UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~June 30,~~March 31, ~~2023~~2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

Commission File Number 1-37816

ALCOA CORPORATION

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		81-1789115 (I.R.S. Employer Identification No.)

201 Isabella Street, Suite 500, Pittsburgh, Pennsylvania (Address of principal executive offices)		15212-5858 (Zip Code)

412-315-2900

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 24, 2023,~~April 29, 2024, ~~178,449,605~~179,559,688 shares of common stock, par value $0.01 per share, of the registrant were outstanding.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2724

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4440

Item 4.	Controls and Procedures	4440

PART II – OTHER INFORMATION		4541

Item 1.	Legal Proceedings	4541

Item 1A.	Risk Factors	4541

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4542

Item 5.	Other Information	4643

Item 6.	Exhibits	4843

SIGNATURES		4944

Forward-Looking Statements

This report contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “aims,” “ambition,” “anticipates,” “believes,” “could,” “develop,” “endeavors,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “potential,” “plans,” “projects,” “reach,” “seeks,” “sees,” “should,” “strive,” “targets,” “will,” “working,” “would,” or other words of similar meaning. All statements by Alcoa Corporation that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements regarding Alcoa Corporation’s proposed transaction to acquire Alumina Limited, an Australian public company limited by shares and listed on the Australian Securities Exchange (Alumina Limited) (the proposed transaction); the ability of the parties to complete the proposed transaction; the expected benefits of the proposed transaction, Alcoa Corporation’s competitive ability and position following completion of the proposed transaction; forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future or targeted financial results, or operating performance (including our ability to execute on strategies related to environmental, social and governance ~~matters)~~matters, such as our Green Finance Framework); statements about strategies, outlook, and business and financial prospects; and statements about capital allocation and return of capital. These statements reflect beliefs and assumptions that are based on ~~Alcoa’s~~Alcoa Corporations’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) cyclicality~~(1) the non-satisfaction or non-waiver, on a timely basis or otherwise, of one or more closing conditions to the proposed transaction; (2) the prohibition or delay of the consummation of the proposed transaction by a governmental entity; (3) the risk that the proposed transaction may not be completed in the expected time frame or at all; (4) unexpected costs, charges or expenses resulting from the proposed transaction; (5) uncertainty of the expected financial performance following completion of the proposed transaction; (6) failure to realize the anticipated benefits of the proposed transaction; (7) the occurrence of any event that could give rise to termination of the proposed transaction; (8) potential litigation in connection with the proposed transaction or other settlements or investigations that may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability; (9) the impact of global economic conditions on the aluminum industry and aluminum ~~end use markets,~~end-use markets; (10) volatility and declines in aluminum and alumina demand and pricing, including ~~due to the influence of~~ global, ~~economic conditions,~~regional, and ~~unfavorable~~product-specific prices, or significant changes in production costs which are linked to London Metal Exchange (LME) or other commodities; (11) the ~~markets served by Alcoa; (b) the effects~~disruption of ~~non-market forces, such as government policies and political instability, on~~market-driven balancing of global aluminum supply and ~~demand; (c) volatility and declines in the aluminum industry, including global supply and~~ demand conditions and fluctuations in London Metal Exchange-based prices and premiums, as applicable, for primary aluminum and other commodities, and fluctuations in indexed-based and spot prices for alumina; (d) legal, regulatory, economic, political, trade, public health and safety, and reputational risks and conditions, including changes in conditions beyond our control as a result of our participation in increasinglyby non-market forces; (12) competitive and complex conditions in global markets; ~~(e)~~(13) our ability to obtain, maintain, or renew permits or approvals necessary for our mining operations; ~~(f)~~(14) rising energy costs and interruptions or uncertainty in energy supplies; (15) unfavorable changes in the cost, quality, or availability of ~~key inputs, including energy and~~ raw materials or ~~uncertainty of~~other key inputs, or ~~disruption to~~by disruptions in the supply ~~chain including logistics; (g)~~chain; (16) our ability to execute on our strategy to be a lower cost, competitive, and integrated aluminum production business and to realize ~~expected~~the anticipated benefits ~~or achieve intended results, including as planned and by targeted completion dates,~~ from announced ~~strategies,~~ plans, programs, or initiatives relating to our portfolio, ~~profitability,~~ capital investments, and developing ~~technologies,~~technologies; (17) our ability to integrate and achieve intended results from joint ventures, or other strategic alliances, orand strategic business transactions; ~~(h)~~(18) economic, political, and social conditions, including the impact of trade policies and adverse industry publicity; (19) fluctuations in foreign currency exchange rates and ~~tax~~interest rates, ~~on costs~~inflation and ~~results; (i)~~other economic factors in the countries in which we operate; (20) changes in tax laws or exposure to additional tax liabilities; (j) changes in global economic and financial market conditions generally, such as inflation, recessionary conditions, and interest rate increases, which may also affect Alcoa’s ability to obtain credit or financing upon acceptable terms or at all; (k) current and potential future impacts to the global economy and our industry, business and financial condition caused by various worldwide or macroeconomic events, such as the ongoing conflict between Russia and Ukraine; (l)(21) global competition within and beyond the aluminum industry; ~~(m)~~(22) our ability to obtain or maintain adequate insurance coverage; ~~(n)~~(23) disruptions in the ~~outcomes of contingencies, including~~global economy caused by ongoing regional conflicts; (24) legal ~~and tax~~ proceedings, ~~government or regulatory~~ investigations, ~~and environmental remediation,~~ or changes in foreign and/or U.S. federal, state, or local laws, regulations, or policies; ~~(o) the impacts of~~(25) climate change, ~~related~~climate change legislation or regulations, and efforts to reduce ~~greenhouse gas~~ emissions and build operational resilience to extreme weather conditions; (26) our ability to achieve our strategies or expectations relating to environmental, social, and ~~expectations related to climate change and other environmental matters; (p)~~governance considerations; (27) claims, costs, and liabilities ~~resulting from the impact of our operations, including impoundments, or from~~related to health, safety and environmental laws, regulations, and other requirements in the ~~areas where~~jurisdictions in which we operate; ~~(q)~~(28) liabilities resulting from impoundment structures, which could impact the ~~impact of cyberattacks and potential information technology~~environment or ~~data security breaches, including disruptions~~cause exposure to ~~our operations, liability, and reputational harm; (r)~~hazardous substances or other damage; (29) our ability to fund capital expenditures; ~~(s) risks associated with long-term debt obligations including~~(30) deterioration in our credit profile or increases in interest rates; (31) restrictions on our current and future operations ~~as a result of~~due to our indebtedness; ~~(t)~~(32) our ability to continue to return capital to our stockholders through the payment of cash dividends and/or ~~share repurchases; (u)~~ the ~~impact~~repurchase of our common stock; (33) cyber attacks, security breaches, system failures, software or application vulnerabilities, or other cyber incidents; (34) labor market conditions, union disputes ~~work stoppages~~ and ~~strikes, or~~ other employee relations ~~issues, as well as labor market conditions; (v) declines~~issues; (35) a decline in the liability discount ~~rates used to measure pension and other postretirement benefit liabilities~~rate or lower-than-expected investment returns on pension ~~assets, or unfavorable changes in laws or regulations that govern pension plan funding;~~assets; and ~~(w)~~(36) the other risk factors discussed in ~~Part I Item IA of~~ Alcoa’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 and other reports filed by Alcoa with the ~~SEC.~~SEC, including those described in this report. Alcoa cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Market projections are subject to the risks described above and other risks in the market. Neither Alcoa nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements and none of the information contained herein should be regarded as a representation that the forward-looking statements contained herein will be achieved.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Operations (unaudited)

(in millions, except per-share amounts)


	Second quarter ended June 30,						Six months ended June 30,						First quarter ended March 31,
	2023			2022			2023			2022			2024			2023
Sales (E)	$	2,684		$	3,644		$	5,354		$	6,937		$	2,599		$	2,670
Cost of goods sold (exclusive of expenses below)		2,515			2,767			4,919			4,948			2,404			2,404
Selling, general administrative, and other expenses		52			52			106			96			60			54
Research and development expenses		6			7			16			16			11			10
Provision for depreciation, depletion, and amortization		153			161			306			321			161			153
Restructuring and other charges, net (D)		24			(75	)		173			50			202			149
Interest expense		27			30			53			55			27			26
Other expenses (income), net (R)		6			(206	)		60			(220	)
Other expenses, net (P)														59			54
Total costs and expenses		2,783			2,736			5,633			5,266			2,924			2,850
(Loss) income before income taxes		(99	)		908			(279	)		1,671
Provision for income taxes		22			234			74			444
Net (loss) income		(121	)		674			(353	)		1,227
Less: Net (loss) income attributable to noncontrolling interest		(19	)		125			(20	)		209
NET (LOSS) INCOME ATTRIBUTABLE TO ALCOA CORPORATION	$	(102	)	$	549		$	(333	)	$	1,018
Loss before income taxes														(325	)		(180	)
(Benefit from) provision for income taxes														(18	)		52
Net loss														(307	)		(232	)
Less: Net loss attributable to noncontrolling interest														(55	)		(1	)
NET LOSS ATTRIBUTABLE TO ALCOA CORPORATION													$	(252	)	$	(231	)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS (F):
Basic	$	(0.57	)	$	3.01		$	(1.87	)	$	5.55		$	(1.41	)	$	(1.30	)
Diluted	$	(0.57	)	$	2.95		$	(1.87	)	$	5.44		$	(1.41	)	$	(1.30	)

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Comprehensive Income (unaudited)

(in millions)


	Alcoa Corporation						Noncontrolling interest						Total						Alcoa Corporation						Noncontrolling interest						Total
	Second quarter ended June 30,						Second quarter ended June 30,						Second quarter ended June 30,						First quarter ended March 31,						First quarter ended March 31,						First quarter ended March 31,
	2023			2022			2023			2022			2023			2022			2024			2023			2024			2023			2024			2023
Net (loss) income	$	(102	)	$	549		$	(19	)	$	125		$	(121	)	$	674
Net loss																			$	(252	)	$	(231	)	$	(55	)	$	(1	)	$	(307	)	$	(232	)
Other comprehensive income (loss), net of tax (G):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		10			52			(2	)		—			8			52
Foreign currency translation adjustments		25			(370	)		11			(132	)		36			(502	)
Net change in unrecognized gains/losses on cash flow hedges		226			1,137			—			1			226			1,138
Total Other comprehensive income (loss), net of tax		261			819			9			(131	)		270			688
Comprehensive income (loss)	$	159		$	1,368		$	(10	)	$	(6	)	$	149		$	1,362

	Alcoa Corporation						Noncontrolling interest						Total
	Six months ended June 30,						Six months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022			2023			2022
Net (loss) income	$	(333	)	$	1,018		$	(20	)	$	209		$	(353	)	$	1,227
Other comprehensive income (loss), net of tax (G):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits		14			74			(2	)		1			12			75
Change in unrecognized net actuarial gain/loss and prior service cost/benefit related to pension and other postretirement benefits																				9			4			1			—			10			4
Foreign currency translation adjustments		27			(44	)		26			(34	)		53			(78	)		(122	)		2			(54	)		15			(176	)		17
Net change in unrecognized gains/losses on cash flow hedges		104			307			—			2			104			309			130			(122	)		—			—			130			(122	)
Total Other comprehensive income (loss), net of tax		145			337			24			(31	)		169			306			17			(116	)		(53	)		15			(36	)		(101	)
Comprehensive (loss) income	$	(188	)	$	1,355		$	4		$	178		$	(184	)	$	1,533		$	(235	)	$	(347	)	$	(108	)	$	14		$	(343	)	$	(333	)

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)


	June 30, 2023			December 31, 2022			March 31, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents (N)	$	990		$	1,363
Cash and cash equivalents (M)							$	1,358		$	944
Receivables from customers (I)		702			778			869			656
Other receivables		104			131			132			152
Inventories (J)		2,400			2,427			2,048			2,158
Fair value of derivative instruments (N)		93			134
Fair value of derivative instruments (M)								22			29
Prepaid expenses and other current assets		381			417			452			466
Total current assets		4,670			5,250			4,881			4,405
Properties, plants, and equipment		19,814			19,605			19,959			20,381
Less: accumulated depreciation, depletion, and amortization		13,369			13,112			13,382			13,596
Properties, plants, and equipment, net		6,445			6,493			6,577			6,785
Investments (H)		1,034			1,122			969			979
Deferred income taxes		320			296			295			333
Fair value of derivative instruments (N)		5			2
Fair value of derivative instruments (M)								1			3
Other noncurrent assets		1,654			1,593			1,605			1,650
Total assets	$	14,128		$	14,756		$	14,328		$	14,155
LIABILITIES
Current liabilities:
Accounts payable, trade	$	1,491		$	1,757		$	1,586		$	1,714
Accrued compensation and retirement costs		340			335			331			357
Taxes, including income taxes		67			230			94			88
Fair value of derivative instruments (N)		165			200
Fair value of derivative instruments (M)								205			214
Other current liabilities		532			481			746			578
Long-term debt due within one year (L & N)		1			1
Long-term debt due within one year (K & M)								79			79
Total current liabilities		2,596			3,004			3,041			3,030
Long-term debt, less amount due within one year (L & N)		1,808			1,806
Accrued pension benefits (M)		242			213
Accrued other postretirement benefits (M)		445			480
Asset retirement obligations (P)		717			711
Environmental remediation (Q)		215			226
Fair value of derivative instruments (N)		912			1,026
Long-term debt, less amount due within one year (K & M)								2,469			1,732
Accrued pension benefits (L)								267			278
Accrued other postretirement benefits (L)								437			443
Asset retirement obligations								718			772
Environmental remediation (O)								197			202
Fair value of derivative instruments (M)								925			1,092
Noncurrent income taxes		221			215			134			193
Other noncurrent liabilities and deferred credits		514			486			606			568
Total liabilities		7,670			8,167			8,794			8,310
CONTINGENCIES AND COMMITMENTS (Q)
CONTINGENCIES AND COMMITMENTS (O)
EQUITY
Alcoa Corporation shareholders’ equity:
Common stock		2			2			2			2
Additional capital		9,173			9,183			9,184			9,187
Accumulated deficit		(939	)		(570	)		(1,564	)		(1,293	)
Accumulated other comprehensive loss (G)		(3,394	)		(3,539	)		(3,628	)		(3,645	)
Total Alcoa Corporation shareholders’ equity		4,842			5,076			3,994			4,251
Noncontrolling interest		1,616			1,513			1,540			1,594
Total equity		6,458			6,589			5,534			5,845
Total liabilities and equity	$	14,128		$	14,756		$	14,328		$	14,155

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in millions)


	Six months ended June 30,						Three months ended March 31,
	2023			2022			2024			2023
CASH FROM OPERATIONS
Net (loss) income	$	(353	)	$	1,227
Adjustments to reconcile net (loss) income to cash from operations:
Net loss							$	(307	)	$	(232	)
Adjustments to reconcile net loss to cash from operations:
Depreciation, depletion, and amortization		306			321			161			153
Deferred income taxes		(36	)		93			(63	)		(24	)
Equity loss (income), net of dividends		123			(61	)
Equity loss, net of dividends								23			93
Restructuring and other charges, net (D)		173			50			202			149
Net loss from investing activities – asset sales (R)		19			5
Net periodic pension benefit cost (M)		2			28
Net loss from investing activities – asset sales (P)								11			18
Net periodic pension benefit cost (L)								3			1
Stock-based compensation		21			20			10			10
Loss (gain) on mark-to-market derivative financial contracts		4			(123	)		2			(18	)
Other		59			28			20			48
Changes in assets and liabilities, excluding effects of divestitures and foreign currency translation adjustments:
Decrease (increase) in receivables		71			(153	)
Decrease (increase) in inventories		22			(657	)
Decrease in prepaid expenses and other current assets		63			15
(Decrease) increase in accounts payable, trade		(277	)		98
(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		(48	)		(103	)		(22	)		(45	)
Decrease in taxes, including income taxes		(146	)		(79	)
Pension contributions (M)		(9	)		(9	)
Increase in noncurrent assets		(66	)		(71	)
Increase (decrease) in taxes, including income taxes								18			(13	)
Pension contributions (L)								(6	)		(4	)
Decrease (increase) in noncurrent assets								9			(29	)
Decrease in noncurrent liabilities		(104	)		(59	)		(39	)		(58	)
CASH (USED FOR) PROVIDED FROM OPERATIONS		(176	)		570
CASH USED FOR OPERATIONS								(223	)		(163	)
FINANCING ACTIVITIES
Additions to debt		25			—			965			25
Payments on debt		(16	)		—			(221	)		(1	)
Proceeds from the exercise of employee stock options		1			22			—			1
Repurchase of common stock		—			(350	)
Dividends paid on Alcoa common stock		(36	)		(37	)		(19	)		(18	)
Payments related to tax withholding on stock-based compensation awards		(34	)		(19	)		(15	)		(34	)
Financial contributions for the divestiture of businesses (C)		(25	)		(9	)		(7	)		(14	)
Contributions from noncontrolling interest		122			83			61			86
Distributions to noncontrolling interest		(22	)		(245	)		(6	)		(6	)
Other		1			(3	)		(4	)		1
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES		16			(558	)
CASH PROVIDED FROM FINANCING ACTIVITIES								754			40
INVESTING ACTIVITIES
Capital expenditures		(198	)		(181	)		(101	)		(83	)
Proceeds from the sale of assets		2			4			1			1
Additions to investments		(36	)		(21	)		(17	)		(20	)
Sale of investments		—			10
Other		10			2
CASH USED FOR INVESTING ACTIVITIES		(222	)		(186	)		(117	)		(102	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		5			(2	)		(6	)		2
Net change in cash and cash equivalents and restricted cash		(377	)		(176	)		408			(223	)
Cash and cash equivalents and restricted cash at beginning of year		1,474			1,924			1,047			1,474
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,097		$	1,748		$	1,455		$	1,251

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Statement of Changes in Consolidated Equity (unaudited)

(in millions)


	Alcoa Corporation shareholders																	Alcoa Corporation shareholders
	Common stock		Additional capital			Accumulated deficit			Accumulated other comprehensive loss			Non- controlling interest			Total equity
Balance at January 1, 2022	$	2	$	9,577		$	(315	)	$	(4,592	)	$	1,612		$	6,284
Net income		—		—			469			—			84			553
Other comprehensive (loss) income (G)		—		—			—			(482	)		100			(382	)
Stock-based compensation		—		9			—			—			—			9
Net effect of tax withholding for compensation plans and exercise of stock options		—		2			—			—			—			2
Repurchase of common stock				(54	)		(21	)								(75	)
Dividends paid on Alcoa common stock ($0.10 per share)		—		—			(19	)		—			—			(19	)
Contributions		—		—			—			—			46			46
Distributions		—		—			—			—			(162	)		(162	)
Other		—		3			—			—			(2	)		1
Balance at March 31, 2022	$	2	$	9,537		$	114		$	(5,074	)	$	1,678		$	6,257
Net income		—		—			549			—			125			674
Other comprehensive income (loss) (G)		—		—			—			819			(131	)		688
Stock-based compensation		—		11			—			—			—			11
Net effect of tax withholding for compensation plans and exercise of stock options		—		1			—			—			—			1
Repurchase of common stock				(236	)		(39	)								(275	)
Dividends paid on Alcoa common stock ($0.10 per share)		—		—			(18	)		—			—			(18	)
Contributions		—		—			—			—			37			37
Distributions		—		—			—			—			(83	)		(83	)
Balance at June 30, 2022	$	2	$	9,313		$	606		$	(4,255	)	$	1,626		$	7,292
																		Common stock		Additional capital			Accumulated deficit			Accumulated other comprehensive (loss) income			Non- controlling interest			Total equity
Balance at January 1, 2023	$	2	$	9,183		$	(570	)	$	(3,539	)	$	1,513		$	6,589		$	2	$	9,183		$	(570	)	$	(3,539	)	$	1,513		$	6,589
Net loss		—		—			(231	)		—			(1	)		(232	)		—		—			(231	)		—			(1	)		(232	)
Other comprehensive (loss) income (G)		—		—			—			(116	)		15			(101	)		—		—			—			(116	)		15			(101	)
Stock-based compensation		—		10			—			—			—			10			—		10			—			—			—			10
Net effect of tax withholding for compensation plans and exercise of stock options		—		(33	)		—			—			—			(33	)		—		(33	)		—			—			—			(33	)
Dividends paid on Alcoa common stock ($0.10 per share)		—		—			(18	)		—			—			(18	)		—		—			(18	)		—			—			(18	)
Contributions		—		—			—			—			86			86			—		—			—			—			86			86
Distributions		—		—			—			—			(6	)		(6	)		—		—			—			—			(6	)		(6	)
Other		—		2			—			—			(1	)		1			—		2			—			—			(1	)		1
Balance at March 31, 2023	$	2	$	9,162		$	(819	)	$	(3,655	)	$	1,606		$	6,296		$	2	$	9,162		$	(819	)	$	(3,655	)	$	1,606		$	6,296

Balance at January 1, 2024																		$	2	$	9,187		$	(1,293	)	$	(3,645	)	$	1,594		$	5,845
Net loss		—		—			(102	)		—			(19	)		(121	)		—		—			(252	)		—			(55	)		(307	)
Other comprehensive income (G)		—		—			—			261			9			270
Other comprehensive income (loss) (G)																			—		—			—			17			(53	)		(36	)
Stock-based compensation		—		11			—			—			—			11			—		10			—			—			—			10
Net effect of tax withholding for compensation plans and exercise of stock options																			—		(15	)		—			—			—			(15	)
Dividends paid on Alcoa common stock ($0.10 per share)		—		—			(18	)		—			—			(18	)		—		—			(19	)		—			—			(19	)
Contributions		—		—			—			—			36			36			—		—			—			—			61			61
Distributions		—		—			—			—			(16	)		(16	)		—		—			—			—			(6	)		(6	)
Balance at June 30, 2023	$	2	$	9,173		$	(939	)	$	(3,394	)	$	1,616		$	6,458
Other																			—		2			—			—			(1	)		1
Balance at March 31, 2024																		$	2	$	9,184		$	(1,564	)	$	(3,628	)	$	1,540		$	5,534

The accompanying notes are an integral part of the consolidated financial statements.

Alcoa Corporation and Subsidiaries

Notes to the Consolidated Financial Statements (unaudited)

(dollars in millions, except per-share amounts; metric tons in thousands (kmt))

A. Basis of Presentation – The interim Consolidated Financial Statements of Alcoa Corporation and its subsidiaries (Alcoa Corporation, Alcoa, or the Company) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The ~~2022~~2023 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, which includes disclosures required by GAAP.

In accordance with GAAP, certain situations require management to make estimates based on judgments and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They also may affect the reported amounts of revenues and expenses during the reporting periods. Management uses historical experience and all available information to make these estimates. Management regularly evaluates the judgments and assumptions used in its estimates, and results could differ from those estimates upon future events and their effects or new information.

Principles of Consolidation. The Consolidated Financial Statements of Alcoa Corporation include the accounts of Alcoa Corporation and companies in which Alcoa Corporation has a controlling interest, including those that comprise the Alcoa World Alumina & Chemicals (AWAC) joint venture (see below). Intercompany transactions have been eliminated. The equity method of accounting is used for investments in affiliates and other joint ventures over which Alcoa Corporation has significant influence but does not have effective control. Investments in affiliates in which Alcoa Corporation cannot exercise significant influence are accounted for at cost less any impairment, a measurement alternative in accordance with GAAP.

AWAC is an unincorporated global joint venture between Alcoa Corporation and Alumina Limited and consists of several affiliated operating entities, which own, have an interest in, or operate the bauxite mines and alumina refineries within Alcoa Corporation’s Alumina segment (except for the Poços de Caldas mine and refinery and portions of the São Luís refinery, ~~and investment in Mineração Rio do Norte S.A. (MRN) until its sale in April 2022,~~ all in Brazil) and a portion (55%) of the Portland smelter (Australia) within Alcoa Corporation’s Aluminum segment. Alcoa Corporation owns 60% and Alumina Limited owns 40% of these individual entities, which are consolidated by the Company for financial reporting purposes and include Alcoa of Australia Limited (AofA), Alcoa World Alumina LLC (AWA), Alcoa World Alumina Brasil Ltda. (AWAB), and Alúmina Española, S.A. (Española). Alumina Limited’s interest in the equity of such entities is reflected as Noncontrolling interest on the accompanying Consolidated Balance Sheet.

B. Recently Adopted and Recently Issued Accounting Guidance

On ~~January 1,~~In December 2023,, the ~~Company~~ ~~adopted~~Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. ~~2022-04~~2023-09 which ~~requires a buyer in a supplier finance program~~includes changes to ~~disclose qualitative and quantitative~~income tax disclosures, including greater disaggregation of information about its supplier finance programs, including the key terms of the program, the amount of obligations outstanding at the end of the reporting period, a description of where those obligations are presented in the ~~balance sheet,~~rate reconciliation and disclosure of taxes paid by jurisdiction. The guidance is effective ~~January 1, 2024, a roll-forward of such amounts during the~~for annual ~~period.~~periods beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance ~~resulted in~~will provide enhanced disclosures regarding ~~these programs (see Note S)~~income taxes and ~~did~~ notwill not have a material impact on the ~~Company's Consolidated Financial Statements.~~Company’s financial statements.

In November 2023, the FASB issued ASU 2023-07 which requires disclosure of significant segment expenses regularly provided to the chief operating decision maker (CODM), other segment items (not included in significant segment expenses for each reportable segment), the title and position of the CODM, and an explanation of how the CODM uses the reported measure of segment profit or loss to assess segment performance and allocate resources. The adoption of this guidance will not have a material impact on the Company’s financial statements and will provide enhanced disclosures regarding reportable segments beginning in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

C. Acquisitions and Divestitures

Alumina Limited Acquisition

On March 11, 2024, the Company and Alumina Limited entered into a Scheme Implementation Deed (the Agreement) for Alcoa’s acquisition of all Alumina Limited ordinary shares (the Transaction), following an agreement reached on February 26, 2024, between Alcoa and Alumina Limited, on terms and process for the acquisition of Alumina Limited (the Process Deed). Alumina Limited holds a 40% ownership interest in the AWAC joint venture. The acquisition is intended to 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.

Under the Agreement, Alumina Limited shareholders would receive consideration of 0.02854 Alcoa common shares for each Alumina Limited share (the Agreed Ratio). Upon completion of the transaction, Alumina Limited shareholders would own 31.25%, and Alcoa shareholders would own 68.75% of the combined company, on a fully diluted basis. Based on Alcoa’s closing share price as of February 23, 2024, the last trading day prior to the announcement of the Process Deed, the Agreed Ratio implies a value of A$1.15 per Alumina Limited share and an equity value of approximately $2,200 for Alumina Limited.

Under the terms of the Agreement, Alcoa also agreed to provide a shareholder loan to AWAC in place of required capital contributions by Alumina Limited if Alumina Limited’s net debt position exceeds $420. Subject to certain accelerated repayment triggers, Alumina Limited would be required to pay its equity calls (plus accrued interest) no later than September 1, 2025 in the event the transaction is not completed. Alcoa and Alumina Limited are also subject to termination fees in the event the transaction is not completed.

Warrick Rolling Mill Divestiture

In conjunction with the sale of its rolling mill located at Warrick Operations (Warrick Rolling Mill) in March 2021, the Company recorded estimated liabilities for site separation commitments. In the first quarters of 2024 and 2023, the Company spent $7 and $14 against the reserve, respectively. The Company recorded aan additional charge of $1711 in the ~~six-month period~~first quarter of ~~2023 and $~~5 ~~in the second quarter and six-month period of 2022~~2024 in Other expenses, ~~(income),~~ net on the Statement of Consolidated Operations related to these commitments. In the ~~second~~first quarter ~~and the six-month period~~ of 2023, the Company ~~spent~~recorded a charge of $1117 ~~and $~~25 ~~against~~in Other expenses, net on the ~~reserve, respectively. In the second quarter and six-month period~~Statement of ~~2022, the Company spent $~~7 ~~and $~~9 ~~against the reserve, respectively.~~Consolidated Operations related to these commitments. The remaining balance of $3815 at ~~June 30, 2023~~March 31, 2024 is expected to be spent ~~over the next 12 months.~~in 2024.

D. Restructuring and Other Charges, Net

– In the ~~second~~first quarter ~~and the six-month period~~ of ~~2023,~~2024, Alcoa Corporation recorded Restructuring and other charges, net, of $24202 which were primarily comprised of a charge of $197 for the curtailment of the Kwinana (Australia) alumina refinery.

In January 2024, Alcoa Corporation announced the full curtailment of the Kwinana alumina refinery which will be completed in the second quarter of 2024. The refinery currently has approximately 780 employees and this number will be reduced to approximately 250 in the third quarter of 2024, after alumina production has ceased. Certain processes will continue until about the third quarter of 2025, when the employee number will be further reduced to approximately 50. In addition to the employees separating as a result of the curtailment, approximately 150 employees will either terminate through the productivity program announced in the third quarter of 2023 or redeploy to other Alcoa operations. The charge of $197 includes $123 for water management costs, $41 for severance and employee termination costs for the separation of approximately 580 employees, $15 for asset retirement obligations, $13 for take-or-pay contracts, and $~~173~~5~~, respectively,~~ for asset impairments. Related cash outlays of approximately $215 (which includes existing employee related liabilities and asset retirement obligations) are expected through 2025, with approximately $140 to be spent in 2024. During the first quarter of 2024, cash outlays were $2.

Alcoa Corporation recorded a net charge of $149 in the first quarter of 2023 in Restructuring and other charges, net, which were primarily comprised of:

•

A charge of $101 ~~(six-month period only)~~ for asset impairments and to establish reserves for environmental, demolition and employee severance costs related to the permanent closure of the Intalco (Washington) aluminum smelter; and,

•

A charge of $47 ~~(six-month period only)~~ for increased reserves for certain employee obligations related to the updated ~~viability~~ agreement for the San Ciprián (Spain) aluminum ~~smelter;~~smelter.

•

~~A charge of $~~21

~~(both periods) related to the settlement of certain pension benefits (see Note M);~~

•

~~A charge of $~~2

~~(both periods) for employee termination and severance costs for overhead reductions; and,~~

•

~~Charges of $~~1 ~~(six-month period only) and $~~1 ~~(both periods) for several other insignificant items.~~

In March 2023, Alcoa Corporation announced the closure of the ~~previously curtailed~~ Intalco aluminum ~~smelter. The facility~~smelter, which had been fully curtailed since 2020. ~~Charges~~The Company recorded charges of $117 related to the closure, ~~totaled $117~~ ~~in the six-month period of 2023 and included~~including a charge of $16 ~~for the write down of remaining inventories to net realizable value recorded~~ in Cost of goods sold on the Statement of Consolidated Operations to write-down remaining inventories to net realizable value and a charge of $101 ~~recorded~~ in Restructuring and other charges, net on the Statement of Consolidated Operations. The restructuring charges were comprised of asset impairments of $50, environmental and demolition obligation reserves of $50, and severance and employee termination costs ~~from~~of $1 for the separation of approximately 12 ~~employees of $~~1.employees. Cash outlays related to the permanent closure of the site are expected to be ~~approximately~~ $8580 over the next three years with approximately $2545 to be spent in ~~2023.~~2024. During the first quarter of 2024, cash outlays were $4.

OnIn February 3, 2023, the Company reached an updated viability agreement with the workers’ representatives of the San Ciprián smelter to commence the restart process ~~of the San Ciprián aluminum smelter~~ in phases beginning in January 2024. The smelter was curtailed in January 2022 as a result of an agreement reached with the workers’ representatives in December 2021. Under the terms of the updated viability agreement, the Company is responsible for certain employee obligations during ~~2024~~2023 through 2025 and ~~2025. As a result, the~~made additional commitments for capital improvements of $78. The Company recorded charges of $4753 ~~in the six-month period of 2023~~ in Restructuring and other charges, net on the Statement of Consolidated ~~Operations.~~Operations to establish the related reserve for employee obligations in 2023. Cash outlays related to ~~these~~employee obligations are expected to be $38 through 2025, with approximately $25 to be spent in 2024. During the first quarter of 2024, ~~and 2025.~~cash outlays were $8

~~Alcoa Corporation recorded a net benefit~~. At March 31, 2024, the Company had restricted cash of $7586 into be made available for remaining capital improvement commitments at the ~~second quarter of 2022 and a net charge~~site of $50115 and smelter restart costs of $33 for both the agreement reached with the worker’s representatives in December 2021 and the ~~six-month period of 2022~~updated viability agreement in ~~Restructuring~~February 2023. Restricted cash is included in Prepaid expenses and other ~~charges, net, which were comprised of:~~

•

~~A reversal of $~~83 ~~(both periods) for~~current assets and Other noncurrent assets on the ~~reversal of a valuation allowance on Brazil value added taxes (VAT)~~Consolidated Balance Sheet (see Note ~~R);~~

•

~~A net charge of $~~3 ~~and net reversal of $~~6~~, respectively, for changes in estimated take-or-pay contract costs at the closed Wenatchee (Washington) and Intalco smelters;~~

•

~~A net charge of $~~3 ~~and $~~2~~, respectively, for site remediation at previously closed sites;~~

•

~~A charge of $~~2 ~~and $~~79~~, respectively, for the offer made to the workers of the divested Avilés and La Coruña (Spain) facilities to settle various legal disputes related to the 2019 divestiture (see Note Q); and,~~

•

~~A charge of $~~58 ~~(six-month period only) for an asset impairment related to the sale of the Company’s interest in MRN (see Note H)~~P).

Alcoa Corporation does not include Restructuring and other charges, net in the results of its reportable segments. The impact of allocating such charges to segment results would have been as follows:


	Second quarter ended June 30,					Six months ended June 30,					First quarter ended March 31,
	2023		2022			2023		2022			2024		2023
Alumina (1)	$	1	$	(83	)	$	2	$	(25	)
Alumina											$	197	$	1
Aluminum		19		5			165		73			—		146
Segment total		20		(78	)		167		48			197		147
Corporate		4		3			6		2			5		2
Total Restructuring and other charges, net	$	24	$	(75	)	$	173	$	50		$	202	$	149

~~(1)~~

Beginning in January 2023, the Company changed its operating segments, by combining the Bauxite and Alumina segments, and reported its financial results in the following two segments: (i) Alumina and (ii) Aluminum (see Note E).

Activity and reserve balances for restructuring charges were as follows:


	Severance and employee termination costs			Other costs			Total			Severance and employee termination costs			Other costs			Total
Balance at December 31, 2021	$	3		$	90		$	93
Restructuring and other charges, net		1			73			74
Cash payments		(2	)		(37	)		(39	)
Reversals and other		(1	)		(10	)		(11	)
Balance at December 31, 2022		1			116			117		$	1		$	116		$	117
Restructuring and other charges, net		3			49			52			11			55			66
Cash payments		(1	)		(22	)		(23	)		(6	)		(118	)		(124	)
Reversals and other		—			4			4			—			4			4
Balance at June 30, 2023	$	3		$	147		$	150
Balance at December 31, 2023											6			57			63
Restructuring and other charges, net											43			139			182
Cash payments											(1	)		(15	)		(16	)
Reversals and other											—			(1	)		(1	)
Balance at March 31, 2024										$	48		$	180		$	228

The activity and reserve balances include only Restructuring and other charges, net that ~~impact~~impacted the reserves for Severance and employee termination costs and Other costs. Restructuring and other charges, net that affected other liability accounts such as ~~Investments (see Note H),~~ Accrued pension benefits (see Note M)L), Asset retirement obligations, ~~(see Note P),~~ and Environmental remediation (see Note Q)O) are excluded from the above activity and balances. Reversals and other includes reversals of previously recorded liabilities and foreign currency translation impacts.

The noncurrent portion of the reserve was $3045 and $315 at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively.

E.8

E. Segment Information – Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. ~~Beginning in January 2023, the financial information provided to the chief~~The Company has two operating ~~decision maker (CODM) for the activities of the bauxite mines~~ and ~~the alumina refineries was combined, and accordingly the Company changed its operating segments. Beginning with the first quarter of 2023, the Company reported its financial results in the following~~ ~~two~~reportable segments: (i) Alumina and (ii) Aluminum. ~~Segment information for all prior periods presented has been updated to reflect the new segment structure.~~ Segment performance under Alcoa Corporation’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) for each segment. The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; and Research and development expenses. Alcoa Corporation’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. The CODM function regularly reviews the financial information, including ~~Sales and~~ Adjusted EBITDA, of these two operating segments to assess performance and allocate resources.

The operating results of Alcoa Corporation’s reportable segments were as follows (differences between segment totals and consolidated amounts are in Corporate):

Alumina

Aluminum

Total

Second quarter ended June 30, 2023

Sales:

Third-party sales

$
894

$
1,788

$
2,682

Intersegment sales

397

4

401

Total sales

$
1,291

$
1,792

$
3,083

Segment Adjusted EBITDA

$
33

$
110

$
143

Supplemental information:

Depreciation, depletion, and amortization

$
80

$
68

$
148

Equity loss

$
(11
)

$
(16
)

$
(27
)
Second quarter ended June 30, 2022

Sales:

Third-party sales

$
1,111

$
2,539

$
3,650

Intersegment sales

483

8

491

Total sales

$
1,594

$
2,547

$
4,141

Segment Adjusted EBITDA

$
358

$
596

$
954

Supplemental information:

Depreciation, depletion, and amortization

$
84

$
71

$
155

Equity (loss) income

$
(5
)

$
40

$
35


	Alumina			Aluminum			Total			Alumina			Aluminum			Total
Six months ended June 30, 2023
First quarter ended March 31, 2024
Sales:
Third-party sales										$	961		$	1,638		$	2,599
Intersegment sales											395			4			399
Total sales										$	1,356		$	1,642		$	2,998
Segment Adjusted EBITDA										$	139		$	50		$	189
Supplemental information:
Depreciation, depletion, and amortization										$	87		$	68		$	155
Equity (loss) income										$	(11	)	$	2		$	(9	)
First quarter ended March 31, 2023
Sales:
Third-party sales	$	1,751		$	3,598		$	5,349		$	857		$	1,810		$	2,667
Intersegment sales		818			7			825			421			3			424
Total sales	$	2,569		$	3,605		$	6,174		$	1,278		$	1,813		$	3,091
Segment Adjusted EBITDA	$	136		$	294		$	430		$	103		$	184		$	287
Supplemental information:
Depreciation, depletion, and amortization	$	157		$	138		$	295		$	77		$	70		$	147
Equity loss	$	(28	)	$	(73	)	$	(101	)	$	(17	)	$	(57	)	$	(74	)
Six months ended June 30, 2022
Sales:
Third-party sales	$	2,009		$	4,927		$	6,936
Intersegment sales		896			15			911
Total sales	$	2,905		$	4,942		$	7,847
Segment Adjusted EBITDA	$	660		$	1,309		$	1,969
Supplemental information:
Depreciation, depletion, and amortization	$	169		$	140		$	309
Equity (loss) income	$	(4	)	$	79		$	75

The following table reconciles total Segment Adjusted EBITDA to Consolidated net ~~(loss) income~~loss attributable to Alcoa Corporation:


	Second quarter ended June 30,						Six months ended June 30,						First quarter ended March 31,
	2023			2022			2023			2022			2024			2023
Total Segment Adjusted EBITDA	$	143		$	954		$	430		$	1,969		$	189		$	287
Unallocated amounts:
Transformation(1)		(17	)		(11	)		(25	)		(25	)		(14	)		(8	)
Intersegment eliminations		31			10			23			110			(8	)		(8	)
Corporate expenses(2)		(24	)		(35	)		(54	)		(64	)		(34	)		(30	)
Provision for depreciation, depletion, and amortization		(153	)		(161	)		(306	)		(321	)		(161	)		(153	)
Restructuring and other charges, net (D)		(24	)		75			(173	)		(50	)		(202	)		(149	)
Interest expense		(27	)		(30	)		(53	)		(55	)		(27	)		(26	)
Other (expenses) income, net (R)		(6	)		206			(60	)		220
Other expenses, net (P)														(59	)		(54	)
Other(3)		(22	)		(100	)		(61	)		(113	)		(9	)		(39	)
Consolidated (loss) income before income taxes		(99	)		908			(279	)		1,671
Provision for income taxes		(22	)		(234	)		(74	)		(444	)
Net loss (income) attributable to noncontrolling interest		19			(125	)		20			(209	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(102	)	$	549		$	(333	)	$	1,018
Consolidated loss before income taxes														(325	)		(180	)
Benefit from (provision for) income taxes														18			(52	)
Net loss attributable to noncontrolling interest														55			1
Consolidated net loss attributable to Alcoa Corporation													$	(252	)	$	(231	)

(1)

Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

(2)

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.

(3)

Other includes certain items that are not included in the Adjusted EBITDA of the reportable segments.

The following table details Alcoa Corporation’s Sales by product division:


	Second quarter ended June 30,						Six months ended June 30,						First quarter ended March 31,
	2023			2022			2023			2022			2024			2023
Aluminum	$	1,824		$	2,624		$	3,670		$	5,071		$	1,661		$	1,846
Alumina		774			1,064			1,488			1,914			890			714
Energy		26			40			54			81			33			28
Bauxite		109			27			236			55			61			127
Other(1)		(49	)		(111	)		(94	)		(184	)		(46	)		(45	)
	$	2,684		$	3,644		$	5,354		$	6,937		$	2,599		$	2,670

(1)

Other includes realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.

F.. Earnings Per Share – Basic earnings per share (EPS) amounts are computed by dividing earnings by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

The share information used to compute basic and diluted EPS attributable to Alcoa Corporation common shareholders was as follows (shares in millions):


	Second quarter ended June 30,					Six months ended June 30,					First quarter ended March 31,
	2023			2022		2023			2022		2024			2023
Net (loss) income attributable to Alcoa Corporation	$	(102	)	$	549	$	(333	)	$	1,018
Net loss attributable to Alcoa Corporation											$	(252	)	$	(231	)
Average shares outstanding – basic		178			182		178			183		179			178
Effect of dilutive securities:
Stock options		—			—		—			—		—			—
Stock units		—			4		—			4		—			—
Average shares outstanding – diluted		178			186		178			187		179			178

In the ~~second quarter~~first quarters of 2024 and ~~six-month period of~~ 2023, basic average shares outstanding and diluted average shares outstanding were the same because the effect of potential shares of common stock was anti-dilutive. Had Alcoa generated net income in the ~~second~~first quarter of 2024 or ~~six-month period~~first quarter of 2023, two million and three million common share equivalents, respectively, related to three million outstanding stock units and stock options combined would have been included in diluted average shares outstanding for the periods.

~~For the second quarter and six-month period of 2022, all options to purchase shares of common stock were included in the computation of diluted EPS.~~10

G. Accumulated Other Comprehensive Loss

The following table details the activity of the three components that comprise Accumulated other comprehensive loss for both Alcoa Corporation’s shareholders and Noncontrolling interest:


	Alcoa Corporation						Noncontrolling interest						Alcoa Corporation						Noncontrolling interest
	Second quarter ended June 30,						Second quarter ended June 30,						First quarter ended March 31,						First quarter ended March 31,
	2023			2022			2023			2022			2024			2023			2024			2023
Pension and other postretirement benefits (M)
Pension and other postretirement benefits (L)
Balance at beginning of period	$	66		$	(860	)	$	(5	)	$	(12	)	$	—		$	62		$	(15	)	$	(5	)
Other comprehensive income (loss):
Unrecognized net actuarial loss and prior service cost/benefit		(18	)		30			(2	)		1
Tax benefit (expense)(2)		8			(6	)		—			—
Total Other comprehensive (loss) income before reclassifications, net of tax		(10	)		24			(2	)		1
Amortization of net actuarial loss and prior service cost/benefit(1)		26			29			—			(1	)
Unrecognized net actuarial gain/loss and prior service cost/benefit														4			—			—			—
Tax expense(2)		(6	)		(1	)		—			—			(1	)		—			—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		20			28			—			(1	)
Total Other comprehensive income (loss)		10			52			(2	)		—
Total Other comprehensive income before reclassifications, net of tax														3			—			—			—
Amortization of net actuarial gain/loss and prior service cost/benefit(1)														6			4			1			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(6)														6			4			1			—
Total Other comprehensive income														9			4			1			—
Balance at end of period	$	76		$	(808	)	$	(7	)	$	(12	)	$	9		$	66		$	(14	)	$	(5	)

Foreign currency translation
Balance at beginning of period	$	(2,683	)	$	(2,288	)	$	(1,025	)	$	(839	)	$	(2,593	)	$	(2,685	)	$	(983	)	$	(1,040	)
Other comprehensive income (loss)		25			(370	)		11			(132	)
Other comprehensive (loss) income														(122	)		2			(54	)		15
Balance at end of period	$	(2,658	)	$	(2,658	)	$	(1,014	)	$	(971	)	$	(2,715	)	$	(2,683	)	$	(1,037	)	$	(1,025	)

Cash flow hedges (N)
Cash flow hedges (M)
Balance at beginning of period	$	(1,038	)	$	(1,926	)	$	1		$	—		$	(1,052	)	$	(916	)	$	—		$	1
Other comprehensive income:
Other comprehensive income (loss):
Net change from periodic revaluations		241			1,184			—			1			117			(187	)		—			—
Tax expense(2)		(38	)		(164	)		—			—
Total Other comprehensive income before reclassifications, net of tax		203			1,020			—			1
Tax (expense) benefit(2)														(31	)		38			—			—
Total Other comprehensive income (loss) before reclassifications, net of tax														86			(149	)		—			—
Net amount reclassified to earnings:
Aluminum contracts(3)		33			132			—			—			57			61			—			—
Financial contracts(4)														—			(20	)		—			—
Interest rate contracts(5)		(3	)		—			—			—			—			1			—			—
Foreign exchange contracts(6)		(3	)		(3	)		—			—
Foreign exchange contracts(3)														(4	)		(5	)		—			—
Sub-total		27			129			—			—			53			37			—			—
Tax expense(2)		(4	)		(12	)		—			—			(9	)		(10	)		—			—
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		23			117			—			—
Total Other comprehensive income		226			1,137			—			1
Total amount reclassified from Accumulated other comprehensive loss, net of tax(6)														44			27			—			—
Total Other comprehensive income (loss)														130			(122	)		—			—
Balance at end of period	$	(812	)	$	(789	)	$	1		$	1		$	(922	)	$	(1,038	)	$	—		$	1

Total Accumulated other comprehensive loss	$	(3,394	)	$	(4,255	)	$	(1,020	)	$	(982	)	$	(3,628	)	$	(3,655	)	$	(1,051	)	$	(1,029	)

Alcoa Corporation

Noncontrolling interest

Six months ended
June 30,

Six months ended
June 30,

2023

2022

2023

2022

Pension and other postretirement benefits (M)

Balance at beginning of period

$
62

$
(882
)

$
(5
)

$
(13
)
Other comprehensive income (loss):

Unrecognized net actuarial loss and prior service
   cost/benefit

(18
)

23

(2
)

1

Tax benefit (expense)(2)

8

(5
)

—

—

Total Other comprehensive (loss) income
   before reclassifications, net of tax

(10
)

18

(2
)

1

Amortization of net actuarial loss and prior
   service cost/benefit(1)

30

57

—

—

Tax expense(2)

(6
)

(1
)

—

—

Total amount reclassified from Accumulated
   other comprehensive loss, net of tax(7)

24

56

—

—

Total Other comprehensive income (loss)

14

74

(2
)

1

Balance at end of period

$
76

$
(808
)

$
(7
)

$
(12
)

Foreign currency translation

Balance at beginning of period

$
(2,685
)

$
(2,614
)

$
(1,040
)

$
(937
)
Other comprehensive income (loss)

27

(44
)

26

(34
)
Balance at end of period

$
(2,658
)

$
(2,658
)

$
(1,014
)

$
(971
)

Cash flow hedges (N)

Balance at beginning of period

$
(916
)

$
(1,096
)

$
1

$
(1
)
Other comprehensive income (loss):

Net change from periodic revaluations

54

121

—

2

Tax expense(2)

—

(11
)

—

—

Total Other comprehensive income
   before reclassifications, net of tax

54

110

—

2

Net amount reclassified to earnings:

Aluminum contracts(3)

94

242

—

—

Financial contracts(4)

(20
)

—

—

—

Interest rate contracts(5)

(2
)

4

—

—

Foreign exchange contracts(6)

(8
)

(3
)

—

—

Sub-total

64

243

—

—

Tax expense(2)

(14
)

(46
)

—

—

Total amount reclassified from
   Accumulated other comprehensive
   loss, net of tax(7)

50

197

—

—

Total Other comprehensive income

104

307

—

2

Balance at end of period

$
(812
)

$
(789
)

$
1

$
1

Total Accumulated other comprehensive loss

$
(3,394
)

$
(4,255
)

$
(1,020
)

$
(982
)

(1)

These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M)L).

(2)

These amounts were reported in ~~Provision~~(Benefit from) provision for income taxes on the accompanying Statement of Consolidated Operations.

(3)

These amounts were reported in Sales on the accompanying Statement of Consolidated Operations.

(4)

These amounts were reported in Cost of goods sold on the accompanying Statement of Consolidated Operations.

(5)

These amounts were reported in Other expenses, ~~(income),~~ net on the accompanying Statement of Consolidated Operations.

(6)

~~For the second quarter and six-month period of 2023, $~~4 ~~was reported in Cost of goods sold (both periods) and $(~~7~~) and $(~~12~~) were reported in Sales, respectively, on the accompanying Statement of Consolidated Operations. For the second quarter and six-month period of 2022, $(~~3~~) was reported in Sales (both periods) on the accompanying Statement of Consolidated Operations.~~

~~(7)~~

A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.

1211

H. Investments – A summary of unaudited financial information for Alcoa Corporation’s equity investments is as follows (amounts represent 100% of investee financial information):


Second quarter ended June 30, 2023	Saudi Arabia Joint Venture			Mining			Energy			Other
First quarter ended March 31, 2024													Saudi Arabia Joint Venture			Mining			Energy			Other
Sales	$	700		$	172		$	59		$	116		$	711		$	115		$	63		$	115
Cost of goods sold		620			101			32			106			599			103			25			105
Net (loss) income		(99	)		14			22			(33	)		(8	)		(5	)		31			(16	)
Equity in net (loss) income of affiliated companies, before reconciling adjustments		(25	)		6			9			(15	)		(2	)		(2	)		12			(8	)
Other		(3	)		1			1			7			(8	)		—			(1	)		(5	)
Alcoa Corporation’s equity in net (loss) income of affiliated companies		(28	)		7			10			(8	)		(10	)		(2	)		11			(13	)

Second quarter ended June 30, 2022
Sales	$	1,016		$	191		$	65		$	125
Cost of goods sold		712			123			23			115
Net income (loss)		156			32			29			(30	)
Equity in net income (loss) of affiliated companies, before reconciling adjustments		39			12			12			(15	)
Other		(4	)		(2	)		(2	)		19
Alcoa Corporation’s equity in net income of affiliated companies		35			10			10			4

Six months ended June 30, 2023
First quarter ended March 31, 2023
Sales	$	1,300		$	359		$	117		$	237		$	600		$	187		$	58		$	121
Cost of goods sold		1,302			204			59			219			682			103			27			113
Net (loss) income		(351	)		38			46			(49	)		(252	)		24			24			(16	)
Equity in net (loss) income of affiliated companies, before reconciling adjustments		(88	)		17			18			(23	)		(63	)		11			9			(8	)
Other		(15	)		1			1			—			(12	)		—			—			(7	)
Alcoa Corporation’s equity in net (loss) income of affiliated companies		(103	)		18			19			(23	)		(75	)		11			9			(15	)

Six months ended June 30, 2022
Sales	$	1,913		$	422		$	127		$	242
Cost of goods sold		1,328			269			53			222
Net income (loss)		311			81			52			(58	)
Equity in net income (loss) of affiliated companies, before reconciling adjustments		78			26			21			(28	)
Other		(4	)		(2	)		(1	)		15
Alcoa Corporation’s equity in net income (loss) of affiliated companies		74			24			20			(13	)

The Company’s basis in the ELYSISTM Limited Partnership (ELYSIS) as of March 31, 2024 and 2023, included in Other in the table above, has been reduced to zero for its share of losses incurred to date. As a result, the Company has $54 in unrecognized losses as of March 31, 2024 that will be recognized upon additional contributions into the partnership.

The results for the Saudi Arabia joint venture for the ~~six-month period of~~quarter ended March 31, 2023 include an adjustment to the estimate for the settlement of a dispute with an industrial utility for periods in 2021 and 2022. Alcoa’s share of this adjustment is $41 which is included in Other expenses, ~~(income),~~ net on the Statement of Consolidated Operations for the ~~six-month period of~~quarter ended March 31, 2023. Alcoa’s total share of this dispute of $62 includes $21 that was recorded in the fourth quarter of 2022.

~~The Company’s basis in the ELYSIS~~ITM. Receivables ~~Limited Partnership (ELYSIS) as of June 30, 2023 and 2022, included in Other in the table above, has been reduced to~~ ~~zero~~ ~~for its share of losses incurred to date. As a result, the Company has $~~63 ~~in unrecognized losses as of June 30, 2023 that will be recognized upon additional contributions into the partnership.~~

In ~~February 2022, the Company signed an agreement to sell its share of its investment in MRN in Brazil for $~~10 ~~to South32 Minerals S.A. Related to this transaction, the Company recorded an asset impairment of $~~58 ~~in the first quarter of 2022 in Restructuring and other charges, net on the Statement of Consolidated Operations. In April 2022, Alcoa completed the sale of its investment in MRN. An additional $~~30 ~~in cash could be paid to the Company in the future if certain post-closing conditions related to future MRN mine development are satisfied.~~

~~I. Receivables~~

~~On January 31,~~ 2023, a wholly-owned special purpose entity (SPE) of the Company entered into ~~a one-year~~and subsequently amended an agreement with a financial institution to sell up to $~~150~~130 of certain customer receivables without recourse on a revolving basis. The termination date of the agreement is November 14, 2024. Company subsidiaries sell customer receivables to the SPE, which then transfers the receivables to the financial institution. The Company does not maintain effective control over the transferred receivables, and therefore accounts for the transfers as sales of receivables.

Alcoa Corporation guarantees the performance obligations of the Company subsidiaries and unsold customer receivables are pledged as collateral to the financial institution to secure the sold receivables. ~~At June 30, 2023, the~~The SPE held unsold customer receivables of $~~184~~181 and $104 pledged as collateral against the sold ~~receivables.~~receivables as of March 31, 2024 and December 31, 2023, respectively.

In the ~~second~~first quarter of ~~2023,~~2024, the Company sold gross customer receivables of $98~~, reinvested collections of $104~~ ~~from previously sold receivables, resulting in a net cash remittance to the financial institution of $~~6~~. In the six-month period of 2023, the Company sold gross customer receivables of $174~~307, and reinvested collections of $~~127~~291 from previously sold receivables, resulting in net cash proceeds from the financial institution of $4716. In the first quarter of 2023, the Company sold gross customer receivables of $76, and reinvested collections of $23 from previously sold receivables, resulting in net cash proceeds from the financial institution of $53.

Cash collections from previously sold receivables yet to be reinvested of $2986 and $99 were included in Accounts payable, trade on the accompanying Consolidated Balance Sheet as of ~~June 30, 2023.~~March 31, 2024 and December 31, 2023, respectively. Cash received from sold receivables under the agreement are presented within operating activities in the Statement of Consolidated Cash Flows.

J. Inventories


	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Finished goods	$	435	$	385	$	326	$	355
Work-in-process		334		350		281		287
Bauxite and alumina		630		584		563		586
Purchased raw materials		803		923		648		700
Operating supplies		198		185		230		230
	$	2,400	$	2,427	$	2,048	$	2,158

K. ~~Goodwill~~

As a result of the January 2023 segment change, the Company reviewed the recoverability of the carrying value of goodwill of its Alumina reporting unit in the first quarter of 2023. The estimated fair value of the Alumina reporting unit substantially exceeded the reporting unit’s carrying value, resulting in no ~~impairment.~~

~~Goodwill, which is included in Other noncurrent assets on the accompanying Consolidated Balance Sheet, was as follows:~~

June 30, 2023

December 31, 2022

Alumina

$
4

$
4

Aluminum

—

—

Corporate(1)

142

141

$
146

$
145

~~(1)~~

~~The carrying value of Corporate’s goodwill is net of accumulated impairment losses of $742~~ ~~as of both June 30, 2023 and December 31, 2022. As of June 30, 2023, the $142~~ of goodwill reflected in Corporate is allocated to Alcoa Corporation’s Alumina reportable segment for purposes of impairment testing. This goodwill is reflected in Corporate for segment reporting purposes because it is not included in management’s assessment of performance by the reportable segment. Changes in the carrying amount of goodwill were attributable to foreign currency translation as of June 30, 2023 and December 31, 2022.

L. Debt

Short-term ~~borrowings~~Borrowings

Inventory Repurchase ~~Agreement~~Agreements

~~In March 2023, the~~The Company has entered into an inventory repurchase ~~agreement~~agreements whereby the Company sold aluminum to a third party and agreed to subsequently repurchase substantially similar inventory. The Company did not record ~~a sale~~sales upon each shipment of ~~the~~ inventory and the net cash received of $2552 and $56 related to these agreements was recorded in Short-term borrowings within Other current liabilities on the Consolidated Balance Sheet as of March 31, ~~2023.~~2024 and December 31, 2023, respectively. The associated inventory sold ~~of $~~25 ~~was pledged as collateral and~~ was reflected in Prepaid expenses and other current assets on the Consolidated Balance ~~Sheet.~~Sheet as of March 31, 2024 and December 31, 2023, respectively.

During the ~~second~~first quarter ~~and six-month period~~ of ~~2023,~~2024, the Company recorded borrowings of $21 and repurchased $1525 of inventory related to ~~this agreement, resulting in an increase~~these agreements. During the first quarter of 2023, the Company recorded borrowings of $25 of inventory related to ~~Inventories and decrease to Prepaid expenses and other current assets on the Consolidated Balance Sheet.~~these agreements.

The cash received and subsequently paid under the inventory repurchase ~~agreement~~agreements is included in Cash provided from ~~(used for)~~ financing activities on the Statement of Consolidated Cash ~~Flows~~Flows.

144A Debt

2031 Notes

In March 2024, Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa Corporation, completed a Rule 144A (U.S. Securities Act of 1933, as amended) debt issuance for $750 aggregate principal amount of 7.125% Senior Notes due 2031 (the 2031 Notes), which carry a green bond designation. The net proceeds of this issuance were $737, reflecting a discount to the initial purchasers of the 2031 Notes, as well as issuance costs. The Company intends to use the net proceeds to finance and/or refinance, in whole or in part, new and/or existing qualifying projects on a two-year look back and three-year look forward that meet certain eligibility criteria within its Green Finance Framework. The net proceeds will also support the Company’s cash position and ongoing cash needs, including with respect to its previously announced portfolio actions.

The discount to the initial purchasers, as well as costs to complete the financing, were deferred and are being amortized to interest expense over the term of the 2031 Notes. Interest on the 2031 Notes is paid semi-annually in March and September, and interest payments will commence September 15, 2024. The indenture contains customary affirmative and negative covenants that are similar to those included in the indenture that governs ANHBV’s 4.125% Senior Notes due 2029 issued in March 2021, such as limitations on liens, limitations on sale and leaseback transactions, a prohibition on a reduction in the ownership of AWAC entities below an agreed level, and the calculation of certain financial ratios.

ANHBV has the option to redeem the 2031 Notes on at least 10 days, but not more than 60 days, notice to the holders of the 2031 Notes under multiple scenarios, including, in whole or in part, at any time or from time to time on and after March 15, 2027, at the applicable redemption price specified in the indenture (up to 103.563% of the principal amount plus any accrued and unpaid interest in each case). Also, the 2031 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the indenture) at a repurchase price in cash equal to 101% of the aggregate principal amount of the 2031 Notes repurchased, plus any accrued and unpaid interest on the 2031 Notes repurchased.

The 2031 Notes are guaranteed on a senior unsecured basis by the Company and its subsidiaries that are party to the indenture. The 2031 Notes rank equally in right of payment with all of ANHBV’s existing and future senior unsecured indebtedness, including the ANHBV’s senior notes with maturities in 2027, 2028 and 2029; rank senior in right of payment to any future subordinated obligations of ANHBV; and are effectively subordinated to ANHBV’s existing and future secured indebtedness, including under the Revolving Credit Agreement, to the extent of the value of property and assets securing such indebtedness. See Part II Item 8 of Alcoa Corporation’s Annual Report on Form 10-K in Note M to the Consolidated Financial Statements for the ~~six-month period of 2023.~~year ended December 31, 2023 for more information related to ANHBV’s existing debt and related covenants.

Credit Facilities

Revolving Credit Facility

The Company has ~~an unsecured~~a $1,250 revolving credit and letter of credit facility in place for working capital and/or other general corporate purposes (the Revolving Credit Facility). The Revolving Credit Facility, established onin September ~~16,~~ 2016, and amended and restated in June 2022 and in January 2024, is scheduled to mature in June ~~2027~~.2027. Subject to the terms and conditions under the Revolving Credit Facility, the Company or ~~Alcoa Nederland Holding B.V. (ANHBV),~~ANHBV, a wholly-owned subsidiary of Alcoa Corporation, may borrow funds or issue letters of credit. Under the terms of the January 2024 amendment, the Company has agreed to provide collateral for its obligations under the Revolving Credit Facility. See Part II Item 8 of Alcoa Corporation’s Annual Report on Form 10-K in Note M to the Consolidated Financial Statements for the year ended December 31, ~~2022~~2023 for more information on the Revolving Credit Facility.

As of ~~June 30, 2023,~~March 31, 2024, the Company was in compliance with all financial covenants. The Company may access the entire amount of commitments under the Revolving Credit Facility. There were no borrowings outstanding at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, and no amounts were borrowed during the ~~second quarter~~first quarters ended March 31, 2024 and ~~six-month period of~~March 31, 2023 ~~and 2022~~ under the Revolving Credit Facility.

Japanese Yen Revolving Credit Facility

~~In April 2023, the~~The Company entered into a ~~one-year unsecured~~$250 revolving credit facility ~~for $250~~ ~~(available~~available to be drawn in Japanese ~~yen)~~yen (the Japanese Yen Revolving Credit Facility) in April 2023. The Japanese Revolving Credit Facility was amended and restated in January 2024 and in April 2024 (see below) and is scheduled to mature in April 2025. Subject to the terms and conditions under the facility, the Company or ANHBV may borrow funds. The facility includes covenants that are substantially the same as those included in the Revolving Credit Facility. IfUnder the current terms of the January 2024 amendment, the Company has agreed to provide collateral for its obligations under the Japanese Yen Revolving Credit Facility. See Part II Item 8 of Alcoa ~~Corporation or ANHBV, as applicable, fails~~Corporation’s Annual Report on Form 10-K in Note M to have a rating of at least Ba1 from Moody’s Investor Service (Moody’s) and BB+ from Standard and Poor’s Global Ratings (S&P), then no lending party to this facility would have any commitment or obligation to lend.the Consolidated Financial Statements for the year ended December 31, 2023 for more information on the Japanese Yen Revolving Credit Facility.

As of ~~June 30, 2023,~~March 31, 2024, the Company was in compliance with all financial covenants. The Company may access the entire amount of commitments under the ~~facility.~~Japanese Revolving Credit Facility. There were no borrowings outstanding at ~~June 30, 2023~~March 31, 2024 and December 31, 2023. During the first quarter of 2024, $no201 ~~amounts were~~(29,686 JPY) was borrowed ~~during~~and $196 (29,686 JPY) was repaid.

On April 26, 2024, the ~~second quarter and six-month period~~Company entered into an amendment extending the maturity of ~~2023.~~the Japanese Revolving Credit Facility to April 2025.

M.L. Pension and Other Postretirement Benefits

The components of net periodic benefit cost were as follows:


	Pension benefits						Other postretirement benefits
First quarter ended March 31,	2024			2023			2024			2023
Service cost	$	2		$	2		$	1		$	1
Interest cost(1)		27			31			6			6
Expected return on plan assets(1)		(35	)		(39	)		—			—
Recognized net actuarial loss(1)		8			7			1			1
Amortization of prior service benefit(1)		—			—			(3	)		(3	)
Curtailments(2)		1			—			—			—
Net periodic benefit cost	$	3		$	1		$	5		$	5

Second quarter ended
June 30,

Six months ended
June 30,

Pension benefits

2023

2022

2023

2022

Service cost

$
3

$
4

$
5

$
7

Interest cost(1)

29

27

60

54

Expected return on plan assets(1)

(37
)

(44
)

(76
)

(88
)
Recognized net actuarial loss(1)

7

27

14

55

Settlements(2)

21

—

21

—

Net periodic benefit cost

$
23

$
14

$
24

$
28

Second quarter ended
June 30,

Six months ended
June 30,

Other postretirement benefits

2023

2022

2023

2022

Service cost

$
1

$
1

$
2

$
2

Interest cost(1)

7

4

13

8

Recognized net actuarial loss(1)

1

5

2

9

Amortization of prior service benefit(1)

(4
)

(4
)

(7
)

(7
)
Net periodic benefit cost

$
5

$
6

$
10

$
12

(1)

These amounts were reported in Other expenses, ~~(income),~~ net on the accompanying Statement of Consolidated Operations (see Note R)P).

(2)

~~These amounts were~~This amount was reported in Restructuring and other charges, net on the accompanying ~~Statements~~Statement of Consolidated Operations ~~(see Note D)~~ and Cash Flows.

Plan Actions. In ~~2023,~~2024, management initiated the following ~~actions~~action to a certain pension ~~and other postretirement plans:~~plan:

Action #1 – InOn January 8, 2024, Alcoa announced the ~~second quarter~~full curtailment of ~~2023, plan amendment accounting and related plan remeasurements were triggered within~~ the Surinamese pension and other postretirement plans as a result of participants electing to prospectively convert their Surinamese dollar pension and Company-provided retiree medical to a United States dollar pension with no Company-provided retiree medical.Kwinana refinery. As a result, ~~Alcoa~~curtailment accounting was triggered within Alcoa’s Australian pension plan. The Company recorded a $15 ~~increase to Accrued pension benefits and a $~~9 ~~decrease to Accrued other postretirement benefits in the second quarter.~~

~~Action #2~~ – In the second quarter of 2023, settlement accounting and related plan remeasurements were triggered within certain Canadian pension plans as a result of the Company's purchase of group annuity contracts to transfer the obligation to pay the remaining retirement benefits of approximately ~~530~~ ~~retirees and beneficiaries from its Canadian defined benefit pension plans. The transfer of approximately $235~~ ~~in both plan obligations and plan assets was completed in April 2023. As a result, Alcoa recorded a $~~22 ~~increase to Accrued pension benefits and a $~~51 decrease to Other noncurrent assets and recognized a ~~non-cash settlement~~curtailment loss of $211 ($160 after-tax) in Restructuring and other charges, net inon the ~~second quarter.~~accompanying Statement of Consolidated Operations.

Action #

Number of
affected
plan
participants

Weighted
average
discount rate
as of prior plan remeasurement
date

Plan
remeasurement
date

Weighted
average
discount rate
as of plan
remeasurement
date

Increase to
accrued
pension
benefits
liability

Decrease to
other noncurrent assets

Decrease to accrued other
postretirement
benefits
liability

Settlement
loss(1)

1

~370

5.58%

March 31, 2023

5.20%

$
15

$
—

$
(9
)

$
—

2

~530

5.20%

April 30, 2023

4.80%

$
22

$
(5
)

$
—

$
21

Action #

Number of
affected
plan
participants

Weighted
average
discount rate
as of prior plan remeasurement
date

Plan
remeasurement
date

Weighted
average
discount rate
as of plan
remeasurement
date

Decrease to
other noncurrent assets

Curtailment
loss(1)

~110

N/A

)

(1)

~~These amounts represent~~This amount represents the net actuarial loss arising from the curtailment and ~~were reclassified from Accumulated other comprehensive loss to~~was recognized immediately in Restructuring and other charges, net ~~(see Note D)~~ on the accompanying Statement of Consolidated Operations.

Funding and Cash Flows. It is Alcoa’s policy to fund amounts for defined benefit pension plans sufficient to meet the minimum requirements set forth in each applicable ~~country's~~country’s benefits laws and tax laws, including the Employee Retirement Income Security Act of 1974 (ERISA) for U.S. plans. From time to time, the Company contributes additional amounts as deemed appropriate.

Under ERISA regulations, a plan sponsor that establishes a pre-funding balance by making discretionary contributions to a U.S. defined benefit pension plan may elect to apply all or a portion of this balance toward its minimum required contribution obligations to the related plan in future years.

In the first ~~and second quarters~~quarter of ~~2023,~~2024, management made such elections related to the Company’s U.S. plans and intends to do so for the remainder of ~~2023.~~2024. As a result, Alcoa’s minimum required contribution to defined benefit pension plans in ~~2023~~2024 is estimated to be approximately $2317, of which approximately $56 was contributed to non-U.S. plans during the ~~second~~first quarter of ~~2023.~~ 2024.

In the ~~six-month period~~first quarter of 2023, $9 ~~was contributed to non-U.S. plans.~~

~~In the second quarter of 2022, $~~5 ~~was contributed to non-U.S. plans. In the six-month period of 2022, $~~94 was contributed to non-U.S. plans.

N.M. Derivatives and Other Financial Instruments

Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

•

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Derivatives

Alcoa Corporation is exposed to certain risks relating to its ongoing business operations, including the risks of changing commodity prices, foreign currency exchange rates, and interest rates. Alcoa Corporation’s commodity and derivative activities include aluminum, energy, foreign exchange, and interest rate contracts which are held for purposes other than trading. They are used to mitigate uncertainty and volatility, and to cover underlying exposures. While Alcoa does not generally enter into derivative contracts to mitigate the risk associated with changes in aluminum price, the Company may do so in isolated cases to address discrete commercial or operational conditions. Alcoa is not involved in trading activities for energy, weather derivatives, or other nonexchange commodity trading activities.

Alcoa Corporation’s aluminum and foreign exchange contracts are predominantly classified as Level 1 under the fair value hierarchy. All of the Level 1 contracts are designated as either fair value or cash flow hedging instruments (except as described below). Alcoa Corporation also has several derivative instruments classified as Level 3 under the fair value hierarchy, which are either designated as cash flow hedges or undesignated. Alcoa includes the changes in its equity method investee’s Level 2 derivatives in Accumulated other comprehensive loss in the accompanying Consolidated Balance Sheet.

The following tables present the detail for Level 1 and 3 derivatives (see additional Level 3 information in further tables below):


	June 30, 2023				December 31, 2022				March 31, 2024				December 31, 2023
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Level 1 derivative instruments	$	69	$	17	$	84	$	14	$	11	$	10	$	16	$	9
Level 3 derivative instruments		29		1,060		52		1,212		12		1,120		16		1,297
Total	$	98	$	1,077	$	136	$	1,226	$	23	$	1,130	$	32	$	1,306
Less: Current		93		165		134		200		22		205		29		214
Noncurrent	$	5	$	912	$	2	$	1,026	$	1	$	925	$	3	$	1,092


	2023					2022					2024						2023
Second quarter ended June 30,	Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized loss reclassed from Other comprehensive loss to earnings
First quarter ended March 31,											Unrealized (loss) gain recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized loss recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	42	$	28		$	332	$	(14	)	$	(3	)	$	4		$	(11	)	$	16
Level 3 derivative instruments		197		(58	)		850		(115	)		120			(57	)		(174	)		(52	)
Noncontrolling and equity interest (Level 2)		2		3			2		—			—			—			(2	)		(1	)
Total	$	241	$	(27	)	$	1,184	$	(129	)	$	117		$	(53	)	$	(187	)	$	(37	)

For the ~~second quarter~~first quarters of 2024 and 2023, the realized ~~gain~~gains of $284 and $16 on Level 1 cash flow hedges ~~was comprised of a $~~32 ~~gain~~were recognized in Sales, ~~and a $~~4 ~~loss recognized in Cost of goods sold. For the second quarter of 2022, the realized loss of $~~14 ~~on Level 1 cash flow hedges was comprised of a $~~13 ~~loss recognized in Sales and a $~~1 ~~loss recognized in Cost of goods sold.~~

2023

2022

Six months ended June 30,

Unrealized gain recognized in Other comprehensive loss

Realized gain (loss) reclassed from Other comprehensive loss to earnings

Unrealized gain recognized in Other comprehensive loss

Realized loss reclassed from Other comprehensive loss to earnings

Level 1 and 2 derivative instruments

$
31

$
44

$
99

$
(20
)
Level 3 derivative instruments

23

(110
)

13

(219
)
Noncontrolling and equity interest (Level 2)

—

2

9

(4
)
Total

$
54

$
(64
)

$
121

$
(243
)

~~For the six-month period of 2023, the realized gain of $~~44 ~~on Level 1 cash flow hedges was comprised of a $~~48 ~~gain recognized in Sales and a $~~4 ~~loss recognized in Cost of goods sold. For the six-month period of 2022, the realized loss of $~~20 ~~on Level 1 cash flow hedges was comprised of a $~~18 ~~loss recognized in Sales and a $~~2 ~~loss recognized in Cost of goods sold.~~respectively.

The following table presents the outstanding quantities of derivative instruments classified as Level 1:


	Classification	June 30, 2023		June 30, 2022		Classification	March 31, 2024		March 31, 2023
Aluminum (in kmt)	Commodity buy forwards		187		162	Commodity buy forwards		101		316
Aluminum (in kmt)	Commodity sell forwards		206		448	Commodity sell forwards		44		398
Foreign currency (in millions of euro)	Foreign exchange buy forwards		86		75	Foreign exchange buy forwards		79		55
Foreign currency (in millions of euro)	Foreign exchange sell forwards		18		—	Foreign exchange sell forwards		17		—
Foreign currency (in millions of Norwegian krone)	Foreign exchange buy forwards		232		388	Foreign exchange buy forwards		102		256
Foreign currency (in millions of Brazilian real)	Foreign exchange buy forwards		1,010		1,399	Foreign exchange buy forwards		450		1,047
Foreign currency (in millions of Canadian dollar)						Foreign exchange buy forwards		26		—

Alcoa Corporation routinely uses Level 1 aluminum derivative instruments to manage exposures to changes in the fair value of firm commitments for the purchases or sales of aluminum. Additionally, Alcoa ~~uses~~used Level 1 aluminum derivative instruments to manage exposures to changes in the LME associated with the Alumar (Brazil) smelter restart ~~(expires~~ (expired December ~~2023) and the San Ciprián strike (expired~~ ~~October 2022~~)2023). As a result of a delay with the Alumar restart, it became probable that certain of the original forecasted transactions would not occur by the end of the originally specified time period and Alcoa dedesignated certain aluminum sell forwards. The Company reclassified the related unrealized gain of $11 included in Accumulated other comprehensive loss to Sales during the second quarter of 2023. In conjunction with the dedesignations, the Company entered into aluminum buy forwards during the second quarter of 2023 for the same volume and periods which were also not designated. The unrealized and realized gains and losses on the aluminum buy and sell forwards that are not designated will offset resulting in no impact to Alcoa’s earnings.

Alcoa Corporation uses Level 1 foreign exchange forward contracts to mitigate the risk of foreign exchange exposure related to euro power purchases in Norway (expires December 2026), ~~krone capital expenditures~~U.S. dollar aluminum sales in Norway (expires June 2025), ~~and~~ U.S. dollar alumina and aluminum sales in Brazil (expires ~~December 2024~~August 2025), and U.S. dollar aluminum sales in Canada (expires March 2025).

1816

Additional Level 3 Disclosures

The following table presents quantitative information related to the significant unobservable inputs described above for Level 3 derivative instruments (megawatt hours in MWh):

June 30, 2023

Unobservable Input

Unobservable Input Range

March 31, 2024

Unobservable Input

Unobservable Input Range

Asset Derivatives

Financial contract (undesignated)

Interrelationship of forward energy price, LME forward price and the Consumer Price Index

Electricity
(per MWh)

2023: $78.59
2023: $44.39

Interrelationship of forward energy price, LME forward price, and the Consumer Price Index

Electricity
(per MWh)

2024: $37.38
2024: $44.71

LME (per mt)

2023: $2,121

LME (per mt)

2024: $2,307

2023: $2,184

2024: $2,378

Power contract

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2023: $2,121
2023: $2,148

—

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2024: $2,307
2024: $2,335

Midwest premium
(per pound)

2023: $0.2405
2023: $0.2401

Midwest premium
(per pound)

2024: $0.1770
2024: $0.2040

Electricity

Rate of 2 million MWh per year

Electricity

Rate of 2 million MWh per year

Total Asset Derivatives

Liability Derivatives

Power contract

180

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2023: $2,121
2027: $2,637

174

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2024: $2,307
2027: $2,705

Electricity

Rate of 4 million MWh per year

Electricity

Rate of 4 million MWh per year

Power contracts

880

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2023: $2,121
2029: $2,822
2036: $3,118

946

MWh of energy needed to produce the forecasted mt of aluminum

LME (per mt)

2024: $2,307
2029: $2,821
2036: $3,069

Midwest premium
(per pound)

2023: $0.2405
2029: $0.2440
2036: $0.2440

Midwest premium
(per pound)

2024: $0.1770
2029: $0.2150
2036: $0.2150

Electricity

Rate of 18 million MWh per year

Electricity

Rate of 18 million MWh per year

Power contract (undesignated)

—

Estimated spread between the 30-year debt yield of Alcoa and the counterparty

Credit spread

1.37%: 30-year debt yield spread
6.48%: Alcoa (estimated)
5.11%: counterparty

—

Estimated spread between the 30-year debt yield of Alcoa and the counterparty

Credit spread

1.63%: 30-year debt yield spread
6.88%: Alcoa (estimated)
5.25%: counterparty

Total Liability Derivatives

1,060

1,120

~~In addition to the instruments presented above, Alcoa had a financial contract that expired on~~ ~~February 28, 2023~~ ~~that was designated as a cash flow hedge of forward sales of power.~~

The fair values of Level 3 derivative instruments recorded in the accompanying Consolidated Balance Sheet were as follows:


Asset Derivatives	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Current—financial contract	$	—	$	20
Current—power contract		1		—
Total derivatives designated as hedging instruments	$	1	$	20
Derivatives not designated as hedging instruments:
Current—financial contract	$	28	$	32	$	12	$	16
Total derivatives not designated as hedging instruments	$	28	$	32	$	12	$	16
Total Asset Derivatives	$	29	$	52	$	12	$	16
Liability Derivatives
Derivatives designated as hedging instruments:
Current—power contracts	$	156	$	195	$	200	$	210
Noncurrent—power contracts		904		1,017		920		1,087
Total derivatives designated as hedging instruments	$	1,060	$	1,212	$	1,120	$	1,297
Total Liability Derivatives	$	1,060	$	1,212	$	1,120	$	1,297

Assuming market rates remain constant with the rates at ~~June 30, 2023,~~March 31, 2024, a realized loss of $~~156~~200 related to power contracts is expected to be recognized in Sales over the next 12 months.

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the power contracts with embedded derivatives designated as cash flow hedges include hedges of forecasted aluminum sales of ~~1,570~~1,400 kmt and ~~1,683~~1,456 kmt, respectively.

1917

The following tables present the reconciliation of activity for Level 3 derivative instruments:


	Assets						Assets
Second quarter ended June 30, 2023	Power contracts			Financial contracts
April 1, 2023	$	2		$	56
First quarter ended March 31, 2024							Power contracts			Financial contracts
January 1, 2024							$	—		$	16
Total gains or losses included in:
Sales (realized)		(4	)		—			(1	)		—
Other expenses, net (unrealized/realized)		—			(9	)		—			(5	)
Other comprehensive income (unrealized)		3			—			1			—
Settlements and other		—			(19	)		—			1
June 30, 2023	$	1		$	28
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2023:
March 31, 2024							$	—		$	12
Change in unrealized gains or losses included in earnings for derivative instruments held at March 31, 2024:
Other expenses, net	$	—		$	(9	)	$	—		$	(5	)

Liabilities

Second quarter ended June 30, 2023

Power contracts

April 1, 2023

$
1,316

Total gains or losses included in:

Sales (realized)

(62
)
Other comprehensive income (unrealized)

(194
)
June 30, 2023

$
1,060

Assets

Six months ended June 30, 2023

Power contracts

Financial
contracts

January 1, 2023

$
—

$
52

Total gains or losses included in:

Sales (realized)

(2
)

—

Cost of goods sold (realized)

—

(20
)
Other income, net (unrealized/realized)

—

17

Other comprehensive income (unrealized)

3

—

Settlements and other

—

(21
)
June 30, 2023

$
1

$
28

Change in unrealized gains or losses included in earnings
for derivative instruments held at June 30, 2023:

Other income, net

$
—

$
17


	Liabilities			Liabilities
Six months ended June 30, 2023	Power contracts
January 1, 2023	$	1,212
First quarter ended March 31, 2024				Power contracts
January 1, 2024				$	1,297
Total gains or losses included in:
Sales (realized)		(132	)		(58	)
Other comprehensive income (unrealized)		(20	)		(119	)
June 30, 2023	$	1,060
March 31, 2024				$	1,120

There were no purchases, sales, or settlements of Level 3 derivative instruments in the periods presented.

Other Financial Instruments

The carrying values and fair values of Alcoa Corporation’s other financial instruments were as follows:

June 30, 2023

December 31, 2022

Carrying
value

Fair
value

Carrying
value

Fair
value

Cash and cash equivalents

$
990

$
990

$
1,363

$
1,363

Restricted cash

107

107

111

111

Short-term borrowings

10

10

—

—

Long-term debt due within one year

1

1

1

1

Long-term debt, less amount due within one year

1,808

1,756

1,806

1,744


	March 31, 2024				December 31, 2023
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	1,358	$	1,358	$	944	$	944
Restricted cash		97		97		103		103
Short-term borrowings		52		52		56		56
Long-term debt due within one year		79		79		79		79
Long-term debt, less amount due within one year		2,469		2,473		1,732		1,702

The following methods were used to estimate the fair values of other financial instruments:

Cash and cash equivalents and Restricted cash. The carrying amounts approximate fair value because of the short maturity of the instruments. The fair value amounts for Cash and cash equivalents and Restricted cash were classified in Level 1 of the fair value hierarchy.

Short-term borrowings and Long-term debt, including amounts due within one year. The fair value of Long-term debt, less amounts due within one year was based on quoted market prices for public debt and on interest rates that are currently available to Alcoa Corporation for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Short-term borrowings and Long-term debt were classified in Level 2 of the fair value hierarchy.

O.18

N. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for ~~2023~~2024 as of ~~June 30, 2023~~March 31, 2024 differs from the U.S. federal statutory rate of 21% primarily due to ~~foreign jurisdictions with higher statutory tax rates in addition to~~ losses in certain jurisdictions with full valuation allowances resulting in no tax benefit. In addition, losses in foreign jurisdictions with higher statutory tax rates contribute to the variance from 21%.


	Six months ended June 30,							First quarter ended March 31,
	2023				2022			2024				2023
(Loss) income before income taxes	$	(279	)		$	1,671
Loss before income taxes								$	(325	)		$	(180	)
Estimated annualized effective tax rate		(29.3	)	%		26.4	%		(8.9	)	%		141.4		%
Income tax expense	$	82			$	440
Income tax expense (benefit)								$	29			$	(255	)
(Favorable) unfavorable tax impact related to losses in jurisdictions with no tax benefit		(11	)			2			(47	)			305
Discrete tax expense		3				2			—				2
Provision for income taxes	$	74			$	444
(Benefit from) provision for income taxes								$	(18	)		$	52

The Company’s subsidiaries in Iceland have a full valuation allowance recorded against deferred tax assets, which was established in 2015 and 2017, as the Company believes it is more likely than not that these tax benefits will not be realized. If the subsidiaries in Iceland continue to demonstrate sustained profitability, management may conclude that Iceland’s deferred tax assets may be realized, resulting in a future reversal of the valuation allowance, generating a non-cash benefit in the period recorded. Iceland’s net deferred tax assets, excluding the valuation allowance, were $92 ~~as of June 30, 2023.~~

~~On August 16, 2022, the U.S. enacted the~~ Inflation Reduction Act of 2022 (IRA)~~, which includes a~~ 15~~% minimum tax on book income of certain large corporations, a~~ 1~~% excise tax on net stock repurchases after December 31, 2022, and several tax incentives to promote clean energy. As a result of the provisions of the IRA, we will incur an excise tax of~~ 1% for certain common stock repurchases made subsequent to December 31, 2022, which will be reflected in the cost of purchasing the underlying shares. The minimum corporate tax will not have an impact on the Company for 2023.

~~The IRA~~ contains a number of tax credits and other incentives for investments in renewable energy production, carbon capture, and other climate-related actions, as well as the production of critical minerals. ~~These provisions may result in an incremental benefit to~~In December 2023, the ~~Company. However, given the complexity and uncertainty around the applicability~~U.S. Treasury issued guidance on Section 45X of the ~~incentives~~Advanced Manufacturing Tax Credit. The Notice of Proposed Rulemaking (the Notice) clarifies that commercial grade aluminum can qualify for the credit, which was designed to ~~our specific facts and circumstances, we continue~~incentivize domestic production of critical materials important for the global transition to ~~analyze~~renewable energy. In the ~~IRA provisions and seek clarity from relevant government entities to identify and quantify potential opportunities and applicable benefits included in~~first quarter of 2024, the ~~legislation. At this time the applicability of those provisions to the Company’s specific facts and circumstances are uncertain, and an estimate of those benefits has not been recorded.~~

~~P. Asset Retirement Obligations~~

~~The~~ Company recorded ~~a liability~~benefits of $9 in Cost of goods sold related to its Massena West smelter (New York) and its Warrick smelter (Indiana). As of March 31, 2024, benefits of $36 were included in ~~the six-month period of 2023 related to the closure of the previously curtailed Intalco aluminum smelter. The additional accrual was recorded~~Other receivables and $9 were included in ~~Restructuring and other charges, net (see Note D)~~Other noncurrent assets on the ~~accompanying Statement~~Consolidated Balance Sheet. As of ~~Consolidated Operations.~~

~~The Company recorded a liability~~December 31, 2023, benefits of $4736 were included in Other receivables on the second quarter and six-month period of 2022 related to improvements required on both operating and closed bauxite residue areas at the Poços de Caldas refinery to comply with updated impoundment regulations in the region. The additional accruals were recorded with a charge to Cost of goods sold of $39 ~~and a corresponding capitalized asset retirement cost of $~~8.

Q~~. Contingencies~~ Consolidated Balance Sheet.

O. Contingencies

Environmental Matters

Alcoa Corporation participates in environmental assessments and cleanups at several locations. These include currently or previously owned or operated facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)) sites.

Alcoa Corporation’s environmental remediation reserve balance reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. The following table details the changes in the carrying value of recorded environmental remediation reserves:


Balance at December 31, 2021	$	309
Balance at December 31, 2022				$	284
Liabilities incurred		32			39
Cash payments		(26	)		(55	)
Reversals of previously recorded liabilities		(30	)		(1	)
Foreign currency translation and other		(1	)		1
Balance at December 31, 2022		284
Balance at December 31, 2023					268
Liabilities incurred		18			1
Cash payments		(23	)		(6	)
Reversals of previously recorded liabilities		(1	)
Balance at June 30, 2023	$	278
Foreign currency translation and other					(2	)
Balance at March 31, 2024				$	261

At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the current portion of the environmental remediation reserve balance was $6364 and $5866, respectively.

~~During~~Payments related to remediation expenses applied against the ~~second~~reserve were $6 in the first quarter ~~and six-month period~~of 2024. These amounts include mandated expenditures as well as those not required by any regulatory authority or third party.

In the first quarter of 2023, the Company incurred liabilities of $4 ~~and $~~18~~, respectively. The Company incurred liabilities of $~~14 ~~for the six-month period of 2023~~ primarily related to the closure of the previously curtailed Intalco aluminum smelter, which was recorded in Restructuring and other charges, net ~~(see Note D) on the Statement of Consolidated Operations, and incurred liabilities of $~~4 ~~for the second quarter of 2023 for ongoing remediation work at various other sites, which was recorded in Cost of goods sold~~ on the accompanying Statement of Consolidated ~~Operations.~~Operations (see Note D). Payments related to remediation expenses applied against the reserve were $16 ~~and $~~237 in the ~~second~~first quarter ~~and six-month period~~ of ~~2023, respectively.~~2023. These amounts include mandated expenditures as well as those not required by any regulatory authority or third party. Further, the Company recorded a reversal of a reserve of $1 ~~during the six-month period of 2023~~ due to the determination that certain remaining site remediation is no longer required.

~~During the six-month period of 2022, the Company incurred liabilities of $~~5 primarily related to a new phase of work at the former East St. Louis (Illinois) site, which was recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations. Payments related to remediation expenses applied against the reserve were $6 ~~and $~~10 in the second quarter and six-month period of 2022, respectively. These amounts include mandated expenditures as well as those not required by any regulatory authority or third party. Further, the Company recorded a reversal of a reserve of $2 ~~during the six-month period of 2022, due to the determination that certain remaining site remediation is no longer required.~~

The estimated timing of cash outflows onfrom the environmental remediation reserve at ~~June 30, 2023 is~~March 31, 2024 was as follows:


2023 (excluding the six months ended June 30, 2023)	$	27
2024 - 2028		182
2024 (excluding the three months ended March 31, 2024)			$	56
2025 – 2029				104
Thereafter		69		101
Total	$	278	$	261

Reserve balances at ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023, associated with significant sites with active remediation underway or for future remediation were $~~222~~207 and $~~234~~211, respectively. In management’s judgment, the Company’s reserves are sufficient to satisfy the provisions of the respective action plans. Upon changes in facts or circumstances, a change to the reserve may be required. The Company’s significant sites include:

Suriname—The reserve associated with the 2017 closure of the Suralco refinery and bauxite mine is for treatment and disposal of refinery waste and soil remediation. The work began in 2017 and is expected to be completed at the end of ~~2025.~~2027.

Hurricane Creek, Arkansas—The reserve associated with the 1990 closure of two mining areas and refineries near Hurricane Creek, Arkansas is for ongoing monitoring and maintenance for water quality surrounding the mine areas and residue disposal areas.

Massena, New York—The reserve associated with the 2015 closure of the Massena East smelter by the Company’s subsidiary, Reynolds Metals Company, is for subsurface soil remediation to be performed after demolition of the structures. Remediation work commenced in 2021 and will take four to eight years to complete.

Point Comfort, Texas—The reserve associated with the 2019 closure of the Point Comfort alumina refinery is for disposal of industrial wastes contained at the site, subsurface remediation, and post-closure monitoring and maintenance. The final remediation plan is currently ~~under review,~~being developed, which may result in a change to the existing reserve.

Sherwin, Texas—In connection with the 2018 settlement of a dispute related to the previously-owned Sherwin alumina refinery, the Company’s subsidiary, Copano Enterprises LLC, accepted responsibility for the final closure of four bauxite residue waste disposal areas (known as the Copano facility). Work commenced on the first residue disposal area in 2018 and ~~will~~is expected to take up to ~~three~~an additional four years to complete, depending on the nature of its potential re-use. Other than ongoing maintenance and repair activities, work on the next three areas has not commenced but is expected to be completed by 2048, depending on its potential re-use.

Longview, Washington—In connection with a 2018 Consent Decree and Cleanup Action Plan with the State of Washington Department of Ecology, the Company’s subsidiary, Northwest Alloys as landowner, accepted certain responsibilities for future remediation of contaminated soil and sediments at the site located near Longview, Washington. In December 2020, the lessee of the land, who was a partner in the remediation of the site, filed for bankruptcy and exited the site in January 2021. ~~Remediation~~The full site remediation project design, ~~changes for consolidation and remediation of the onsite industrial waste landfills, groundwater remediation,~~including long-term and post-closure monitoring and maintenance at the site, was approved in March 2023. In the third quarter of 2023, changes in scope and cost increases for remediation resulted in an increase to the reserve. The project is planned to be completed in ~~2021.~~the next two years.

Addy, Washington—The reserve associated with the 2022 closure of the Addy magnesium smelter facility is for site-wide remediation and investigation and post-closure monitoring and maintenance. Remediation work is not expected to begin until ~~2024~~2026 and will take three to five years to complete. The final remediation plan is currently being developed, which may result in a change to the existing reserve.

Ferndale, Washington—The reserve associated with the 2023 closure of the Intalco aluminum smelter in Ferndale, Washington is for below grade site remediation and five years of post-closure maintenance and monitoring. The final remediation plan is under ~~review but is expected to be completed in~~ ~~three years~~.review.

Other Sites—The Company is in the process of decommissioning various other plants and remediating sites in several countries for potential redevelopment or to return the land to a natural state. In aggregate, there are remediation projects at 32 other sites that are planned or underway. These activities will be completed at various times in the future with the latest expected to be in 2026, after which ongoing monitoring and other activities may be required. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023, the reserve balance associated with these activities was $5654 and $5057, respectively.

Tax

Brazil (AWAB)—In March 2013, AWAB was notified by the Brazilian Federal Revenue Office (RFB) that approximately $110 (R$220) of value added tax credits previously claimed were being disallowed and a penalty of 50% was assessed. Of this amount, AWAB received $41 (R$82) in cash in May 2012. The value added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and ~~São Luís~~Alumar refinery expansion for tax years 2009 through 2011. The RFB has disallowed credits they allege belong to the consortium in which AWAB owns an interest and should not have been claimed by AWAB. Credits have also been disallowed as a result of challenges to apportionment methods used, questions about the use of the credits, and an alleged lack of documented proof. AWAB presented defense of its claim to the RFB on April 8, 2013. In February 2022, the RFB notified AWAB that it had inspected the value added tax credits claimed for 2012 and disallowed $4 (R$19). In its decision, the RFB allowed credits of $14 (R$65) that were similar to those previously disallowed for 2009 through 2011. In July 2022, the RFB notified AWAB that it had inspected the value added tax credits claimed for 2013 and disallowed $13 (R$70). In its decision, the RFB allowed credits of $16 (R$84) that were similar to those previously disallowed for 2009 through 2011. The decisions on the 2012 and 2013 credits provide positive evidence to support management’s opinion that there is no basis for these credits to be disallowed. AWAB received the 2012 allowed credits with interest of $9 (R$44) in March 2022 and the 2013 allowed credits with interest of $6 (R$31) in August 2022. AWAB will continue to dispute the credits that were disallowed for 2012 and 2013. If AWAB is successful in this administrative process, the RFB would have no further recourse. If unsuccessful in this process, AWAB has the option to litigate at a judicial level. Separately from AWAB’s administrative appeal, in June 2015, a new tax law was enacted repealing the provisions in the tax code that were the basis for the RFB assessing a 50% penalty in this matter. As such, the estimated range of reasonably possible loss for these matters is $0 to $4962 (R$~~239~~309). It is management’s opinion that the allegations have no basis; however, at this time, the Company is unable to reasonably predict an outcome for this matter.

Australia (AofA)—In December 2019, AofA received a statement of audit position (SOAP) from the Australian Taxation Office (ATO) related to the pricing of certain historic third-party alumina sales. The SOAP proposed adjustments that would result in additional income tax payable by AofA. During 2020, the SOAP was the subject of an independent review process within the ATO. At the conclusion of this process, the ATO determined to continue with the proposed adjustments and issued Notices of Assessment (the Notices) that were received by AofA on July 7, 2020. The Notices asserted claims for income tax payable by AofA of approximately $~~141~~139 (A$214). The Notices also included claims for compounded interest on the tax amount totaling approximately $~~467~~460 (A$707).

On September 17, 2020, the ATO issued a position paper with its preliminary view on the imposition of administrative penalties related to the tax assessment issued to AofA. This paper proposed penalties of approximately $8583 (A$128).

AofA disagreed with the Notices and with the ATO’s proposed position on penalties. ~~In September~~During 2020, AofA lodged formal objections to the ~~Notices. In the fourth quarter of 2020, AofA~~Notices, provided a submission on the ATO’s imposition of interest and ~~also~~ submitted a response to the ATO’s position paper on penalties. After the ATO completes its review of AofA’s response to the penalties position paper, the ATO could issue a penalty assessment.

To date, AofA has not received a response to its submission on the ATO’s imposition of interest or its response to the ATO’s position paper on penalties.

Through February 1, 2022, AofA did not receive a response from the ATO on AofA’s formal objections to the Notices and, on that date, AofA submitted statutory notices to the ATO requiring the ATO to make decisions on AofA’s objections within a 60-day period. On April 1, 2022, the ATO issued its decision disallowing the Company’s objections related to the income tax assessment, while the position on penalties and interest remains outstanding.

On April 29, 2022, AofA filed proceedings in the Australian Administrative Appeals Tribunal (AAT) against the ATO to contest the Notices, a process which could last several years. The AAT held the first directions hearing on July 25, 2022 ordering AofA to file its evidence and related materials by November 4, 2022, ATO to file its materials by April 14, 2023 and AofA to file reply materials by May 26, 2023. AofA filed its evidence and related materials on November 4, 2022. The ATO did not file its materials by April 14, 2023. At a directions hearing on May 17, 2023, the ATO was granted an extension to file its materials by August 18, 2023. ~~There will be~~At a ~~subsequent~~ directions hearing on September 1,26, 2023, the ATO was granted an additional extension to ~~determine the next steps.~~ file its materials by November 3, 2023. The ATO filed its materials on November 13, 2023. At a directions hearing on November 22, 2023, AofA was ordered to file any reply materials by March 15, 2024. AofA filed its reply materials on March 15, 2024. The substantive hearing is scheduled for June 2024.

The Company maintains that the sales subject to the ATO’s review, which were ultimately sold to Aluminium Bahrain B.S.C., were the result of arm’s length transactions by AofA over two decades and were made at arm’s length prices consistent with the prices paid by other third-party alumina customers.

In accordance with the ATO’s dispute resolution practices, AofA paid 50% of the assessed income tax amount exclusive of interest and any penalties, or approximately $74 (A$107), during the third quarter 2020, and the ATO is not expected to seek further payment prior to final resolution of the matter. If AofA is ultimately successful, any amounts paid to the ATO as part of the 50% payment would be refunded. AofA funded the payment with cash on hand and recorded the payment within Other noncurrent assets as a noncurrent prepaid tax asset; at March 31, 2024 the related ~~June 30, 2023~~ balance iswas $7069 (A$107).

Further interest on the unpaid tax will continue to accrue during the dispute. The initial interest assessment and the additional interest accrued are deductible against taxable income by AofA but would be taxable as income in the year the dispute is resolved if AofA is ultimately successful. AofA applied this deduction beginning in the third quarter of 2020, reducing cash tax payments. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, total reductions in cash tax payments were $~~182~~197 (A$~~276~~302) and $~~174~~199 (A$~~260~~293), respectively, and are reflected within Other noncurrent liabilities and deferred credits as a noncurrent accrued tax liability.

The Company continues to believe it is more likely than not that AofA’s tax position will be sustained and therefore is not recognizing any tax expense in relation to this matter. However, because the ultimate resolution of this matter is uncertain at this time, the Company cannot predict the potential loss or range of loss associated with the outcome, which may materially affect its results of operations and financial condition. References to any assessed U.S. dollar amounts presented in connection with this matter have been converted into U.S. dollars from Australian dollars based on the exchange rate in the respective period.

AofA is part of the Company’s joint venture with Alumina Limited, an Australian public company listed on the Australian Securities Exchange. The Company and Alumina Limited own 60% and 40%, respectively, of the joint venture entities, including AofA.

~~Other~~

~~Spain~~—In July 2019, the Company completed the divestiture of the Avilés and La Coruña aluminum facilities to PARTER Capital Group AG (PARTER) in a sale process endorsed by the Spanish government and supported by the workers’ representatives following a collective dismissal process.

In early 2020, PARTER sold a majority stake in the facilities to an unrelated party. Alcoa had no knowledge of the subsequent transaction prior to its announcement and on August 28, 2020, Alcoa filed a lawsuit with the Court of First Instance in Madrid, Spain asserting that the sale was in breach of the sale agreement between Alcoa and PARTER. In June 2023, the Court of First Instance in Madrid issued a declaratory judgement in Alcoa’s favor ruling that the transaction between PARTER and the unrelated party was a breach of the sale agreement. There was no financial compensation to the Company as a result of this ruling.

Related to this subsequent sale transaction, certain proceedings and investigations have been initiated by or at the request of the employees of the facilities against their current employers, the new owners of the current employers, and Alcoa, alleging that certain agreements from the 2019 collective dismissal process remain in force and that, under such agreements, Alcoa remains liable for certain related employment benefits. One such proceeding is a collective case before the Spanish National Court, filed on November 10, 2020, wherein the workers’ representatives and employees are seeking to have the terms of a Collective Dismissal Agreement signed between Alcoa and the workers in January 2019 be fulfilled. Other proceedings include: a second collective claim filed in National Court on behalf of employees that were not affected by the 2019 collective dismissal process, numerous individual labor claims filed in the labor courts of Avilés and La Coruña and the initiation of a separate criminal investigation by the National Court.

On June 15, 2021, the Spanish National Court ruled that the collective dismissal agreement for the divested Avilés and La Coruña aluminum facilities should be applied to the situation of the claimant workers, and that Alcoa should be liable for the severance of those employees to the extent they were affected by the 2019 collective dismissal process. Alcoa appealed this ruling to the Supreme Court of Spain.

In July 2021, the Spanish National Court appointed a judicial director to oversee the facilities and later declared the facilities insolvent. In early 2022, the insolvency administrators appointed by the courts (one for each facility) announced their intention to collectively dismiss all employees at the two facilities.

In April 2022, the Company received unanimous acceptance of an offer made to all active workers of the divested Avilés and La Coruña facilities to settle various legal disputes related to the 2019 divestiture and a Global Settlement Agreement (GSA) was fully executed. Alcoa recorded $2 ~~and $~~79 ~~in the second quarter and six-month period of 2022 in Restructuring and other charges, net, respectively, to reflect estimated cash payments related to the GSA.~~

On July 6, 2023, the Supreme Court ratified the GSA. The Company expects to make substantially all cash payments in the third quarter of 2023 upon completion of the remaining administrative and judicial approvals in accordance with the GSA.

General

In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa Corporation, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement, employment, and employee and retiree benefit matters, and other actions and claims arising out of the normal course of business. While the amounts claimed in these other matters may be substantial, the ultimate liability is not readily determinable because of the considerable uncertainties that exist. Accordingly, it is possible that the Company’s liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.

R.P. Other Financial Information

Other Expenses, ~~(Income),~~ Net


	Second quarter ended June 30,						Six months ended June 30,						First quarter ended March 31,
	2023			2022			2023			2022			2024			2023
Equity loss (income)	$	44		$	(35	)	$	139		$	(53	)
Foreign currency (gains) losses, net		(39	)		(4	)		(55	)		8
Equity loss													$	27		$	95
Foreign currency losses (gains), net														24			(16	)
Net loss from asset sales		1			4			15			5			11			14
Net loss (gain) on mark-to-market derivative instruments		9			(176	)		(17	)		(191	)		5			(26	)
Non-service costs – pension and other postretirement benefits		3			15			6			31			4			3
Other		(12	)		(10	)		(28	)		(20	)
Other, net														(12	)		(16	)
	$	6		$	(206	)	$	60		$	(220	)	$	59		$	54

2522

Other Noncurrent Assets


	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Value added tax credits	$	341	$	294	$	324	$	336
Prepaid gas transmission contract						285		297
Gas supply prepayment		291		311		262		283
Prepaid gas transmission contract		284		285
Deferred mining costs, net		170		161		179		187
Goodwill						146		146
Prepaid pension benefit		158		146		127		125
Goodwill		146		145
Noncurrent prepaid tax asset		70		72		69		73
Noncurrent restricted cash		63		56		66		71
Intangibles, net		39		29		36		37
Other		92		94		111		95
	$	1,654	$	1,593	$	1,605	$	1,650

~~Value added tax credits~~—In the fourth quarter of 2018, after an assessment of the future realizability of Brazil state VAT credits recorded, the Company established an allowance on the accumulated state VAT credit balances and stopped recording any future credit benefits. With the restart of the Alumar smelter in São Luís, Brazil and its first metal sales in June 2022, the Company had the ability to monetize these credits. In June 2022, the Company reversed the allowance with a credit of $83 ~~to Restructuring and other charges, net and reversed the subsequent additions to the valuation allowance with a credit to Cost of goods sold of $~~46 ~~(same accounts as when incurred).~~

Cash and Cash Equivalents and Restricted Cash


	June 30, 2023		December 31, 2022		March 31, 2024		December 31, 2023
Cash and cash equivalents	$	990	$	1,363	$	1,358	$	944
Current restricted cash		44		55		31		32
Noncurrent restricted cash		63		56		66		71
	$	1,097	$	1,474	$	1,455	$	1,047

S.Q. Supplier Finance Programs

The Company has various supplier finance programs with third-party financial institutions that are made available to suppliers to facilitate payment term negotiations. Under the terms of these agreements, participating suppliers ~~may elect to participate to~~ receive payment in advance of the payment date from third-party financial institutions for qualifying invoices. Alcoa’s obligations to its suppliers, including amounts due and payment terms, are not impacted by its suppliers’ participation in these programs. The Company does not pledge any assets as security or provide any guarantees beyond payment of outstanding invoices at maturity under these arrangements. The Company does not pay fees to the financial institutions under these arrangements. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, qualifying supplier invoices outstanding under these programs were $~~132~~100 and $~~185~~104, respectively, and have payment terms ranging from 50 45to 110 days. These obligations are included in Accounts payable, trade on the accompanying Consolidated Balance Sheet.

2623

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in millions, except per-share amounts, average realized prices, and average cost amounts; metric tons in thousands (kmt); dry metric tons in millions (mdmt))

Business Update

During the ~~second~~first quarter of ~~2023,~~2024, Alcoa ~~remained focused on improving operating performance across its operations and continued~~entered into a binding agreement to ~~work with relevant government bodies to support its annual mine plan approvals processes in Australia.~~

In early July 2023, the Alumar (Brazil) refinery returned to normal production levels after the repair of the ship-to-shore conveyance system that failed on March 25, 2023 and other unplanned maintenance was completed. Asacquire Alumina Limited, which holds a result of the conveyance system event, bauxite discharge at the Alumar port was temporarily halted and the refinery operated on existing inventory until initial repairs were completed on April 8, 2023. Bauxite flows to the refinery were fully restored by the end of April 2023. The pier was not damaged and could still berth vessels.

The Company continues to progress the restart of the Alumar smelter in São Luís, Brazil. During the second quarter, additional measures were taken to establish a controlled pace for the restart with a goal to improve operating stability of the restarted pots. The site was operating at approximately 6040 percent ~~of the site’s total annual capacity of 268 kmt (Alcoa share) during the second quarter of 2023.~~

In the second quarter of 2023, the Company continued investments to support the phased restart of the San Ciprián aluminum smelter to begin in January 2024, in accordance with the updated viability agreement reached with the workers’ representatives in February 2023. Alcoa plans to operate an initial complement of approximately 6 percent of total pots, to then restart additional pots based on favorable market conditions, and to restart all pots by October 1, 2025. From October 1, 2025 until the end of 2026, the planned minimum production will be 75 percent of the annual capacity of 228 kmt. The updated viability agreement includes increased investmentsownership interest in the ~~facility~~AWAC joint venture. The acquisition is intended to enhance Alcoa’s position as a leading pure play, upstream aluminum company globally, while simplifying the Company’s corporate structure and ~~protections for~~governance, resulting in greater operational flexibility and strategic optionality. In addition to announcing the ~~workforce.~~

In March 2023, the Company reduced production at the Portland smelter to approximately 75 percent of the site’s annual capacity of 197 kmt (Alcoa share) due to instability and challenges related to the production of rodded anodes. As of April 2023, the Company regained operational stability at the site and continues to operate at approximately 75 percent of its capacity.

~~The Company announced the closure of the previously curtailed Intalco aluminum smelter after evaluating various options for the asset in March 2023. The facility has been fully curtailed since 2020.~~

~~Australia Mine Plan Approvals~~

In Australia, the Company seeks annual approvals from the Western Australian State Government for a rolling five-year mine plan to maintain continued operations at the Huntly and Willowdale bauxite mines. This statutory annual mine approvals process is currently taking longer than it has taken historically due to increased requirements and expectations from stakeholders. During the second quarter of 2023,Alumina Limited acquisition, the Company continued to ~~work with relevant state government agencies~~make progress on key near term actions to ~~support~~further optimize its portfolio and to reduce controllable costs during the ~~annual mine approvals process.~~first quarter of 2024.

~~In April 2023,~~Alumina Limited Acquisition

On March 11, 2024, the Company and Alumina Limited entered into a Scheme Implementation Deed (the Agreement) for Alcoa’s acquisition of all Alumina Limited ordinary shares (the Transaction), following an agreement reached on February 26, 2024, between Alcoa ~~began~~and Alumina Limited, on terms and process for the acquisition of Alumina Limited (the Process Deed). Under the Agreement, Alumina Limited shareholders would receive consideration of 0.02854 Alcoa common shares for each Alumina Limited share (the Agreed Ratio). Upon completion of the transaction, Alumina Limited shareholders would own 31.25 percent, and Alcoa shareholders would own 68.75 percent of the combined company, on a fully diluted basis. Based on Alcoa’s closing share price as of February 23, 2024, the last trading day prior to the announcement of the Process Deed, the Agreed Ratio implies a value of A$1.15 per Alumina Limited share and an equity value of approximately $2,200 for Alumina Limited.

Under the terms of the Agreement, Alcoa also agreed to provide a shareholder loan to AWAC in place of required capital contributions by Alumina Limited if Alumina Limited’s net debt position exceeds $420. Based on AWAC’s current 2024 cash flow forecast, Alcoa does not expect any support to be required in 2024. Subject to certain accelerated repayment triggers, Alumina Limited would be required to pay its equity calls (plus accrued interest) no later than September 1, 2025 in the event the transaction is not completed. Alcoa’s fees and expenses related to the transaction include financial advisor fees, filing fees, legal and accounting fees, and regulatory fees, some of which will be paid regardless of whether the transaction is completed. Alcoa and Alumina Limited are also subject to termination fees in the event the transaction is not completed.

Alcoa expects the transaction to close in the third quarter of 2024 following a shareholder vote and the receipt of regulatory approvals. Both Alcoa and Alumina Limited shareholders will benefit from cost synergies, simplification of the organizational structure, and increased flexibility in funding and capital allocation decisions upon completion of the transaction.

For Alcoa shareholders, the transaction will enhance Alcoa’s vertical integration along the value chain across bauxite mining, ~~lower grade bauxite~~alumina refining, and aluminum smelting, increases Alcoa’s economic interest in areas already permitted under Mine Management Programs (MMPs) at the Huntly mine (that supplies the Pinjarra and Kwinana refineries). The reduction in grade will extend the ore supply and provide more time to work through the approvals process. Alcoa plans to continue to mine lower grade bauxite in these areas, which impacts the refineries by increasing the use of caustic, energy, andits bauxite and ~~decreasing~~ alumina ~~output.~~assets, simplifies governance, and reaffirms Alcoa’s commitment to Western Australia.

In addition to the ~~ongoing statutory process,~~implied premium over recent share prices, Alumina Limited shareholders’ ownership will be diversified to a ~~third party has referred~~large-scale, global upstream aluminum portfolio and interests in Alcoa common shares will be traded in Australia through a secondary listing on the ~~Company’s future~~Australian Securities Exchange via CHESS Depositary Interests.

Portfolio Actions

San Ciprián Operations

During the first quarter of 2024, Alcoa completed the restart of approximately 6 percent of pots at the San Ciprián smelter in compliance with the February 2023 updated viability agreement. Although both purchase prices for energy and ~~existing mine plans~~sales prices improved during the first quarter of 2024, the San Ciprián complex remains unviable for the long-term based on current and forward market assumptions for delivered energy in ~~existing mine regions~~Spain and sales prices, and near-term government support remains unlikely. While continuing to optimize the Western Australian Environmental Protection Authority (WA EPA) for assessment. The WA EPA has indicated it could decide by the end of July 2023 whether to proceed to the next stage in its evaluation of these referrals, which would include a 7-day public comment period. After a public comment period, the WA EPA would then take time to consider whether to formally assess all orsmelter and refinery operations and preserve cash, and as part of Alcoa’s efforts to find a long-term solution for the ~~mine plans~~complex, Alcoa initiated a process for the potential sale of the complex during the first quarter of 2024 and ~~if so, at what level.~~anticipates completing the bid process by June 2024. Any long-term solution requires the support of the government and workers’ representatives.

The ~~referrals~~refinery and smelter incurred significant losses in the first quarter of 2024 and in prior years, which have ~~further delayed~~been funded with internal credit lines that are now nearing their limits (with less than $100 available to be drawn), and which the ~~annual mine approvals process,~~operations have no ability to repay. While the Company had restricted cash of $86 remaining at March 31, 2024 (see Aluminum below) to be made available for capital improvements at the site and ~~because~~smelter restart costs, the workers’ representatives have rejected the use of this cash to fund operating losses at the smelter. Based on current economic conditions, and barring reaching an acceptable outcome on either achieving economic viability or completing a sale of the ~~lead time required to deploy new mine plans, bauxite grade impacts~~complex, the San Ciprián operations are expected to ~~continue until~~incur substantial losses in the remainder of 2024 and Alcoa anticipates that available funding will be exhausted in the second half of 2024. At that point, Alcoa will not provide additional funding and difficult decisions will have to be considered regarding the future of the San Ciprián complex.

Warrick Operations

During the first quarter 2024, the Company completed the restart of one potline (54,000 mtpy) at ~~least~~its Warrick Operations site in Indiana that began in October 2023, and incurred restart expenses of $3.

Kwinana Refinery

In January 2024, Alcoa announced the full curtailment of the Kwinana refinery which will be completed in the second quarter of 2024.

The ~~Company believes the current statutory process for its MMPs, which involves input from various government agencies, provides appropriate environmental~~refinery has an annual nameplate capacity of 2.2 million metric tons and social protections in existing mine regions, without the need for an assessment from the WA EPA. For future major mine extensions, Alcoa supports the use of the WA EPA process. Alcoa previously had initiated this process for the proposed new Myara North and Holyoake mine regions.

~~The Kwinana refinery~~ has been operating ~~four~~at approximately 80 percent of its ~~five digesters~~nameplate capacity since January 2023, when the Company reduced production in response to a ~~state-wide shortage of~~domestic natural gas ~~from key suppliers~~shortage in Western ~~Australia. On April 19, 2023, the Company announced its~~Australia due to production challenges experienced by key gas suppliers. The Company’s decision to ~~keep~~fully curtail the ~~one digester offline due~~refinery was made based on a variety of factors, including the refinery’s age, scale, operating costs, and current bauxite grades, in addition to market conditions. The refinery currently has approximately 780 employees and this number will be reduced to approximately 250 in the third quarter of 2024, after alumina production has ceased. Certain processes will continue until about the third quarter of 2025, when the employee number will be further reduced to approximately 50. In addition to the ~~prolonged annual mine plan approvals process.~~employees separating as a result of the curtailment, approximately 150 employees will either terminate through the productivity program announced in the third quarter of 2023 or redeploy to other Alcoa operations.

Other Matters

~~In May 2023, members~~On March 21, 2024, the Company completed an offering of $750 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 net proceeds will also support the Company’s cash position and ongoing cash needs, including with respect to its previously announced portfolio actions. The Company does not expect to allocate part of the ~~United Steelworkers ratified a new three-year collective bargaining agreement which covers more than 800 active employees at~~net proceeds to significant capital investments in breakthrough technologies as those are not expected to occur within the ~~smelter at Warrick Operations (Indiana) and the smelter at Massena Operations (New York).~~applicable time period.

In April 2023, the Company purchased group annuity contracts to transfer approximately $235 of pension obligations and assets associated with defined benefit pension plans for approximately 530 Canadian retirees and beneficiaries. As a result, Alcoa recognized a non-cash settlement loss of $21 ($16 after-tax) in Restructuring and other charges, net on the Statement of Consolidated Operations in the second quarter of 2023. See Part I Item I of this Form 10-Q in Note M to the Consolidated Financial Statements for additional information.

~~In April 2023, the Company entered into a one-year unsecured revolving credit facility for $250 (available to be drawn in Japanese yen).~~

InDuring the first quarter of ~~2023,~~2024, the Company ~~recorded an adjustment related to~~initiated and fully deployed a productivity and competitiveness program across its global operations and functions. The program is part of the Company’s ~~Ma’aden Aluminum joint venture for~~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 on a run rate basis and to be achieved by the settlement of a dispute with an industrial utility for periods in 2021 and 2022. Alcoa’s share of this adjustment was $41 which is included in Other expenses (income), net on the Statement of Consolidated Operations for the six-month period of 2023. Alcoa’s total share of this dispute of $62 includes $21 that was recorded in the fourthfirst quarter of ~~2022.~~2025.

The Company paid a quarterly cash dividend of $0.10 per share of the Company’s common stock in ~~June 2023,~~March 2024, totaling ~~$18.~~$19.

See the below sections for additional details on the above-described actions.

2825

Results of Operations

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the quarterly and year-to-date periods outlined in the table below.

Selected Financial Data:


	Quarter ended						Six months ended						Quarter ended						Three months ended
	Sequential						Year-to-date						Sequential						Year-to-date
Statement of Operations	June 30, 2023			March 31, 2023			June 30, 2023			June 30, 2022			March 31, 2024			December 31, 2023			March 31, 2024			March 31, 2023
Sales	$	2,684		$	2,670		$	5,354		$	6,937		$	2,599		$	2,595		$	2,599		$	2,670
Cost of goods sold (exclusive of expenses below)		2,515			2,404			4,919			4,948			2,404			2,425			2,404			2,404
Selling, general administrative, and other expenses		52			54			106			96			60			64			60			54
Research and development expenses		6			10			16			16			11			14			11			10
Provision for depreciation, depletion, and amortization		153			153			306			321			161			163			161			153
Restructuring and other charges, net		24			149			173			50			202			(11	)		202			149
Interest expense		27			26			53			55			27			28			27			26
Other expenses (income), net		6			54			60			(220	)		59			(11	)		59			54
Total costs and expenses		2,783			2,850			5,633			5,266			2,924			2,672			2,924			2,850
(Loss) income before income taxes		(99	)		(180	)		(279	)		1,671
Provision for income taxes		22			52			74			444
Net (loss) income		(121	)		(232	)		(353	)		1,227
Less: Net (loss) income attributable to noncontrolling interest		(19	)		(1	)		(20	)		209
Net (loss) income attributable to Alcoa Corporation	$	(102	)	$	(231	)	$	(333	)	$	1,018
Loss before income taxes														(325	)		(77	)		(325	)		(180	)
(Benefit from) provision for income taxes														(18	)		150			(18	)		52
Net loss														(307	)		(227	)		(307	)		(232	)
Less: Net loss attributable to noncontrolling interest														(55	)		(77	)		(55	)		(1	)
Net loss attributable to Alcoa Corporation													$	(252	)	$	(150	)	$	(252	)	$	(231	)


	Quarter ended						Six months ended					Quarter ended						Three months ended
Selected Financial Metrics	June 30, 2023			March 31, 2023			June 30, 2023			June 30, 2022		March 31, 2024			December 31, 2023			March 31, 2024			March 31, 2023
Diluted (loss) income per share attributable to Alcoa Corporation common shareholders	$	(0.57	)	$	(1.30	)	$	(1.87	)	$	5.44
Diluted loss per share attributable to Alcoa Corporation common shareholders												$	(1.41	)	$	(0.84	)	$	(1.41	)	$	(1.30	)
Third-party shipments of alumina (kmt)		2,136			1,929			4,065			4,715		2,397			2,259			2,397			1,929
Third-party shipments of aluminum (kmt)		623			600			1,223			1,308		634			638			634			600
Average realized price per metric ton of alumina	$	363		$	371		$	367		$	410	$	372		$	344		$	372		$	371
Average realized price per metric ton of aluminum	$	2,924		$	3,079		$	3,000		$	3,863	$	2,620		$	2,678		$	2,620		$	3,079
Average Alumina Price Index (API)(1)	$	355		$	346		$	351		$	395	$	356		$	336		$	356		$	346
Average London Metal Exchange (LME) 15-day lag(2)	$	2,283		$	2,379		$	2,331		$	3,104	$	2,201		$	2,186		$	2,201		$	2,379

(1)

API (Alumina Price Index) is a pricing mechanism that is calculated by the Company based on the weighted average of a prior month’s daily spot prices published by the following three indices: CRU Metallurgical Grade Alumina Price; Platts Metals Daily Alumina PAX Price; and FastMarkets Metal Bulletin Non-Ferrous Metals Alumina Index.

(2)

LME (London Metal Exchange) is a globally recognized exchange for commodity trading, including aluminum. The LME pricing component represents the underlying base metal component, based on quoted prices for aluminum on the exchange.

2926

Overview

Sequential period comparison

Net ~~(loss) income~~loss attributable to Alcoa Corporation ~~increased $129~~was $252 in the first quarter of 2024 compared with $150 in the fourth quarter of 2023. The unfavorable change of $102 is primarily as a result of:

•

~~Lower~~Higher restructuring charges

•

~~Lower equity losses~~Unfavorable currency revaluation impacts

•

Higher production costs

•

Lower ~~taxes in the jurisdictions where Alcoa pays taxes~~

•

~~Lower raw material costs~~average realized prices of aluminum

Partially offset by:

•

Absence of a charge to tax expense to record a valuation allowance against the deferred tax assets of AWAB

•

Lower energy costs across both segments

•

Favorable raw material costs

Year-to-date comparison

Net loss attributable to Alcoa Corporation was $252 in the first quarter of 2024 compared with $231 in the first quarter of 2023. The unfavorable change of $21 is primarily a result of:

•

Lower average realized price of aluminum

•

Higher ~~costs primarily associated with direct material usage and maintenance, primarily in the Alumina segment~~restructuring charges

~~Year-to-date comparison~~

~~Net (loss) income attributable to Alcoa Corporation decreased $1,351 primarily as a result of:~~

•

~~Lower average realized prices of aluminum and alumina~~Unfavorable currency revaluation impacts

•

Higher production costs ~~primarily associated with maintenance, direct material usage, and labor~~

•

~~Lower equity earnings~~

•

~~Unfavorable mark-to-market results on derivative instruments~~

•

~~Higher raw material costs due to inflation pressures~~

•

~~Higher restructuring charges~~

Partially offset by:

•

Favorable raw material and energy costs

•

Lower taxes on lower earnings

•

~~Favorable currency impacts~~Higher equity earnings

Sales

Sequential period comparison

Sales increased ~~$14~~$4 primarily as a result of:

•

Higher shipments ~~mainly in the Alumina segment~~of alumina

•

Higher ~~trading activities and increased offtake from a joint venture supply agreement~~average realized price of alumina

•

Favorable currency impacts

Partially offset by:

•

Lower volumes and price from bauxite offtake and supply agreements

•

Lower average realized price of aluminum

•

Lower shipments of aluminum

Year-to-date comparison

Sales decreased $71 primarily as a result of:

•

Lower average realized price of aluminum

•

Lower volumes and price from bauxite offtake and supply agreements

•

~~Unfavorable currency impacts~~

~~Year-to-date comparison~~

~~Sales decreased $1,583 primarily as a result of:~~

•

~~Lower average realized prices of aluminum and alumina~~

•

~~Lower trading activities~~

•

~~Lower shipments across both segments~~

•

Decrease in value add product sales

Partially offset by:

•

Higher ~~volumes~~shipments of alumina and ~~price from bauxite offtake and supply agreements~~aluminum

3027

Cost of goods sold

Sequential period comparison

Cost of goods sold as a percentage of sales ~~increased 4%~~decreased 1% primarily as a result of:

•

Lower energy costs across both segments

•

Higher ~~costs primarily associated with direct~~average realized price of alumina

•

Favorable raw material ~~usage and maintenance,~~costs

Partially offset by:

•

Higher production costs, primarily in the ~~Alumina~~Aluminum segment

•

Lower average realized price of aluminum

•

~~Lower premiums on value add products~~

~~Partially offset by:~~

•

~~Favorable raw material costs~~

Year-to-date comparison

Cost of goods sold as a percentage of sales increased ~~21%~~2% primarily as a result of:

•

Lower average realized ~~prices~~price of aluminum ~~and alumina~~

•

Higher production costs, primarily ~~associated with maintenance, direct material usage, and labor~~

•

~~Higher raw material costs due to inflation pressures~~

•

~~Decrease~~ in ~~value add product sales~~the Alumina segment

Partially offset by:

•

Favorable ~~currency impacts~~raw material costs

•

Lower energy costs across both segments

Selling, general administrative, and other expenses

Sequential period comparison

Selling, general administrative, and other expenses decreased $2$4 primarily as a result of:

•

Lower ~~variable compensation~~information technology services and external legal fees

Partially offset by:

•

Higher labor costs

Year-to-date comparison

Selling, general administrative, and other expenses increased ~~$10~~$6 primarily as a result of:

•

Higher ~~external legal fees and~~ labor costs

Provision for depreciation, depletion, and amortization

Sequential period comparison

Depreciation ~~did not fluctuate~~decreased $2 primarily as a result of:

•

Absence of asset write offs recognized in the fourth quarter of 2023 for projects no longer being pursued

Partially offset by:

•

Higher depreciation in Brazil and Australia for mine reclamation and bauxite residue storage asset retirement obligations

Year-to-date comparison

Depreciation increased $8 primarily as a result of:

•

Higher depreciation in Brazil and Australia for mine reclamation and bauxite residue storage asset retirement obligations

Interest expense

Interest expense decreased $1 in comparison to the fourth quarter of 2023 and increased $1 in comparison to the first quarter of 2023.

~~Year-to-date comparison~~

~~Depreciation decreased $15 primarily as a result of:~~

•

~~Lower depreciation in Brazil for mine reclamation and bauxite residue storage asset retirement obligations~~

•

~~Favorable currency impacts~~

~~Partially offset by:~~28

•

~~Higher depreciation at the Juruti mine primarily due to the completion of a mine move in the first quarter of 2023~~

~~Interest expense~~

~~Interest expense increased $1 in comparison to the first quarter of 2023 and decreased $2 in comparison to the six-month period of 2022.~~

Other expenses (income), net

Sequential period comparison

Other expenses (income), net was ~~$6 in the second quarter of 2023 compared with $54~~$59 in the first quarter of 2024 compared with $(11) in the fourth quarter of 2023. The ~~favorable~~unfavorable change of ~~$48~~$70 was primarily a result of:

•

~~Lower equity losses from the Ma’aden aluminum joint venture~~Unfavorable currency revaluation impacts primarily due to the absence of ~~a charge for a utility settlement~~

•

~~Favorable currency impacts, primarily~~gains recognized in the fourth quarter of 2023 due to the U.S. dollar weakening against the Brazilian real and losses recognized in the ~~Canadian~~current quarter primarily due to the U.S. dollar strengthening against the Brazilian real

•

~~Absence of~~Additional costs related to site separation commitments associated with the Warrick Rolling Mill sale

Partially offset by:

•

~~Mark-to-market results on derivative instruments~~Decrease in equity losses from the Ma’aden aluminum joint venture primarily due to ~~lower power prices in the current quarter~~higher sales volume, partially offset by higher production costs

Year-to-date comparison

Other expenses (income), net was ~~$60~~$59 in the ~~six-month period~~first quarter of ~~2023,~~2024 compared with ~~$(220)~~$54 in the ~~six-month period~~first quarter of ~~2022.~~2023. The unfavorable change of ~~$280~~$5 was primarily a result of:

•

Unfavorable currency revaluation impacts primarily due to losses recognized in the current quarter primarily due to the U.S. dollar strengthening against the Brazilian real, partially offset by the absence of gains recognized in the first quarter of 2023 due to the U.S. dollar weakening against the Brazilian real

•

Mark-to-market results on derivative instruments primarily due to ~~lower~~the absence of gains in the first quarter of 2023 driven by elevated power prices ~~in the current year~~

Partially offset by:

•

Decrease in equity ~~earnings~~losses from the Ma’aden aluminum joint venture primarily due to the absence of a charge for a utility settlement ~~lower~~and higher shipments, ~~and~~partially offset by lower aluminum prices

•

Decrease in equity ~~earnings~~losses from the Ma’aden bauxite and alumina joint venture primarily due to ~~lower~~higher shipments, ~~lower alumina prices~~partially offset by increased raw material and ~~higher raw material~~production costs

•

~~Higher ELYSIS capital contributions, which triggered loss recognition~~

~~Partially offset by:~~

•

~~Favorable currency impacts primarily due~~Decrease in costs related to site separation commitments associated with the ~~U.S. dollar weakening against the Brazilian real and Canadian dollar~~

•

~~Lower pension expense primarily due to a decrease in recognized net actuarial losses~~Warrick Rolling Mill sale

Restructuring and other charges, net

Sequential period comparison

In the ~~second~~first quarter of 2024, Restructuring and other charges, net of $202 primarily related to:

•

$197 for the curtailment of the Kwinana alumina refinery

In the fourth quarter of 2023, Restructuring and other charges, net of ~~$24~~$(11) primarily related to:

•

$21(19) for the ~~settlement~~sale of ~~certain pension benefits~~unused carbon credits at a previously closed location

Partially offset by:

•

$6 related to the February 2023 updated viability agreement for the San Ciprián aluminum smelter

Year-to-date comparison

In the ~~first quarter~~three-month period of 2024, Restructuring and other charges, net of $202 primarily related to:

•

$197 for the curtailment of the Kwinana alumina refinery

In the three-month period of 2023, Restructuring and other charges, net of $149 primarily related to:

•

$101 for the permanent closure of the previously curtailed Intalco aluminum smelter

•

$47 for the updated ~~viability agreement for the~~ restart ~~of the San Ciprián aluminum smelter~~

~~Year-to-date comparison~~

~~In the six-month period of 2023, Restructuring and other charges, net of $173 primarily related to:~~

•

~~$101 for the permanent closure of the previously curtailed Intalco aluminum smelter~~

•

~~$47 for the updated viability~~ agreement for the San Ciprián aluminum smelter

•

~~$21 for the settlement of certain pension benefits~~

~~In the six-month period of 2022, Restructuring and other charges, net of $50 primarily related to:~~29

•

~~$79 for the offer made to the workers of the divested Avilés and La Coruña facilities to settle various legal disputes related to the 2019 divestiture~~

•

~~$58 for an asset impairment related to the sale of the Company’s interest in the MRN mine~~

•

~~$6 for additional take-or-pay contract costs at the previously curtailed Intalco smelter~~

•

~~$2 to adjust asset retirement obligation reserves at previously closed locations~~

~~Partially offset by:~~

•

~~$83 for the reversal of state value added tax valuation allowance associated with the restart of the Alumar smelter~~

•

~~$12 for changes in estimated take-or-pay contract costs at the closed Wenatchee smelter~~

~~Provision~~(Benefit from) provision for income taxes

Sequential period comparison

The ~~Provision for~~Benefit from income taxes in the ~~second~~first quarter of ~~2023~~2024 was ~~$22~~$(18) on a loss before taxes of ~~$(99)~~$(325) or ~~(22.2)%~~5.5%. In comparison, the ~~first~~fourth quarter of 2023 Provision for income taxes was $150 on a loss before taxes of $(77) or (194.8)%.

The decrease in tax expense of $168 is primarily attributable to the full valuation allowance of $152 recorded against the deferred tax assets of AWAB in the fourth quarter of 2023 and lower income in the jurisdictions where taxes are paid.

Year-to-date comparison

The Benefit for income taxes in the three-month period of 2024 was $(18) on a loss before taxes of $(325) or 5.5%. In comparison, the three-month period of 2023 Provision for income taxes was $52 on a loss before taxes of $(180) or (28.9)%.

The decrease in tax expense of ~~$30~~$70 is primarily attributable to lower income in the jurisdictions where taxes are paid.

~~Year-to-date comparison~~

The Provision for income taxes in the six-month period of 2023 was $74 on a loss before taxes of $(279) or (26.5)%. In comparison, the six-month period of 2022 Provision for income taxes was $444 on income before taxes of $1,671 or 26.6%.

~~The decrease in tax expense of $370 is primarily attributable to lower income in the jurisdictions where taxes are paid.~~

Noncontrolling interest

Sequential period comparison

Net ~~(loss) income~~loss attributable to noncontrolling interest was ~~$(19)~~$(55) in the ~~second~~first quarter of ~~2023~~2024 compared with ~~$(1)~~$(77) in the ~~first~~fourth quarter of 2023. These amounts are entirely related to Alumina Limited’s 40% ownership interest in several affiliated operating entities.

The change is primarily a result of lower taxes and higher ~~direct material usage and maintenance, and unfavorable mark-to-market results on derivative instruments,~~average realized price of alumina, partially offset by ~~lower taxes, and lower elimination of intercompany profit in inventory.~~higher restructuring costs.

Year-to-date comparison

Net ~~(loss) income~~loss attributable to noncontrolling interest was ~~$(20)~~$(55) in the ~~six-month~~three-month period of ~~2023~~2024 compared with ~~$209~~$(1) in the ~~six-month~~three-month period of ~~2022.~~2023. These amounts are entirely related to Alumina Limited’s 40% ownership interest in several affiliated operating entities.

The change is primarily a result of higher direct material usage and maintenance and lower average realized price of alumina, unfavorable mark-to-market results on derivative instruments, higher elimination of intercompany profit in inventory, decrease in equity earnings from the Ma'aden bauxite and alumina joint venture,restructuring costs and higher ~~restructuring charges,~~production costs, partially offset by lower raw material and energy costs, and lower taxes.

Segment Information

Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. ~~In January 2023, the financial information provided to the Chief Operating Decision Maker (CODM) for the activities of the bauxite mines~~The Company has two operating and ~~the alumina refineries was combined, and accordingly the Company changed its operating segments. Beginning in the first quarter of 2023, the Company’s operations consisted of two worldwide~~ reportable segments: (i) Alumina and (ii) Aluminum. ~~Segment information for all prior periods presented was updated to reflect the new segment structure.~~

Segment performance under Alcoa Corporation’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) offor each segment. The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; and Research and development expenses. Alcoa Corporation believes that the presentation of Adjusted EBITDA is useful to management and investors because such measure provides both additional information about the operating performance of Alcoa Corporation and insight on the ability of Alcoa Corporation to meet its financial obligations. The presentation of Adjusted EBITDA is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. Alcoa Corporation’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies. The CODM function regularly reviews the financial information, including Adjusted EBITDA, of these two operating segments to assess performance and allocate resources.

Alumina

Business Update. The average API of ~~$355~~$356 per metric ton trended favorably compared to the prior quarter reflecting a 3%6% sequential increase. ~~Compared to the six-month period of 2022, the average API trended unfavorably, reflecting an 11% decrease year-over-year.~~

During the ~~second~~first quarter, the Alumina segment also experienced ~~higher production costs primarily related to higher raw material usages due to operating certain Australian refineries with a lower grade bauxite, partially offset by~~ lower energy ~~costs, primarily in Europe~~ and ~~lower~~ raw materials ~~costs.~~costs compared to the fourth quarter of 2023.

~~Alumina production decreased 7%~~On January 8, 2024, Alcoa announced the full curtailment of the Kwinana refinery which will be completed in the second quarter of 2024. The refinery currently has approximately 780 employees and this number will be reduced to approximately 250 in ~~comparison~~the third quarter of 2024, after alumina production has ceased. Certain processes will continue until about the third quarter of 2025, when the employee number will be further reduced to approximately 50. In addition to the employees separating as a result of the curtailment, approximately 150 employees will either terminate through the productivity program announced in the third quarter of 2023 or redeploy to other Alcoa operations.

In the first quarter, Alcoa recorded a restructuring charge of $197 related to the curtailment of the refinery. The charge includes $123 for water management costs, $41 for severance and employee termination costs, $15 for asset retirement obligations, $13 for take-or-pay contracts, and $5 for asset impairments. Related cash outlays of approximately $215 (which includes existing employee related liabilities and asset retirement obligations) are expected through 2025, with approximately $140 to be spent in 2024. During the first quarter of 2023 primarily due to unplanned maintenance at the Alumar refinery and operating certain Australian refineries with a lower grade bauxite, partially offset by increased production at the San Ciprián (Spain) refinery.

On March 25, 2023, a ship-to-shore conveyance system at the Alumar refinery failed, temporarily halting bauxite discharge at the Alumar port. The Alumar refinery operated on existing inventory until initial repairs2024, cash outlays were ~~completed on April 8, 2023, and bauxite flows to the refinery were restored by the end of April 2023. The pier was not damaged and could still berth vessels.~~

In January 2023, in response to a state-wide shortage of natural gas from key suppliers in Western Australia, the Company reduced production at the Kwinana refinery by decreasing process flows and taking offline one of five digesters. While the supply of natural gas improved, on April 19, 2023, the Company announced its decision to keep the one digester offline due to the prolonged annual mine plan approvals process.

Mining operations are relocated periodically in support of optimizing the value extracted from bauxite reserves. In the first quarter of 2023, the Company completed the process of moving the Juruti mining operations and incurred $4 related to the mining operation relocation.$2.

Capacity. The Alumina segment had a base capacity of 13,843 kmt with 1,452 kmt of curtailed refining capacity. There was no change in curtailed capacity during the quarter.

Total alumina shipments include metric tons that were not produced by the Alumina segment. Such alumina was purchased to satisfy certain customer commitments. The Alumina segment bears the risk of loss of the purchased alumina until control of the product has been transferred to this segment’s customers. Additionally, operating costs in the table below includes all production related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.


	Quarter ended				Six months ended				Quarter ended				Three months ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022		March 31, 2024		December 31, 2023		March 31, 2024		March 31, 2023
Bauxite production (mdmt)		10.0		9.9		19.9		21.2		10.1		10.4		10.1		9.9
Third-party bauxite shipments (mdmt)		1.8		1.9		3.7		1.4		1.0		2.0		1.0		1.9
Alumina production (kmt)		2,559		2,755		5,314		6,435		2,670		2,789		2,670		2,755
Third-party alumina shipments (kmt)		2,136		1,929		4,065		4,715		2,397		2,259		2,397		1,929
Intersegment alumina shipments (kmt)		944		1,039		1,983		1,924		943		1,176		943		1,039
Total alumina shipments (kmt)		3,080		2,968		6,048		6,639		3,340		3,435		3,340		2,968
Third-party bauxite sales	$	113	$	136	$	249	$	77	$	64	$	124	$	64	$	136
Third-party alumina sales		781		721		1,502		1,932		897		781		897		721
Total segment third-party sales	$	894	$	857	$	1,751	$	2,009	$	961	$	905	$	961	$	857
Intersegment alumina sales		397		421		818		896		395		449		395		421
Total sales	$	1,291	$	1,278	$	2,569	$	2,905	$	1,356	$	1,354	$	1,356	$	1,278
Segment Adjusted EBITDA	$	33	$	103	$	136	$	660	$	139	$	84	$	139	$	103
Average realized third-party price per metric ton of alumina	$	363	$	371	$	367	$	410	$	372	$	344	$	372	$	371
Operating costs	$	1,269	$	1,174	$	2,443	$	2,263	$	1,163	$	1,165	$	1,163	$	1,024
Average cost per metric ton of alumina shipped	$	412	$	396	$	404	$	341	$	348	$	339	$	348	$	345

Production

Sequential period comparison

Alumina production decreased 7%4% primarily as a result of:

•

Reduced production at the ~~Alumar refinery~~Australia refineries due to ~~unplanned equipment maintenance~~lower bauxite grade

Year-to-date comparison

Alumina production decreased 3% primarily as a result of:

•

Reduced production ~~output~~ at ~~certain of~~ the Australia refineries ~~primarily~~ due to lower bauxite grade ~~bauxite~~

Partially offset by:

•

Increased production at the San Ciprián refinery as the refinery ~~moved toward~~was operating at 50 percent of capacity ~~operating levels~~

~~Year-to-date comparison~~

~~Alumina production decreased 17% primarily as a result of:~~

•

~~Decreased production at the San Ciprián refinery due to the curtailment of capacity in the third quarter of 2022~~

•

~~Reduced production at the Kwinana refinery due to the impact of the partial curtailment~~ in the first quarter of ~~2023~~

•

~~Reduced production at~~2024, and 35 to 50 percent capacity in the ~~Australia refineries due to lower grade bauxite~~

•

~~Decreased production at the Alumar refinery due to unplanned equipment maintenance~~first quarter of 2023

Third-party sales

Sequential period comparison

Third-party sales increased ~~$37~~$56 primarily as a result of:

•

Higher average realized price of $28/ton principally driven by a higher average API

•

Higher shipments of alumina primarily due to increased trading activity

•

Favorable currency impacts

Partially offset by:

•

Lower volumes and price from bauxite offtake and supply agreements

Year-to-date comparison

Third-party sales increased $104 primarily as a result of:

•

Higher shipments of alumina primarily due to increased trading activity and sales of externally sourced alumina to satisfy certain customer commitments

Partially offset by:

•

Lower volumes and price from bauxite offtake and supply agreements ~~primarily caused by the shift to intrasegment sales due to higher production at the San Ciprián refinery~~

~~Year-to-date comparison~~

~~Third-party sales decreased $258 primarily as a result of:~~

•

~~Lower shipments of alumina primarily due to lower production at the San Ciprián refinery and Australian refineries~~

•

~~Lower average realized price of $43/ton principally driven by a lower average API~~

•

~~Unfavorable currency impacts~~

~~Partially offset by:~~

•

~~Higher volumes and price from bauxite offtake and supply agreements primarily caused by the shift to third-party sales due to reduced production at the San Ciprián refinery~~

Intersegment sales

Sequential period comparison

Intersegment sales decreased ~~$24~~$54 primarily as a result of:

•

Lower alumina shipments due to lower alumina production

Partially offset by:

•

Higher average API on sales to the Aluminum segment

Year-to-date comparison

Intersegment sales decreased ~~$78~~$26 primarily as a result of:

•

Lower alumina shipments primarily due to lower alumina production

Partially offset by:

•

Higher average API on sales to the Aluminum segment

~~Partially offset by:~~

•32

~~Higher alumina shipments primarily due to the Alumar smelter restart~~

Segment Adjusted EBITDA

Sequential period comparison

Segment Adjusted EBITDA ~~decreased $70~~increased $55 primarily as a result of:

•

Higher ~~costs primarily associated with direct material usage related to operating certain~~average realized price of ~~the Australian refineries with lower grade bauxite and maintenance~~$28/ton principally driven by a higher average API

~~Partially offset by:~~

•

Lower energy costs across the refineries primarily ~~in Europe~~due to favorable natural gas prices

•

Favorable raw material costs primarily on lower prices for caustic soda

Partially offset by:

•

Lower shipments

Year-to-date comparison

Segment Adjusted EBITDA ~~decreased $524~~increased $36 primarily as a result of:

•

Higher costs primarily associated with direct material usage related to the partial curtailment of the San Ciprián refinery and operating certain of the Australian refineries with lower grade bauxite, and increased maintenance

•

~~Lower average realized price of $43/ton principally driven by a lower average API~~

•

~~Unfavorable~~Favorable raw material costs primarily on ~~higher~~lower prices for caustic soda

•

Lower ~~shipments~~energy costs across the refineries primarily ~~from the Australian refineries~~ due to ~~decreased production~~favorable natural gas prices

•

Higher average realized price of $1/ton principally driven on a higher average API

•

Favorable currency impacts

Partially offset by:

•

~~Favorable currency impacts~~

•

~~Lower energy~~Higher production costs primarily ~~in Europe~~related to operating certain of the Australia refineries with lower grade bauxite and higher labor costs

Forward Look. For the ~~third~~second quarter of 2024 in comparison to the ~~second~~first quarter of ~~2023,~~2024, the Alumina segment anticipates ~~unfavorable raw material and energy usages~~increased costs due to ~~operating the Kwinana~~seasonal maintenance and Pinjarra refineries with a lower bauxite grade to be more than offset by lower raw material prices, and lower production costs and higher volumes as a result of the conclusion of elevated maintenance during the second quarter of 2023.other mining costs.

The Company expects total 2024 alumina ~~2023~~production and shipments to remain unchanged from the prior projection, ranging between 9.8 and 10.0 million metric tons and between 12.7 and 12.9 million metric ~~tons.~~tons, respectively. The difference between production and shipments reflects trading volumes and externally sourced alumina to fulfill customer contracts due to the curtailment of the Kwinana refinery.

Aluminum

Business Update. Aluminum prices ~~decreased~~increased sequentially with LME prices on a 15-day lag averaging ~~$2,283~~$2,201 per metric ton in the ~~second~~first quarter of ~~2023. The~~2024. During the first quarter, the Aluminum segment also experienced lower energy and raw ~~material~~materials costs ~~during~~compared to the ~~second~~fourth quarter of 2023.

In ~~March 2023, Alcoa~~April 2024, the U.S. Treasury, in coordination with the United Kingdom, announced sanctions on Russian aluminum. The sanctions ban imports into the ~~closure~~U.S. and the United Kingdom of ~~279 kmt of previously curtailed capacity~~Russian Federation origin aluminum produced on or after April 13, 2024, and restrict activity at the ~~Intalco aluminum smelter. Charges related to~~London Metal Exchange and the closure totaled $117 in the first quarter of 2023 and included a charge of $16 for the write down of remaining inventories to net realizable value recorded in Cost of goods sold on the Statement of Consolidated Operations and a charge of $101 recorded in Restructuring and other charges, net on the Statement of Consolidated Operations. The restructuring charges were comprised of $50 of asset impairments, $50 to establish reserves related to environmental and demolition obligations, and $1 of severance and employee termination costs. Cash outlays related to the permanent closure of the site are expected to be approximately $85 over the next three years, with approximately $25 to be spent in 2023.Chicago Mercantile Exchange.

In March ~~2023,~~2024, Alcoa completed the Company reduced production at the Portland smelter to approximately 75 percent of the site’s total annual capacity of 197 kmt (Alcoa share) due to instability and challenges related to the production of rodded anodes. As of April 2023, the Company regained operational stability at the site and continues to operate at approximately 75 percent of its capacity.

~~In conjunction with the previously announced~~ restart of ~~the Alumar smelter~~approximately 54,000 mtpy of capacity at its Warrick Operations site in ~~São Luís, Brazil,~~Indiana that began in October 2023. Alcoa incurred restart expenses of ~~$13 and $32~~$3 during ~~the second quarter and six-month period of 2023, respectively.~~

~~San Ciprián Smelter~~

The San Ciprián smelter was curtailed in January 2022 as a result of an agreement that was reached with the workers’ representatives in December 2021. On February 3, 2023, the Company reached an updated viability agreement with the workers’ representatives to commence the restart process in phases beginning in January 2024. The Company recorded charges of $47 in the first quarter of 2023 in Restructuring and other charges, net on the Statement of Consolidated Operations for certain employee obligations during the extended curtailment period. The Company also made additional commitments of $78 for capital improvements at the site. Cash outlays related to the employee obligations and capital improvements are expected in 2024 and 2025.

In connection with the agreements, the Company has restricted cash of $96 remaining at June 30, 2023 to be made available for $133 in capital improvements at the site and $35 in smelter restart costs. The Company incurred $8 and $13 of capital investment expenditures against the commitments during the second quarter and six-month period of 2023, respectively, which is expected to be released from restricted cash in subsequent periods.2024.

During the first quarter of ~~2023, relevant authorities denied some permits related~~2024, the Alumar smelter experienced operational instability primarily due to equipment reliability and is taking actions to improve overall performance in order to resume the ~~development~~controlled pace for the restart.

San Ciprián Smelter

In March 2024, Alcoa completed the restart of ~~windfarms included in two long-term power purchase agreements (PPAs) signed in 2022 with renewable energy providers. As a result, those PPAs are now expected to supply up to 50~~approximately 6 percent of total pots at the ~~smelter’s future power needs at its full capacity;~~San Ciprián smelter as required by the ~~supply~~February 2023 updated viability agreement. The Company incurred restart expenses of ~~energy will continue to depend on the permitting and development of the remaining windfarms included~~$2 in the ~~PPAs.~~first quarter of 2024. In connection with the December 2021 agreement and the February 2023 updated viability agreement, the Company has restricted cash of $86 remaining at March 31, 2024 to be made available for capital improvements at the site and smelter restart costs. The ~~Company continues~~workers’ representatives have rejected the use of this cash to ~~negotiate with other suppliers to secure~~fund operating losses at the ~~remaining power supply needs for the~~ smelter.

Total aluminum third-party shipments include metric tons that were not produced by the Aluminum segment. Such aluminum was purchased by this segment to satisfy certain customer commitments. The Aluminum segment bears the risk of loss of the purchased aluminum until control of the product has been transferred to this segment’s customer. Additionally, Total shipments includes offtake from a joint venture supply agreement.

The average realized third-party price per metric ton of aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States); and c) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., billet, slab, rod, etc.) or alloy.

Operating costs includes all ~~production-related~~production related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.


	Quarter ended						Six months ended						Quarter ended						Three months ended
	June 30, 2023			March 31, 2023			June 30, 2023			June 30, 2022			March 31, 2024			December 31, 2023			March 31, 2024			March 31, 2023
Production (kmt)		523			518			1,041			997			542			541			542			518
Total shipments (kmt)		623			600			1,223			1,308			634			638			634			600
Third-party aluminum sales	$	1,824		$	1,846		$	3,670		$	5,071		$	1,661		$	1,709		$	1,661		$	1,846
Other(1)		(36	)		(36	)		(72	)		(144	)		(23	)		(26	)		(23	)		(36	)
Total segment third-party sales	$	1,788		$	1,810		$	3,598		$	4,927		$	1,638		$	1,683		$	1,638		$	1,810
Intersegment sales		4			3			7			15			4			4			4			3
Total sales	$	1,792		$	1,813		$	3,605		$	4,942		$	1,642		$	1,687		$	1,642		$	1,813
Segment Adjusted EBITDA	$	110		$	184		$	294		$	1,309		$	50		$	88		$	50		$	184
Average realized third-party price per metric ton	$	2,924		$	3,079		$	3,000		$	3,863		$	2,620		$	2,678		$	2,620		$	3,079
Operating costs	$	1,665		$	1,616		$	3,281		$	3,613		$	1,568		$	1,585		$	1,568		$	1,616
Average cost per metric ton of aluminum shipped	$	2,669		$	2,695		$	2,682		$	2,763		$	2,474		$	2,483		$	2,474		$	2,695

(1)

Other includes third-party sales of energy, as well as realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.

3734

Production

Sequential period comparison

Production was consistent with the fourth quarter’s strong output.

Year-to-date comparison

Production increased 1%5% primarily as a result of:

•

~~Increased production in North America, Europe~~Warrick smelter and ~~Brazil~~

~~Partially offset by:~~

•

~~Partial curtailment of the Portland smelter in March 2023~~

~~Year-to-date comparison~~

~~Production increased 4% primarily as a result of:~~

•

Alumar smelter ~~restart~~

~~Partially offset by:~~

•

~~Partial curtailment of the Warrick smelter in July 2022~~

•

~~Partial curtailment of the Lista (Norway) smelter in August 2022~~restarts

Third-party sales

Sequential period comparison

Third-party sales decreased ~~$22~~$45 primarily as a result of:

•

Lower trading activities

•

Lower average realized price of $58/ton driven by the absence of gains from the Alumar smelter restart hedge program, which ended in December 2023, and timing of shipments

Partially offset by:

•

Increased offtake from a joint venture supply agreement

•

Higher shipments, primarily in Europe

Year-to-date comparison

Third-party sales decreased $172 primarily as a result of:

•

Lower average realized price of ~~$155/ton driven by a lower average LME (on a 15-day lag) and lower regional premiums~~

•

~~Unfavorable currency impacts~~

~~Partially offset by:~~

•

~~Higher trading activities and increased offtake from a joint venture supply agreement~~

~~Year-to-date comparison~~

~~Third-party sales decreased $1,329 primarily as a result of:~~

•

~~Lower average realized price of $863/~~$459/ton driven by a lower average LME (on a 15-day lag) and lower regional premiums

•

Lower trading activities

•

Lower shipments due to partial curtailments at the Warrick smelter, the Lista smelter and the Portland smelter and the absence of sales of accumulated inventory at the San Ciprián smelter due to the strike in 2021

•

Decrease in value add product sales due to overall lower market demand and product premiums in Europe and North America

Partially offset by:

•

Higher shipments, primarily due to ~~improved availability of railcars or vessels for outbound product~~the Warrick smelter restart

•

Increased offtake from ~~North American smelters and the Alumar smelter restart~~a joint venture supply agreement

Segment Adjusted EBITDA

Sequential period comparison

Segment Adjusted EBITDA decreased ~~$74~~$38 primarily as a result of:

•

Higher production costs primarily associated with the absence of full year Inflation Reduction Act of 2022 benefits recorded in the fourth quarter of 2023 and labor costs

•

Lower average realized price

Partially offset by:

•

Lower energy costs, primarily in Europe and the absence of an adjustment related to carbon dioxide compensation

•

Lower raw material costs primarily on lower market prices for carbon materials

Year-to-date comparison

Segment Adjusted EBITDA decreased $134 primarily as a result of:

•

Lower average realized price based on LME (on a 15-day lag) and lower regional premiums

•

~~Unfavorable currency impacts~~Decrease in value add product sales

Partially offset by:

•

Favorable raw material costs primarily on lower market prices for carbon materials ~~partially offset by higher average alumina input costs~~

~~Year-to-date comparison~~

~~Segment Adjusted EBITDA decreased $1,015 primarily as a result of:~~

•

~~Lower average realized price based on LME (on a 15-day lag) and lower regional premiums~~

•

~~Higher costs primarily associated with increased maintenance costs and higher labor costs~~

•

~~Decrease in value add product sales~~

•

~~Lower Warrick power plant energy sales~~

•

~~Unfavorable raw material costs, primarily on higher market prices for carbon materials, partially offset by lower average alumina input costs~~

~~Partially offset by:~~

•

~~Favorable currency impacts~~

3835

The following table provides consolidated capacity and curtailed capacity (each in kmt) for each smelter owned by Alcoa Corporation:


		June 30, 2023				March 31, 2023				June 30, 2022					March 31, 2024				December 31, 2023				March 31, 2023
Facility	Country	Capacity (1)		Curtailed		Capacity (1)		Curtailed		Capacity (1)		Curtailed		Country	Capacity(1)		Curtailed		Capacity(1)		Curtailed		Capacity(1)		Curtailed
Portland (2)	Australia		197		49		197		49		197		30	Australia		197		42		197		42		197		49
São Luís (Alumar) (3)	Brazil		268		118		268		118		268		239	Brazil		268		84		268		84		268		118
Baie Comeau	Canada		314		—		314		—		312		—	Canada		324		—		324		—		314		—
Bécancour	Canada		350		—		350		—		347		—	Canada		350		—		350		—		350		—
Deschambault	Canada		287		—		287		—		287		—	Canada		287		—		287		—		287		—
Fjarðaál	Iceland		351		—		351		—		351		—	Iceland		351		—		351		—		351		—
Lista	Norway		95		31		95		31		94		—	Norway		95		31		95		31		95		31
Mosjøen	Norway		200		—		200		—		200		—	Norway		200		—		200		—		200		—
San Ciprián (4)	Spain		228		228		228		228		228		228	Spain		228		214		228		228		228		228
Intalco (5)	U.S.		—		—		—		—		279		279
Massena West	U.S.		130		—		130		—		130		—	U.S.		130		—		130		—		130		—
Warrick	U.S.		269		162		269		162		269		108
Warrick(5)														U.S.		215		54		215		80		269		162
			2,689		588		2,689		588		2,962		884			2,645		425		2,645		465		2,689		588

(1)

These figures represent Alcoa Corporation’s share of the facility Nameplate Capacity based on its ownership interest in the respective smelter.

(2)

~~On March 15,~~In the fourth quarter of 2023, the Company ~~announced~~began the ~~curtailment~~restart of 16,000 mtpy of previously curtailed capacity at the Portland smelter in ~~Australia to 75%~~Australia. The smelter had previously been operating at approximately 75 percent of the site’s annual capacity of 197,000 mtpy (Alcoa share) since March 2023. The site was operating at approximately 79 percent of its ~~current capacity.~~capacity as of March 31, 2024.

(3)

In 2021, the Company announced the restart of its 268,000 metric tons per year (mtpy) share of capacity at the Alumar smelter in São Luís, Brazil. Production began in the second quarter of 2022. Curtailed capacity decreased from ~~June 30, 2022~~March 31, 2023 as a result of the restart process.

(4)

In December 2021, the Company announced a two-year curtailment of the San Ciprián smelter’s 228,000 mtpy of annual smelting capacity. In February 2023, the Company and the workers’ representatives reached an updated viability agreement for the phased restart of the smelter beginning in January 2024. In the first quarter of 2024, the Company completed the restart of approximately 6% of pots, in accordance with the updated viability agreement.

(5)

In ~~March~~the first quarter of 2024, the Company completed the restart of one potline (54,000 mtpy) at its Warrick Operations site that began in October 2023. The line was curtailed in July 2022. In the fourth quarter of 2023, the Company ~~announced~~also approved the permanent closure of ~~279,000~~54,000 mtpy ~~smelting~~of previously curtailed capacity ~~at the Intalco smelter in the state of Washington that~~(which had ~~been fully curtailed~~not operated since ~~2020.~~2016).

Forward Look. For the ~~third~~second quarter of 2024 in comparison to the ~~second~~first quarter of ~~2023,~~2024, the Aluminum segment expects lower raw ~~materials~~material costs and lower production costs to be ~~partially~~ offset by ~~lower value add aluminum products sales, primarily due to softer billet demand.~~higher energy costs.

The Company expects total 2024 Aluminum segment production and shipments to remain unchanged from the prior projection, ranging between 2.2 and 2.3 million metrics tons and between 2.5 and 2.6 million metric tons, ~~in 2023.~~respectively.

Reconciliations of Certain Segment Information

Reconciliation of Total Segment Third-Party Sales to Consolidated Sales


	Quarter ended				Six months ended				Quarter ended				Three months ended
	June 30, 2023		March 31, 2023		June 30, 2023		June 30, 2022		March 31, 2024		December 31, 2023		March 31, 2024		March 31, 2023
Alumina	$	894	$	857	$	1,751	$	2,009	$	961	$	905	$	961	$	857
Aluminum		1,788		1,810		3,598		4,927		1,638		1,683		1,638		1,810
Total segment third-party sales	$	2,682	$	2,667	$	5,349	$	6,936	$	2,599	$	2,588	$	2,599	$	2,667
Other		2		3		5		1		—		7		—		3
Consolidated sales	$	2,684	$	2,670	$	5,354	$	6,937	$	2,599	$	2,595	$	2,599	$	2,670

Reconciliation of Total Segment Operating Costs to Consolidated Cost of Goods Sold

Quarter ended

Six months ended

June 30,
2023

March 31,
2023

June 30,
2023

June 30,
2022

Alumina

$
1,269

$
1,174

$
2,443

$
2,263

Aluminum

1,665

1,616

3,281

3,613

Other(1)

120

129

249

266

Total segment operating costs

3,054

2,919

5,973

6,142

Eliminations(2)

(431
)

(416
)

(847
)

(1,022
)
Provision for depreciation, depletion, and amortization(3)

(148
)

(147
)

(295
)

(309
)
Other(4)

40

48

88

137

Consolidated cost of goods sold

$
2,515

$
2,404

$
4,919

$
4,948


	Quarter ended						Three months ended
	March 31, 2024			December 31, 2023			March 31, 2024			March 31, 2023
Alumina	$	1,163		$	1,165		$	1,163		$	1,024
Aluminum		1,568			1,585			1,568			1,616
Other(1)		198			246			198			279
Total segment operating costs		2,929			2,996			2,929			2,919
Eliminations(2)		(391	)		(442	)		(391	)		(416	)
Provision for depreciation, depletion, and amortization(3)		(155	)		(157	)		(155	)		(147	)
Other(4)		21			28			21			48
Consolidated cost of goods sold	$	2,404		$	2,425		$	2,404		$	2,404

(1)

Other largely relates to the Aluminum ~~segment's~~segment’s energy product ~~division.~~division and the Alumina segment’s purchases of bauxite from offtake or other supply agreements that is sold to third-parties.

(2)

Represents the elimination of Cost of goods sold related to intersegment sales between Alumina and Aluminum.

(3)

Provision for depreciation, depletion, and amortization is included in the operating costs used to calculate average cost for each of the alumina and aluminum product divisions (see Alumina and Aluminum above). However, for financial reporting purposes, Provision for depreciation, depletion, and amortization is presented as a separate line item on Alcoa Corporation’s Statement of Consolidated Operations.

(4)

Other includes costs related to Transformation, and certain other items that are not included in the operating costs of segments (see footnotes 1 and 3 in the Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net ~~(Loss) Income~~Loss Attributable to Alcoa Corporation below).

Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net ~~(Loss) Income~~Loss Attributable to Alcoa Corporation


	Quarter ended						Six months ended						Quarter ended						Three months ended
	June 30, 2023			March 31, 2023			June 30, 2023			June 30, 2022			March 31, 2024			December 31, 2023			March 31, 2024			March 31, 2023
Total Segment Adjusted EBITDA	$	143		$	287		$	430		$	1,969		$	189		$	172		$	189		$	287
Unallocated amounts:
Transformation(1)		(17	)		(8	)		(25	)		(25	)		(14	)		(26	)		(14	)		(8	)
Intersegment eliminations		31			(8	)		23			110			(8	)		(12	)		(8	)		(8	)
Corporate expenses(2)		(24	)		(30	)		(54	)		(64	)		(34	)		(46	)		(34	)		(30	)
Provision for depreciation, depletion, and amortization		(153	)		(153	)		(306	)		(321	)		(161	)		(163	)		(161	)		(153	)
Restructuring and other charges, net		(24	)		(149	)		(173	)		(50	)		(202	)		11			(202	)		(149	)
Interest expense		(27	)		(26	)		(53	)		(55	)		(27	)		(28	)		(27	)		(26	)
Other (expenses) income, net		(6	)		(54	)		(60	)		220			(59	)		11			(59	)		(54	)
Other(3)		(22	)		(39	)		(61	)		(113	)		(9	)		4			(9	)		(39	)
Consolidated (loss) income before income taxes		(99	)		(180	)		(279	)		1,671
Provision for income taxes		(22	)		(52	)		(74	)		(444	)
Net loss (income) attributable to noncontrolling interest		19			1			20			(209	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(102	)	$	(231	)	$	(333	)	$	1,018
Consolidated loss before income taxes														(325	)		(77	)		(325	)		(180	)
Benefit from (provision for) income taxes														18			(150	)		18			(52	)
Net loss attributable to noncontrolling interest														55			77			55			1
Consolidated net loss attributable to Alcoa Corporation													$	(252	)	$	(150	)	$	(252	)	$	(231	)

(1)

Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

(2)

(3)

Other includes certain items that are not included in the Adjusted EBITDA of the reportable segments.

Environmental Matters

See the Environmental Matters section of Note QO to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

4037

Liquidity and Capital Resources

Management believes that the Company’s cash on hand, ~~future operating~~projected cash flows, and liquidity options, combined with its strategic actions, ~~are~~will be adequate to fund its ~~short term~~short-term (at least 12 months) and ~~long term~~long-term operating and investing ~~needs for at least twelve months~~needs. The Company plans to opportunistically access liquidity sources to support its cash position and ~~the foreseeable future thereafter.~~ongoing cash needs. Further, the Company has flexibility related to its use of cash; the Company has no significant debt maturities until 2027 and no significant cash contribution requirements related to its ~~U.S.~~ pension plan ~~obligations for the foreseeable future.~~obligations.

Although management believes that Alcoa’s ~~future~~projected cash ~~from operations~~flows and other liquidity options will provide adequate resources to fund operating and investing needs, the Company’s access to, and the availability of, financing on acceptable terms in the future will be affected by many factors, including: (i) Alcoa Corporation’s credit rating; (ii) the liquidity of the overall capital markets; (iii) the current state of the economy and commodity markets, and (iv) short- and long-term debt ratings. There can be no assurances that the Company will continue to have access to capital markets on terms acceptable to Alcoa Corporation.

Changes in market conditions caused by global or macroeconomic events, such as ~~the~~ ongoing ~~conflict between Russia and Ukraine,~~regional conflicts, high inflation, and changing global monetary policies could have adverse effects on Alcoa’s ability to obtain additional financing and cost of borrowing. Inability to generate sufficient earnings could impact the Company’s ability to meet the financial covenants in our outstanding debt and revolving credit facility agreements and limit our ability to access these sources of liquidity or refinance or renegotiate our outstanding debt or credit agreements on terms acceptable to the Company. Additionally, the impact on market conditions from such events could adversely affect the liquidity of Alcoa’s customers, suppliers, and joint venture partners and equity method investments, which could negatively impact the collectability of outstanding receivables and our cash flows.

Cash from Operations

Cash used for operations was ~~$176~~$223 in the ~~six-month~~three-month period of ~~2023~~2024 compared with ~~cash provided from operations of $570~~$163 in the same period of ~~2022.~~2023. Notable changes to sources and (uses) of cash ~~include:~~included:

•

~~$(1,457) lower~~($22) unfavorable change in net ~~income generation,~~loss, excluding the impacts from restructuring charges, primarily due to lower aluminum pricing, ~~higher production and~~partially offset by lower raw material ~~costs,~~costs; and, ~~the absence of favorable mark-to-market derivative results;~~

•

~~$528~~($23) in certain working capital accounts, primarily an increase in ~~inventories in the six-month period of 2022 due to higher raw material prices, as well as higher volumes on hand, and an increase in~~ receivables in the ~~six-month~~three-month period of ~~2022~~2024 on less favorable payment terms due to ~~increased realized aluminum price. The~~a change in product mix and timing of shipments, partially offset by a decrease in accounts payable in the ~~six-month~~2023 three-month period ~~of 2023 is~~ due to lower raw material ~~prices;~~purchases, decreased maintenance and

•

~~$(160) in income taxes paid on prior year earnings, as well as on lower current year earnings in the jurisdictions where taxes are paid.~~ capital expenditures.

During ~~2023,~~2024, AofA will continue to record its tax provision and tax liability without effect of the ATO assessment, since it expects to prevail. The tax payable will remain on AofA’s balance sheet as a noncurrent liability, increased by the tax effect of subsequent periods’ interest deductions, until dispute resolution, which is expected to take several years. At ~~June 30, 2023,~~March 31, 2024, the noncurrent liability resulting from the cumulative interest deductions was ~~approximately $182~~$197 (A$~~276)~~302). See description of the tax dispute in Note QO to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

The Company utilizes a Receivables Purchase Agreement facility to sell up to ~~$150~~$130 of certain receivables through an SPE to a financial institution on a revolving basis. Alcoa Corporation guarantees the performance obligations of the Company subsidiaries, and unsold customer receivables are pledged as collateral to the financial institution to secure the sold receivables. At ~~June 30, 2023,~~March 31, 2024, the SPE held unsold customer receivables of ~~$184~~$181 pledged as collateral against the sold receivables.

The Company continues to service the customer receivables that were transferred to the financial institution. As Alcoa collects customer payments, the SPE transfers additional receivables to the financial institution rather than remitting cash. In the ~~six-month~~three-month period of ~~2023,~~2024, the Company sold gross customer receivables of ~~$174,~~$307, and reinvested collections of ~~$127~~$291 from previously sold receivables, resulting in net cash proceeds from the financial institution of ~~$47.~~$16. In the three-month period of 2023, the Company sold gross customer receivables of $76, and reinvested collections of $23 from previously sold receivables, resulting in net cash proceeds from the financial institution of $53. Cash collections from previously sold receivables yet to be reinvested of ~~$29~~$86 were included in Accounts payable, trade on the accompanying Consolidated Balance Sheet as of ~~June 30, 2023.~~March 31, 2024. Cash received from sold receivables under the agreement are presented within operating activities in the Statement of Consolidated Cash Flows. See Note I to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

4138

Financing Activities

Cash provided from financing activities was ~~$16~~$754 in the ~~six-month~~three-month period of ~~2023~~2024 compared ~~to cash used for financing activities of $558~~with $40 in the same period of ~~2022.~~2023.

The source of cash in the ~~six-month~~three-month period of ~~2023~~2024 was primarily ~~$100~~$737 net proceeds from the bond issuance (see below) and $55 of net contributions from Alumina Limited (see Noncontrolling interest ~~in Results of Operations~~ above) ~~and $9 related to the net issuance of short-term borrowings (see below)~~, partially offset by ~~$36~~$19 of dividends ~~paid, $34 for payments related to tax withholding on stock-based compensation awards, and $25 in financial contributions primarily related to the sale of the Warrick Rolling Mill.~~paid.

~~In March 2023,~~Short-term Borrowings

The Company has entered into inventory repurchase agreements whereby the Company ~~entered into agreements with~~sold aluminum to a ~~financial institution for the sale~~third party and ~~subsequent repurchases of $25 of aluminum~~agreed to subsequently repurchase substantially similar inventory. The Company did not record ~~a sale~~sales upon each shipment of ~~the~~ inventory and the net cash received of ~~$25~~$52 related to these agreements was recorded in Short-term borrowings within Other current liabilities on the Consolidated Balance ~~Sheet.~~Sheet as of March 31, 2024.

During the ~~second quarter~~three-month period of 2024 the Company recorded borrowings of $21 and ~~six-month~~repurchased $25 of inventory related to these agreements. During the three-month period of 2023, the Company ~~repurchased $15~~recorded borrowings of ~~inventory~~$25 and related to ~~this agreement.~~ these agreements.

The cash received and subsequently paid under the inventory repurchase ~~agreement~~agreements is included in ~~cash~~Cash provided from ~~(used for)~~ financing activities on the Statement of Consolidated Cash ~~Flows for the six-month period of 2023.~~Flows.

144A Debt

In March 2024, ANHBV, a wholly-owned subsidiary of Alcoa Corporation, completed a Rule 144A (U.S. Securities Act of 1933, as amended) debt issuance for $750 aggregate principal amount of 7.125% Senior Notes due 2031 (the 2031 Notes), which carry a green bond designation. The ~~use~~net proceeds of ~~cash~~this issuance were $737 reflecting a discount to the initial purchasers of the 2031 Notes, as well as issuance costs. See Note K to the Consolidated Financial Statements in ~~the six-month period~~Part I Item 1 of ~~2022 was primarily $162 of net cash paid to Alumina Limited, $350 from the repurchase of common stock, and $37 of dividends paid.~~this Form 10-Q.

Credit Facilities

Revolving Credit Facility

The Company has ~~an unsecured~~a $1,250 revolving credit and letter of credit facility in place for working capital and/or other general corporate purposes (the Revolving Credit Facility). The Revolving Credit Facility, established onin September ~~16,~~ 2016, and amended and restated in June 2022 and in January 2024, is scheduled to mature in June 2027. Subject to the terms and conditions under the Revolving Credit Facility, the Company or ANHBV, a wholly-owned subsidiary of Alcoa Corporation, may borrow funds or issue letters of credit. Under the terms of the January 2024 amendment, the Company has agreed to provide collateral for its obligations under the Revolving Credit Facility. See Part II Item 8 of Alcoa Corporation’s Annual Report on Form 10-K in Note M to the Consolidated Financial Statements for the year ended December 31, ~~2022~~2023 for more information on the Revolving Credit Facility.

~~In April~~As of March 31, 2024, the Company was in compliance with all financial covenants. The Company may access the entire amount of commitments under the Revolving Credit Facility. There were no borrowings outstanding at March 31, 2024, and no amounts were borrowed during the three-month periods of 2024 and 2023 under the Revolving Credit Facility.

Japanese Yen Revolving Credit Facility

The Company entered into a ~~one-year unsecured~~$250 revolving credit facility ~~for $250 (available~~available to be drawn in Japanese ~~yen).~~yen (the Japanese Yen Revolving Credit Facility) in April 2023. The Japanese Revolving Credit Facility was amended and restated in January 2024 and in April 2024 (see below) and is scheduled to mature in April 2025. Subject to the terms and conditions under the facility, the Company or ANHBV may borrow funds. The facility includes covenants that are substantially the same as those included in the Revolving Credit Facility. IfUnder the current terms of the January 2024 amendment, the Company has agreed to provide collateral for its obligations under the Japanese Yen Revolving Credit Facility. See Part II Item 8 of Alcoa ~~Corporation or ANHBV, as applicable, fails~~Corporation’s Annual Report on Form 10-K in Note M to ~~have a rating of at least Ba1 from Moody’s and BB+ from S&P, then no lending party to this facility would have any commitment or obligation to lend.~~the Consolidated Financial Statements for the year ended December 31, 2023 for more information on the Japanese Yen Revolving Credit Facility.

As of ~~June 30, 2023,~~March 31, 2024, the Company was in compliance with all ~~covenants and~~financial covenants. The Company may access the entire amount of commitments under ~~both of these facilities.~~the Japanese Revolving Credit Facility. There were no borrowings outstanding at ~~June 30, 2023 and December~~March 31, ~~2022, and no amounts were borrowed during~~2024. During the ~~six-month~~three-month period of ~~2023~~2024, $201 (29,686 JPY) was borrowed and ~~2022 under either of these facilities.~~

~~Dividend~~$196 (29,686 JPY) was repaid.

On ~~May 4, 2023,~~April 26, 2024, the Company entered into an amendment extending the maturity of the Japanese Revolving Credit Facility to April 2025.

Dividend

On February 22, 2024, the Board of Directors declared a quarterly cash dividend of $0.10 per share of the Company’s common stock to stockholders of record as of the close of business on ~~May 16, 2023. On June 2, 2023,~~March 5, 2024. In March 2024, the Company paid cash dividends of ~~$18.~~$19.

Ratings

Alcoa Corporation’s cost of borrowing and ability to access the capital markets are affected not only by market conditions but also by the short- and long-term debt ratings assigned to Alcoa Corporation’s debt by the major credit rating agencies.

On March 6, 2024, Moody’s Investor Service downgraded the rating of ANHBV’s long-term debt from Baa3 to Ba1 and revised the outlook from negative to stable.

On March 4, 2024, Fitch Ratings downgraded the rating for Alcoa Corporation and ANHBV’s long-term debt from BBB- to BB+ and revised the outlook from negative to stable.

On March 4, 2024, Standard and Poor’s Global Ratings downgraded the rating of Alcoa Corporation’s long-term debt from BB+ to BB and revised the outlook from positive to stable.

Ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization.

Investing Activities

Cash used for investing activities was ~~$222~~$117 in the ~~six-month~~three-month period of ~~2023~~2024 compared ~~to cash used for investing activities of $186~~with $102 for the same period of ~~2022.~~2023.

In the ~~six-month~~three-month period of 2024, the use of cash was primarily attributable to $101 related to capital expenditures and $17 of cash contributions to the ELYSIS partnership.

In the three-month period of 2023, the use of cash was primarily attributable to ~~$198~~$83 related to capital expenditures and ~~$36~~$20 of cash contributions to the ELYSIS ~~joint venture.~~partnership.

In the six-month period of 2022, the use of cash was primarily attributable to $181 related to capital expenditures and $21 of cash contributions to the ELYSIS joint venture, partially offset by the sale of the Company’s interest in the MRN mine of $10.

Recently Adopted and Recently Issued Accounting Guidance

See Note B to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Dissemination of Company Information

Alcoa Corporation intends to make future announcements regarding company developments and financial performance through its website, http://www.alcoa.com, as well as through press releases, filings with the Securities and Exchange Commission, conference calls, and webcasts.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

See Part II Item 7A Quantitative and Qualitative Disclosures About Market Risk of Alcoa Corporation’s Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. Our exposure to market risk has not changed materially since December 31, ~~2022.~~2023. Refer to Part I Item 1 of this Form 10-Q in Note NM to the Consolidated Financial Statements under caption Derivatives for additional information.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Alcoa Corporation’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the U.S. Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report, and they have concluded that these controls and procedures were effective as of ~~June 30, 2023.~~March 31, 2024.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the ~~second~~first quarter of ~~2023,~~2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

4440

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of its business, Alcoa is involved in a number of lawsuits and claims, both actual and potential. Various lawsuits, claims, and proceedings have been or may be instituted or asserted against Alcoa Corporation, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement, employment, employee and retiree benefit matters, and other actions and claims arising out of the normal course of business. While the amounts claimed in these other matters may be substantial, the ultimate liability is not readily determinable because of the considerable uncertainties that exist. Accordingly, it is possible that the Company’s liquidity or results of operations in a particular period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.

SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that Alcoa Corporation reasonably believes will exceed a specified threshold. Pursuant to these regulations, the Company uses a threshold of $1 for purposes of determining whether disclosure of any such proceedings is required.

A discussion of our material pending lawsuits and claims can be found in Part I Item 3 Legal Proceedings of Alcoa Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. See Part I Item 1 of this Form 10-Q in Note QO to the Consolidated Financial Statements for additional information regarding legal proceedings.

Item 1A. Risk Factors.

We face a number of risks that could materially and adversely affect our business, results of operations, cash flow, liquidity, or financial condition. A full discussion of our risk factors can be found in Part I Item 1A. Risk Factors of Alcoa Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. The information below includes additional risks relating to the Transaction.

Alcoa will incur significant transaction costs in connection with the Transaction.

Alcoa expects to incur significant costs associated with the Transaction. Alcoa’s fees and expenses related to the Transaction include financial advisor fees, filing fees, legal and accounting fees, and regulatory fees, some of which will be paid regardless of whether the Transaction is completed.

The Transaction is subject to conditions to closing that could result in the Transaction being delayed or not completed and the Agreement can be terminated in certain circumstances, each of which could negatively impact the price of Alcoa common stock and Alcoa’s business and operations.

Completion of the Transaction is subject to conditions, including, among others:

•

the approval of the Transaction by the Alumina Limited shareholders;

•

the approval of the scheme by the Federal Court of Australia (sitting in Melbourne) (the Court);

•

the issuance of a report by an independent expert (who is appointed by Alumina Limited pursuant to the Agreement) for the scheme concluding that the scheme is in the best interests of Alumina Limited shareholders and who does not change its conclusion prior to the second Court date;

•

the absence of any law, order or injunction by an Australian or United States court or regulatory authority that would prohibit or make illegal the Transaction;

•

the receipt of certain regulatory approvals;

•

the approval for listing on the NYSE of the shares of Alcoa common stock to be issued or issuable in the Transaction and the establishment of a secondary listing on the ASX to allow shareholders of Alumina Limited to trade Alcoa CDIs on the ASX; and,

•

no specified events having occurred in respect of Alumina Limited or Alcoa.

The regulatory approval processes may take a lengthy period of time to complete. There can be no assurances that any or all of such approvals will be obtained or will be obtained in a timely manner. Even if such approvals or conditional approvals are obtained, no assurances can be given as to the terms, conditions and timing of the approvals or whether they will be acceptable to Alcoa (in terms of any impact on the Transaction or the combined company’s operations). In addition, Alcoa and Alumina Limited may waive certain of these conditions.

In addition, Alcoa and Alumina Limited each has the right, in certain circumstances, to terminate the Agreement. If the Agreement is terminated or any of the conditions to closing are not satisfied or, where waivable, not waived, the Transaction will not be completed.

Failure to complete the Transaction, any delay in the completion of the Transaction or any uncertainty about the completion of the Transaction may adversely affect the price of Alcoa common stock or have an adverse impact on Alcoa’s business and operations.

If the Transaction is not completed for any reason, Alcoa’s ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Transaction, Alcoa may be subject to a number of risks, including the following:

•

negative reactions from the financial markets;

•

incurring and paying significant expenses in connection with the Transaction, such as financial advisor fees, filing fees, legal and accounting fees, soliciting fees, regulatory fees and other related expenses, many of which will become due and payable regardless of whether the Transaction is completed;

•

nonpayment or delay in payment of any amounts due under any shareholder loan to AWAC made pursuant to the Agreement in accordance with the terms of such loan; and,

•

paying a termination fee of $20 if Alumina Limited validly terminates the Agreement on the basis that Alcoa has failed to obtain the approval of its stockholders for issuance of the Alcoa shares in connection with the Transaction, or $50 if the Agreement is terminated in certain other circumstances.

In addition, Alcoa could be subject to litigation related to any failure to complete the Transaction or litigation seeking to require Alcoa to perform its obligations under the Agreement.

Obtaining required governmental and court approvals necessary to satisfy closing conditions may delay or prevent completion of the Transaction.

Completion of the Transaction is conditioned upon the receipt of certain governmental authorizations, consents, orders or other approvals, including approvals, clearances or filings required in relation to the Transaction under the antitrust and foreign investment laws of Australia and the antitrust laws of Brazil. The Transaction must also be approved by the Court. No assurance can be given that the approvals will be obtained. Even if such approvals or conditional approvals are obtained, no assurance can be given as to the terms, conditions and timing of the approvals or that they will satisfy the terms of the Agreement.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

The table below sets forth information regarding the repurchase of shares of our common stock during the periods indicated.

Period

Total Number of Shares Purchased

Weighted Average Price Paid Per Share

Total Number of Shares Purchased as Part of Publicly Announced Program

Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (1)

April 1 to April 30

—

—

—

$
500,000,000

May 1 to May 31

—

—

—

500,000,000

June 1 to June 30

—

—

—

500,000,000

Total

—

—

—


Period	Total Number of Shares Purchased		Weighted Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares that May Yet be Purchased Under the Program(1)
January 1 to January 31		—		—		—	$	500,000,000
February 1 to February 29		—		—		—		500,000,000
March 1 to March 31		—		—		—		500,000,000
Total		—		—		—

(1)

On July 20, 2022, Alcoa Corporation announced that its Board of Directors approved a common stock repurchase program under which the Company may purchase shares of its outstanding common stock up to an aggregate transactional value of $500, depending on the Company’s continuing analysis of market, financial, and other factors (the July 2022 authorization).

As of the date of this report, the Company is currently authorized to repurchase up to a total of $500, in the aggregate, of its outstanding shares of common stock under the July 2022 authorization. Repurchases under this program may be made using a variety of methods, which may include open market purchases, privately negotiated transactions, or pursuant to a Rule 10b5-1 plan. This program may be suspended or discontinued at any time and does not have a predetermined expiration date. Alcoa Corporation intends to retire repurchased shares of common stock.

4542

Item 5. Other Information.

Trading Arrangements

None of the Company’s directors or ~~"officers,"~~“officers,” as defined in Rule 16a-1(f) of the Exchange Act, adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K, during the Company’s fiscal quarter ended ~~June 30, 2023.~~March 31, 2024.

~~Amended and Restated Bylaws~~

On July 26, 2023, the Company’s Board of Directors approved the Amended and Restated Bylaws of Alcoa Corporation, effective as of such date (the Amended and Restated Bylaws). Among other updates, the Amended and Restated Bylaws:

•

address matters relating to Rule 14a-19 (the Universal Proxy Rule) under the Securities Exchange Act of 1934, as amended (the Exchange Act), including (i) requiring that any stockholder submitting a nomination notice make a representation as to whether such stockholder intends to solicit proxies in support of director nominees other than the Company’s nominees in accordance with the Universal Proxy Rule, and if so, agree in writing that such stockholder will comply with the requirements of the Universal Proxy Rule; (ii) providing the Company a remedy if a stockholder fails to satisfy the Universal Proxy Rule requirements; (iii) requiring that a stockholder inform the Company if such stockholder no longer plans to solicit proxies in accordance with the Universal Proxy Rule; and (iv) requiring stockholders intending to use the Universal Proxy Rule to provide reasonable evidence of the satisfaction of the requirements under the Universal Proxy Rule at least five business days before the meeting upon request by the Company;

•

revise and enhance the procedures and disclosure requirements set forth in the advance notice bylaw provisions for director nominations made and business proposals submitted by stockholders (other than proposals submitted pursuant to Rule 14a-8 under the Exchange Act), including (i) requiring additional information, representations and disclosures regarding proposing stockholders, proposed nominees, proposed business, and other persons related to, and acting in concert with, a stockholder and the stockholder’s solicitation of proxies; (ii) clarifying that stockholders are not entitled to make additional or substitute nominations or proposals after the submission deadline and may only nominate a number of candidates to the Board of Directors that does not exceed the number of directors to be elected at such meeting; (iii) requiring that if requested by the Secretary of the Company, the Board of Directors or any committee of the Board of Directors, proposed nominees make themselves available for interviews by the Board of Directors and any committee of the Board of Directors within five business days following the date of such request; and (iv) clarifying the authority of the Secretary of the Company, the Board of Directors, or any committee of the Board of Directors to request additional information or written verification to demonstrate the accuracy of previously-provided information with respect to proposing stockholders, proposed nominees, and proposed business;

•

require any stockholders directly or indirectly soliciting proxies from other stockholders to use a proxy card color other than white, with the white proxy card being reserved for exclusive use by the Board of Directors;

•

~~adopt an exclusive forum provision designating the federal district courts of the United States of America as the exclusive forum for all claims arising under the Securities Act of 1933, as amended;~~

•

provide that the vote standard applicable to the proposal on the frequency of future advisory votes on executive compensation required by Section 14A(a)(2) of the Exchange Act (to determine whether the advisory vote on executive compensation will occur every one year, two years or three years) is a plurality of the votes cast by the Company’s stockholders; and

•

~~incorporate certain administrative, modernizing, and conforming changes to provide clarification and consistency, including regarding meetings of the Board of Directors.~~

The foregoing description of the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Bylaws, which is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

~~New Director~~

On July 26, 2023, the Company’s Board of Directors voted to increase the size of the Board of Directors from nine directors to ten directors and elected Mr. Roberto Marques to serve as a director, each effective immediately. Mr. Marques will serve for a term expiring on the date of the Company’s 2024 Annual Meeting of Stockholders (the 2024 Annual Meeting). The Board of Directors has appointed Mr. Marques to serve as a member of the Compensation and Benefits Committee of the Board of Directors and the Safety, Sustainability and Public Issues Committee of the Board of Directors.

Mr. Marques will participate in the Company’s non-employee director compensation program, as described on page 24 of the Company’s proxy statement for its 2023 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on March 16, 2023. In connection with his appointment to the Board of Directors, for his service until the 2024 Annual Meeting, Mr. Marques will receive a pro-rated annual cash retainer and on July 26, 2023 (the Grant Date) received a pro-rated grant of restricted share units (RSUs) in accordance with the terms of the Company’s Non-Employee Director Compensation Policy and the terms and conditions applicable to the equity awards, filed with the Securities and Exchange Commission as Exhibits 10.38 and 10.43 to the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2022. The RSUs granted to Mr. Marques will vest upon the earlier of the first anniversary of the Grant Date or the next subsequent annual meeting of stockholders following the Grant Date, subject to accelerated vesting under certain circumstances such as death or disability or change in control of the Company. In addition, the Company will enter into its standard Amended and Restated Indemnification Agreement with Mr. Marques. There are no arrangements or understandings between Mr. Marques and any other persons pursuant to which he was selected as director of the Company. Mr. Marques does not have any direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K.

Item 6. Exhibits.



~~3.1~~2.1	~~Amended~~Transaction Process and ~~Restated Bylaws of~~Exclusivity Deed, by and among Alumina Limited, AAC Investments Australia Pty Ltd and Alcoa Corporation, dated as ~~adopted~~of February 26, 2024 (incorporated by referenced to Exhibit 2.1 to the Company’s Current Report on ~~July~~Form 8-K filed February 26, ~~2023 (filed herewith)~~2024 (File No. 1-37816))

2.2	Share Sale Agreement, by and among Allan Gray Australia Pty Ltd, AAC Investments Australia Pty Ltd and Alcoa Corporation, dated as of February 26, 2024 (incorporated by referenced to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed February 26, 2024 (File No. 1-37816))

2.3	Scheme Implementation Deed, dated as of March 12, 2024, by and among Alcoa Corporation, AAC Investments Australia 2 Pty Ltd, and Alumina Limited (incorporated by referenced to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed March 12, 2024 (File No. 1-37816))

4.1	Indenture, dated as of March 21, 2024, among Alcoa Nederland Holding B.V., Alcoa Corporation, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by referenced to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 21, 2024 (File No. 1-37816))

10.1	Letter Agreement, dated July 22, 2023, between Andrew Hastings and Alcoa Corporation (filed herewith)*

31.1	Certification of Principal Executive Officer required by Rule 13a-14(a) or 15d-14(a)

31.2	Certification of Principal Financial Officer required by Rule 13a-14(a) or 15d-14(a)

32.1	Certification of Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code

32.2	Certification of Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema ~~Document~~

~~101.CAL~~	~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~	~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~	~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~	~~Inline XBRL Taxonomy Extension Presentation Linkbase~~with Embedded Linkbases Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Denotes management contracts or compensatory plans or arrangements required to be filed as Exhibits to this Form 10-Q.

48Certain schedules exhibits, and appendices have been omitted in accordance with to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of any omitted schedule, exhibit, or appendix to the Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



						Alcoa Corporation

~~July 27, 2023~~May 2, 2024						/s/ Molly S. Beerman
Date						Molly S. Beerman
						Executive Vice President and Chief Financial Officer
						(Principal Financial ~~Officer and Principal Accounting~~ Officer)


May 2, 2024						/s/ Renee R. Henry
Date						Renee R. Henry
						Senior Vice President and Controller

						(Principal Accounting Officer)

4944


	June 30, 2023				December 31, 2022
	Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents	$	990	$	990	$	1,363	$	1,363
Restricted cash		107		107		111		111
Short-term borrowings		10		10		—		—
Long-term debt due within one year		1		1		1		1
Long-term debt, less amount due within one year		1,808		1,756		1,806		1,744