income (loss) attributable to Alcoa Corporation $337 $549 $(746) Diluted earnings (loss) per share $1.76 $2.95 $(4.17
Slide 24: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items Prior Year Sequential M, Except realized prices and per share amounts 3Q21 2Q22 3Q22 Change Change Realized primary aluminum price ($/mt) $3,124 $3,864 $3,204 $80 $(660) Realized alumina price ($/mt
Slide 25: 3Q22 Financial summary
3Q22 Financial summary Three months ending September 30, 2022, excluding special items Intersegment Other Alcoa $M Bauxite Alumina Aluminum3 Transformation eliminations corporate Corporation Total revenue $240 $1,250 $1,986 $11 $(622) $(14) $2,851 Third-party revenue $59 $832 $1,975 $2 - $(17) $2,85
Slide 26: 3Q22 Adjusted EBITDA drivers by segment
3Q22 Adjusted EBITDA drivers by segment Adjusted EBITDA excluding special items sequential changes by segment, $M Adjusted Adjusted EBITDA Metal Raw Production EBITDA Segment 2Q22 Currency prices API materials Energy Price/mix Volume costs Other 3Q22 Bauxite $5 5 0 0 0 (1) (6) 11 (6) 7 $15 Alumina $
Slide 27: Aluminum value chain
Aluminum value chain 2022 YTD Alcoa product shipments by segment Bauxite Alumina Aluminum 32.4 Mdmt shipments 9.9 Mmt shipments 1.9 Mmt shipments Third party Intersegment 7% 0% Intersegment 30% 70% Third party 93% 100% Intersegment Third party 27
Slide 28: Composition of alumina and aluminum production costs
Composition of alumina and aluminum production costs Alcoa 3Q22 production cash costs Alumina refining Bauxite Input Inventory Pricing FY22 annual cost Conversion cost flow convention sensitivity 22% 30% Caustic soda 5 - 6 Months Quarterly, Spot $10M per $10/dmt 17% Quarterly, 85% with Natural gas 1
Slide 29: 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 + $100/mt 0.681 5.241 1.301 1.011 138.481 9.951 Bauxite (4) 2 Alumina 123 (20) 5 (3)
Slide 30: Currency impacts on Adjusted EBITDA
Currency impacts on Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities ($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 3Q21 r
Slide 31: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA for 4Q22 ▪ Expected sequential impacts on Adjusted EBITDA excluding special items, excluding indexed sales prices or currency impacts: − In Bauxite, we expect Adjusted EBITDA to improve approximately $5 million on higher thi
Slide 32: Pension and OPEB summary
Pension and OPEB summary Net pension and OPEB liability and financial impacts Net liability as of September 30, 20221 Estimated financial impacts, $M Expense impact 2022 ROW Segment pension $15 $0.2 Segment OPEB 5 Pension Total Corporate pension & OPEB - $0.2B Total adj. EBITDA impact 20 Non-operati
Slide 33: 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 September 30, 2022 equity earnings ELYSISTM Limited Partnership Canada Aluminum smelting technology 48.235% Ma’aden Alumin
Slide 34: 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 Safety 0 fatal or serious injury/illness illness) injuries/
Slide 35: Production and capacity information
Production and capacity information Alcoa Corporation annual consolidated amounts as of September 30, 2022 Bauxite production, Mdmt Alumina refining, kmt Aluminum smelting, kmt 2021 Mine Country Production Facility Country Capacity Curtailed Facility Country Capacity Curtailed Darling Range Australi
Slide 36: Valuation framework
Valuation framework Valuation framework key considerations LTM ending 9/30/22 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 $107M Transformation + Alumina ii. Ownership in certain mines and re
Slide 37: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation $M 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 Net income (loss) attributable to Alcoa $337 $(392) $429 $469 $549 $(746) Add: Net income (loss) attributable to noncontrolling interest 33 23 141 84 125 (23) Provision for income taxes 127 298 629 210 234 40 Other (income) expense, net
Slide 38: Free cash flow reconciliation
Free cash flow reconciliation $M 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 Cash provided from operations $435 $565 $920 $34 $536 $134 Capital expenditures (83) (153) (390) (74) (107) (128) Free cash flow 352 412 530 (40) 429 6 Contributions from noncontrolling interest 8 13 21 46 37 67 Distributions to noncontr
Slide 39: Net debt reconciliation
Net debt reconciliation 3Q21 2Q22 3Q22 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 1 - 1 1 - 1 1 - 1 Long-term debt, less amount due within one year 1,724 - 1,724 1,725 - 1,725 1,725
Slide 40: Net debt reconciliation
Net debt reconciliation FY16 FY17 FY18 FY19 FY20 FY21 3Q22 Alcoa Alcoa Alcoa Alcoa Alcoa Alcoa Alcoa Cons. NCI Cons. NCI Cons. NCI Cons. NCI Cons. NCI $M Prop. Prop. Prop. Prop. Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $1 $- $1 $8 $- $8 $- $- $- $- $- $- $77 $31 $46 $75 $30 $45 $7
Slide 41: Days working capital reconciliation
Days working capital reconciliation $M 3Q21 4Q21 1Q22 2Q22 3Q22 Receivables from customers $769 $757 $952 $898 $749 Add: Inventories 1,702 1,956 2,495 2,556 2,400 Less: Accounts payable, trade 1,482 1,674 1,645 1,752 1,590 DWC working capital $989 $1,039 $1,802 $1,702 $1,559 Sales $3,109 $3,340 $3,2
Slide 42: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of September 30, 2022 $M 2021 YTD 2022 YTD (Net Loss/Income Attributable to Alcoa + Special Items) Numerator: ROE % = X 100 Net income attributable to Alcoa Corporation $821 $272 (Total Assets – Total Liabilities – N
Slide 43: 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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