Alcoa Corporation (the “Company”) announced today the initiation
of a quarterly cash dividend on its common stock and a new $500
million share repurchase program.
The Board of Directors declared the first quarterly cash
dividend of $0.10 per share of the Company’s common stock, to be
paid on November 19, 2021 to stockholders of record as of the close
of business on October 29, 2021.
“The Company’s decision to return cash to our stockholders
through our first-ever quarterly cash dividend program and a new
share repurchase program is a result of the significant work that
Alcoans have completed to improve our Company’s financial
position,” said Alcoa President and CEO Roy Harvey. “These new
programs are consistent with our capital allocation framework and
reflect our confidence in the strength of our Company and cash
generation ability.”
Harvey continued: “Based on our view of markets and expected
cash flows, we believe these programs can be sustained through the
commodity cycle.”
Alcoa Executive Vice President and Chief Financial Officer
William Oplinger said: “The share repurchase program will be
financed by operating cash flows and cash on hand, as the balance
sheet has continued to strengthen with proportional adjusted net
debt is at its lowest level since the inception of our Company in
2016.
“Today, we have no substantial debt maturities until 2027, and
our expected cash pension funding requirements are at their lowest
levels,” Oplinger said.
The annualized dividend is approximately 1% or greater than the
historical five-year, one-year, and six-month averages of the Alcoa
share price, a typical dividend initiation threshold. The Company
intends to pay cash dividends on a quarterly basis, with future
declarations subject to approval by its Board of Directors. The
details of any future cash dividend declaration, including the
amount of such dividend and the timing and establishment of the
record and payment dates, will be determined by the Board of
Directors. The decision of whether to pay future cash dividends and
the amount of any such dividends will be based on the Company's
financial position, results of operations, cash flows, capital
requirements, business conditions, the requirements of applicable
law, and any other factors the Board of Directors may deem
relevant.
In addition, the Company is authorized to repurchase up to a
total of $650 million of its outstanding shares of common stock,
which includes $500 million under the newly authorized share
repurchase program and a remaining $150 million under the Company’s
previously authorized share repurchase program. The timing of the
share repurchases will be based upon the Company’s continuing
analysis of market, financial, and other factors. Repurchases under
the programs may be made using a variety of methods, which may
include, but are not limited to, open market purchases, privately
negotiated transactions, or purchases pursuant to a Rule 10b5-1
plan. The new and previously authorized share repurchase programs
may be suspended or discontinued at any time and do not have
predetermined expiration dates. The Company intends to retire the
repurchased shares of common stock. As of September 30, 2021, the
Company had 187,060,044 issued and outstanding shares of common
stock.
About Alcoa Corporation
Alcoa (NYSE: AA) is a global industry leader in bauxite,
alumina, and aluminum products, and is built on a foundation of
strong values and operating excellence dating back 135 years to the
world-changing discovery that made aluminum an affordable and vital
part of modern life. Since developing the aluminum industry, and
throughout our history, our talented Alcoans have followed on with
breakthrough innovations and best practices that have led to
efficiency, safety, sustainability, and stronger communities
wherever we operate.
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.
Forward-Looking Statements
This release contains statements that relate to future events
and expectations, including those relating to our plans to declare
and pay cash dividends and execute share repurchases, 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 “anticipates,”
“endeavors,” “working,” “potential,” “ambition,” “develop,”
“reach,” “believes,” “could,” “estimates,” “expects,” “forecasts,”
“goal,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,”
“sees,” “should,” “targets,” “will,” “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, 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 or sustainability
performance; 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: (a) current and
potential future impacts of the coronavirus (COVID-19) pandemic on
the global economy and our business, financial condition, results
of operations, or cash flows and judgments and assumptions used in
our estimates; (b) material adverse changes in aluminum industry
conditions, including global supply and demand conditions and
fluctuations in London Metal Exchange-based prices and premiums, as
applicable, for primary aluminum and other products, and
fluctuations in indexed-based and spot prices for alumina; (c)
deterioration in global economic and financial market conditions
generally and which may also affect Alcoa Corporation’s ability to
obtain credit or financing upon acceptable terms or at all; (d)
unfavorable changes in the markets served by Alcoa Corporation; (e)
the impact of changes in foreign currency exchange and tax rates on
costs and results; (f) increases in energy or raw material costs or
uncertainty of energy supply or raw materials; (g) declines in the
discount rates used to measure pension and other postretirement
benefit liabilities or lower-than-expected investment returns on
pension assets, or unfavorable changes in laws or regulations that
govern pension plan funding; (h) the inability to achieve
improvement in profitability and margins, cost savings, cash
generation, revenue growth, fiscal discipline, sustainability
targets, or strengthening of competitiveness and operations
anticipated from portfolio actions, operational and productivity
improvements, technology advancements, and other initiatives; (i)
the inability to realize expected benefits, in each case as planned
and by targeted completion dates, from acquisitions, divestitures,
restructuring activities, facility closures, curtailments,
restarts, expansions, or joint ventures; (j) political, economic,
trade, legal, public health and safety, and regulatory risks in the
countries in which Alcoa Corporation operates or sells products;
(k) labor disputes and/or work stoppages; (l) the outcome of
contingencies, including legal and tax proceedings, government or
regulatory investigations, and environmental remediation; (m) the
impact of cyberattacks and potential information technology or data
security breaches; (n) risks associated with long-term debt
obligations; (o) the timing and amount of future cash dividends and
share repurchases; and (p) the other risk factors discussed in Part
I Item 1A of Alcoa Corporation’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2020 and other reports filed by
Alcoa Corporation with the U.S. Securities and Exchange Commission.
Alcoa Corporation 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20211014005906/en/
Investor Contact: James Dwyer 412-992-5450
James.Dwyer@alcoa.com
Media Contact: Jim Beck 412-315-2909 Jim.Beck@alcoa.com
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