Slide 1: 4th Quarter Earnings
th 4 Quarter Earnings Alcoa Corporation January 17, 2024 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: William Oplinger
William Oplinger President and Chief Executive Officer 4
Slide 5: Solid progress on safety, key challenges and operations
Solid progress on safety, key challenges and operations 4Q23 safety and operations highlights Slide from 3Q23 earnings presentation: Progress through recent actions ▪ Western Australia (WA) bauxite mine plans approved, provide near term consistency ▪ Kwinana curtailment announced January 8, 2024; re
Slide 6: Molly Beerman
Molly Beerman Executive Vice President and Chief Financial Officer 6
Slide 7: 4Q23 EPS of $(0.84), Adjusted EPS of $(0.56)
4Q23 EPS of $(0.84), Adjusted EPS of $(0.56) Quarterly and full year income statement summary 3Q23 4Q23 FY22 FY23 Third Party Realized prices ($/mt) Realized primary aluminum price $2,647 $2,678 $3,457 $2,828 Realized alumina price $354 $344 $384 $358 Income statement highlights (millions, except pe
Slide 8: Lower raw materials costs drive sequential Adj. EBITDA increase
Lower raw materials costs drive sequential Adj. EBITDA increase 4Q23 Sequential changes in Adjusted EBITDA excluding special items, $M 56 3Q23 4Q23 Change 33 89 Alumina1 $53 $84 $31 11 (38) (15) 10 Aluminum1 79 88 9 70 6 (17) Transformation (29) (26) 3 (27) Intersegment (4) (12) (8) eliminations Oth
Slide 9: Working capital improvement is significant source of cash
Working capital improvement is significant source of cash 4Q23 sequential quarter cash flow information 9/30/23 to 12/31/23 Cash balance changes, $M 4Q23 Commentary 222 89 18 ▪ Working capital change was a $222 926 (77) 97 944 million source of cash, due mainly to (64) $201 million from increases in
Slide 10: Capital expenditures, income taxes are top FY23 cash uses
Capital expenditures, income taxes are top FY23 cash uses Key financial metrics and cash flow information, 4Q23 and FY23 Key financial metrics FY23 Cash flow information, $M 1,459 63 Pension/OPEB2 4Q23 Days 70 Elysis investment FY23 Return on equity working capital 72 Cash dividends 100 Interest pay
Slide 11: 2024 Outlook
2024 Outlook FY23 and FY24 Key metrics Income statement excl. special items impacts Cash flow impacts FY23 Actual FY24 Outlook FY23 Actual FY24 Outlook Alumina production (Mmt) 10.9 9.8 – 10.0 Pension / OPEB cash funding $76M ~ $70M Alumina shipments (Mmt) 12.8 12.7 – 12.9 Stock repurchases and divi
Slide 12: William Oplinger
William Oplinger President and Chief Executive Officer 12
Slide 13: Alumina may tighten; aluminum demand set for rebound
Alumina may tighten; aluminum demand set for rebound 4Q23 Market and commercial update $/mt 360 Alumina supply cuts made, demand stable Platts FOB WA ▪ Supply: China refineries curtailments; Guinea bauxite 350 supply questions; Kwinana curtailment Alumina 340 ▪ Demand: stable as smelters continue op
Slide 14: Taking actions now to improve, opportunities for further progress
Taking actions now to improve, opportunities for further progress Path forward for annual profitability improvement Near term actions Medium term opportunities (2024 – 2025), $M ▪ Examples of medium term Raw materials: negotiation opportunities $310 and current view of market − WA new bauxite mine a
Slide 15: Progress on multiple fronts; positioning for positive outlook
Progress on multiple fronts; positioning for positive outlook 4Q23 Summary Fourth quarter summary ▪ Improved upon strong safety performance and operational stability across portfolio ▪ Net loss, Adjusted net loss and Adjusted EBITDA all improved from prior quarter ▪ Made substantial progress on key
Slide 16: Appendix
Appendix 16
Slide 17: 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 ▪ 4Q23 dividend payments totaled $18 million Transfo
Slide 18: Quarterly income statement
Quarterly income statement Quarterly income statement for 4Q22, 3Q23 and 4Q23 Prior Year Sequential Millions, except realized prices and per share amounts 4Q22 3Q23 4Q23 Change Change Realized primary aluminum price ($/mt) $2,889 $2,647 $2,678 $(211) $31 Realized alumina price ($/mt) $342 $354 $344
Slide 19: Special items
Special items Breakdown of special items by income statement classification – gross basis Millions, except per share amounts 4Q22 3Q23 4Q23 Description of significant 4Q23 special items Net loss attributable to Alcoa Corporation $(395) $(168) $(150) Loss per share1 $(2.24) $(0.94) $(0.84) Special it
Slide 20: Quarterly income statement excluding special items
Quarterly income statement excluding special items Quarterly income statement excluding special items for 4Q22, 3Q23 and 4Q23 Prior Year Sequential Millions, except realized prices and per share amounts 4Q22 3Q23 4Q23 Change Change Realized primary aluminum price ($/mt) $2,889 $2,647 $2,678 $(211) $
Slide 21: 4Q23 Financial summary
4Q23 Financial summary Three months ending December 31, 2023, excluding special items Intersegment Other Alcoa Millions Alumina3 Aluminum3,4 Transformation eliminations corporate Corporation Total revenue $1,354 $1,687 $8 $(460) $6 $2,595 Third-party revenue $905 $1,683 $5 - $2 $2,595 Adjusted EBITD
Slide 22: 4Q23 Segment Adjusted EBITDA drivers
4Q23 Segment Adjusted EBITDA drivers Segment Adjusted EBITDA sequential changes, $M Segment Segment Adjusted Adjusted EBITDA Metal Raw Production EBITDA 3Q23 Currency prices API materials Energy Price/mix Volume costs Other 4Q23 Alumina $53 (6) 0 1 23 (6) (7) 9 13 4 $84 Aluminum $79 12 (17) 10 33 (3
Slide 23: Income statement information
Income statement information FY22 and FY23 Annual income statement FY22 FY23 Adjusted excl. Adjusted excl. Millions, except realized prices and per share amounts Reported Special items special items Reported Special items special items Realized primary aluminum price ($/mt) $3,457 $3,457 $2,828 $2,8
Slide 24: FY23 Financial information
FY23 Financial information FY23 Highlights and annual Adjusted EBITDA excluding special items change analysis Full year financial highlights Adjusted EBITDA excl. special items bridge, $M FY22 FY23 92 2,224 Realized primary aluminum price ($/mt) $3,457 $2,828 Realized alumina price ($/mt) $384 $358
Slide 25: Aluminum value chain
Aluminum value chain 2023 Alcoa shipments by product type Bauxite Alumina Aluminum 45.2 Mdmt shipments 12.8 Mmt shipments 2.5 Mmt shipments Intersegment Third party 0% 17% Intersegment 32% 68% 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 4Q23 production cash costs Alumina refining Input Inventory Pricing FY24 annual cost Bauxite cost flow convention sensitivity Conversion 25% 35% Caustic soda 5 - 6 Months Quarterly, Spot $11M per $10/dmt1 Quarterly, 91% with 14% Natural gas
Slide 27: 2024 Business information
2024 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 + $100/mt 0.651 4.961 1.361 1.071 138.911 10.841 Alumina 1012 (22)2 7
Slide 28: Currency impacts on Segment Adjusted EBITDA
Currency impacts on Segment Adjusted EBITDA Currency balance sheet revaluation and EBITDA sensitivities impact ($M, except currencies) AUD BRL CAD EUR ISK NOK Total 12/31/23 currencies 0.68 4.83 1.32 1.11 135.35 10.13 4Q23 currency avg. 0.65 4.96 1.36 1.07 138.91 10.84 4Q23 Balance sheet revaluation
Slide 29: Additional business considerations
Additional business considerations Items expected to impact Adjusted EBITDA and Adjusted net income for 1Q24 Expected sequential impacts on Adjusted EBITDA excluding special items, excluding indexed sales prices or currency impacts: ▪ In the Alumina segment, we expect an unfavorable impact of $15 mi
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 December 31, 2023 equity earnings ELYSIS 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 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 December 31, 2023 Alumina refining, kmt Aluminum smelting, kmt Facility Country Capacity Curtailed Facility Country Capacity Curtailed Kwinana1 Australia 2,190 438 Portland Australia 197 42 Pinjarra Australia 4,7
Slide 33: Valuation framework
Valuation framework Valuation framework key considerations LTM ending 12/31/23 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 $273M ii. Ownership in certain mines and ref
Slide 34: Adjusted EBITDA reconciliations
Adjusted EBITDA reconciliations Millions 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Net loss attributable to Alcoa $(395) $(123) $(231) $(102) $(168) $(150) $(651) Add: Net (loss) income attributable to noncontrolling interest (25) 161 (1) (19) (25) (77) (122) Provision for (benefit from) income taxes 180 6
Slide 35: Free cash flow reconciliation
Free cash flow reconciliation Millions 4Q22 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Cash provided from operations $118 $822 $(163) $(13) $69 $198 $91 Capital expenditures (171) (480) (83) (115) (145) (188) (531) Free cash flow (53) 342 (246) (128) (76) 10 (440) Contributions from noncontrolling interest 64 21
Slide 36: Net debt reconciliations
Net debt reconciliations 4Q22 3Q23 4Q23 Alcoa Alcoa Alcoa $M Cons. NCI Prop. Cons. NCI Prop. Cons. NCI Prop. Short-term borrowings $- $- $- $42 $- $42 $56 $- $56 Long-term debt due within one year 1 - 1 1 - 1 79 31 48 Long-term debt, less amount due within one year 1,806 32 1,774 1,809 32 1,777 1,73
Slide 37: DWC working capital and Days working capital reconciliations
DWC working capital and Days working capital reconciliations Millions 4Q22 1Q23 2Q23 3Q23 4Q23 Receivables from customers $778 $753 $702 $691 $656 Add: Inventories 2,427 2,395 2,400 2,190 2,158 Less: Accounts payable, trade 1,757 1,489 1,491 1,472 1,714 DWC working capital $1,448 $1,659 $1,611 $1,40
Slide 38: Annualized Return on Equity (ROE)
Annualized Return on Equity (ROE) ROE Reconciliation and calculation information as of December 31, 2023 Millions 2022 2023 (Net Loss/Income Attributable to Alcoa + Special Items1) Numerator: ROE % = X 100 Net loss attributable to Alcoa Corporation $(123) $(651) (Total Assets – Total Liabilities – N
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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