Alcoa Corporation Reports Second Quarter 2024 Results
Financial Results and Highlights
M, except per share amounts |
2Q24 |
|
1Q24 |
|
2Q23 |
|
|||
Revenue |
$ |
2,906 |
|
$ |
2,599 |
|
$ |
2,684 |
|
Net income (loss) attributable to |
$ |
20 |
|
$ |
(252 |
) |
$ |
(102 |
) |
Income (loss) per share attributable to |
$ |
0.11 |
|
$ |
(1.41 |
) |
$ |
(0.57 |
) |
Adjusted net income (loss) |
$ |
30 |
|
$ |
(145 |
) |
$ |
(62 |
) |
Adjusted income (loss) per share |
$ |
0.16 |
|
$ |
(0.81 |
) |
$ |
(0.35 |
) |
Adjusted EBITDA excluding special items |
$ |
325 |
|
$ |
132 |
|
$ |
137 |
|
-
Revenue increased 12 percent sequentially to
$2.9 billion , on higher alumina and aluminum prices -
Net income increased sequentially to
$20 million , or$0.11 per share -
Adjusted net income increased to
$30 million , or$0.16 per share -
Adjusted EBITDA excluding special items increased sequentially to
$325 million -
Alumina Limited acquisition expected to close on or about
August 1, 2024 -
Completed the full curtailment of
Kwinana refinery inAustralia -
Paid quarterly cash dividend of
$0.10 per share of common stock, totaling$18 million -
Finished the second quarter 2024 with cash balance of
$1.4 billion
“It was another fast-paced quarter at
Second Quarter 2024 Results
-
Production: Alumina production decreased 5 percent sequentially to 2.53 million metric tons primarily due to the full curtailment of the
Kwinana refinery completed inJune 2024 . In the Aluminum segment,Alcoa produced 543,000 metric tons, demonstrating a seventh consecutive quarter of increased aluminum production. -
Shipments: In the Alumina segment, third-party shipments of alumina decreased 5 percent sequentially primarily due to the full curtailment of the
Kwinana refinery . In Aluminum, total shipments increased 7 percent sequentially primarily due to the timing of shipments and the restart of one potline at Warrick Operations in the first quarter 2024. -
Revenue: The Company’s total third-party revenue of
$2.9 billion increased 12 percent sequentially. In the Alumina segment, third-party revenue increased 5 percent on a 7 percent increase in average realized third-party price, partially offset by lower shipments. In the Aluminum segment, third-party revenue increased 16 percent on a 9 percent increase in average realized third-party price and increased shipments. -
Net income attributable to
Alcoa Corporation was$20 million , or$0.11 per share. Sequentially, the results reflect higher average realized third-party prices for alumina and aluminum and lower production and raw material costs, partially offset by higher energy costs and higher interest expense. Additionally, the results reflect the non-recurrence of a$197 million charge in the first quarter 2024 related to the full curtailment of theKwinana refinery . -
Adjusted net income was
$30 million , or$0.16 per share, excluding the impact from net special items of$10 million . Notable special items include a mark-to-market gain of$26 million related to energy contracts, which was more than offset by restructuring related charges of$18 million and the tax and noncontrolling interest impact of these items. -
Adjusted EBITDA excluding special items was
$325 million , a sequential increase of$193 million primarily due to higher average realized third-party prices for alumina and aluminum and lower production and raw material costs, partially offset by higher energy costs. -
Cash:
Alcoa ended the quarter with a cash balance of$1.4 billion . Cash provided from operations was$287 million . Cash used for financing activities was$75 million primarily related to$21 million of net payments on short-term borrowings,$22 million in net distributions to noncontrolling interest and$18 million in cash dividends on common stock. Cash used for investing activities was$164 million due to capital expenditures of$164 million . Free cash flow was$123 million . -
Working capital: For the second quarter, Receivables from customers of
$0.9 billion , Inventories of$2.0 billion and Accounts payable, trade of$1.6 billion comprised DWC working capital.Alcoa reported 41 days working capital, a sequential decrease of six days primarily due to a decrease in inventory days, partially offset by a decrease in accounts payable days both on higher sales and favorable changes in balances in the second quarter.
Key Actions
-
Acquisition of Alumina Limited:
Alcoa expects its acquisition of Alumina Limited to be completed on or aboutAugust 1, 2024 , subject to approval of the transaction by the shareholders of Alumina Limited. OnJuly 17, 2024 ,Alcoa announced voting results of its Special Meeting of Stockholders, at which its stockholders approved the issuance ofAlcoa shares for the transaction. All required regulatory approvals for the transaction have been received after theAustralian Foreign Investment Review Board approved the transaction onJune 13, 2024 . OnJune 11, 2024 ,Alcoa announced it had reached several other key milestones for the transaction. -
ELYSISTM: On
June 28, 2024 , the Companyannounced further progress on ELYSIS technology with Rio Tinto’s plans to launch the first industrial-scale demonstration of the breakthrough technology. -
San Ciprián complex: During the second quarter 2024,
Alcoa continued to work to find competitive energy solutions for both the San Ciprián refinery and smelter, while progressing the process for the potential sale of the complex. Both alumina and aluminum prices improved during the second quarter, and based on current economic conditions,Alcoa anticipates that available funding will be exhausted by the end of 2024. -
Kwinana refinery: The Company completed the full curtailment of the
Kwinana refinery inAustralia inJune 2024 , as planned. -
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 second quarter 2024, the Company had implemented numerous run rate improvements and realized year over year raw materials savings which are projected to achieve$350 million of the target. The Company is on track to deliver the full target by year end 2025.
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.
Within third quarter 2024 Alumina Segment Adjusted EBITDA, the Company expects sequential unfavorable impacts of
Within third quarter 2024 Aluminum Segment Adjusted EBITDA, the Company expects favorable raw material prices of
Interest expense in the third quarter 2024 is expected to increase by approximately
Based on current alumina and aluminum market conditions,
Net income attributable to noncontrolling interest will be reported through the closing of the Alumina Limited acquisition in the third quarter and is expected to approximate
Conference Call
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
Dissemination of Company Information
About
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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
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
Statement of Consolidated Operations (unaudited) (dollars in millions, except per-share amounts) |
||||||||||||
|
|
Quarter Ended |
||||||||||
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
2,906 |
|
|
$ |
2,599 |
|
|
$ |
2,684 |
|
|
|
|
|
|
|
|
|
|||||
Cost of goods sold (exclusive of expenses below) |
|
|
2,533 |
|
|
|
2,404 |
|
|
|
2,515 |
|
Selling, general administrative, and other expenses |
|
|
69 |
|
|
|
60 |
|
|
|
52 |
|
Research and development expenses |
|
|
13 |
|
|
|
11 |
|
|
|
6 |
|
Provision for depreciation, depletion, and amortization |
|
|
163 |
|
|
|
161 |
|
|
|
153 |
|
Restructuring and other charges, net |
|
|
18 |
|
|
|
202 |
|
|
|
24 |
|
Interest expense |
|
|
40 |
|
|
|
27 |
|
|
|
27 |
|
Other (income) expenses, net |
|
|
(22 |
) |
|
|
59 |
|
|
|
6 |
|
Total costs and expenses |
|
|
2,814 |
|
|
|
2,924 |
|
|
|
2,783 |
|
|
|
|
|
|
|
|
|
|||||
Income (loss) before income taxes |
|
|
92 |
|
|
|
(325 |
) |
|
|
(99 |
) |
Provision for (benefit from) income taxes |
|
|
61 |
|
|
|
(18 |
) |
|
|
22 |
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
|
31 |
|
|
|
(307 |
) |
|
|
(121 |
) |
|
|
|
|
|
|
|
|
|||||
Less: Net income (loss) attributable to noncontrolling interest |
|
|
11 |
|
|
|
(55 |
) |
|
|
(19 |
) |
|
|
|
|
|
||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA CORPORATION |
|
$ |
20 |
|
$ |
(252 |
) |
$ |
(102 |
) |
||
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS: |
|
|
|
|
|
|||||||
Basic: |
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
$ |
0.11 |
|
|
$ |
(1.41 |
) |
|
$ |
(0.57 |
) |
Average number of shares |
|
|
179,560,596 |
|
|
|
179,285,359 |
|
|
|
178,404,252 |
|
|
|
|
|
|
|
|
|
|||||
Diluted: |
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
$ |
0.11 |
|
|
$ |
(1.41 |
) |
|
$ |
(0.57 |
) |
Average number of shares |
|
|
181,056,581 |
|
|
|
179,285,359 |
|
|
|
178,404,252 |
|
|
|
|
|
|
|
|
Statement of Consolidated Operations (unaudited) (dollars in millions, except per-share amounts) |
||||||||
|
|
Six Months Ended |
||||||
|
|
|
|
|
||||
Sales |
|
$ |
5,505 |
|
|
$ |
5,354 |
|
|
|
|
|
|
||||
Cost of goods sold (exclusive of expenses below) |
|
|
4,937 |
|
|
|
4,919 |
|
Selling, general administrative, and other expenses |
|
|
129 |
|
|
|
106 |
|
Research and development expenses |
|
|
24 |
|
|
|
16 |
|
Provision for depreciation, depletion, and amortization |
|
|
324 |
|
|
|
306 |
|
Restructuring and other charges, net |
|
|
220 |
|
|
|
173 |
|
Interest expense |
|
|
67 |
|
|
|
53 |
|
Other expenses, net |
|
|
37 |
|
|
|
60 |
|
Total costs and expenses |
|
|
5,738 |
|
|
|
5,633 |
|
|
|
|
|
|
||||
Loss before income taxes |
|
|
(233 |
) |
|
|
(279 |
) |
Provision for income taxes |
|
|
43 |
|
|
|
74 |
|
|
|
|
|
|
||||
Net loss |
|
|
(276 |
) |
|
|
(353 |
) |
|
|
|
|
|
||||
Less: Net loss attributable to noncontrolling interest |
|
|
(44 |
) |
|
|
(20 |
) |
|
|
|
|
|
||||
NET LOSS ATTRIBUTABLE TO ALCOA CORPORATION |
|
$ |
(232 |
) |
|
$ |
(333 |
) |
|
|
|
|
|
||||
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS: |
|
|
|
|
||||
Basic: |
|
|
|
|
||||
Net loss |
|
$ |
(1.29 |
) |
|
$ |
(1.87 |
) |
Average number of shares |
|
|
179,403,447 |
|
|
|
178,182,657 |
|
|
|
|
|
|
||||
Diluted: |
|
|
|
|
||||
Net loss |
|
$ |
(1.29 |
) |
|
$ |
(1.87 |
) |
Average number of shares |
|
|
179,403,447 |
|
|
|
178,182,657 |
|
|
|
|
|
|
Consolidated Balance Sheet (unaudited) (in millions) |
||||||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,396 |
|
|
$ |
944 |
|
Receivables from customers |
|
|
939 |
|
|
|
656 |
|
Other receivables |
|
|
135 |
|
|
|
152 |
|
Inventories |
|
|
1,975 |
|
|
|
2,158 |
|
Fair value of derivative instruments |
|
|
38 |
|
|
|
29 |
|
Prepaid expenses and other current assets(1) |
|
|
420 |
|
|
|
466 |
|
Total current assets |
|
|
4,903 |
|
|
|
4,405 |
|
Properties, plants, and equipment |
|
|
19,999 |
|
|
|
20,381 |
|
Less: accumulated depreciation, depletion, and amortization |
|
|
13,496 |
|
|
|
13,596 |
|
Properties, plants, and equipment, net |
|
|
6,503 |
|
|
|
6,785 |
|
Investments |
|
|
989 |
|
|
|
979 |
|
Deferred income taxes |
|
|
311 |
|
|
|
333 |
|
Fair value of derivative instruments |
|
|
— |
|
|
|
3 |
|
Other noncurrent assets(2) |
|
|
1,601 |
|
|
|
1,650 |
|
Total assets |
|
$ |
14,307 |
|
|
$ |
14,155 |
|
LIABILITIES |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable, trade |
|
$ |
1,619 |
|
|
$ |
1,714 |
|
Accrued compensation and retirement costs |
|
|
358 |
|
|
|
357 |
|
Taxes, including income taxes |
|
|
119 |
|
|
|
88 |
|
Fair value of derivative instruments |
|
|
251 |
|
|
|
214 |
|
Other current liabilities |
|
|
740 |
|
|
|
578 |
|
Long-term debt due within one year |
|
|
79 |
|
|
|
79 |
|
Total current liabilities |
|
|
3,166 |
|
|
|
3,030 |
|
Long-term debt, less amount due within one year |
|
|
2,469 |
|
|
|
1,732 |
|
Accrued pension benefits |
|
|
264 |
|
|
|
278 |
|
Accrued other postretirement benefits |
|
|
427 |
|
|
|
443 |
|
Asset retirement obligations |
|
|
699 |
|
|
|
772 |
|
Environmental remediation |
|
|
191 |
|
|
|
202 |
|
Fair value of derivative instruments |
|
|
951 |
|
|
|
1,092 |
|
Noncurrent income taxes |
|
|
133 |
|
|
|
193 |
|
Other noncurrent liabilities and deferred credits |
|
|
591 |
|
|
|
568 |
|
Total liabilities |
|
|
8,891 |
|
|
|
8,310 |
|
EQUITY |
|
|
|
|
||||
|
|
|
|
|
||||
Common stock |
|
|
2 |
|
|
|
2 |
|
Additional capital |
|
|
9,196 |
|
|
|
9,187 |
|
Accumulated deficit |
|
|
(1,562 |
) |
|
|
(1,293 |
) |
Accumulated other comprehensive loss |
|
|
(3,737 |
) |
|
|
(3,645 |
) |
|
|
|
3,899 |
|
|
|
4,251 |
|
Noncontrolling interest |
|
|
1,517 |
|
|
|
1,594 |
|
Total equity |
|
|
5,416 |
|
|
|
5,845 |
|
Total liabilities and equity |
|
$ |
14,307 |
|
|
$ |
14,155 |
|
(1) |
|
This line item includes |
(2) |
|
This line item includes |
Statement of Consolidated Cash Flows (unaudited) (in millions) |
||||||||
|
|
Six Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
CASH FROM OPERATIONS |
|
|
|
|
|
|||
Net loss |
|
$ |
(276 |
) |
|
$ |
(353 |
) |
Adjustments to reconcile net loss to cash from operations: |
|
|
|
|
|
|||
Depreciation, depletion, and amortization |
|
|
324 |
|
|
|
306 |
|
Deferred income taxes |
|
|
(75 |
) |
|
|
(36 |
) |
Equity (income) loss, net of dividends |
|
|
(8 |
) |
|
|
123 |
|
Restructuring and other charges, net |
|
|
220 |
|
|
|
173 |
|
Net loss from investing activities – asset sales |
|
|
17 |
|
|
|
19 |
|
Net periodic pension benefit cost |
|
|
5 |
|
|
|
2 |
|
Stock-based compensation |
|
|
22 |
|
|
|
21 |
|
(Gain) loss on mark-to-market derivative financial contracts |
|
|
(19 |
) |
|
|
4 |
|
Other |
|
|
31 |
|
|
|
59 |
|
Changes in assets and liabilities, excluding effects of divestitures and foreign currency translation adjustments: |
|
|
|
|
|
|||
(Increase) decrease in receivables |
|
|
(283 |
) |
|
|
71 |
|
Decrease in inventories |
|
|
157 |
|
|
|
22 |
|
Decrease in prepaid expenses and other current assets |
|
|
23 |
|
|
|
63 |
|
Decrease in accounts payable, trade |
|
|
(57 |
) |
|
|
(277 |
) |
Decrease in accrued expenses |
|
|
(30 |
) |
|
|
(48 |
) |
Increase (decrease) in taxes, including income taxes |
|
|
70 |
|
|
|
(146 |
) |
Pension contributions |
|
|
(10 |
) |
|
|
(9 |
) |
Decrease (increase) in noncurrent assets |
|
|
25 |
|
|
|
(66 |
) |
Decrease in noncurrent liabilities |
|
|
(72 |
) |
|
|
(104 |
) |
CASH PROVIDED FROM (USED FOR) OPERATIONS |
|
|
64 |
|
|
|
(176 |
) |
|
|
|
|
|
|
|||
FINANCING ACTIVITIES |
|
|
|
|
|
|||
Additions to debt |
|
|
989 |
|
|
|
25 |
|
Payments on debt |
|
|
(266 |
) |
|
|
(16 |
) |
Proceeds from the exercise of employee stock options |
|
|
— |
|
|
|
1 |
|
Dividends paid on |
|
|
(37 |
) |
|
|
(36 |
) |
Payments related to tax withholding on stock-based compensation awards |
|
|
(15 |
) |
|
|
(34 |
) |
Financial contributions for the divestiture of businesses |
|
|
(12 |
) |
|
|
(25 |
) |
Contributions from noncontrolling interest |
|
|
65 |
|
|
|
122 |
|
Distributions to noncontrolling interest |
|
|
(32 |
) |
|
|
(22 |
) |
Other |
|
|
(13 |
) |
|
|
1 |
|
CASH PROVIDED FROM FINANCING ACTIVITIES |
|
|
679 |
|
|
|
16 |
|
|
|
|
|
|
|
|||
INVESTING ACTIVITIES |
|
|
|
|
|
|||
Capital expenditures |
|
|
(265 |
) |
|
|
(198 |
) |
Proceeds from the sale of assets |
|
|
2 |
|
|
|
2 |
|
Additions to investments |
|
|
(17 |
) |
|
|
(36 |
) |
Other |
|
|
(1 |
) |
|
|
10 |
|
CASH USED FOR INVESTING ACTIVITIES |
|
|
(281 |
) |
|
|
(222 |
) |
|
|
|
|
|||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(16 |
) |
|
|
5 |
|
Net change in cash and cash equivalents and restricted cash |
|
|
446 |
|
|
|
(377 |
) |
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 |
|
$ |
1,493 |
|
$ |
1,097 |
|
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 |
|
|||||||
Alumina: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bauxite production (mdmt) |
|
9.9 |
|
|
|
10.0 |
|
|
|
10.7 |
|
|
|
10.4 |
|
|
|
41.0 |
|
|
|
10.1 |
|
|
|
9.5 |
|
Third-party bauxite shipments (mdmt) |
|
1.9 |
|
|
|
1.8 |
|
|
|
1.9 |
|
|
|
2.0 |
|
|
|
7.6 |
|
|
|
1.0 |
|
|
|
1.5 |
|
Alumina production (kmt) |
|
2,755 |
|
|
|
2,559 |
|
|
|
2,805 |
|
|
|
2,789 |
|
|
|
10,908 |
|
|
|
2,670 |
|
|
|
2,539 |
|
Third-party alumina shipments (kmt) |
|
1,929 |
|
|
|
2,136 |
|
|
|
2,374 |
|
|
|
2,259 |
|
|
|
8,698 |
|
|
|
2,397 |
|
|
|
2,267 |
|
Intersegment alumina shipments (kmt) |
|
1,039 |
|
|
|
944 |
|
|
|
966 |
|
|
|
1,176 |
|
|
|
4,125 |
|
|
|
943 |
|
|
|
1,025 |
|
Average realized third-party price per metric ton of alumina |
$ |
371 |
|
|
$ |
363 |
|
|
$ |
354 |
|
|
$ |
344 |
|
|
$ |
358 |
|
|
$ |
372 |
|
|
$ |
399 |
|
Third-party bauxite sales |
$ |
136 |
|
|
$ |
113 |
|
|
$ |
111 |
|
|
$ |
124 |
|
|
$ |
484 |
|
|
$ |
64 |
|
|
$ |
96 |
|
Third-party alumina sales |
$ |
721 |
|
|
$ |
781 |
|
|
$ |
846 |
|
|
$ |
781 |
|
|
$ |
3,129 |
|
|
$ |
897 |
|
|
$ |
914 |
|
Intersegment alumina sales |
$ |
421 |
|
|
$ |
397 |
|
|
$ |
381 |
|
|
$ |
449 |
|
|
$ |
1,648 |
|
|
$ |
395 |
|
|
$ |
457 |
|
Segment Adjusted EBITDA(1) |
$ |
103 |
|
|
$ |
33 |
|
|
$ |
53 |
|
|
$ |
84 |
|
|
$ |
273 |
|
|
$ |
139 |
|
|
$ |
186 |
|
Depreciation and amortization |
$ |
77 |
|
|
$ |
80 |
|
|
$ |
89 |
|
|
$ |
87 |
|
|
$ |
333 |
|
|
$ |
87 |
|
|
$ |
90 |
|
Equity (loss) income |
$ |
(17 |
) |
|
$ |
(11 |
) |
|
$ |
(9 |
) |
|
$ |
(11 |
) |
|
$ |
(48 |
) |
|
$ |
(11 |
) |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Aluminum: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Aluminum production (kmt) |
|
518 |
|
|
|
523 |
|
|
|
532 |
|
|
|
541 |
|
|
|
2,114 |
|
|
|
542 |
|
|
|
543 |
|
Total aluminum shipments (kmt) |
|
600 |
|
|
|
623 |
|
|
|
630 |
|
|
|
638 |
|
|
|
2,491 |
|
|
|
634 |
|
|
|
677 |
|
Average realized third-party price per metric ton of aluminum |
$ |
3,079 |
|
|
$ |
2,924 |
|
|
$ |
2,647 |
|
|
$ |
2,678 |
|
|
$ |
2,828 |
|
|
$ |
2,620 |
|
|
$ |
2,858 |
|
Third-party sales |
$ |
1,810 |
|
|
$ |
1,788 |
|
|
$ |
1,644 |
|
|
$ |
1,683 |
|
|
$ |
6,925 |
|
|
$ |
1,638 |
|
|
$ |
1,895 |
|
Intersegment sales |
$ |
3 |
|
|
$ |
4 |
|
|
$ |
4 |
|
|
$ |
4 |
|
|
$ |
15 |
|
|
$ |
4 |
|
|
$ |
3 |
|
Segment Adjusted EBITDA(1) |
$ |
184 |
|
|
$ |
110 |
|
|
$ |
79 |
|
|
$ |
88 |
|
|
$ |
461 |
|
|
$ |
50 |
|
|
$ |
233 |
|
Depreciation and amortization |
$ |
70 |
|
|
$ |
68 |
|
|
$ |
69 |
|
|
$ |
70 |
|
|
$ |
277 |
|
|
$ |
68 |
|
|
$ |
68 |
|
Equity (loss) income |
$ |
(57 |
) |
|
$ |
(16 |
) |
|
$ |
(15 |
) |
|
$ |
(18 |
) |
|
$ |
(106 |
) |
|
$ |
2 |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Reconciliation of Total Segment Adjusted EBITDA to Consolidated net (loss) income attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Segment Adjusted EBITDA(1) |
$ |
287 |
|
|
$ |
143 |
|
|
$ |
132 |
|
|
$ |
172 |
|
|
$ |
734 |
|
|
$ |
189 |
|
|
$ |
419 |
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Transformation(2) |
|
(8 |
) |
|
|
(17 |
) |
|
|
(29 |
) |
|
|
(26 |
) |
|
|
(80 |
) |
|
|
(14 |
) |
|
|
(16 |
) |
Intersegment eliminations |
|
(8 |
) |
|
|
31 |
|
|
|
(4 |
) |
|
|
(12 |
) |
|
|
7 |
|
|
|
(8 |
) |
|
|
(29 |
) |
Corporate expenses(3) |
|
(30 |
) |
|
|
(24 |
) |
|
|
(33 |
) |
|
|
(46 |
) |
|
|
(133 |
) |
|
|
(34 |
) |
|
|
(41 |
) |
Provision for depreciation, depletion, and amortization |
|
(153 |
) |
|
|
(153 |
) |
|
|
(163 |
) |
|
|
(163 |
) |
|
|
(632 |
) |
|
|
(161 |
) |
|
|
(163 |
) |
Restructuring and other charges, net |
|
(149 |
) |
|
|
(24 |
) |
|
|
(22 |
) |
|
|
11 |
|
|
|
(184 |
) |
|
|
(202 |
) |
|
|
(18 |
) |
Interest expense |
|
(26 |
) |
|
|
(27 |
) |
|
|
(26 |
) |
|
|
(28 |
) |
|
|
(107 |
) |
|
|
(27 |
) |
|
|
(40 |
) |
Other (expenses) income, net |
|
(54 |
) |
|
|
(6 |
) |
|
|
(85 |
) |
|
|
11 |
|
|
|
(134 |
) |
|
|
(59 |
) |
|
|
22 |
|
Other(4) |
|
(39 |
) |
|
|
(22 |
) |
|
|
2 |
|
|
|
4 |
|
|
|
(55 |
) |
|
|
(9 |
) |
|
|
(42 |
) |
Consolidated (loss) income before income taxes |
|
(180 |
) |
|
|
(99 |
) |
|
|
(228 |
) |
|
|
(77 |
) |
|
|
(584 |
) |
|
|
(325 |
) |
|
|
92 |
|
(Provision for) benefit from income taxes |
|
(52 |
) |
|
|
(22 |
) |
|
|
35 |
|
|
|
(150 |
) |
|
|
(189 |
) |
|
|
18 |
|
|
|
(61 |
) |
Net loss (income) attributable to noncontrolling interest |
|
1 |
|
|
|
19 |
|
|
|
25 |
|
|
|
77 |
|
|
|
122 |
|
|
|
55 |
|
|
|
(11 |
) |
Consolidated net (loss) income attributable to |
$ |
(231 |
) |
|
$ |
(102 |
) |
|
$ |
(168 |
) |
|
$ |
(150 |
) |
|
$ |
(651 |
) |
|
$ |
(252 |
) |
|
$ |
20 |
|
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. |
Calculation of Financial Measures (unaudited) (in millions, except per-share amounts) |
||||||||||||||||||||||||
Adjusted Income |
|
Income (Loss) |
|
Diluted EPS(4) |
||||||||||||||||||||
|
|
Quarter ended |
|
Quarter ended |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) attributable to |
|
$ |
20 |
|
|
$ |
(252 |
) |
|
$ |
(102 |
) |
|
$ |
0.11 |
|
|
$ |
(1.41 |
) |
|
$ |
(0.57 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring and other charges, net |
|
|
18 |
|
|
|
202 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|||
Other special items(1) |
|
|
(18 |
) |
|
|
22 |
|
|
|
35 |
|
|
|
|
|
|
|
|
|
|
|||
Discrete and other tax items impacts(2) |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|||
Tax impact on special items(3) |
|
|
5 |
|
|
|
(60 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|||
Noncontrolling interest impact(3) |
|
|
5 |
|
|
|
(57 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|||
Subtotal |
|
|
10 |
|
|
|
107 |
|
|
|
40 |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to |
|
$ |
30 |
|
|
$ |
(145 |
) |
|
$ |
(62 |
) |
|
$ |
0.16 |
|
|
$ |
(0.81 |
) |
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to |
||
(1) |
|
Other special items include the following:
|
(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:
|
(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 |
Calculation of Financial Measures (unaudited), continued (in millions) |
||||||||||||
Adjusted EBITDA |
|
Quarter ended |
||||||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to |
|
$ |
20 |
|
|
$ |
(252 |
) |
|
$ |
(102 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Add: |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) attributable to noncontrolling interest |
|
|
11 |
|
|
|
(55 |
) |
|
|
(19 |
) |
Provision for (benefit from) income taxes |
|
|
61 |
|
|
|
(18 |
) |
|
|
22 |
|
Other (income) expenses, net |
|
|
(22 |
) |
|
|
59 |
|
|
|
6 |
|
Interest expense |
|
|
40 |
|
|
|
27 |
|
|
|
27 |
|
Restructuring and other charges, net |
|
|
18 |
|
|
|
202 |
|
|
|
24 |
|
Provision for depreciation, depletion, and amortization |
|
|
163 |
|
|
|
161 |
|
|
|
153 |
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA |
|
|
291 |
|
|
|
124 |
|
|
|
111 |
|
|
|
|
|
|
|
|
|
|
|
|||
Special items(1) |
|
|
34 |
|
|
|
8 |
|
|
|
26 |
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA, excluding special items |
|
$ |
325 |
|
|
$ |
132 |
|
|
$ |
137 |
|
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):
|
Calculation of Financial Measures (unaudited), continued (in millions) |
||||||||||||
Free Cash Flow |
|
Quarter ended |
||||||||||
|
|
|
|
|
|
|
||||||
Cash provided from (used for) operations |
|
$ |
287 |
|
|
$ |
(223 |
) |
|
$ |
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
|
(164 |
) |
|
|
(101 |
) |
|
|
(115 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Free cash flow |
|
$ |
123 |
|
|
$ |
(324 |
) |
|
$ |
(128 |
) |
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 |
|
|
|
|
||||
Short-term borrowings |
|
$ |
31 |
|
|
$ |
56 |
|
Long-term debt due within one year |
|
|
79 |
|
|
|
79 |
|
Long-term debt, less amount due within one year |
|
|
2,469 |
|
|
|
1,732 |
|
Total debt |
|
|
2,579 |
|
|
|
1,867 |
|
|
|
|
|
|
|
|
||
Less: Cash and cash equivalents |
|
|
1,396 |
|
|
|
944 |
|
|
|
|
|
|
|
|
||
Net debt |
|
$ |
1,183 |
|
|
$ |
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. |
Calculation of Financial Measures (unaudited), continued (in millions)
Adjusted Net Debt and Proportional Adjusted Net Debt |
||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
Consolidated |
NCI |
|
|
Consolidated |
NCI |
|
||||||||||||||||
Short-term borrowings |
|
$ |
31 |
|
|
$ |
— |
|
|
$ |
31 |
|
|
$ |
56 |
|
|
$ |
— |
|
|
$ |
56 |
|
Long-term debt due within one year |
|
|
79 |
|
|
|
31 |
|
|
|
48 |
|
|
|
79 |
|
|
|
31 |
|
|
|
48 |
|
Long-term debt, less amount due within one year |
|
|
2,469 |
|
|
|
— |
|
|
|
2,469 |
|
|
|
1,732 |
|
|
|
— |
|
|
|
1,732 |
|
Total debt |
|
|
2,579 |
|
|
|
31 |
|
|
|
2,548 |
|
|
|
1,867 |
|
|
|
31 |
|
|
|
1,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Less: Cash and cash equivalents |
|
|
1,396 |
|
|
|
156 |
|
|
|
1,240 |
|
|
|
944 |
|
|
|
141 |
|
|
|
803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net debt (net cash) |
|
|
1,183 |
|
|
|
(125 |
) |
|
|
1,308 |
|
|
|
923 |
|
|
|
(110 |
) |
|
|
1,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plus: Net pension / OPEB liability |
|
|
599 |
|
|
|
8 |
|
|
|
591 |
|
|
|
657 |
|
|
|
17 |
|
|
|
640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net debt (net cash) |
|
$ |
1,782 |
|
|
$ |
(117 |
) |
|
$ |
1,899 |
|
|
$ |
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 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). |
|
||||||||||||
|
|
Quarter ended |
||||||||||
|
|
|
|
|
|
|
||||||
Receivables from customers |
|
$ |
939 |
|
|
$ |
869 |
|
|
$ |
702 |
|
|
|
|
|
|
|
|
|
|
|
|||
Add: Inventories |
|
|
1,975 |
|
|
|
2,048 |
|
|
|
2,400 |
|
|
|
|
|
|
|
|
|
|
|
|||
Less: Accounts payable, trade |
|
|
(1,619 |
) |
|
|
(1,586 |
) |
|
|
(1,491 |
) |
|
|
|
|
|
|
|
|
|
|
|||
DWC working capital |
|
$ |
1,295 |
|
|
$ |
1,331 |
|
|
$ |
1,611 |
|
|
|
|
|
|
|
|
|
|
|
|||
Sales |
|
$ |
2,906 |
|
|
$ |
2,599 |
|
|
$ |
2,684 |
|
|
|
|
|
|
|
|
|
|
|
|||
Number of days in the quarter |
|
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
|
|
|
|
|
|
|
|
|
|||
Days working capital(1) |
|
|
41 |
|
|
|
47 |
|
|
|
55 |
|
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/20240715430360/en/
Investor Contact:
+1 412 992 5450
James.Dwyer@alcoa.com
Media Contact:
+1 412 527 9792
Courtney.Boone@alcoa.com
Source: