Alcoa Corporation (NYSE: AA; ASX: AAI) today reported results
for the third quarter 2024 that reflect the acquisition of Alumina
Limited in addition to sequential increases in net income, adjusted
net income and Adjusted EBITDA excluding special items.
Financial Results and Highlights
M, except per share amounts
3Q24
2Q24
3Q23
Revenue
$
2,904
$
2,906
$
2,602
Net income (loss) attributable to Alcoa
Corporation
$
90
$
20
$
(168
)
Income (loss) per share attributable to
Alcoa Corporation common shareholders1
$
0.38
$
0.11
$
(0.94
)
Adjusted net income (loss)
$
135
$
30
$
(202
)
Adjusted income (loss) per common
share1
$
0.57
$
0.16
$
(1.14
)
Adjusted EBITDA excluding special
items
$
455
$
325
$
70
1 For 3Q24, undistributed earnings of $1
and undistributed adjusted earnings of $2 were allocated to
preferred stock under the two-class method.
- Net income increased sequentially to $90 million, or $0.38 per
common share
- Adjusted net income increased sequentially to $135 million, or
$0.57 per common share
- Adjusted EBITDA excluding special items increased sequentially
to $455 million
- Completed the acquisition of Alumina Limited on August 1,
2024
- Announced an agreement for the sale of 25.1% interest in the
Ma’aden joint ventures
- Announced progress toward a strategic cooperation agreement
with a partner to support continued San Ciprián operations
- Paid quarterly cash dividend of $0.10 per share of stock,
totaling $26 million (including newly issued shares for the
acquisition of Alumina Limited)
- Finished the third quarter 2024 with cash balance of $1.3
billion
“During the third quarter, we maintained our pace of delivering
on strategic actions. We gained flexibility after closing the
Alumina Limited acquisition and announced the sale of our interest
in the Ma’aden joint ventures,” said Alcoa President and CEO
William F. Oplinger. “Positive markets and our focus on continuous
improvement led to stronger results for the third quarter, while we
continue to execute initiatives to further enhance our
operations.”
Third Quarter 2024 Results
- Production: Alumina production decreased 4 percent
sequentially to 2.44 million metric tons primarily due to the full
curtailment of the Kwinana refinery completed in June 2024. In the
Aluminum segment, production increased 3 percent sequentially to
559,000 metric tons primarily due to continued progress on the
Alumar smelter restart.
- Shipments: In the Alumina segment, third-party shipments
of alumina decreased 9 percent sequentially primarily due to
decreased trading. In Aluminum, total shipments decreased 6 percent
sequentially primarily due to decreased trading and the timing of
shipments.
- Revenue: The Company’s total third-party revenue was
flat sequentially at $2.9 billion. In the Alumina segment,
third-party revenue increased 9 percent on a 22 percent increase in
average realized third-party price, partially offset by lower
shipments. In the Aluminum segment, third-party revenue decreased 5
percent primarily due to lower shipments.
- Net income attributable to Alcoa Corporation was $90
million, or $0.38 per common share. Sequentially, the results
reflect increased alumina prices and lower raw material costs.
Additionally, the results reflect the benefit of the absence of Net
income attributable to noncontrolling interest for the full
quarter.
- Adjusted net income was $135 million, or $0.57 per
common share, excluding the impact from net special items of $45
million. Notable special items include a mark-to-market loss of $31
million related to energy contracts, restructuring charges of $14
million related to remediation and demolition costs at closed
locations, and a restructuring charge of $12 million for contract
termination costs at a closed location, partially offset by the tax
and noncontrolling interest impact of these items.
- Adjusted EBITDA excluding special items was $455
million, a sequential increase of $130 million primarily due to
higher alumina prices and lower raw material costs.
- Cash: Alcoa ended the quarter with a cash balance of
$1.3 billion. Cash provided from operations was $143 million. Cash
used for financing activities was $84 million primarily related to
$26 million in cash dividends on stock, $19 million of net payments
on short-term borrowings and $17 million in distributions to
noncontrolling interest. Cash used for investing activities was
$153 million due to capital expenditures of $146 million.
- Working capital: For the third quarter, Receivables from
customers of $0.9 billion, Inventories of $2.1 billion and Accounts
payable, trade of $1.5 billion comprised DWC working capital. Alcoa
reported 45 days working capital, a sequential increase of four
days primarily due to an increase in inventory days on timing of
shipments.
Key Actions
Strategic
- Ma’aden joint ventures: On September 15, 2024, Alcoa
announced that it entered into a binding share purchase and
subscription agreement with Saudi Arabian Mining Company (Ma’aden),
under which Alcoa will sell its full ownership interest of 25.1% in
the Ma’aden joint ventures to Ma’aden for approximately $1.1
billion. The transaction is subject to regulatory approvals,
approval by Ma’aden’s shareholders and other customary closing
conditions and is expected to close in the first half of 2025.
- Acquisition of Alumina Limited: On August 1, 2024, the
Company announced the completion of its acquisition of Alumina
Limited. This strategic move positions Alcoa to further strengthen
its market leadership as a pure play, upstream aluminum
company.
Operational
- Western Australia mine approvals: The Company continued
to advance mine approvals for the next two Western Australian mine
regions (Myara North and Holyoake) which were referred for
accredited assessment by the Western Australian Environmental
Protection Authority (WA EPA) under the bilateral assessment
process (Accredited Assessment). The process began in 2020 and
Alcoa is focused on receiving approval by the first quarter of
2026. The Company anticipates mining in the new regions will
commence no earlier than 2027. Until then, the Company expects
bauxite quality will remain similar to recent grades.
- San Ciprián complex: On October 16, 2024, Alcoa
announced that it is progressing toward entering into a strategic
cooperation agreement with IGNIS Equity Holdings, SL (IGNIS EQT),
to support the continued operation of the San Ciprián complex.
Under the proposed agreement, Alcoa would maintain a majority
ownership share of San Ciprián complex, including continuing as the
managing operator, with IGNIS EQT holding 25 percent. The proposed
agreement is conditional upon delivery of key areas of cooperation
with San Ciprián’s stakeholders.
- Profitability improvement programs: In January 2024, the
Company shared a series of actions to improve its profitability by
$645 million by year end 2025 in comparison to the base year 2023.
Through the third quarter 2024, the Company had implemented
numerous improvements to achieve approximately 80 percent of the
target. The Company is on track to deliver the full target by year
end 2025.
- Energy contract: In September 2024, Alcoa secured a new
power agreement with AGL Energy Limited (AGL) to support future
operations at Portland Aluminium Smelter in the State of Victoria
in Australia. The nine-year agreement for 287 megawatts of power
supply is effective July 1, 2026, when current contracts end.
Together with a contract reached with AGL in 2023, the combined
contracts represent approximately 95 percent of the energy required
to meet the facility’s total capacity of 358,000 mtpy.
Commercial
- Alumina supply agreement: On October 15, 2024, the
Company announced a long-term agreement for Alcoa to supply up to
16.5 million tonnes of smelter grade alumina to Aluminium Bahrain
B.S.C. (Alba) over 10 years.
2024 Outlook
The following outlook does not include reconciliations of the
forward-looking non-GAAP financial measures Adjusted EBITDA and
Adjusted Net Income, including transformation, intersegment
eliminations and other corporate Adjusted EBITDA; operational tax
expense; and other expense; each excluding special items, to the
most directly comparable forward-looking GAAP financial measures
because it is impractical to forecast certain special items, such
as restructuring charges and mark-to-market contracts, without
unreasonable efforts due to the variability and complexity
associated with predicting the occurrence and financial impact of
such special items. For the same reasons, the Company is unable to
address the probable significance of the unavailable information,
which could be material to future results.
Alcoa expects total 2024 Alumina segment production to remain
unchanged from the prior projection, ranging between 9.8 and 10.0
million metric tons. The Company is increasing its projection for
shipments to range between 12.9 and 13.1 million metric tons, an
increase of 0.2 million metric tons from the prior projection
primarily due to increased trading volumes. The difference between
production and shipments reflects trading volumes and externally
sourced alumina to fulfill customer contracts due to the
curtailment of the Kwinana refinery.
Alcoa expects 2024 total Aluminum segment production and
shipments to remain unchanged from the prior projection, ranging
between 2.2 and 2.3 million metric tons, and between 2.5 and 2.6
million metric tons, respectively.
Within fourth quarter 2024 Alumina Segment Adjusted EBITDA, the
Company expects sequential favorable impacts of $30 million due to
higher shipments and lower production costs.
For the fourth quarter 2024, the Company expects Aluminum
Segment performance to be flat, maintaining the strong performance
from the third quarter 2024.
The Company expects Other expenses for the fourth quarter 2024
to increase approximately $20 million sequentially on Ma’aden
equity losses and equity contributions to ELYSIS™.
Based on current alumina and aluminum market conditions, Alcoa
expects fourth quarter operational tax expense to approximate $120
million to $130 million, which may vary with market conditions and
jurisdictional profitability.
Conference Call
Alcoa will hold its quarterly conference call at 5:00 p.m.
Eastern Daylight Time (EDT) / 8:00 a.m. Australian Eastern Daylight
Time (AEDT) on Wednesday, October 16, 2024 / Thursday, October 17,
2024, to present third quarter 2024 financial results and discuss
the business, developments, and market conditions.
The call will be webcast via the Company’s homepage on
www.alcoa.com. Presentation materials for the call will be
available for viewing on the same website at approximately 4:15
p.m. EDT on October 16, 2024 / 7:15 a.m. AEDT on October 17, 2024.
Call information and related details are available under the
“Investors” section of www.alcoa.com.
Dissemination of Company Information
Alcoa intends to make future announcements regarding company
developments and financial performance through its website,
www.alcoa.com, as well as through press releases, filings with the
Securities and Exchange Commission, conference calls and webcasts.
The Company does not incorporate the information contained on, or
accessible through, its corporate website or such other websites or
platforms referenced herein into this press release.
About Alcoa Corporation
Alcoa (NYSE: AA; ASX: AAI) is a global industry leader in
bauxite, alumina and aluminum products with a vision to reinvent
the aluminum industry for a sustainable future. Our purpose is to
turn raw potential into real progress, underpinned by Alcoa Values
that encompass integrity, operating excellence, care for people and
courageous leadership. Since developing the process that made
aluminum an affordable and vital part of modern life, our talented
Alcoans have developed breakthrough innovations and best practices
that have led to improved safety, sustainability, efficiency, and
stronger communities wherever we operate.
Discover more by visiting www.alcoa.com. Follow us on our social
media channels: Facebook, Instagram, X, YouTube and LinkedIn.
Cautionary Statement on Forward-Looking Statements
This news release 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 include those
containing such words as “aims,” “ambition,” “anticipates,”
“believes,” “could,” “develop,” “endeavors,” “estimates,”
“expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,”
“potential,” “plans,” “projects,” “reach,” “seeks,” “sees,”
“should,” “strive,” “targets,” “will,” “working,” “would,” or other
words of similar meaning. All statements by Alcoa Corporation that
reflect expectations, assumptions or projections about the future,
other than statements of historical fact, are forward-looking
statements, including, without limitation, statements regarding
forecasts concerning global demand growth for bauxite, alumina, and
aluminum, and supply/demand balances; statements, projections or
forecasts of future or targeted financial results, or operating
performance (including our ability to execute on strategies related
to environmental, social and governance matters, such as our Green
Finance Framework); statements about strategies, outlook, and
business and financial prospects; and statements about capital
allocation and return of capital. These statements reflect beliefs
and assumptions that are based on Alcoa Corporation’s perception of
historical trends, current conditions, and expected future
developments, as well as other factors that management believes are
appropriate in the circumstances. Forward-looking statements are
not guarantees of future performance and are subject to known and
unknown risks, uncertainties, and changes in circumstances that are
difficult to predict. Although Alcoa Corporation believes that the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these
expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties. Such risks and uncertainties include, but are not
limited to: (1) the impact of global economic conditions on the
aluminum industry and aluminum end-use markets; (2) volatility and
declines in aluminum and alumina demand and pricing, including
global, regional, and product-specific prices, or significant
changes in production costs which are linked to London Metal
Exchange (LME) or other commodities; (3) the disruption of
market-driven balancing of global aluminum supply and demand by
non-market forces; (4) competitive and complex conditions in global
markets; (5) our ability to obtain, maintain, or renew permits or
approvals necessary for our mining operations; (6) rising energy
costs and interruptions or uncertainty in energy supplies; (7)
unfavorable changes in the cost, quality, or availability of raw
materials or other key inputs, or by disruptions in the supply
chain; (8) our ability to execute on our strategy to be a lower
cost, competitive, and integrated aluminum production business and
to realize the anticipated benefits from announced plans, programs,
initiatives relating to our portfolio, capital investments, and
developing technologies; (9) our ability to integrate and achieve
intended results from joint ventures, other strategic alliances,
and strategic business transactions; (10) economic, political, and
social conditions, including the impact of trade policies and
adverse industry publicity; (11) fluctuations in foreign currency
exchange rates and interest rates, inflation and other economic
factors in the countries in which we operate; (12) changes in tax
laws or exposure to additional tax liabilities; (13) global
competition within and beyond the aluminum industry; (14) our
ability to obtain or maintain adequate insurance coverage; (15)
disruptions in the global economy caused by ongoing regional
conflicts; (16) legal proceedings, investigations, or changes in
foreign and/or U.S. federal, state, or local laws, regulations, or
policies; (17) climate change, climate change legislation or
regulations, and efforts to reduce emissions and build operational
resilience to extreme weather conditions; (18) our ability to
achieve our strategies or expectations relating to environmental,
social, and governance considerations; (19) claims, costs, and
liabilities related to health, safety and environmental laws,
regulations, and other requirements in the jurisdictions in which
we operate; (20) liabilities resulting from impoundment structures,
which could impact the environment or cause exposure to hazardous
substances or other damage; (21) our ability to fund capital
expenditures; (22) deterioration in our credit profile or increases
in interest rates; (23) restrictions on our current and future
operations due to our indebtedness; (24) our ability to continue to
return capital to our stockholders through the payment of cash
dividends and/or the repurchase of our common stock; (25) cyber
attacks, security breaches, system failures, software or
application vulnerabilities, or other cyber incidents; (26) labor
market conditions, union disputes and other employee relations
issues; (27) a decline in the liability discount rate or
lower-than-expected investment returns on pension assets; and (28)
the other risk factors discussed in Alcoa’s Annual Report on Form
10-K for the fiscal year ended December 31, 2023 and other reports
filed by Alcoa with the SEC. Alcoa cautions readers not to place
undue reliance upon any such forward-looking statements, which
speak only as of the date they are made. Alcoa disclaims any
obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise,
except as required by applicable law. Market projections are
subject to the risks described above and other risks in the market.
Neither Alcoa nor any other person assumes responsibility for the
accuracy and completeness of any of these forward-looking
statements and none of the information contained herein should be
regarded as a representation that the forward-looking statements
contained herein will be achieved.
Non-GAAP Financial Measures
This news release 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 these
non-GAAP financial measures is useful to investors because such
measures provide both additional information about the operating
performance of Alcoa Corporation and insight on the ability of
Alcoa Corporation to meet its financial obligations by adjusting
the most directly comparable GAAP financial measure for the impact
of, among others, “special items” as defined by the Company,
non-cash items in nature, and/or nonoperating expense or income
items. The presentation of non-GAAP financial measures is not
intended to be a substitute for, and should not be considered in
isolation from, the financial measures reported in accordance with
GAAP. Certain definitions, reconciliations to the most directly
comparable GAAP financial measures and additional details regarding
management’s rationale for the use of the non-GAAP financial
measures can be found in the schedules to this release.
Alcoa Corporation and subsidiaries
Statement of Consolidated Operations
(unaudited)
(dollars in millions, except per-share
amounts)
Quarter Ended
September 30, 2024
June 30, 2024
September 30, 2023
Sales
$
2,904
$
2,906
$
2,602
Cost of goods sold (exclusive of expenses
below)
2,393
2,533
2,469
Selling, general administrative, and other
expenses
66
69
56
Research and development expenses
16
13
9
Provision for depreciation, depletion, and
amortization
159
163
163
Restructuring and other charges, net
30
18
22
Interest expense
44
40
26
Other expenses (income), net
12
(22
)
85
Total costs and expenses
2,720
2,814
2,830
Income (loss) before income taxes
184
92
(228
)
Provision for (benefit from) income
taxes
86
61
(35
)
Net income (loss)
98
31
(193
)
Less: Net income (loss) attributable to
noncontrolling interest
8
11
(25
)
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA
CORPORATION
$
90
$
20
$
(168
)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA
CORPORATION COMMON SHAREHOLDERS(1):
Basic:
Net income (loss)
$
0.39
$
0.11
$
(0.94
)
Average number of common shares
231,799,090
179,560,596
178,443,311
Diluted:
Net income (loss)
$
0.38
$
0.11
$
(0.94
)
Average number of common shares
233,594,549
181,056,581
178,443,311
(1)
For the quarter ended September 30, 2024,
undistributed earnings of $1 were allocated to preferred stock
under the two-class method required by GAAP.
Alcoa Corporation and
subsidiaries
Statement of Consolidated Operations
(unaudited)
(dollars in millions, except per-share
amounts)
Nine Months Ended
September 30, 2024
September 30, 2023
Sales
$
8,409
$
7,956
Cost of goods sold (exclusive of expenses
below)
7,330
7,388
Selling, general administrative, and other
expenses
195
162
Research and development expenses
40
25
Provision for depreciation, depletion, and
amortization
483
469
Restructuring and other charges, net
250
195
Interest expense
111
79
Other expenses, net
49
145
Total costs and expenses
8,458
8,463
Loss before income taxes
(49
)
(507
)
Provision for income taxes
129
39
Net loss
(178
)
(546
)
Less: Net loss attributable to
noncontrolling interest
(36
)
(45
)
NET LOSS ATTRIBUTABLE TO ALCOA
CORPORATION
$
(142
)
$
(501
)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA
CORPORATION COMMON SHAREHOLDERS(1):
Basic:
Net loss
$
(0.72
)
$
(2.81
)
Average number of common shares
196,997,535
178,262,741
Diluted:
Net loss
$
(0.72
)
$
(2.81
)
Average number of common shares
196,997,535
178,262,741
(1)
For the nine months ended September 30,
2024, undistributed earnings of $1 were allocated to preferred
stock under the two-class method required by GAAP.
Alcoa Corporation and
subsidiaries
Consolidated Balance Sheet
(unaudited)
(in millions)
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,313
$
944
Receivables from customers
862
656
Other receivables
145
152
Inventories
2,096
2,158
Fair value of derivative instruments
5
29
Prepaid expenses and other current
assets(1)
445
466
Total current assets
4,866
4,405
Properties, plants, and equipment
20,535
20,381
Less: accumulated depreciation, depletion,
and amortization
13,814
13,596
Properties, plants, and equipment, net
6,721
6,785
Investments
982
979
Deferred income taxes
329
333
Fair value of derivative instruments
1
3
Other noncurrent assets(2)
1,643
1,650
Total assets
$
14,542
$
14,155
LIABILITIES
Current liabilities:
Accounts payable, trade
$
1,544
$
1,714
Accrued compensation and retirement
costs
363
357
Taxes, including income taxes
109
88
Fair value of derivative instruments
267
214
Other current liabilities
712
578
Long-term debt due within one year
464
79
Total current liabilities
3,459
3,030
Long-term debt, less amount due within one
year
2,469
1,732
Accrued pension benefits
258
278
Accrued other postretirement benefits
422
443
Asset retirement obligations
789
772
Environmental remediation
182
202
Fair value of derivative instruments
1,007
1,092
Noncurrent income taxes
74
193
Other noncurrent liabilities and deferred
credits
632
568
Total liabilities
9,292
8,310
EQUITY
Alcoa Corporation shareholders’
equity:
Preferred stock
—
—
Common stock
3
2
Additional capital
11,487
9,187
Accumulated deficit
(1,498
)
(1,293
)
Accumulated other comprehensive loss
(4,742
)
(3,645
)
Total Alcoa Corporation shareholders’
equity
5,250
4,251
Noncontrolling interest
—
1,594
Total equity
5,250
5,845
Total liabilities and equity
$
14,542
$
14,155
(1)
This line item includes $44 and $32 of
current restricted cash at September 30, 2024 and December 31,
2023, respectively.
(2)
This line item includes $53 and $71 of
noncurrent restricted cash at September 30, 2024 and December 31,
2023, respectively.
Alcoa Corporation and
subsidiaries
Statement of Consolidated Cash Flows
(unaudited)
(in millions)
Nine Months Ended September
30,
2024
2023
CASH FROM OPERATIONS
Net loss
$
(178
)
$
(546
)
Adjustments to reconcile net loss to cash
from operations:
Depreciation, depletion, and
amortization
483
469
Deferred income taxes
(8
)
(156
)
Equity loss, net of dividends
2
161
Restructuring and other charges, net
250
195
Net loss from investing activities – asset
sales
18
18
Net periodic pension benefit cost
8
4
Stock-based compensation
31
27
Loss on mark-to-market derivative
financial contracts
16
31
Other
33
67
Changes in assets and liabilities,
excluding effects of divestitures and foreign currency translation
adjustments:
(Increase) decrease in receivables
(202
)
108
Decrease in inventories
79
166
(Increase) decrease in prepaid expenses
and other current assets
(12
)
53
Decrease in accounts payable, trade
(149
)
(275
)
Decrease in accrued expenses
(88
)
(119
)
Increase (decrease) in taxes, including
income taxes
55
(52
)
Pension contributions
(14
)
(20
)
Increase in noncurrent assets
(4
)
(179
)
Decrease in noncurrent liabilities
(113
)
(59
)
CASH PROVIDED FROM (USED FOR)
OPERATIONS
207
(107
)
FINANCING ACTIVITIES
Additions to debt
989
80
Payments on debt
(285
)
(39
)
Proceeds from the exercise of employee
stock options
—
1
Dividends paid on Alcoa preferred
stock
—
—
Dividends paid on Alcoa common stock
(63
)
(54
)
Payments related to tax withholding on
stock-based compensation awards
(15
)
(34
)
Financial contributions for the
divestiture of businesses
(19
)
(44
)
Contributions from noncontrolling
interest
65
164
Distributions to noncontrolling
interest
(49
)
(24
)
Acquisition of noncontrolling interest
(23
)
—
Other
(5
)
1
CASH PROVIDED FROM FINANCING
ACTIVITIES
595
51
INVESTING ACTIVITIES
Capital expenditures
(411
)
(343
)
Proceeds from the sale of assets
2
2
Additions to investments
(30
)
(51
)
Other
5
4
CASH USED FOR INVESTING ACTIVITIES
(434
)
(388
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS AND RESTRICTED CASH
(5
)
—
Net change in cash and cash equivalents
and restricted cash
363
(444
)
Cash and cash equivalents and restricted
cash at beginning of year
1,047
1,474
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT END OF PERIOD
$
1,410
$
1,030
Alcoa Corporation and
subsidiaries
Segment Information (unaudited)
(dollars in millions, except realized
prices; dry metric tons in millions (mdmt); metric tons in
thousands (kmt))
1Q23
2Q23
3Q23
4Q23
2023
1Q24
2Q24
3Q24
Alumina:
Bauxite production (mdmt)
9.9
10.0
10.7
10.4
41.0
10.1
9.5
9.4
Third-party bauxite shipments (mdmt)
1.9
1.8
1.9
2.0
7.6
1.0
1.5
1.5
Alumina production (kmt)
2,755
2,559
2,805
2,789
10,908
2,670
2,539
2,435
Third-party alumina shipments (kmt)
1,929
2,136
2,374
2,259
8,698
2,397
2,267
2,052
Intersegment alumina shipments (kmt)
1,039
944
966
1,176
4,125
943
1,025
1,027
Average realized third-party price per
metric ton of alumina
$
371
$
363
$
354
$
344
$
358
$
372
$
399
$
485
Third-party bauxite sales
$
136
$
113
$
111
$
124
$
484
$
64
$
96
$
93
Third-party alumina sales
$
721
$
781
$
846
$
781
$
3,129
$
897
$
914
$
1,003
Intersegment alumina sales
$
421
$
397
$
381
$
449
$
1,648
$
395
$
457
$
565
Segment Adjusted EBITDA(1)
$
103
$
33
$
53
$
84
$
273
$
139
$
186
$
367
Depreciation and amortization
$
77
$
80
$
89
$
87
$
333
$
87
$
90
$
85
Equity (loss) income
$
(17
)
$
(11
)
$
(9
)
$
(11
)
$
(48
)
$
(11
)
$
2
$
6
Aluminum:
Aluminum production (kmt)
518
523
532
541
2,114
542
543
559
Total aluminum shipments (kmt)
600
623
630
638
2,491
634
677
638
Average realized third-party price per
metric ton of aluminum
$
3,079
$
2,924
$
2,647
$
2,678
$
2,828
$
2,620
$
2,858
$
2,877
Third-party sales
$
1,810
$
1,788
$
1,644
$
1,683
$
6,925
$
1,638
$
1,895
$
1,802
Intersegment sales
$
3
$
4
$
4
$
4
$
15
$
4
$
3
$
5
Segment Adjusted EBITDA(1)
$
184
$
110
$
79
$
88
$
461
$
50
$
233
$
180
Depreciation and amortization
$
70
$
68
$
69
$
70
$
277
$
68
$
68
$
68
Equity (loss) income
$
(57
)
$
(16
)
$
(15
)
$
(18
)
$
(106
)
$
2
$
21
$
(11
)
Reconciliation of Total Segment
Adjusted EBITDA to Consolidated net (loss) income attributable to
Alcoa Corporation:
Total Segment Adjusted EBITDA(1)
$
287
$
143
$
132
$
172
$
734
$
189
$
419
$
547
Unallocated amounts:
Transformation(2)
(8
)
(17
)
(29
)
(26
)
(80
)
(14
)
(16
)
(14
)
Intersegment eliminations
(8
)
31
(4
)
(12
)
7
(8
)
(29
)
(38
)
Corporate expenses(3)
(30
)
(24
)
(33
)
(46
)
(133
)
(34
)
(41
)
(39
)
Provision for depreciation, depletion, and
amortization
(153
)
(153
)
(163
)
(163
)
(632
)
(161
)
(163
)
(159
)
Restructuring and other charges, net
(149
)
(24
)
(22
)
11
(184
)
(202
)
(18
)
(30
)
Interest expense
(26
)
(27
)
(26
)
(28
)
(107
)
(27
)
(40
)
(44
)
Other (expenses) income, net
(54
)
(6
)
(85
)
11
(134
)
(59
)
22
(12
)
Other(4)
(39
)
(22
)
2
4
(55
)
(9
)
(42
)
(27
)
Consolidated (loss) income before income
taxes
(180
)
(99
)
(228
)
(77
)
(584
)
(325
)
92
184
(Provision for) benefit from income
taxes
(52
)
(22
)
35
(150
)
(189
)
18
(61
)
(86
)
Net loss (income) attributable to
noncontrolling interest
1
19
25
77
122
55
(11
)
(8
)
Consolidated net (loss) income
attributable to Alcoa Corporation
$
(231
)
$
(102
)
$
(168
)
$
(150
)
$
(651
)
$
(252
)
$
20
$
90
The difference between segment totals and
consolidated amounts is in Corporate.
(1)
Alcoa Corporation’s definition of Adjusted
EBITDA (Earnings before interest, taxes, depreciation, and
amortization) is net margin plus an add-back for depreciation,
depletion, and amortization. Net margin is equivalent to Sales
minus the following items: Cost of goods sold; Selling, general
administrative, and other expenses; Research and development
expenses; and Provision for depreciation, depletion, and
amortization. The Adjusted EBITDA presented may not be comparable
to similarly titled measures of other companies.
(2)
Transformation includes, among other
items, the Adjusted EBITDA of previously closed operations.
(3)
Corporate expenses are composed of general
administrative and other expenses of operating the corporate
headquarters and other global administrative facilities, as well as
research and development expenses of the corporate technical
center.
(4)
Other includes certain items that are not
included in the Adjusted EBITDA of the reportable segments.
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited)
(in millions, except per-share
amounts)
Adjusted Income
Income (Loss)
Quarter ended
September 30, 2024
June 30, 2024
September 30, 2023
Net income (loss) attributable to Alcoa
Corporation
$
90
$
20
$
(168
)
Special items:
Restructuring and other charges, net
30
18
22
Other special items(1)
34
(18
)
13
Discrete and other tax items
impacts(2)
(3
)
—
(60
)
Tax impact on special items(3)
(12
)
5
(6
)
Noncontrolling interest impact(3)
(4
)
5
(3
)
Subtotal
45
10
(34
)
Net income (loss) attributable to Alcoa
Corporation – as adjusted
$
135
$
30
$
(202
)
Diluted EPS(4):
Net income (loss) attributable to Alcoa
Corporation common shareholders
$
0.38
$
0.11
$
(0.94
)
Net income (loss) attributable to Alcoa
Corporation common shareholders – as adjusted
$
0.57
$
0.16
$
(1.14
)
Net income (loss) attributable to Alcoa
Corporation – as adjusted and Diluted EPS – as adjusted are
non-GAAP financial measures. Management believes these measures are
meaningful to investors because management reviews the operating
results of Alcoa Corporation excluding the impacts of restructuring
and other charges, various tax items, and other special items
(collectively, “special items”). There can be no assurances that
additional special items will not occur in future periods. To
compensate for this limitation, management believes it is
appropriate to consider Net income (loss) attributable to Alcoa
Corporation and Diluted EPS determined under GAAP as well as Net
income (loss) attributable to Alcoa Corporation – as adjusted and
Diluted EPS – as adjusted.
(1)
Other special items include the
following:
- for the quarter ended September 30, 2024, a net unfavorable
change in mark-to-market energy derivative instruments ($31),
external costs related to portfolio actions ($4), and a net benefit
for other special items ($1);
- for the quarter ended June 30, 2024, a net favorable change in
mark-to-market energy derivative instruments ($26), an adjustment
to the gain on sale of the Warrick Rolling Mill in Evansville,
Indiana for additional site separation costs ($4), external costs
related to portfolio actions ($2), and net charges for other
special items ($2); and,
- for the quarter ended September 30, 2023, a net unfavorable
change in mark-to-market energy derivative instruments ($21), gain
on sale of non-core rights ($9), and charges for other special
items ($1).
(2)
Discrete and other tax items are generally
unusual or infrequently occurring items, changes in law, items
associated with uncertain tax positions, or the effect of
measurement-period adjustments and include the following:
- for the quarter ended September 30, 2024, a net benefit for
discrete tax items ($3).
- for the quarter ended September 30, 2023, a benefit related to
the reversal of a valuation allowance on deferred tax assets of the
Company's subsidiaries in Iceland ($58) and a net benefit for other
discrete tax items ($2).
(3)
The tax impact on special items is based
on the applicable statutory rates in the jurisdictions where the
special items occurred. The noncontrolling interest impact on
special items represents Alcoa’s partner’s share of certain special
items.
(4)
In any period with a Net loss attributable
to Alcoa Corporation (GAAP or as adjusted), the average number of
common shares applicable to diluted earnings per share exclude
certain share equivalents as their effect is anti-dilutive. For the
quarter ended September 30, 2024, undistributed earnings of $1 and
undistributed earnings – as adjusted of $2 were allocated to
preferred stock under the two-class method.
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Adjusted EBITDA
Quarter ended
September 30, 2024
June 30, 2024
September 30, 2023
Net income (loss) attributable to Alcoa
Corporation
$
90
$
20
$
(168
)
Add:
Net income (loss) attributable to
noncontrolling interest
8
11
(25
)
Provision for (benefit from) income
taxes
86
61
(35
)
Other expenses (income), net
12
(22
)
85
Interest expense
44
40
26
Restructuring and other charges, net
30
18
22
Provision for depreciation, depletion, and
amortization
159
163
163
Adjusted EBITDA
429
291
68
Special items(1)
26
34
2
Adjusted EBITDA, excluding special
items
$
455
$
325
$
70
Alcoa Corporation’s definition of Adjusted
EBITDA (Earnings before interest, taxes, depreciation, and
amortization) is net margin plus an add-back for depreciation,
depletion, and amortization. Net margin is equivalent to Sales
minus the following items: Cost of goods sold; Selling, general
administrative, and other expenses; Research and development
expenses; and Provision for depreciation, depletion, and
amortization. Adjusted EBITDA is a non-GAAP financial measure.
Management believes this measure is meaningful to investors because
Adjusted EBITDA provides additional information with respect to
Alcoa Corporation’s operating performance and the Company’s ability
to meet its financial obligations. The Adjusted EBITDA presented
may not be comparable to similarly titled measures of other
companies.
(1)
Special items include the following (see
reconciliation of Adjusted Income above for additional
information):
- for the quarter ended September 30, 2024, the mark-to-market
contracts associated with the Portland smelter generated gains
($21) in Other expenses (income), net which economically offset a
portion of the cost of power recorded in Cost of goods sold. This
non-GAAP reclass presents the net cost of power within Cost of
goods sold. This was in addition to external costs related to
portfolio actions ($4) and charges for other specials items
($1);
- for the quarter ended June 30, 2024, net cost of power
associated with the Portland smelter ($29), external costs related
to portfolio actions ($2), and net charges for other specials items
($3); and,
- for the quarter ended September 30, 2023, costs related to the
restart process at the Alumar, Brazil smelter ($1) and costs
related to the restart process at the San Ciprián, Spain smelter
($1).
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Free Cash Flow
Quarter ended
September 30, 2024
June 30, 2024
September 30, 2023
Cash provided from operations
$
143
$
287
$
69
Capital expenditures
(146
)
(164
)
(145
)
Free cash flow
$
(3
)
$
123
$
(76
)
Free Cash Flow is a non-GAAP financial
measure. Management believes this measure is meaningful to
investors because management reviews cash flows generated from
operations after taking into consideration capital expenditures,
which are necessary to maintain and expand Alcoa Corporation’s
asset base and are expected to generate future cash flows from
operations. It is important to note that Free Cash Flow does not
represent the residual cash flow available for discretionary
expenditures since other non-discretionary expenditures, such as
mandatory debt service requirements, are not deducted from the
measure.
Net Debt
September 30, 2024
December 31, 2023
Short-term borrowings
$
12
$
56
Long-term debt due within one year
464
79
Long-term debt, less amount due within one
year
2,469
1,732
Total debt
2,945
1,867
Less: Cash and cash equivalents
1,313
944
Net debt
$
1,632
$
923
Net debt is a non-GAAP financial measure.
Management believes this measure is meaningful to investors because
management assesses Alcoa Corporation’s leverage position after
considering available cash that could be used to repay outstanding
debt. When cash exceeds total debt, the measure is expressed as net
cash.
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Adjusted Net Debt and Proportional
Adjusted Net Debt
September 30, 2024
December 31, 2023
Consolidated
NCI
Alcoa Proportional
Consolidated
NCI
Alcoa Proportional
Short-term borrowings
$
12
$
—
$
12
$
56
$
—
$
56
Long-term debt due within one year
464
—
464
79
31
48
Long-term debt, less amount due within one
year
2,469
—
2,469
1,732
—
1,732
Total debt
2,945
—
2,945
1,867
31
1,836
Less: Cash and cash equivalents
1,313
—
1,313
944
141
803
Net debt (net cash)
1,632
—
1,632
923
(110
)
1,033
Plus: Net pension / OPEB liability
581
—
581
657
17
640
Adjusted net debt (net cash)
$
2,213
$
—
$
2,213
$
1,580
$
(93
)
$
1,673
Net debt is a non-GAAP financial measure.
Management believes that this measure is meaningful to investors
because management assesses Alcoa Corporation’s leverage position
after considering available cash that could be used to repay
outstanding debt. When cash exceeds total debt, the measure is
expressed as net cash.
Adjusted net debt and proportional
adjusted net debt (prior to Alcoa’s acquisition of Alumina Limited
on August 1, 2024) are also non-GAAP financial measures. Management
believes that these additional measures are meaningful to investors
because management also assesses Alcoa Corporation’s leverage
position after considering available cash that could be used to
repay outstanding debt and net pension/OPEB liability, net of the
portion of those items attributable to noncontrolling interest
(NCI).
DWC Working Capital and Days Working
Capital
Quarter ended
September 30, 2024
June 30, 2024
September 30, 2023
Receivables from customers
$
862
$
939
$
691
Add: Inventories
2,096
1,975
2,190
Less: Accounts payable, trade
(1,544
)
(1,619
)
(1,472
)
DWC working capital
$
1,414
$
1,295
$
1,409
Sales
$
2,904
$
2,906
$
2,602
Number of days in the quarter
92
91
92
Days working capital(1)
45
41
50
DWC working capital and Days working
capital are non-GAAP financial measures. Management believes that
these measures are meaningful to investors because management uses
its working capital position to assess Alcoa Corporation’s
efficiency in liquidity management.
(1)
Days working capital is calculated as DWC
working capital divided by the quotient of Sales and number of days
in the quarter.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241012435567/en/
Investor Contact: Yolande Doctor +1 412 992 5450
Yolande.B.Doctor@alcoa.com Media Contact: Courtney Boone +1
412 527 9792 Courtney.Boone@alcoa.com
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