Alcoa Corporation (NYSE: AA) today reported its highest
quarterly net income and earnings per share, eclipsing the prior
quarter’s record-setting financial performance and continuing to
capture benefits from strong aluminum pricing.
Third Quarter Highlights
- Grew revenue to $3.1 billion, a sequential increase of 10
percent
- Set a record for quarterly net income of $337 million and
earnings per share of $1.76
- Realized a 39 percent sequential increase in adjusted net
income to $391 million, and an 18 percent sequential increase in
Adjusted EBITDA excluding special items to $728 million
- Announced plans to restart 268,000 metric tons of curtailed
aluminum capacity at the Alumar smelter in São Luís, Brazil, to be
fully operational in the fourth quarter of 2022
- Redeemed $500 million in higher-interest rate notes; no debt
maturities until 2027
- Strengthened the balance sheet with total debt at $1.8 billion
and net debt of $350 million as of September 30, 2021; proportional
adjusted net debt of $1.7 billion, below the Company's target range
of $2.0 billion to $2.5 billion
- Generated $435 million in cash from operations; finished the
quarter with a cash balance of $1.45 billion
Financial Results
M, except per share amounts
3Q21
2Q21
3Q20
Revenue
$3,109
$2,833
$2,365
Net income (loss) attributable to Alcoa
Corporation
$337
$309
$(49)
Earnings (loss) per share attributable to
Alcoa Corporation
$1.76
$1.63
$(0.26)
Adjusted net income (loss)
$391
$281
$(218)
Adjusted earnings (loss) per share
$2.05
$1.49
$(1.17)
Adjusted EBITDA excluding special
items
$728
$618
$284
“The strategic work we’ve been implementing across our Company
has helped us effectively capture the benefits from very strong
market fundamentals and deliver another excellent quarter with
record profitability,” said Alcoa President and CEO Roy Harvey.
“Today, Alcoa is stronger and better poised for the future, and
we plan to continue our positive momentum and consistently deliver
value through the commodity cycle,” Harvey said.
Third Quarter 2021 Results
- Revenue: Higher aluminum and alumina prices, and higher
premiums for value-add products, drove a 10 percent sequential
increase in revenue to $3.1 billion. On a sequential basis, the
average realized third-party price of primary aluminum increased 13
percent.
- Shipments: In Aluminum, total third-party shipments
decreased 6 percent sequentially due to completion of accumulated
inventory sales at the San Ciprián smelter in the second quarter,
and a lack of railcar availability for the Canadian smelters in the
third quarter. Shipment volume for value-add aluminum products,
which includes specific shapes and alloys such as billet, slab,
foundry, and rod, decreased 5 percent sequentially primarily
attributable to European sales, which are seasonally lower in the
third quarter. In Alumina, third-party shipments were flat.
- Production: Aluminum production remained consistent with
the second quarter’s strong output. Alumina segment production was
down 4 percent with lower production in Western Australia, as well
as in Brazil due to a damaged ship unloader at the Alumar refinery.
July’s damage to the ship unloader reduced Alumar’s refining
production by about one-third. In early October, Alumar’s alumina
production was restored to approximately 95 percent capacity with
the use of temporary cranes to unload bauxite. Permanent repairs to
the unloader are being planned.
- Net income attributable to Alcoa Corporation of $337
million, or $1.76 per share, an improvement from the prior
quarter’s net income of $309 million, or $1.63 per share. The
record-setting results are primarily due to higher aluminum and
alumina prices, partially offset by the absence of the second
quarter’s gain on the sale of the former Eastalco site, and higher
raw materials and energy costs.
- Adjusted net income increased 39 percent sequentially to
$391 million, or $2.05 per share, excluding the impact from net
special items of $54 million. Notable special items include charges
of $28 million for the closure of the anode portion of the Lake
Charles facility and $22 million in debt redemption expenses.
- Adjusted EBITDA excluding special items increased 18
percent sequentially to $728 million, primarily due to higher
aluminum and alumina prices.
- Cash: Alcoa ended the quarter with cash on hand of $1.45
billion. Cash activity included the early redemption of $500
million aggregate principal amount of 7.00 percent senior notes due
in 2026. Cash provided from operations was $435 million. Cash used
for financing activities was $545 million, primarily related to the
early debt redemption. Cash used for investing activities was $77
million, primarily related to capital expenditures. Free cash flow
was $352 million.
- Debt: Total debt as of September 30, 2021 was $1.8
billion, an improvement from total debt of $2.3 billion in the
second quarter 2021 with the redemption of $500 million of 7.00
percent senior notes in September 2021. The redemption moves the
Company’s proportional adjusted net debt to $1.7 billion, below the
target range of $2.0 billion to $2.5 billion. The Company ended the
quarter with $350 million in net debt.
- Working capital: The Company reported 29 days working
capital, three days higher than the second quarter of 2021.
Compared to the third quarter 2020, excluding the working capital
of the Warrick rolling mill in the comparative period, days working
capital increased 10 days. Increased working capital is due
primarily to higher aluminum sales prices and raw materials
inflation in both periods.
Dividend and Share Repurchase Program
Today, October 14, 2021, Alcoa announced 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 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.
Portfolio Review
Alcoa continues to make progress against its five-year review of
production assets. When announced in October 2019, the review
included 1.5 million metric tons of smelting capacity to evaluate
options for significant improvement, curtailment, closure, or
divestiture. Alcoa has now addressed more than 700,000 metric tons
of global aluminum smelting capacity. Since announcing the review,
Alcoa has completed the curtailment of the Intalco smelter in
Washington State, repowered the Portland smelter in Australia, and
announced the restart of 268,000 metric tons of capacity at the
Alumar smelter in Brazil.
Alcoa also continues to seek a solution regarding the San
Ciprián aluminum smelter in Spain and its 228,000 metric tons of
capacity. The price of power in Spain for the smelter far exceeds
the averages for global smelters and those in the European Union.
Alcoa remains committed to transfer the aluminum smelter to a third
party as soon as the Spanish government can develop and implement a
competitive energy framework that would make the smelter viable. On
September 27, 2021, the workers’ representatives at the facility
initiated a strike that limits various activities and has blocked
aluminum shipments.
Advancing Sustainably
Alcoa continues to focus on its strategic priority to advance
sustainably. On October 4, 2021, the Company announced its ambition
to reach net zero greenhouse gas (GHG) emissions by 2050 for direct
(scope 1) and indirect (scope 2) emissions.
The endeavor to reach net zero GHG emissions complements the
Company’s existing targets, which include reducing direct and
indirect GHG emissions from aluminum smelting and alumina refining
operations by 30 percent by 2025 and 50 percent by 2030 from 2015
baselines.
On September 30, 2021, Alcoa announced a joint development
project to evaluate potential entry into the high purity alumina
(HPA) market, which is expected to experience continued growth to
support the sustainable economy. Market applications for this
particular non-metallurgical alumina includes LED lighting and
lithium ion batteries used in electric vehicles.
Alcoa continues to gain additional certifications for
sustainable production. In September, Alcoa announced that all of
the Canadian smelters it operates now have certification from the
Aluminium Stewardship Initiative (ASI), the industry’s most
comprehensive, third-party system to verify responsible production.
Today, Alcoa has 15 global operating sites certified to the ASI’s
Performance Standard. Also, the Company can sell at a premium
ASI-certified bauxite, alumina and aluminum.
2021 Outlook
Alcoa continues to expect a strong 2021 based on the continued
economic recovery and increased demand for aluminum in all end
markets. The Company’s Aluminum segment is forecasting double digit
growth on year-over-year shipment volume of value-add products, and
the Company expects annual global demand for primary aluminum to
increase approximately 10 percent relative to 2020 and to surpass
the pre-pandemic levels in 2019.
The Company’s 2021 shipment outlook for the Alumina and Aluminum
segments remains unchanged with Alumina projected at 14.1 to 14.2
million metric tons and Aluminum expected to be 2.9 to 3.0 million
metric tons.
In Bauxite, the shipment outlook is reduced by 1 million dry
metric tons to between 49.0 and 50.0 million dry metric tons due
primarily to reduced demand from the Alumar refinery during the
unloader outage in the third quarter.
Alcoa anticipates continued positive financial results in the
fourth quarter of 2021 and is well positioned to participate in
strong market pricing.
The San Ciprián refining and smelting operations are expected to
face significantly higher energy and raw materials costs, as well
as the loss of value-add premiums while strike conditions persist.
The resulting fourth quarter impact on net income attributable to
Alcoa could approximate $90 million. Included in that impact is the
reduction of approximately 52,000 metric tons of aluminum
shipments. Additionally, working capital increase in the fourth
quarter related to San Ciprián could approximate $120 million.
Beyond the San Ciprián impacts, the Company also anticipates
continuing inflationary pressure on raw materials and energy.
Based on current alumina and aluminum market conditions, the
Company expects fourth quarter tax expense of approximately $230
million, which may vary with market conditions and jurisdictional
profitability.
The COVID-19 pandemic is ongoing, and its magnitude and duration
continue to be unknown. The Company continues to take appropriate
measures to protect its employees and business from the risks of
the pandemic by following all appropriate health-based protocols.
Uncertainty around the pandemic’s impact on the Company’s business,
financial condition, operating results, and cash flows could cause
actual results to differ from this outlook.
Conference Call
Alcoa will hold its quarterly conference call at 5:00 p.m.
Eastern Daylight Time (EDT) on Thursday, October 14, 2021, to
present third quarter 2021 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 14, 2021. 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 into this press
release.
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.
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 “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.
Non-GAAP Financial Measures
Some of the information included in this release is derived from
Alcoa Corporation’s consolidated financial information but is not
presented in Alcoa Corporation’s financial statements prepared in
accordance with accounting principles generally accepted in the
United States of America (GAAP). Certain of these data are
considered “non-GAAP financial measures” under SEC regulations.
Alcoa Corporation believes that the presentation of 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.
Reconciliations to the most directly comparable GAAP financial
measures and 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, 2021
June 30, 2021
September 30, 2020
Sales
$
3,109
$
2,833
$
2,365
Cost of goods sold (exclusive of expenses
below)
2,322
2,156
2,038
Selling, general administrative, and other
expenses
53
54
47
Research and development expenses
8
6
6
Provision for depreciation, depletion, and
amortization
156
161
161
Restructuring and other charges, net
33
33
5
Interest expense
58
67
41
Other (income) expenses, net
(18
)
(105
)
45
Total costs and expenses
2,612
2,372
2,343
Income before income taxes
497
461
22
Provision for income taxes
127
111
42
Net income (loss)
370
350
(20
)
Less: Net income attributable to
noncontrolling interest
33
41
29
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA
CORPORATION
$
337
$
309
$
(49
)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA
CORPORATION COMMON SHAREHOLDERS:
Basic:
Net income (loss)
$
1.80
$
1.66
$
(0.26
)
Average number of shares
186,942,851
186,705,311
185,923,106
Diluted:
Net income (loss)
$
1.76
$
1.63
$
(0.26
)
Average number of shares
190,823,143
190,195,453
185,923,106
Alcoa Corporation and
subsidiaries
Statement of Consolidated Operations
(unaudited), continued
(dollars in millions, except per-share
amounts)
Nine months ended
September 30, 2021
September 30, 2020
Sales
$
8,812
$
6,894
Cost of goods sold (exclusive of expenses
below)
6,770
5,995
Selling, general administrative, and other
expenses
159
151
Research and development expenses
21
18
Provision for depreciation, depletion, and
amortization
499
483
Restructuring and other charges, net
73
44
Interest expense
167
103
Other income, net
(147
)
(36
)
Total costs and expenses
7,542
6,758
Income before income taxes
1,270
136
Provision for income taxes
331
167
Net income (loss)
939
(31
)
Less: Net income attributable to
noncontrolling interest
118
135
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA
CORPORATION
$
821
$
(166
)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA
CORPORATION COMMON SHAREHOLDERS:
Basic:
Net income (loss)
$
4.40
$
(0.89
)
Average number of shares
186,623,281
185,852,913
Diluted:
Net income (loss)
$
4.32
$
(0.89
)
Average number of shares
189,926,028
185,852,913
Common stock outstanding at the end of the
period
187,060,044
185,924,651
Alcoa Corporation and
subsidiaries
Consolidated Balance Sheet
(unaudited)
(in millions)
September 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,452
$
1,607
Receivables from customers
769
471
Other receivables
92
85
Inventories
1,702
1,398
Fair value of derivative instruments
19
21
Assets held for sale
—
648
Prepaid expenses and other current
assets(1)
251
290
Total current assets
4,285
4,520
Properties, plants, and equipment
20,111
20,522
Less: accumulated depreciation, depletion,
and amortization
13,432
13,332
Properties, plants, and equipment, net
6,679
7,190
Investments
1,146
1,051
Deferred income taxes
698
655
Fair value of derivative instruments
2
—
Other noncurrent assets(2)
1,387
1,444
Total assets
$
14,197
$
14,860
LIABILITIES
Current liabilities:
Accounts payable, trade
$
1,482
$
1,403
Accrued compensation and retirement
costs
378
395
Taxes, including income taxes
218
91
Fair value of derivative instruments
299
103
Liabilities held for sale
—
242
Other current liabilities
551
525
Long-term debt due within one year
1
2
Total current liabilities
2,929
2,761
Long-term debt, less amount due within one
year
1,724
2,463
Accrued pension benefits
633
1,492
Accrued other postretirement benefits
652
744
Asset retirement obligations
554
625
Environmental remediation
260
293
Fair value of derivative instruments
1,278
742
Noncurrent income taxes
182
209
Other noncurrent liabilities and deferred
credits
524
515
Total liabilities
8,736
9,844
EQUITY
Alcoa Corporation shareholders’
equity:
Common stock
2
2
Additional capital
9,708
9,663
Retained earnings (deficit)
96
(725
)
Accumulated other comprehensive loss
(5,928
)
(5,629
)
Total Alcoa Corporation shareholders’
equity
3,878
3,311
Noncontrolling interest
1,583
1,705
Total equity
5,461
5,016
Total liabilities and equity
$
14,197
$
14,860
(1)
This line item includes $3 of restricted
cash as of both September 30, 2021 and December 31, 2020.
(2)
This line item includes $4 of noncurrent
restricted cash as of September 30, 2021.
Alcoa Corporation and
subsidiaries
Statement of Consolidated Cash Flows
(unaudited)
(in millions)
Nine Months Ended September
30,
2021
2020
CASH FROM OPERATIONS
Net income (loss)
$
939
$
(31
)
Adjustments to reconcile net income to
cash from operations:
Depreciation, depletion, and
amortization
499
483
Deferred income taxes
61
(12
)
Equity earnings, net of dividends
(84
)
19
Restructuring and other charges, net
73
44
Net gain from investing activities – asset
sales
(132
)
(174
)
Net periodic pension benefit cost
36
103
Stock-based compensation
26
24
Provision for bad debt expense
1
2
Premium paid on early redemption of
debt
43
—
Other
44
11
Changes in assets and liabilities,
excluding effects of divestitures and foreign currency translation
adjustments:
(Increase) Decrease in receivables
(408
)
26
(Increase) Decrease in inventories
(373
)
221
Decrease in prepaid expenses and other
current assets
39
21
Increase (Decrease) in accounts payable,
trade
153
(87
)
(Decrease) in accrued expenses
—
(166
)
Increase in taxes, including income
taxes
143
95
Pension contributions
(575
)
(83
)
(Increase) in noncurrent assets
(47
)
(64
)
(Decrease) in noncurrent liabilities
(83
)
(76
)
CASH PROVIDED FROM OPERATIONS
355
356
FINANCING ACTIVITIES
Additions to debt (original maturities
greater than three months)
495
739
Payments on debt (original maturities
greater than three months)
(1,294
)
—
Proceeds from the exercise of employee
stock options
19
—
Financial contributions for the
divestiture of businesses
(14
)
(30
)
Contributions from noncontrolling
interest
8
24
Distributions to noncontrolling
interest
(177
)
(152
)
Other
(3
)
(4
)
CASH (USED FOR) PROVIDED FROM FINANCING
ACTIVITIES
(966
)
577
INVESTING ACTIVITIES
Capital expenditures
(237
)
(242
)
Proceeds from the sale of assets
715
198
Additions to investments
(7
)
(6
)
CASH PROVIDED FROM (USED FOR) INVESTING
ACTIVITIES
471
(50
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS AND RESTRICTED CASH
(11
)
(27
)
Net change in cash and cash equivalents
and restricted cash
(151
)
856
Cash and cash equivalents and restricted
cash at beginning of year
1,610
883
CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH AT END OF PERIOD
$
1,459
$
1,739
Alcoa Corporation and
subsidiaries
Segment Information (unaudited)
(dollars in millions, except realized
prices; dry metric tons in millions (mdmt); metric tons in
thousands (kmt))
1Q20
2Q20
3Q20
4Q20
2020
1Q21
2Q21
3Q21
Bauxite:
Production(1) (mdmt)
11.6
12.2
12.0
12.2
48.0
11.9
12.2
11.7
Third-party shipments (mdmt)
1.4
1.6
1.6
1.9
6.5
1.5
1.1
1.5
Intersegment shipments (mdmt)
10.5
10.8
10.5
10.4
42.2
10.5
10.8
10.5
Third-party sales
$
71
$
66
$
56
$
79
$
272
$
58
$
39
$
56
Intersegment sales
$
235
$
245
$
236
$
225
$
941
$
185
$
179
$
172
Segment Adjusted EBITDA(2)
$
120
$
131
$
124
$
120
$
495
$
59
$
41
$
23
Depreciation, depletion, and
amortization
$
34
$
30
$
33
$
38
$
135
$
57
$
32
$
30
Alumina:
Production (kmt)
3,298
3,371
3,435
3,371
13,475
3,327
3,388
3,253
Third-party shipments (kmt)
2,365
2,415
2,549
2,312
9,641
2,472
2,437
2,426
Intersegment shipments (kmt)
1,075
987
1,135
1,046
4,243
1,101
1,054
1,011
Average realized third-party price per
metric ton of alumina
$
299
$
250
$
274
$
268
$
273
$
308
$
282
$
312
Third-party sales
$
707
$
603
$
697
$
620
$
2,627
$
760
$
688
$
756
Intersegment sales
$
336
$
289
$
329
$
314
$
1,268
$
364
$
343
$
349
Segment Adjusted EBITDA(2)
$
193
$
88
$
119
$
97
$
497
$
227
$
124
$
148
Depreciation and amortization
$
49
$
37
$
41
$
45
$
172
$
46
$
50
$
47
Equity loss
$
(9
)
$
(8
)
$
(4
)
$
(2
)
$
(23
)
$
(5
)
$
(1
)
$
(1
)
Aluminum:
Primary aluminum production (kmt)
564
581
559
559
2,263
548
546
545
Third-party aluminum shipments(3)
(kmt)
725
789
767
735
3,016
831
767
722
Average realized third-party price per
metric ton of primary aluminum
$
1,988
$
1,694
$
1,904
$
2,094
$
1,915
$
2,308
$
2,753
$
3,124
Third-party sales
$
1,598
$
1,475
$
1,607
$
1,685
$
6,365
$
2,047
$
2,102
$
2,295
Intersegment sales
$
3
$
2
$
2
$
5
$
12
$
2
$
3
$
8
Segment Adjusted EBITDA(2)
$
62
$
(34
)
$
116
$
181
$
325
$
283
$
460
$
613
Depreciation and amortization
$
81
$
79
$
80
$
82
$
322
$
73
$
73
$
72
Equity income (loss)
$
5
$
(12
)
$
(6
)
$
6
$
(7
)
$
13
$
28
$
38
Reconciliation of total segment
Adjusted
EBITDA to consolidated net income
(loss)
attributable to Alcoa
Corporation:
Total Segment Adjusted EBITDA(2)
$
375
$
185
$
359
$
398
$
1,317
$
569
$
625
$
784
Unallocated amounts:
Transformation(4)
(16
)
(10
)
(11
)
(8
)
(45
)
(11
)
(13
)
(10
)
Intersegment eliminations
(8
)
30
(35
)
5
(8
)
(7
)
35
(8
)
Corporate expenses(5)
(27
)
(21
)
(24
)
(30
)
(102
)
(26
)
(28
)
(30
)
Provision for depreciation, depletion, and
amortization
(170
)
(152
)
(161
)
(170
)
(653
)
(182
)
(161
)
(156
)
Restructuring and other charges, net
(2
)
(37
)
(5
)
(60
)
(104
)
(7
)
(33
)
(33
)
Interest expense
(30
)
(32
)
(41
)
(43
)
(146
)
(42
)
(67
)
(58
)
Other income (expenses), net
132
(51
)
(45
)
(44
)
(8
)
24
105
18
Other(6)
(35
)
(17
)
(15
)
(11
)
(78
)
(6
)
(2
)
(10
)
Consolidated income (loss) before income
taxes
219
(105
)
22
37
173
312
461
497
Provision for income taxes
(80
)
(45
)
(42
)
(20
)
(187
)
(93
)
(111
)
(127
)
Net income attributable to noncontrolling
interest
(59
)
(47
)
(29
)
(21
)
(156
)
(44
)
(41
)
(33
)
Consolidated net income (loss)
attributable to Alcoa Corporation
$
80
$
(197
)
$
(49
)
$
(4
)
$
(170
)
$
175
$
309
$
337
The difference between segment totals and
consolidated amounts is in Corporate.
(1)
The production amounts can vary from total
shipments due primarily to differences between the equity
allocation of production and off-take agreements with the
respective equity investment.
(2)
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.
(3)
Until the sale of the Warrick Rolling Mill
on March 31, 2021, the Aluminum segment’s third-party aluminum
shipments were composed of both primary aluminum and flat-rolled
aluminum. Beginning April 1, 2021, the segment’s third-party
aluminum shipments include only primary aluminum.
(4)
Transformation includes, among other
items, the Adjusted EBITDA of previously closed operations.
(5)
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.
(6)
Other includes certain items that impact
Cost of goods sold and other expenses on Alcoa Corporation’s
Statement of Consolidated Operations 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)
Diluted EPS(4)
Quarter ended
Quarter ended
September 30, 2021
June 30, 2021
September 30, 2020
September 30, 2021
June 30, 2021
September 30, 2020
Net income (loss) attributable to Alcoa
Corporation
$
337
$
309
$
(49
)
$
1.76
$
1.63
$
(0.26
)
Special items:
Restructuring and other charges, net
33
33
5
Other special items(1)
26
(65
)
14
Discrete tax items and interim tax
impacts(2)
1
—
(184
)
Tax impact on special items(3)
(2
)
3
(3
)
Noncontrolling interest impact(3)
(4
)
1
(1
)
Subtotal
54
(28
)
(169
)
Net income (loss) attributable to Alcoa
Corporation – as adjusted
$
391
$
281
$
(218
)
$
2.05
$
1.49
$
(1.17
)
Net income (loss) attributable to Alcoa Corporation – as adjusted
is a non-GAAP financial measure. Management believes this measure
is 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 both Net income (loss) attributable to
Alcoa Corporation determined under GAAP as well as Net income
(loss) attributable to Alcoa Corporation – as adjusted.
(1)
Other special items include the
following:
- for the quarter ended September 30, 2021, a charge for debt
redemption expenses ($22), a net unfavorable change in certain
mark-to-market energy derivative instruments ($9), net gains on
asset sales ($8), and a net charge from other special items
($3);
- for the quarter ended June 30, 2021, gains on asset sales
($96), primarily related to the former Eastalco site sale, a charge
for debt redemption expenses ($32), and a net benefit from other
special items ($1); and,
- for the quarter ended September 30, 2020, costs related to the
restart process at the Bécancour, Canada smelter ($7), a net
unfavorable change in certain mark-to-market energy derivative
instruments ($4), and external costs related to portfolio actions
($3).
(2)
Discrete tax items and interim tax impacts
are the result of discrete transactions and interim period tax
impacts based on full-year assumptions and include the
following:
- for the quarter ended September 30, 2021, a net charge for
discrete tax items ($1); and,
- for the quarter ended September 30, 2020, a net benefit of
interim tax impacts ($182) and a net benefit of several other 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 given period, the average number of
shares applicable to diluted EPS for Net income (loss) attributable
to Alcoa Corporation common shareholders may exclude certain share
equivalents as their effect is anti-dilutive. For the quarter ended
September 30, 2020, all share equivalents had an anti-dilutive
effect, and therefore, are excluded from the diluted EPS
calculation.
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Adjusted EBITDA
Quarter ended
September 30, 2021
June 30, 2021
September 30, 2020
Net income (loss) attributable to Alcoa
Corporation
$
337
$
309
$
(49
)
Add:
Net income attributable to noncontrolling
interest
33
41
29
Provision for income taxes
127
111
42
Other (income) expenses, net
(18
)
(105
)
45
Interest expense
58
67
41
Restructuring and other charges, net
33
33
5
Provision for depreciation, depletion, and
amortization
156
161
161
Adjusted EBITDA
726
617
274
Special items(1)
2
1
10
Adjusted EBITDA, excluding special
items
$
728
$
618
$
284
Alcoa’s 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, 2021, external costs
related to portfolio actions ($1) and costs related to the closure
of the Lake Charles anode facility ($1);
- for the quarter ended June 30, 2021, external costs related to
portfolio actions ($1); and,
- for the quarter ended September 30, 2020, costs related to the
restart process at the Bécancour, Canada smelter ($7) and external
costs related to portfolio actions ($3).
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Free Cash Flow
Quarter ended
September 30, 2021
June 30, 2021
September 30, 2020
Cash provided from (used for) operations
(1)
$
435
$
(86
)
$
158
Capital expenditures
(83
)
(79
)
(74
)
Free cash flow
$
352
$
(165
)
$
84
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 both necessary to maintain and expand Alcoa Corporation’s
asset base and 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.
(1)
Cash provided from (used for) operations
for the quarter ended June 30, 2021 includes a $500 cash outflow
for unscheduled contributions to certain U.S. defined benefit
pension plans. The $500 was funded with the net proceeds of 4.125%
senior notes due 2029, together with cash on hand.
Net Debt
September 30, 2021
December 31, 2020
Short-term borrowings
$
77
$
77
Long-term debt due within one year
1
2
Long-term debt, less amount due within one
year
1,724
2,463
Total debt
1,802
2,542
Less: Cash and cash equivalents
1,452
1,607
Net debt
$
350
$
935
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.
Alcoa Corporation and
subsidiaries
Calculation of Financial Measures
(unaudited), continued
(in millions)
Adjusted Net Debt and Proportional
Adjusted Net Debt
September 30, 2021
Consolidated
NCI
Alcoa Proportional
Short-term borrowings
$
77
$
31
$
46
Long-term debt due within one year
1
—
1
Long-term debt, less amount due within one
year
1,724
—
1,724
Total debt
1,802
31
1,771
Less: Cash and cash equivalents
1,452
124
1,328
Net debt
350
(93
)
443
Plus: Net pension / OPEB liability
1,323
30
1,293
Adjusted net debt
$
1,673
$
(63
)
$
1,736
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.
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).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211014005908/en/
Investor Contact: James Dwyer +1 412 992 5450
James.Dwyer@alcoa.com Media Contact: Jim Beck +1 412 315
2909 Jim.Beck@alcoa.com
Alcoa (NYSE:AA)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024
Alcoa (NYSE:AA)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024