Alcoa Corporation Reports First Quarter 2024 Results
Financial Results and Highlights
M, except per share amounts |
1Q24 |
4Q23 |
1Q23 |
|||
Revenue |
|
|
|
|||
Net loss attributable to |
|
|
|
|||
Loss per share attributable to |
|
|
|
|||
Adjusted net loss |
|
|
|
|||
Adjusted loss per share |
|
|
|
|||
Adjusted EBITDA excluding special items |
|
|
|
-
Entered into binding agreement to acquire
Alumina Limited in all-stock transaction - Initiated process for the potential sale of the San Ciprián complex
- Completed restart of one potline at Warrick Operations
-
Announced curtailment of
Kwinana refinery inAustralia to be completed in the second quarter 2024 - Implemented productivity and competitiveness program
-
Paid quarterly cash dividend of
$0.10 per share of common stock, totaling$19 million -
Finished the first quarter 2024 with cash balance of
$1.4 billion , includes$737 million in net proceeds fromMarch 2024 green bond issuance
“In the first quarter of 2024, we finalized the terms of our acquisition of
First Quarter 2024 Results
-
Production: Alumina production decreased 4 percent sequentially to 2.67 million metric tons on lower production from the
Australia refineries. In Aluminum,Alcoa produced 542,000 metric tons, consistent with the fourth quarter’s strong output.
- Shipments: In the Alumina segment, third-party shipments of alumina increased 6 percent sequentially primarily due to increased trading. In Aluminum, total shipments decreased 1 percent sequentially.
-
Revenue: The Company’s total third-party revenue of
$2.6 billion was consistent with the prior quarter. In the Alumina segment, third-party revenue increased 6 percent due to the higher average realized third-party price for alumina and higher shipments. In the Aluminum segment, third-party revenue decreased 3 percent due to the lower average realized third-party price for aluminum, driven by the unfavorable sequential impact of the Alumar smelter restart hedge program which ended inDecember 2023 and timing of shipments.
-
Net loss attributable to
Alcoa Corporation was$252 million , or$1.41 per share. Sequentially, the results reflect lower average realized third-party prices for aluminum and higher production costs, partially offset by lower energy and raw material costs. Additionally, the results include a charge of$197 million related to the curtailment of theKwinana refinery , and reflect the non-recurrence of a charge to tax expense of$152 million to record a valuation allowance on Alcoa World Alumina Brasil Ltda. (AWAB) deferred tax assets in the fourth quarter 2023.
-
Adjusted net loss was
$145 million , or$0.81 per share, excluding the impact from net special items of$107 million . Notable special items include$197 million related to the curtailment of theKwinana refinery discussed above, partially offset by tax and noncontrolling interest impacts of$117 million .
-
Adjusted EBITDA excluding special items was
$132 million , a sequential increase of$43 million primarily due to lower energy and raw material costs, partially offset by lower average realized third-party price for aluminum and higher production costs.
Production costs increased primarily due to the non-recurrence of the full year benefit of$36 million for the credit related to Section 45X of the Inflation Reduction Act recorded in the fourth quarter 2023.
-
Cash:
Alcoa ended the quarter with a cash balance of$1.4 billion . Cash used for operations was$223 million . Cash provided from financing activities was$754 million primarily related to the net proceeds from the debt issuance of$737 million . Cash used for investing activities was$117 million primarily related to capital expenditures of$101 million .
-
Working capital: For the first 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 47 days working capital, a sequential increase of eight days. The increase is primarily due to typical first quarter increase in accounts receivable and a decrease in accounts payable.
Key Actions
Strategic
-
Alumina Limited : OnMarch 11, 2024 ,Alcoa announced that it entered into a binding Scheme Implementation Deed withAlumina Limited (ASX: AWC), under whichAlcoa will acquireAlumina Limited in an all-scrip, or all-stock, transaction. The acquisition ofAlumina Limited will enhance Alcoa’s position as a leading pure play, upstream aluminum company globally, while simplifying the Company’s corporate structure and governance, resulting in greater operational flexibility and strategic optionality.
Operational
-
San Ciprián complex: During the first quarter of 2024,
Alcoa completed the restart of approximately 6 percent of pots at the smelter in compliance with theFebruary 2023 updated viability agreement. Although both energy and API prices improved during the quarter, the improvements are insufficient for the long-term viability of the complex forAlcoa . Additionally, near-term government support remains unlikely. While continuing to optimize the smelter and refinery operations and preserve cash, and as part ofAlcoa's efforts to find a long-term solution for the complex,Alcoa initiated a process for the potential sale of the complex during the first quarter of 2024 and anticipates completing the bid process byJune 2024 .
-
Warrick Operations: During the first quarter 2024, the Company completed the restart of one potline (54,000 mtpy) that was curtailed in
July 2022 .
-
Kwinana refinery: On
January 8, 2024 , the Company announced the decision to curtail theKwinana refinery inAustralia to be completed in the second quarter of 2024.
Financial
-
Green bond issuance: On
March 21, 2024 , the Company closed an offering of$750 million aggregate principal amount of 7.125 percent senior notes due in 2031. This was the Company’s first notes issuance under its new Green Finance Framework, which prioritizes climate change mitigation expenditures related to circular or low carbon products, pollution prevention technologies, renewable energy, and water management. Net proceeds from the issuance, which can be allocated to qualifying expenditures on a two year look back and three year look forward, are expected to cover expenses associated with both new and existing decarbonization and water management projects, research and development, renewable energy, and the production of low carbon alumina and aluminum products. The Company does not expect to allocate part of the net proceeds to significant capital investments in breakthrough technologies as those are not expected to occur in the remainder of this decade.
-
Productivity and competitiveness program: In
January 2024 , the Company initiated a productivity and competitiveness program across its global operations and functions. The program is part of the Company’s objective to improve overall competitiveness and profitability and includes a target to save approximately 5 percent of operating costs, exclusive of raw materials, energy and transportation costs, which are already under active management and cost control programs. Total savings are expected to approximate$100 million on a run rate basis and to be achieved by the first quarter of 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 second quarter 2024 Alumina Segment Adjusted EBITDA, the Company expects sequential unfavorable impacts of
Within second quarter 2024 Aluminum Segment Adjusted EBITDA, the Company expects favorable raw material prices and production costs to be fully offset by higher energy costs. Alumina costs in the Aluminum segment are expected to be unfavorable by
Other expenses for the first quarter of 2024 included unfavorable impacts of approximately
Based on current alumina and aluminum market conditions,
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
Discover more by visiting www.alcoa.com. Follow us on our social media channels: Facebook, Instagram, X, YouTube and LinkedIn.
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
Additional Information and Where to Find It
This news release does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities. This communication relates to the proposed transaction. In connection with the proposed transaction,
Participants in the Solicitation
Non-GAAP Financial Measures
This 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 |
|
$ |
2,599 |
|
|
$ |
2,595 |
|
|
$ |
2,670 |
|
|
|
|
|
|
|
|
||||||
Cost of goods sold (exclusive of expenses below) |
|
|
2,404 |
|
|
|
2,425 |
|
|
|
2,404 |
|
Selling, general administrative, and other expenses |
|
|
60 |
|
|
|
64 |
|
|
|
54 |
|
Research and development expenses |
|
|
11 |
|
|
|
14 |
|
|
|
10 |
|
Provision for depreciation, depletion, and amortization |
|
|
161 |
|
|
|
163 |
|
|
|
153 |
|
Restructuring and other charges, net |
|
|
202 |
|
|
|
(11 |
) |
|
|
149 |
|
Interest expense |
|
|
27 |
|
|
|
28 |
|
|
|
26 |
|
Other expenses (income), net |
|
|
59 |
|
|
|
(11 |
) |
|
|
54 |
|
Total costs and expenses |
|
|
2,924 |
|
|
|
2,672 |
|
|
|
2,850 |
|
|
|
|
|
|
|
|
||||||
Loss before income taxes |
|
|
(325 |
) |
|
|
(77 |
) |
|
|
(180 |
) |
(Benefit from) provision for income taxes |
|
|
(18 |
) |
|
|
150 |
|
|
|
52 |
|
|
|
|
|
|
|
|
||||||
Net loss |
|
|
(307 |
) |
|
|
(227 |
) |
|
|
(232 |
) |
|
|
|
|
|
|
|
||||||
Less: Net loss attributable to noncontrolling interest |
|
|
(55 |
) |
|
|
(77 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
||||||
NET LOSS ATTRIBUTABLE TO ALCOA CORPORATION |
|
$ |
(252 |
) |
|
$ |
(150 |
) |
|
$ |
(231 |
) |
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS: |
|
|
|
|
|
|
||||||
Basic: |
|
|
|
|
|
|
||||||
Net loss |
|
$ |
(1.41 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.30 |
) |
Average number of shares |
|
|
179,285,359 |
|
|
|
178,466,610 |
|
|
|
178,012,784 |
|
|
|
|
|
|
|
|
||||||
Diluted: |
|
|
|
|
|
|
||||||
Net loss |
|
$ |
(1.41 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.30 |
) |
Average number of shares |
|
|
179,285,359 |
|
|
|
178,466,610 |
|
|
|
178,012,784 |
|
|
|
|
|
|
|
|
Consolidated Balance Sheet (unaudited) (in millions)
|
||||||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,358 |
|
|
$ |
944 |
|
Receivables from customers |
|
|
869 |
|
|
|
656 |
|
Other receivables |
|
|
132 |
|
|
|
152 |
|
Inventories |
|
|
2,048 |
|
|
|
2,158 |
|
Fair value of derivative instruments |
|
|
22 |
|
|
|
29 |
|
Prepaid expenses and other current assets(1) |
|
|
452 |
|
|
|
466 |
|
Total current assets |
|
|
4,881 |
|
|
|
4,405 |
|
Properties, plants, and equipment |
|
|
19,959 |
|
|
|
20,381 |
|
Less: accumulated depreciation, depletion, and amortization |
|
|
13,382 |
|
|
|
13,596 |
|
Properties, plants, and equipment, net |
|
|
6,577 |
|
|
|
6,785 |
|
Investments |
|
|
969 |
|
|
|
979 |
|
Deferred income taxes |
|
|
295 |
|
|
|
333 |
|
Fair value of derivative instruments |
|
|
1 |
|
|
|
3 |
|
Other noncurrent assets(2) |
|
|
1,605 |
|
|
|
1,650 |
|
Total assets |
|
$ |
14,328 |
|
|
$ |
14,155 |
|
LIABILITIES |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable, trade |
|
$ |
1,586 |
|
|
$ |
1,714 |
|
Accrued compensation and retirement costs |
|
|
331 |
|
|
|
357 |
|
Taxes, including income taxes |
|
|
94 |
|
|
|
88 |
|
Fair value of derivative instruments |
|
|
205 |
|
|
|
214 |
|
Other current liabilities |
|
|
746 |
|
|
|
578 |
|
Long-term debt due within one year |
|
|
79 |
|
|
|
79 |
|
Total current liabilities |
|
|
3,041 |
|
|
|
3,030 |
|
Long-term debt, less amount due within one year |
|
|
2,469 |
|
|
|
1,732 |
|
Accrued pension benefits |
|
|
267 |
|
|
|
278 |
|
Accrued other postretirement benefits |
|
|
437 |
|
|
|
443 |
|
Asset retirement obligations |
|
|
718 |
|
|
|
772 |
|
Environmental remediation |
|
|
197 |
|
|
|
202 |
|
Fair value of derivative instruments |
|
|
925 |
|
|
|
1,092 |
|
Noncurrent income taxes |
|
|
134 |
|
|
|
193 |
|
Other noncurrent liabilities and deferred credits |
|
|
606 |
|
|
|
568 |
|
Total liabilities |
|
|
8,794 |
|
|
|
8,310 |
|
EQUITY |
|
|
|
|
||||
|
|
|
|
|
||||
Common stock |
|
|
2 |
|
|
|
2 |
|
Additional capital |
|
|
9,184 |
|
|
|
9,187 |
|
Accumulated deficit |
|
|
(1,564 |
) |
|
|
(1,293 |
) |
Accumulated other comprehensive loss |
|
|
(3,628 |
) |
|
|
(3,645 |
) |
|
|
|
3,994 |
|
|
|
4,251 |
|
Noncontrolling interest |
|
|
1,540 |
|
|
|
1,594 |
|
Total equity |
|
|
5,534 |
|
|
|
5,845 |
|
Total liabilities and equity |
|
$ |
14,328 |
|
|
$ |
14,155 |
|
(1) |
This line item includes |
(2) |
This line item includes |
Statement of Consolidated Cash Flows (unaudited) (in millions)
|
||||||||
|
|
Three Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
CASH FROM OPERATIONS |
|
|
|
|
||||
Net loss |
|
$ |
(307 |
) |
|
$ |
(232 |
) |
Adjustments to reconcile net loss to cash from operations: |
|
|
|
|
||||
Depreciation, depletion, and amortization |
|
|
161 |
|
|
|
153 |
|
Deferred income taxes |
|
|
(63 |
) |
|
|
(24 |
) |
Equity loss, net of dividends |
|
|
23 |
|
|
|
93 |
|
Restructuring and other charges, net |
|
|
202 |
|
|
|
149 |
|
Net loss from investing activities – asset sales |
|
|
11 |
|
|
|
18 |
|
Net periodic pension benefit cost |
|
|
3 |
|
|
|
1 |
|
Stock-based compensation |
|
|
10 |
|
|
|
10 |
|
Loss (gain) on mark-to-market derivative financial contracts |
|
|
2 |
|
|
|
(18 |
) |
Other |
|
|
20 |
|
|
|
48 |
|
Changes in assets and liabilities, excluding effects of divestitures and foreign currency translation adjustments: |
|
|
|
|
||||
(Increase) decrease in receivables |
|
|
(212 |
) |
|
|
40 |
|
Decrease in inventories |
|
|
71 |
|
|
|
17 |
|
(Increase) decrease in prepaid expenses and other current assets |
|
|
(6 |
) |
|
|
4 |
|
Decrease in accounts payable, trade |
|
|
(98 |
) |
|
|
(273 |
) |
Decrease in accrued expenses |
|
|
(22 |
) |
|
|
(45 |
) |
Increase (decrease) in taxes, including income taxes |
|
|
18 |
|
|
|
(13 |
) |
Pension contributions |
|
|
(6 |
) |
|
|
(4 |
) |
Decrease (increase) in noncurrent assets |
|
|
9 |
|
|
|
(29 |
) |
Decrease in noncurrent liabilities |
|
|
(39 |
) |
|
|
(58 |
) |
CASH USED FOR OPERATIONS |
|
|
(223 |
) |
|
|
(163 |
) |
|
|
|
|
|
||||
FINANCING ACTIVITIES |
|
|
|
|
||||
Additions to debt |
|
|
965 |
|
|
|
25 |
|
Payments on debt |
|
|
(221 |
) |
|
|
(1 |
) |
Proceeds from the exercise of employee stock options |
|
|
— |
|
|
|
1 |
|
Dividends paid on |
|
|
(19 |
) |
|
|
(18 |
) |
Payments related to tax withholding on stock-based compensation awards |
|
|
(15 |
) |
|
|
(34 |
) |
Financial contributions for the divestiture of businesses |
|
|
(7 |
) |
|
|
(14 |
) |
Contributions from noncontrolling interest |
|
|
61 |
|
|
|
86 |
|
Distributions to noncontrolling interest |
|
|
(6 |
) |
|
|
(6 |
) |
Other |
|
|
(4 |
) |
|
|
1 |
|
CASH PROVIDED FROM FINANCING ACTIVITIES |
|
|
754 |
|
|
|
40 |
|
|
|
|
|
|
||||
INVESTING ACTIVITIES |
|
|
|
|
||||
Capital expenditures |
|
|
(101 |
) |
|
|
(83 |
) |
Proceeds from the sale of assets |
|
|
1 |
|
|
|
1 |
|
Additions to investments |
|
|
(17 |
) |
|
|
(20 |
) |
CASH USED FOR INVESTING ACTIVITIES |
|
|
(117 |
) |
|
|
(102 |
) |
|
|
|
|
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
(6 |
) |
|
|
2 |
|
Net change in cash and cash equivalents and restricted cash |
|
|
408 |
|
|
|
(223 |
) |
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 |
|
$ |
1,455 |
|
|
$ |
1,251 |
|
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 |
|
||||||||||||
Alumina: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bauxite production (mdmt) |
|
9.9 |
|
|
|
10.0 |
|
|
|
10.7 |
|
|
|
10.4 |
|
|
|
41.0 |
|
|
|
10.1 |
|
|
Third-party bauxite shipments (mdmt) |
|
1.9 |
|
|
|
1.8 |
|
|
|
1.9 |
|
|
|
2.0 |
|
|
|
7.6 |
|
|
|
1.0 |
|
|
Alumina production (kmt) |
|
2,755 |
|
|
|
2,559 |
|
|
|
2,805 |
|
|
|
2,789 |
|
|
|
10,908 |
|
|
|
2,670 |
|
|
Third-party alumina shipments (kmt) |
|
1,929 |
|
|
|
2,136 |
|
|
|
2,374 |
|
|
|
2,259 |
|
|
|
8,698 |
|
|
|
2,397 |
|
|
Intersegment alumina shipments (kmt) |
|
1,039 |
|
|
|
944 |
|
|
|
966 |
|
|
|
1,176 |
|
|
|
4,125 |
|
|
|
943 |
|
|
Average realized third-party price per metric ton of alumina |
$ |
371 |
|
|
$ |
363 |
|
|
$ |
354 |
|
|
$ |
344 |
|
|
$ |
358 |
|
|
$ |
372 |
|
|
Third-party bauxite sales |
$ |
136 |
|
|
$ |
113 |
|
|
$ |
111 |
|
|
$ |
124 |
|
|
$ |
484 |
|
|
$ |
64 |
|
|
Third-party alumina sales |
$ |
721 |
|
|
$ |
781 |
|
|
$ |
846 |
|
|
$ |
781 |
|
|
$ |
3,129 |
|
|
$ |
897 |
|
|
Intersegment alumina sales |
$ |
421 |
|
|
$ |
397 |
|
|
$ |
381 |
|
|
$ |
449 |
|
|
$ |
1,648 |
|
|
$ |
395 |
|
|
Segment Adjusted EBITDA(1) |
$ |
103 |
|
|
$ |
33 |
|
|
$ |
53 |
|
|
$ |
84 |
|
|
$ |
273 |
|
|
$ |
139 |
|
|
Depreciation and amortization |
$ |
77 |
|
|
$ |
80 |
|
|
$ |
89 |
|
|
$ |
87 |
|
|
$ |
333 |
|
|
$ |
87 |
|
|
Equity loss |
$ |
(17 |
) |
|
$ |
(11 |
) |
|
$ |
(9 |
) |
|
$ |
(11 |
) |
|
$ |
(48 |
) |
|
$ |
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aluminum: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Aluminum production (kmt) |
|
518 |
|
|
|
523 |
|
|
|
532 |
|
|
|
541 |
|
|
|
2,114 |
|
|
|
542 |
|
|
Total aluminum shipments (kmt) |
|
600 |
|
|
|
623 |
|
|
|
630 |
|
|
|
638 |
|
|
|
2,491 |
|
|
|
634 |
|
|
Average realized third-party price per metric ton of aluminum |
$ |
3,079 |
|
|
$ |
2,924 |
|
|
$ |
2,647 |
|
|
$ |
2,678 |
|
|
$ |
2,828 |
|
|
$ |
2,620 |
|
|
Third-party sales |
$ |
1,810 |
|
|
$ |
1,788 |
|
|
$ |
1,644 |
|
|
$ |
1,683 |
|
|
$ |
6,925 |
|
|
$ |
1,638 |
|
|
Intersegment sales |
$ |
3 |
|
|
$ |
4 |
|
|
$ |
4 |
|
|
$ |
4 |
|
|
$ |
15 |
|
|
$ |
4 |
|
|
Segment Adjusted EBITDA(1) |
$ |
184 |
|
|
$ |
110 |
|
|
$ |
79 |
|
|
$ |
88 |
|
|
$ |
461 |
|
|
$ |
50 |
|
|
Depreciation and amortization |
$ |
70 |
|
|
$ |
68 |
|
|
$ |
69 |
|
|
$ |
70 |
|
|
$ |
277 |
|
|
$ |
68 |
|
|
Equity (loss) income |
$ |
(57 |
) |
|
$ |
(16 |
) |
|
$ |
(15 |
) |
|
$ |
(18 |
) |
|
$ |
(106 |
) |
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reconciliation of total segment
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Segment Adjusted EBITDA(1) |
$ |
287 |
|
|
$ |
143 |
|
|
$ |
132 |
|
|
$ |
172 |
|
|
$ |
734 |
|
|
$ |
189 |
|
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transformation(2) |
|
(8 |
) |
|
|
(17 |
) |
|
|
(29 |
) |
|
|
(26 |
) |
|
|
(80 |
) |
|
|
(14 |
) |
|
Intersegment eliminations |
|
(8 |
) |
|
|
31 |
|
|
|
(4 |
) |
|
|
(12 |
) |
|
|
7 |
|
|
|
(8 |
) |
|
Corporate expenses(3) |
|
(30 |
) |
|
|
(24 |
) |
|
|
(33 |
) |
|
|
(46 |
) |
|
|
(133 |
) |
|
|
(34 |
) |
|
Provision for depreciation, depletion, and amortization |
|
(153 |
) |
|
|
(153 |
) |
|
|
(163 |
) |
|
|
(163 |
) |
|
|
(632 |
) |
|
|
(161 |
) |
|
Restructuring and other charges, net |
|
(149 |
) |
|
|
(24 |
) |
|
|
(22 |
) |
|
|
11 |
|
|
|
(184 |
) |
|
|
(202 |
) |
|
Interest expense |
|
(26 |
) |
|
|
(27 |
) |
|
|
(26 |
) |
|
|
(28 |
) |
|
|
(107 |
) |
|
|
(27 |
) |
|
Other (expenses) income, net |
|
(54 |
) |
|
|
(6 |
) |
|
|
(85 |
) |
|
|
11 |
|
|
|
(134 |
) |
|
|
(59 |
) |
|
Other(4) |
|
(39 |
) |
|
|
(22 |
) |
|
|
2 |
|
|
|
4 |
|
|
|
(55 |
) |
|
|
(9 |
) |
|
Consolidated loss before income taxes |
|
(180 |
) |
|
|
(99 |
) |
|
|
(228 |
) |
|
|
(77 |
) |
|
|
(584 |
) |
|
|
(325 |
) |
|
(Provision for) benefit from income taxes |
|
(52 |
) |
|
|
(22 |
) |
|
|
35 |
|
|
|
(150 |
) |
|
|
(189 |
) |
|
|
18 |
|
|
Net loss attributable to noncontrolling interest |
|
1 |
|
|
|
19 |
|
|
|
25 |
|
|
|
77 |
|
|
|
122 |
|
|
|
55 |
|
|
Consolidated net loss attributable to |
$ |
(231 |
) |
|
$ |
(102 |
) |
|
$ |
(168 |
) |
|
$ |
(150 |
) |
|
$ |
(651 |
) |
|
$ |
(252 |
) |
|
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 |
|
(Loss) Income |
|
Diluted EPS(4) |
||||||||||||||||||||
|
|
Quarter ended |
|
Quarter ended |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss attributable to |
|
$ |
(252 |
) |
|
$ |
(150 |
) |
|
$ |
(231 |
) |
|
$ |
(1.41 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring and other charges, net |
|
|
202 |
|
|
|
(11 |
) |
|
|
149 |
|
|
|
|
|
|
|
||||||
Other special items(1) |
|
|
22 |
|
|
|
(2 |
) |
|
|
25 |
|
|
|
|
|
|
|
||||||
Discrete and other tax items impacts(2) |
|
|
— |
|
|
|
102 |
|
|
|
2 |
|
|
|
|
|
|
|
||||||
Tax impact on special items(3) |
|
|
(60 |
) |
|
|
1 |
|
|
|
6 |
|
|
|
|
|
|
|
||||||
Noncontrolling interest impact(3) |
|
|
(57 |
) |
|
|
(40 |
) |
|
|
8 |
|
|
|
|
|
|
|
||||||
Subtotal |
|
|
107 |
|
|
|
50 |
|
|
|
190 |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss attributable to |
|
$ |
(145 |
) |
|
$ |
(100 |
) |
|
$ |
(41 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net 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 loss attributable to |
|
$ |
(252 |
) |
|
$ |
(150 |
) |
|
$ |
(231 |
) |
|
|
|
|
|
|
|
||||||
Add: |
|
|
|
|
|
|
||||||
Net loss attributable to noncontrolling interest |
|
|
(55 |
) |
|
|
(77 |
) |
|
|
(1 |
) |
(Benefit from) provision for income taxes |
|
|
(18 |
) |
|
|
150 |
|
|
|
52 |
|
Other expenses (income), net |
|
|
59 |
|
|
|
(11 |
) |
|
|
54 |
|
Interest expense |
|
|
27 |
|
|
|
28 |
|
|
|
26 |
|
Restructuring and other charges, net |
|
|
202 |
|
|
|
(11 |
) |
|
|
149 |
|
Provision for depreciation, depletion, and amortization |
|
|
161 |
|
|
|
163 |
|
|
|
153 |
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA |
|
|
124 |
|
|
|
92 |
|
|
|
202 |
|
|
|
|
|
|
|
|
||||||
Special items(1) |
|
|
8 |
|
|
|
(3 |
) |
|
|
38 |
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA, excluding special items |
|
$ |
132 |
|
|
$ |
89 |
|
|
$ |
240 |
|
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 (used for) provided from operations |
|
$ |
(223 |
) |
|
$ |
198 |
|
|
$ |
(163 |
) |
|
|
|
|
|
|
|
||||||
Capital expenditures |
|
|
(101 |
) |
|
|
(188 |
) |
|
|
(83 |
) |
|
|
|
|
|
|
|
||||||
Free cash flow |
|
$ |
(324 |
) |
|
$ |
10 |
|
|
$ |
(246 |
) |
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 |
|
$ |
52 |
|
$ |
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 |
|
|
2,600 |
|
|
|
1,867 |
|
|
|
|
|
|
||||
Less: Cash and cash equivalents |
|
|
1,358 |
|
|
|
944 |
|
|
|
|
|
|
||||
Net debt |
|
$ |
1,242 |
|
|
$ |
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 |
Alcoa Proportional |
|
|
Consolidated |
NCI |
Alcoa Proportional |
||||||||||||||||
Short-term borrowings |
|
$ |
52 |
|
$ |
— |
|
|
$ |
52 |
|
|
$ |
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 |
|
|
2,600 |
|
|
|
31 |
|
|
|
2,569 |
|
|
|
|
1,867 |
|
|
|
31 |
|
|
|
1,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less: Cash and cash equivalents |
|
|
1,358 |
|
|
|
142 |
|
|
|
1,216 |
|
|
|
|
944 |
|
|
|
141 |
|
|
|
803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net debt (net cash) |
|
|
1,242 |
|
|
|
(111 |
) |
|
|
1,353 |
|
|
|
|
923 |
|
|
|
(110 |
) |
|
|
1,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Plus: Net pension / OPEB liability |
|
|
637 |
|
|
|
17 |
|
|
|
620 |
|
|
|
|
657 |
|
|
|
17 |
|
|
|
640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net debt (net cash) |
|
$ |
1,879 |
|
|
$ |
(94 |
) |
|
$ |
1,973 |
|
|
|
$ |
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 |
|
$ |
869 |
|
|
$ |
656 |
|
|
$ |
753 |
|
|
|
|
|
|
|
|
||||||
Add: Inventories |
|
|
2,048 |
|
|
|
2,158 |
|
|
|
2,395 |
|
|
|
|
|
|
|
|
||||||
Less: Accounts payable, trade |
|
|
(1,586 |
) |
|
|
(1,714 |
) |
|
|
(1,489 |
) |
|
|
|
|
|
|
|
||||||
DWC working capital |
|
$ |
1,331 |
|
|
$ |
1,100 |
|
|
$ |
1,659 |
|
|
|
|
|
|
|
|
||||||
Sales |
|
$ |
2,599 |
|
|
$ |
2,595 |
|
|
$ |
2,670 |
|
|
|
|
|
|
|
|
||||||
Number of days in the quarter |
|
|
91 |
|
|
|
92 |
|
|
|
90 |
|
|
|
|
|
|
|
|
||||||
Days working capital(1) |
|
|
47 |
|
|
|
39 |
|
|
|
56 |
|
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/20240412060300/en/
Investor Contact:
Media Contact:
Source: