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Alcoa Corporation

02/08/2024 | Press release | Distributed by Public on 02/08/2024 21:07

Quarterly Report for Quarter Ending June 30, 2024 (Form 10-Q)

10-Q

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, 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 ☒

Indicate the number of shares outstanding of each of the registrant's classes of stock, as of the latest practicable date.


Title or Class		Outstanding Shares as of August 1, 2024
Common Stock, par value $0.01 per share		258,340,140
Series A Convertible Preferred Stock, par value $0.01 per share		4,041,989

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		28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		43

Item 4.	Controls and Procedures		43

PART II - OTHER INFORMATION		43

Item 1.	Legal Proceedings		43

Item 1A.	Risk Factors		44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		45

Item 5.	Other Information		45

Item 6.	Exhibits		46

SIGNATURES		47

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 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, 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 Corporation's perception of historical trends, current conditions, and expected future developments, as well as other factors that management believes are appropriate in the circumstances.

Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa Corporation believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: (1) the impact of global economic conditions on the aluminum industry and aluminum end-use markets; (2) volatility and declines in aluminum and alumina demand and pricing, including global, regional, and product-specific prices, or significant changes in production costs which are linked to London Metal Exchange (LME) or other commodities; (3) the disruption of market-driven balancing of global aluminum supply and demand by non-market forces; (4) competitive and complex conditions in global markets; (5) our ability to obtain, maintain, or renew permits or approvals necessary for our mining operations; (6) rising energy costs and interruptions or uncertainty in energy supplies; (7) unfavorable changes in the cost, quality, or availability of raw materials or other key inputs, or by disruptions in the supply chain; (8) our ability to execute on our strategy to be a lower cost, competitive, and integrated aluminum production business and to realize the anticipated benefits from announced plans, programs, initiatives relating to our portfolio, capital investments, and developing technologies; (9) our ability to integrate and achieve intended results from joint ventures, other strategic alliances, and strategic business transactions; (10) economic, political, and social conditions, including the impact of trade policies and adverse industry publicity; (11) fluctuations in foreign currency exchange rates and interest rates, inflation and other economic factors in the countries in which we operate; (12) changes in tax laws or exposure to additional tax liabilities; (13) global competition within and beyond the aluminum industry; (14) our ability to obtain or maintain adequate insurance coverage; (15) disruptions in the global economy caused by ongoing regional conflicts; (16) legal proceedings, investigations, or changes in foreign and/or U.S. federal, state, or local laws, regulations, or policies; (17) climate change, climate change legislation or regulations, and efforts to reduce emissions and build operational resilience to extreme weather conditions; (18) our ability to achieve our strategies or expectations relating to environmental, social, and governance considerations; (19) claims, costs, and liabilities related to health, safety and environmental laws, regulations, and other requirements in the jurisdictions in which we operate; (20) liabilities resulting from impoundment structures, which could impact the environment or cause exposure to hazardous substances or other damage; (21) our ability to fund capital expenditures; (22) deterioration in our credit profile or increases in interest rates; (23) restrictions on our current and future operations due to our indebtedness; (24) our ability to continue to return capital to our stockholders through the payment of cash dividends and/or the repurchase of our common stock; (25) cyber attacks, security breaches, system failures, software or application vulnerabilities, or other cyber incidents; (26) labor market conditions, union disputes and other employee relations issues; (27) a decline in the liability discount rate or lower-than-expected investment returns on pension assets; and (28) the other risk factors discussed in Alcoa's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other reports filed by Alcoa with the 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 ConsolidatedOperations (unaudited)

(in millions, except per-share amounts)


	Second quarter ended June 30,			Six months ended June 30,
	2024			2023			2024		2023
Sales (E)	$	2,906			$	2,684		$	5,505		$	5,354
Cost of goods sold (exclusive of expenses below)		2,533				2,515			4,937			4,919
Selling, general administrative, and other expenses		69				52			129			106
Research and development expenses		13				6			24			16
Provision for depreciation, depletion, and amortization		163				153			324			306
Restructuring and other charges, net (D)		18				24			220			173
Interest expense		40				27			67			53
Other (income) expenses, net (P)		(22	)			6			37			60
Total costs and expenses		2,814				2,783			5,738			5,633
Income (loss) before income taxes		92				(99	)		(233	)		(279	)
Provision for income taxes		61				22			43			74
Net income (loss)		31				(121	)		(276	)		(353	)
Less: Net income (loss) attributable to noncontrolling interest		11				(19	)		(44	)		(20	)
NET INCOME (LOSS) ATTRIBUTABLE TO ALCOA CORPORATION	$	20			$	(102	)	$	(232	)	$	(333	)
EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA CORPORATION COMMON SHAREHOLDERS (F):
Basic	$	0.11			$	(0.57	)	$	(1.29	)	$	(1.87	)
Diluted	$	0.11			$	(0.57	)	$	(1.29	)	$	(1.87	)

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
	Second quarter ended June 30,			Second quarter ended June 30,			Second quarter ended June 30,
	2024			2023			2024		2023		2024			2023
Net income (loss)	$	20			$	(102	)	$	11		$	(19	)		$	31		$	(121	)
Other comprehensive (loss) income, net of tax (G):
Change in unrecognized net actuarial gain/loss and prior service cost/benefit related to pension and other postretirement benefits		13				10			5			(2	)			18			8
Foreign currency translation adjustments		(60	)			25			(16	)		11				(76	)		36
Net change in unrecognized gains/losses on cash flow hedges		(62	)			226			(1	)		-				(63	)		226
Total Other comprehensive (loss) income, net of tax		(109	)			261			(12	)		9				(121	)		270
Comprehensive (loss) income	$	(89	)		$	159		$	(1	)	$	(10	)		$	(90	)	$	149

	Alcoa Corporation			Noncontrolling interest			Total
	Six months ended June 30,			Six months ended June 30,			Six months ended June 30,
	2024			2023			2024		2023		2024			2023
Net loss	$	(232	)		$	(333	)	$	(44	)	$	(20	)		$	(276	)	$	(353	)
Other comprehensive (loss) income, net of tax (G):
Change in unrecognized net actuarial gain/loss and prior service cost/benefit related to pension and other postretirement benefits		22				14			6			(2	)			28			12
Foreign currency translation adjustments		(182	)			27			(70	)		26				(252	)		53
Net change in unrecognized gains/losses on cash flow hedges		68				104			(1	)		-				67			104
Total Other comprehensive (loss) income, net of tax		(92	)			145			(65	)		24				(157	)		169
Comprehensive (loss) income	$	(324	)		$	(188	)	$	(109	)	$	4			$	(433	)	$	(184	)

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

Alcoa Corporation and Subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)


	June 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents (M)	$	1,396			$	944
Receivables from customers (I)		939				656
Other receivables		135				152
Inventories (J)		1,975				2,158
Fair value of derivative instruments (M)		38				29
Prepaid expenses and other current assets		420				466
Total current assets		4,903				4,405
Properties, plants, and equipment		19,999				20,381
Less: accumulated depreciation, depletion, and amortization		13,496				13,596
Properties, plants, and equipment, net		6,503				6,785
Investments (H)		989				979
Deferred income taxes		311				333
Fair value of derivative instruments (M)		-				3
Other noncurrent assets		1,601				1,650
Total assets	$	14,307			$	14,155
LIABILITIES
Current liabilities:
Accounts payable, trade	$	1,619			$	1,714
Accrued compensation and retirement costs		358				357
Taxes, including income taxes		119				88
Fair value of derivative instruments (M)		251				214
Other current liabilities		740				578
Long-term debt due within one year (K & M)		79				79
Total current liabilities		3,166				3,030
Long-term debt, less amount due within one year (K & M)		2,469				1,732
Accrued pension benefits (L)		264				278
Accrued other postretirement benefits (L)		427				443
Asset retirement obligations		699				772
Environmental remediation (O)		191				202
Fair value of derivative instruments (M)		951				1,092
Noncurrent income taxes		133				193
Other noncurrent liabilities and deferred credits		591				568
Total liabilities		8,891				8,310
CONTINGENCIES AND COMMITMENTS (O)
EQUITY
Alcoa Corporation shareholders' equity:
Common stock		2				2
Additional capital		9,196				9,187
Accumulated deficit		(1,562	)			(1,293	)
Accumulated other comprehensive loss (G)		(3,737	)			(3,645	)
Total Alcoa Corporation shareholders' equity		3,899				4,251
Noncontrolling interest		1,517				1,594
Total equity		5,416				5,845
Total liabilities and equity	$	14,307			$	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,
	2024			2023
CASH FROM OPERATIONS
Net loss	$	(276	)		$	(353	)
Adjustments to reconcile net loss to cash from operations:
Depreciation, depletion, and amortization		324				306
Deferred income taxes		(75	)			(36	)
Equity (income) loss, net of dividends		(8	)			123
Restructuring and other charges, net (D)		220				173
Net loss from investing activities - asset sales (P)		17				19
Net periodic pension benefit cost (L)		5				2
Stock-based compensation		22				21
(Gain) loss on mark-to-market derivative financial contracts		(19	)			4
Other		31				59
Changes in assets and liabilities, excluding effects of divestitures and foreign currency translation adjustments:
(Increase) decrease in receivables		(283	)			71
Decrease in inventories		157				22
Decrease in prepaid expenses and other current assets		23				63
Decrease in accounts payable, trade		(57	)			(277	)
Decrease in accrued expenses		(30	)			(48	)
Increase (decrease) in taxes, including income taxes		70				(146	)
Pension contributions (L)		(10	)			(9	)
Decrease (increase) in noncurrent assets		25				(66	)
Decrease in noncurrent liabilities		(72	)			(104	)
CASH PROVIDED FROM (USED FOR) OPERATIONS		64				(176	)
FINANCING ACTIVITIES
Additions to debt		989				25
Payments on debt		(266	)			(16	)
Proceeds from the exercise of employee stock options		-				1
Dividends paid on Alcoa common stock		(37	)			(36	)
Payments related to tax withholding on stock-based compensation awards		(15	)			(34	)
Financial contributions for the divestiture of businesses (C)		(12	)			(25	)
Contributions from noncontrolling interest		65				122
Distributions to noncontrolling interest		(32	)			(22	)
Other		(13	)			1
CASH PROVIDED FROM FINANCING ACTIVITIES		679				16
INVESTING ACTIVITIES
Capital expenditures		(265	)			(198	)
Proceeds from the sale of assets		2				2
Additions to investments		(17	)			(36	)
Other		(1	)			10
CASH USED FOR INVESTING ACTIVITIES		(281	)			(222	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		(16	)			5
Net change in cash and cash equivalents and restricted cash		446				(377	)
Cash and cash equivalents and restricted cash at beginning of year		1,047				1,474
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,493			$	1,097

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
	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
Net loss		-			-			(231	)		-			(1	)		(232	)
Other comprehensive (loss) income (G)		-			-			-			(116	)		15			(101	)
Stock-based compensation		-			10			-			-			-			10
Net effect of tax withholding for compensation plans and exercise of stock options		-			(33	)		-			-			-			(33	)
Dividends paid on Alcoa common stock ($0.10per share)		-			-			(18	)		-			-			(18	)
Contributions		-			-			-			-			86			86
Distributions		-			-			-			-			(6	)		(6	)
Other		-			2			-			-			(1	)		1
Balance at March 31, 2023	$	2		$	9,162		$	(819	)	$	(3,655	)	$	1,606		$	6,296
Net loss		-			-			(102	)		-			(19	)		(121	)
Other comprehensive income (G)		-			-			-			261			9			270
Stock-based compensation		-			11			-			-			-			11
Dividends paid on Alcoa common stock ($0.10per share)		-			-			(18	)		-			-			(18	)
Contributions		-			-			-			-			36			36
Distributions		-			-			-			-			(16	)		(16	)
Balance at June 30, 2023	$	2		$	9,173		$	(939	)	$	(3,394	)	$	1,616		$	6,458

Balance at January 1, 2024	$	2		$	9,187		$	(1,293	)	$	(3,645	)	$	1,594		$	5,845
Net loss		-			-			(252	)		-			(55	)		(307	)
Other comprehensive income (loss) (G)		-			-			-			17			(53	)		(36	)
Stock-based compensation		-			10			-			-			-			10
Net effect of tax withholding for compensation plans and exercise of stock options		-			(15	)		-			-			-			(15	)
Dividends paid on Alcoa common stock ($0.10per share)		-			-			(19	)		-			-			(19	)
Contributions		-			-			-			-			61			61
Distributions		-			-			-			-			(6	)		(6	)
Other		-			2			-			-			(1	)		1
Balance at March 31, 2024	$	2		$	9,184		$	(1,564	)	$	(3,628	)	$	1,540		$	5,534
Net income		-			-			20			-			11			31
Other comprehensive loss (G)		-			-			-			(109	)		(12	)		(121	)
Stock-based compensation		-			12			-			-			-			12
Dividends paid on Alcoa common stock ($0.10per share)		-			-			(18	)		-			-			(18	)
Contributions		-			-			-			-			4			4
Distributions		-			-			-			-			(26	)		(26	)
Balance at June 30, 2024	$	2		$	9,196		$	(1,562	)	$	(3,737	)	$	1,517		$	5,416

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 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, 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, 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. On August 1, 2024, the Company completed the acquisition of Alumina Limited (see Note C).

B. Recently Adopted and Recently Issued Accounting Guidance

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2023-09 which includes changes to income tax disclosures, including greater disaggregation of information in the rate reconciliation and disclosure of taxes paid by jurisdiction. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance will provide enhanced disclosures regarding income taxes and will not have a material impact on the 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

Under the Scheme Implementation Deed (the Agreement) entered into in March 2024, as amended in May 2024, holders of Alumina Shares received 0.02854Alcoa CHESS Depositary Interests (CDIs) for each Alumina Share (the Agreed Ratio), except that i) holders of Alumina Shares represented by American Depositary Shares, each of which represented 4Alumina Shares, received 0.02854shares of Alcoa common stock and ii) a certain shareholder received, for certain of their Alumina Shares, 0.02854shares of Alcoa non-voting convertible preferred stock. The Alcoa CDIs are quoted on the Australian Stock Exchange.

At closing, Alumina Shares outstanding of 2,760,056,014and 141,625,403were exchanged for 78,772,422and 4,041,989shares of Alcoa common stock and Alcoa preferred stock, respectively. Based on Alcoa's closing share price as of July 26, 2024, the Agreed Ratio implies a value of A$1.45per Alumina Share and aggregate purchase consideration of approximately $2,800for Alumina Limited.

The transaction consisted in substance of the acquisition of Alumina Limited's noncontrolling interest in AWAC, the assumption of Alumina Limited's indebtedness (approximately $385as of August 1, 2024, see Note K), and the recognition of deferred tax assets (approximately $100, see Note N) related to Alumina Limited's prior net operating losses. The increase in ownership in AWAC from 60% to 100%, as well as the assumption of Alumina Limited's assets and liabilities, will be accounted for as an equity transaction under ASC 810, Consolidation, with the difference in purchase consideration and the net assets acquired recognized as an increase in total Alcoa Corporation shareholders' equity. The accounting for the transaction is not yet complete and the final value of assets and liabilities acquired is subject to change. Additionally, as of June 30, 2024, the Company recognized transaction costs of $9in Prepaid expenses and other current assets, which will be reclassified to Additional capital as of August 1, 2024.

Under the terms of the Agreement, Alcoa agreed to provide a shareholder loan to AWAC in place of required capital contributions by Alumina Limited if Alumina Limited's net debt position exceeded $420prior to the acquisition closing. Alcoa was not required to and did not provide any shareholder loans to AWAC under this provision.

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.

The Company recorded charges of $4and $15in the second quarter and the six-month period of 2024, respectively, in Other (income) expenses, net on the accompanying Statement of Consolidated Operations related to these commitments. During the second quarter and the six-month period of 2024, the Company spent $5and $12against the reserve, respectively.

In the six-month period of 2023, the Company recorded a charge of $17in Other (income) expenses, net on the accompanying Statement of Consolidated Operations related to these commitments. During the second quarter and six-month period of 2023, the Company spent $11and $25against the reserve, respectively.

The remaining balance of $14at June 30, 2024is expected to be spent in 2024.

D. Restructuring and Other Charges, Net

In the second quarter and the six-month period of 2024, Alcoa Corporation recorded Restructuring and other charges, net, of $18and $220, respectively, which were primarily comprised of:

•

A charge of $8and $205, respectively, for the curtailment of the Kwinana (Australia) refinery; and,

•

A charge of $8and $12, respectively, for take-or-pay contract costs at the closed Wenatchee (Washington) smelter.

In June 2024, Alcoa completed the full curtailment of the Kwinana refinery, as planned, which was announced in January 2024. As of March 2024, the refinery had approximately 780employees and this number will be reduced to approximately 250in the third quarter of 2024 to manage certain processes that will continue until about the third quarter of 2025. At that time, the employee number will be further reduced to approximately 50. In addition to the employees separating as a result of the curtailment, approximately 150employees will either terminate through the productivity program announced in the third quarter of 2023 or redeploy to other Alcoa operations. Charges related to the curtailment totaled $205in the six-month period of 2024 and included charges of $129for water management costs, $41for severance and employee termination costs for the separation of approximately 580employees, $15for asset retirement obligations, $13for take-or-pay contracts, $5for asset impairments and $2for contract terminations. Related cash outlays of approximately $225(which includes existing employee related liabilities and asset retirement obligations) are expected through 2025, with approximately $145to be spent in 2024. The Company spent $22and $24against the reserve in the second quarter and six-month period of 2024, respectively.

In the second quarter and the six-month period of 2023, Alcoa Corporation recorded Restructuring and other charges, net, of $24and $173, respectively, 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;

•

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

•

A charge of $21(both periods) related to the settlement of certain pension benefits.

In March 2023, Alcoa Corporation announced the closure of the Intalco aluminum smelter, which had been fully curtailed since 2020. The Company recorded charges of $117related to the closure, including a charge of $16in Cost of goods sold on the Statement of Consolidated Operations to write-down remaining inventories to net realizable value and a charge of $101in 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 of $1for the separation of approximately 12employees. Cash outlays related to the permanent closure of the site are expected to be $85over the next three years with approximately $45to be spent in2024. The Company spent $9and $13against the reserve in the second quarter and six-month period of 2024, respectively.

In February 2023, the Company reached an updated viability agreement with the workers' representatives of the San Ciprián smelter to commence the restart process 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 2023 through 2025 and made additional commitments for capital improvements of $78. The Company recorded charges of $47in Restructuring and other charges, net on the Statement of Consolidated Operations to establish the related reserve for employee obligations in the six month period of 2023. Cash outlays related to employee obligations are expected to be $47through 2025, with approximately $36to be spent in 2024. The Company spent $9and $18against the reserve in the second quarter and six-month period of 2024, respectively. At June 30, 2024, the Company had restricted cash of $86to be made available for remaining capital improvement commitments at the site of $111and smelter restart costs of $32for both the agreement reached with the worker's representatives in December 2021 and the updated viability agreement in February 2023. Restricted cash is included in Prepaid expenses and other current assets and Other noncurrent assets on the Consolidated Balance Sheet (see Note 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,
	2024		2023			2024		2023
Alumina	$	8		$	1		$	205	$	2
Aluminum		-			19			-		165
Segment total		8			20			205		167
Corporate		10			4			15		6
Total Restructuring and other charges, net	$	18		$	24		$	220	$	173

Activity and reserve balances for restructuring charges were as follows:


	Severance and employee termination costs			Other costs			Total
Balance at December 31, 2022	$	1			$	116		$	117
Restructuring and other charges, net		11				55			66
Cash payments		(6	)			(118	)		(124	)
Reversals and other		-				4			4
Balance at December 31, 2023		6				57			63
Restructuring and other charges, net		43				156			199
Cash payments		(1	)			(55	)		(56	)
Reversals and other		1				3			4
Balance at June 30, 2024	$	49			$	161		$	210

The activity and reserve balances include only Restructuring and other charges, net that impacted the reserves for Severance and employee termination costs and Other costs. Restructuring and other charges, net that affected other liability accounts such as Accrued pension benefits (see Note L), Asset retirement obligations, and Environmental remediation (see Note 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 $22and $15at June 30, 2024 and December 31, 2023, respectively.

E. Segment Information- Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. The Company has two operating and reportable segments: (i) Alumina and (ii) Aluminum. 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 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, 2024
Sales:
Third-party sales	$	1,010			$	1,895		$	2,905
Intersegment sales		457				3			460
Total sales	$	1,467			$	1,898		$	3,365
Segment Adjusted EBITDA	$	186			$	233		$	419
Supplemental information:
Depreciation, depletion, and amortization	$	90			$	68		$	158
Equity income	$	2			$	21		$	23
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	)


	Alumina			Aluminum			Total
Six months ended June 30, 2024
Sales:
Third-party sales	$	1,971			$	3,533		$	5,504
Intersegment sales		852				7			859
Total sales	$	2,823			$	3,540		$	6,363
Segment Adjusted EBITDA	$	325			$	283		$	608
Supplemental information:
Depreciation, depletion, and amortization	$	177			$	136		$	313
Equity (loss) income	$	(9	)		$	23		$	14
Six months ended June 30, 2023
Sales:
Third-party sales	$	1,751			$	3,598		$	5,349
Intersegment sales		818				7			825
Total sales	$	2,569			$	3,605		$	6,174
Segment Adjusted EBITDA	$	136			$	294		$	430
Supplemental information:
Depreciation, depletion, and amortization	$	157			$	138		$	295
Equity loss	$	(28	)		$	(73	)	$	(101	)

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


	Second quarter ended June 30,			Six months ended June 30,
	2024			2023			2024		2023
Total Segment Adjusted EBITDA	$	419			$	143		$	608		$	430
Unallocated amounts:
Transformation(1)		(16	)			(17	)		(30	)		(25	)
Intersegment eliminations		(29	)			31			(37	)		23
Corporate expenses(2)		(41	)			(24	)		(75	)		(54	)
Provision for depreciation, depletion, and amortization		(163	)			(153	)		(324	)		(306	)
Restructuring and other charges, net (D)		(18	)			(24	)		(220	)		(173	)
Interest expense		(40	)			(27	)		(67	)		(53	)
Other income (expenses), net (P)		22				(6	)		(37	)		(60	)
Other(3)		(42	)			(22	)		(51	)		(61	)
Consolidated income (loss) before income taxes		92				(99	)		(233	)		(279	)
Provision for income taxes		(61	)			(22	)		(43	)		(74	)
Net (income) loss attributable to noncontrolling interest		(11	)			19			44			20
Consolidated net income (loss) attributable to Alcoa Corporation	$	20			$	(102	)	$	(232	)	$	(333	)

(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,
	2024			2023			2024		2023
Aluminum	$	1,934			$	1,824		$	3,595		$	3,670
Alumina		904				774			1,794			1,488
Energy		29				26			62			54
Bauxite		96				109			157			236
Other(1)		(57	)			(49	)		(103	)		(94	)
	$	2,906			$	2,684		$	5,505		$	5,354

(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,
	2024		2023			2024		2023
Net income (loss) attributable to Alcoa Corporation	$	20		$	(102	)	$	(232	)	$	(333	)
Average shares outstanding - basic		180			178			179			178
Effect of dilutive securities:
Stock options		-			-			-			-
Stock units		1			-			-			-
Average shares outstanding - diluted		181			178			179			178

In the six-month period of 2024, 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 six-month period of 2024, twomillion common share equivalents related to threemillion outstanding stock units and stock options combined would have been included in diluted average shares outstanding for the period.

In the second quarter 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 quarter or six-month period of 2023, twomillion and threemillion common share equivalents, respectively, related to threemillion outstanding stock units and stock options combined would have been included in diluted average shares outstanding for the periods.

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
	Second quarter ended June 30,			Second quarter ended June 30,
	2024			2023			2024		2023
Pension and other postretirement benefits (L)
Balance at beginning of period	$	9			$	66		$	(14	)	$	(5	)
Other comprehensive income (loss):
Unrecognized net actuarial gain/loss and prior service cost/benefit		10				(18	)		7			(2	)
Tax (expense) benefit(2)		(2	)			8			(2	)		-
Total Other comprehensive income (loss) before reclassifications, net of tax		8				(10	)		5			(2	)
Amortization of net actuarial gain/loss and prior service cost/benefit(1)		5				26			-			-
Tax expense(2)		-				(6	)		-			-
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		5				20			-			-
Total Other comprehensive income (loss)		13				10			5			(2	)
Balance at end of period	$	22			$	76		$	(9	)	$	(7	)

Foreign currency translation
Balance at beginning of period	$	(2,715	)		$	(2,683	)	$	(1,037	)	$	(1,025	)
Other comprehensive (loss) income		(60	)			25			(16	)		11
Balance at end of period	$	(2,775	)		$	(2,658	)	$	(1,053	)	$	(1,014	)

Cash flow hedges (M)
Balance at beginning of period	$	(922	)		$	(1,038	)	$	-		$	1
Other comprehensive (loss) income:
Net change from periodic revaluations		(153	)			241			-			-
Tax benefit (expense)(2)		31				(38	)		-			-
Total Other comprehensive (loss) income before reclassifications, net of tax		(122	)			203			-			-
Net amount reclassified to earnings:
Aluminum contracts(3)		75				33			-			-
Financial contracts(4)		-				-			-			-
Interest rate contracts(5)		(1	)			(3	)		(1	)		-
Foreign exchange contracts(6)		-				(3	)		-			-
Sub-total		74				27			(1	)		-
Tax expense(2)		(14	)			(4	)		-			-
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		60				23			(1	)		-
Total Other comprehensive (loss) income		(62	)			226			(1	)		-
Balance at end of period	$	(984	)		$	(812	)	$	(1	)	$	1

Total Accumulated other comprehensive loss	$	(3,737	)		$	(3,394	)	$	(1,063	)	$	(1,020	)


	Alcoa Corporation			Noncontrolling interest
	Six months ended June 30,			Six months ended June 30,
	2024			2023			2024		2023
Pension and other postretirement benefits (L)
Balance at beginning of period	$	-			$	62		$	(15	)	$	(5	)
Other comprehensive income (loss):
Unrecognized net actuarial gain/loss and prior service cost/benefit		14				(18	)		7			(2	)
Tax (expense) benefit(2)		(3	)			8			(2	)		-
Total Other comprehensive income (loss) before reclassifications, net of tax		11				(10	)		5			(2	)
Amortization of net actuarial gain/loss and prior service cost/benefit(1)		11				30			1			-
Tax expense(2)		-				(6	)		-			-
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		11				24			1			-
Total Other comprehensive income (loss)		22				14			6			(2	)
Balance at end of period	$	22			$	76		$	(9	)	$	(7	)

Foreign currency translation
Balance at beginning of period	$	(2,593	)		$	(2,685	)	$	(983	)	$	(1,040	)
Other comprehensive (loss) income		(182	)			27			(70	)		26
Balance at end of period	$	(2,775	)		$	(2,658	)	$	(1,053	)	$	(1,014	)

Cash flow hedges (M)
Balance at beginning of period	$	(1,052	)		$	(916	)	$	-		$	1
Other comprehensive (loss) income:
Net change from periodic revaluations		(36	)			54			-			-
Total Other comprehensive (loss) income before reclassifications, net of tax		(36	)			54			-			-
Net amount reclassified to earnings:
Aluminum contracts(3)		132				94			-			-
Financial contracts(4)		-				(20	)		-			-
Interest rate contracts(5)		(1	)			(2	)		(1	)		-
Foreign exchange contracts(6)		(4	)			(8	)		-			-
Sub-total		127				64			(1	)		-
Tax expense(2)		(23	)			(14	)		-			-
Total amount reclassified from Accumulated other comprehensive loss, net of tax(7)		104				50			(1	)		-
Total Other comprehensive income (loss)		68				104			(1	)		-
Balance at end of period	$	(984	)		$	(812	)	$	(1	)	$	1

Total Accumulated other comprehensive loss	$	(3,737	)		$	(3,394	)	$	(1,063	)	$	(1,020	)

(1)

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

(2)

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

(6)

For the second quarter and six-month period of 2024, these amounts were reported in Sales (both periods) on the accompanying Statement of Consolidated Operations. For the second quarter and six-month period of 2023, $4was reported in Cost of goods sold (both periods) and $(7) and $(12) were reported in Sales, respectively, 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.

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, 2024	Saudi Arabia Joint Venture			Mining			Energy		Other
Sales	$	804			$	158		$	59		$	114
Cost of goods sold		613				104			25			104
Net income (loss)		102				14			29			(20	)
Equity in net income (loss) of affiliated companies, before reconciling adjustments		26				6			11			(9	)
Other		(4	)			-			-			12
Alcoa Corporation's equity in net income of affiliated companies		22				6			11			3

Second quarter ended June 30, 2023
Sales	$	700			$	172		$	59		$	116
Cost of goods sold		620				101			32			106
Net (loss) income		(99	)			14			22			(33	)
Equity in net (loss) income of affiliated companies, before reconciling adjustments		(25	)			6			9			(15	)
Other		(3	)			1			1			7
Alcoa Corporation's equity in net (loss) income of affiliated companies		(28	)			7			10			(8	)

Six months ended June 30, 2024
Sales	$	1,515			$	273		$	122		$	229
Cost of goods sold		1,212				207			50			209
Net income (loss)		94				9			60			(36	)
Equity in net income (loss) of affiliated companies, before reconciling adjustments		24				4			23			(17	)
Other		(12	)			-			(1	)		7
Alcoa Corporation's equity in net income (loss) of affiliated companies		12				4			22			(10	)

Six months ended June 30, 2023
Sales	$	1,300			$	359		$	117		$	237
Cost of goods sold		1,302				204			59			219
Net (loss) income		(351	)			38			46			(49	)
Equity in net (loss) income of affiliated companies, before reconciling adjustments		(88	)			17			18			(23	)
Other		(15	)			1			1			-
Alcoa Corporation's equity in net (loss) income of affiliated companies		(103	)			18			19			(23	)

The Company's basis in the ELYSISTMLimited Partnership (ELYSIS) as of June 30, 2024 and 2023, included in Other in the table above, has been reduced to zerofor its share of losses incurred to date. As a result, the Company has $66in unrecognized losses as of June 30, 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 2023include 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 $41which is included in Other (income) expenses, net on the Statement of Consolidated Operations for the six-month period of 2023. Alcoa's total share of this dispute of $62includes $21that was recorded in the fourth quarter of 2022.

I. Receivables

In 2023, a wholly-owned special purpose entity (SPE) of the Company entered into and subsequently amended an agreement with a financial institution to sell up to $130of 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. The SPE held unsold customer receivables of $239and $104pledged as collateral against the sold receivables as of June 30, 2024 and December 31, 2023, respectively.

In the second quarter of 2024, the Company sold gross customer receivables of $293and reinvested collections of $293from previously sold receivables, resulting in nonet cash remittance to the financial institution. In the six-month period of 2024, the Company sold gross customer receivables of $600and reinvested collections of $584from previously sold receivables, resulting in net cash proceeds from the financial institution of $16.

In the second quarter of 2023, the Company sold gross customer receivables of $98and reinvested collections of $104from 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 $174and reinvested collections of $127from previously sold receivables, resulting in net cash proceeds from the financial institution of $47.

Cash collections from previously sold receivables yet to be reinvested of $89and $99were included in Accounts payable, trade on the accompanying Consolidated Balance Sheet as of June 30, 2024and 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, 2024		December 31, 2023
Finished goods	$	320		$	355
Work-in-process		268			287
Bauxite and alumina		530			586
Purchased raw materials		612			700
Operating supplies		245			230
	$	1,975		$	2,158

K. Debt

Short-term Borrowings

Inventory Repurchase Agreements

The Company has entered into inventory repurchase agreements whereby the Company sold aluminum to a third party and agreed to subsequently repurchase substantially similar inventory. The Company did not record sales upon each shipment of inventory and the net cash received of $31and $56related to these agreements was recorded in Short-term borrowings within Other current liabilities on the Consolidated Balance Sheet as of June 30, 2024 and December 31, 2023, respectively. The associated inventory sold was reflected in Prepaid expenses and other current assets on the Consolidated Balance Sheet as of June 30, 2024 and December 31, 2023, respectively.

During the second quarter and six-month period of 2024, the Company recorded borrowings of $24and $45, respectively, and repurchased $45and $70, respectively, of inventory related to these agreements. During the second quarter and six-month period of 2023, the Company recorded borrowings of $25(six-month period only) and repurchased $15(both periods) of inventory related to these agreements.

The cash received and subsequently paid under the inventory repurchase agreements is included in Cash provided from financing activities on the Statement of Consolidated Cash 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 $750aggregate 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 is utilizing 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 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-annuallyin 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 10days, but not more than 60days, 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 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 a $1,250revolving 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 in September 2016, amended and restated in June 2022 and amended 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 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, 2023 for more information on the Revolving Credit Facility.

As of June 30, 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 noborrowings outstanding at June 30, 2024 and December 31, 2023, and noamounts were borrowed during the second quarter and six-month periods of 2024 and 2023 under the Revolving Credit Facility.

Japanese Yen Revolving Credit Facility

The Company entered into a $250revolving credit facility available to be drawn in Japanese yen (the Japanese Yen Revolving Credit Facility) in April 2023. The Japanese Revolving Credit Facility was amended 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. Under the current terms of the January 2024 amendment, the Company agreed to provide collateral for its obligations under the Japanese Yen 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, 2023 for more information on the Japanese Yen Revolving Credit Facility.

As of June 30, 2024, the Company was in compliance with all financial covenants. The Company may access the entire amount of commitments under the Japanese Revolving Credit Facility. There were noborrowings outstanding at June 30, 2024 and December 31, 2023. During the second quarter of 2024, noamounts were borrowed. During the six-month period of 2024,$201(29,686JPY) was borrowed and $196(29,686JPY) was repaid. Noamounts were borrowed during the second quarter and six-month period of 2023 under the Japanese Yen Revolving Credit Facility.

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

Alumina Limited Revolving Credit Facility

In connection with the acquisition of Alumina Limited, the Company assumed approximately $385of indebtedness as of August 1, 2024, representing the amount drawn on Alumina Limited's revolving credit facility.

Alumina Limited has a $500revolving credit facility with tranches maturing in October 2025($100), January 2026($150), July 2026($150), and June 2027($100). Alumina Limited's facility contains a financial covenant limiting the incurrence of indebtedness. As of June 30, 2024, Alumina Limited was in compliance with such covenant and could access the remaining commitments under the facility.

Alumina Limited's revolving credit facility also contains a clause that allows a majority of lenders, upon a change of control, to issue a notice to Alumina Limited requiring repayment within 90 business days of issuing the notice (the 90-day Notice). Alcoa has engaged with the facility lenders and the lenders have indicated their intention to delay issuing the 90-day Notice until at least December 1, 2024, providing additional time for Alcoa to consider potential repayment or refinancing options subsequent to the acquisition of Alumina Limited.

L. Pension and Other Postretirement Benefits

The components of net periodic benefit cost were as follows:


	Second quarter ended June 30,			Six months ended June 30,
Pension benefits	2024			2023			2024		2023
Service cost	$	3			$	3		$	5		$	5
Interest cost(1)		27				29			54			60
Expected return on plan assets(1)		(35	)			(37	)		(70	)		(76	)
Recognized net actuarial loss(1)		8				7			16			14
Curtailments(2)		-				-			1			-
Settlements(2)		(1	)			21			(1	)		21
Net periodic benefit cost	$	2			$	23		$	5		$	24


	Second quarter ended June 30,			Six months ended June 30,
Other postretirement benefits	2024			2023			2024		2023
Service cost	$	-			$	1		$	1		$	2
Interest cost(1)		6				7			12			13
Recognized net actuarial loss(1)		2				1			3			2
Amortization of prior service benefit(1)		(4	)			(4	)		(7	)		(7	)
Net periodic benefit cost	$	4			$	5		$	9		$	10

(1)

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

(2)

These amounts were reported in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations and Cash Flows.

Plan Actions. In 2024, management initiated the following actions to a certain pension plan:

Action #1- On January 8, 2024, Alcoa announced the full curtailment of the Kwinana refinery. As a result, curtailment accounting was triggered within Alcoa's Australian pension plan. The Company recorded a $1decrease to Other noncurrent assets and recognized a curtailment loss of $1($0after-tax) in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

Action #2- In the second quarter of 2024, settlement accounting and a related plan remeasurement was triggered within Alcoa's Australian pension plan as a result of participants electing lump sum payments. Alcoa recorded a $19increase to Other noncurrent assets and recognized a settlement gain of $1($0after-tax) in Restructuring and other charges, net on the 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 (decrease) to other noncurrent assets			Curtailment loss(1)			Settlement gain(2)
1	~110	N/A	N/A	N/A	$	(1	)		$	1		$	-
2	~10	4.81%	June 30, 2024	5.23%		19				-			(1	)
	~120				$	18			$	1		$	(1	)

(1)

This amount represents the net actuarial loss arising from the curtailment and was recognized immediately in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

(2)

This amount represents the net actuarial gain and was reclassified from Accumulated other comprehensive loss to Restructuring and other charges, net 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 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 of 2024, management made such elections related to the Company's U.S. plans and intends to do so for the remainder of 2024. As a result, Alcoa's minimum required contribution to defined benefit pension plans in 2024is estimated to be approximately $18, of which approximately $4was contributed to non-U.S. plans during the second quarter of 2024. In the six-month period of 2024, $10was contributed to non-U.S. plans.

In the second quarter of 2023, $5was contributed to non-U.S. plans. In six-month period of 2023, $9was contributed to non-U.S. plans.

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. 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, 2024		December 31, 2023
	Assets		Liabilities			Assets		Liabilities
Level 1 derivative instruments	$	4		$	11		$	16	$	9
Level 3 derivative instruments		34			1,191			16		1,297
Total	$	38		$	1,202		$	32	$	1,306
Less: Current		38			251			29		214
Noncurrent	$	-		$	951		$	3	$	1,092


	2024			2023
Second quarter ended June 30,	Unrealized loss recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	(7	)		$	-		$	42	$	28
Level 3 derivative instruments		(146	)			(75	)		197		(58	)
Noncontrolling and equity interest (Level 2)		-				1			2		3
Total	$	(153	)		$	(74	)	$	241	$	(27	)

For the second quarter of 2024, the realized gains and losses on Level 1 cash flow hedges were immaterial. For the second quarter of 2023, the realized gain of $28on Level 1 cash flow hedges was comprised of a $32gain recognized in Sales and a $4loss recognized in Cost of goods sold.


	2024			2023
Six months ended June 30,	Unrealized loss recognized in Other comprehensive loss			Realized gain (loss) reclassed from Other comprehensive loss to earnings			Unrealized gain recognized in Other comprehensive loss		Realized gain (loss) reclassed from Other comprehensive loss to earnings
Level 1 derivative instruments	$	(10	)		$	4		$	31	$	44
Level 3 derivative instruments		(26	)			(132	)		23		(110	)
Noncontrolling and equity interest (Level 2)		-				1			-		2
Total	$	(36	)		$	(127	)	$	54	$	(64	)

For the six-month period of 2024, the realized gain of $4on Level 1 cash flow hedges was recognized in Sales. For the six-month period of 2023, the realized gain of $44on Level 1 cash flow hedges was comprised of a $48gain recognized in Sales and a $4loss recognized in Cost of goods sold.

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


	Classification	June 30, 2024		June 30, 2023
Aluminum (in kmt)	Commodity buy forwards		133		187
Aluminum (in kmt)	Commodity sell forwards		80		206
Foreign currency (in millions of euro)	Foreign exchange buy forwards		61		86
Foreign currency (in millions of euro)	Foreign exchange sell forwards		16		18
Foreign currency (in millions of Norwegian krone)	Foreign exchange buy forwards		85		232
Foreign currency (in millions of Brazilian real)	Foreign exchange buy forwards		351		1,010
Foreign currency (in millions of Canadian dollar)	Foreign exchange buy forwards		22		-

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 Level 1 aluminum derivative instruments to manage LME exposures at certain locations with profitability improvement actions (expires December 2024), and the Alumar (Brazil) smelter restart (expired December 2023).

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), U.S. dollar aluminum sales in Norway (expires June 2025), U.S. dollar alumina and aluminum sales in Brazil (expires August 2025), and U.S. dollar aluminum sales in Canada (expires March 2025).

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, 2024		Unobservable Input		Unobservable Input Range
Asset Derivatives
Financial contract (undesignated)	$	34		Interrelationship of forward energy price, LME forward price, and the Consumer Price Index		Electricity (per MWh)	2024: $93.52 2024: $40.54
					LME (per mt)	2024: $2,491
						2024: $2,562
Total Asset Derivatives	$	34
Liability Derivatives
Power contract	$	180		MWh of energy needed to produce the forecasted mt of aluminum		LME (per mt)	2024: $2,491 2027: $2,742
					Electricity	Rate of 4million MWh per year
Power contracts		1,008		MWh of energy needed to produce the forecasted mt of aluminum		LME (per mt)	2024: $2,491 2029: $2,734 2036: $2,934
					Midwest premium (per pound)	2024: $0.1999 2029: $0.2365 2036: $0.2365
					Electricity	Rate of 18million MWh per year
Power contract		2		MWh of energy needed to produce the forecasted mt of aluminum		LME (per mt)	2024: $2,491 2024: $2,524
					Midwest premium (per pound)	2024: $0.1999 2024: $0.2240
					Electricity	Rate of 2million MWh per year
Power contract (undesignated)		1		Estimated spread between the 30-year debt yield of Alcoa and the counterparty		Credit spread	1.71%: 30-year debt yield spread 6.98%: Alcoa (estimated) 5.27%: counterparty
Total Liability Derivatives	$	1,191

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


Asset Derivatives	June 30, 2024		December 31, 2023
Derivatives not designated as hedging instruments:
Current-financial contract	$	34		$	16
Total derivatives not designated as hedging instruments	$	34		$	16
Total Asset Derivatives	$	34		$	16
Liability Derivatives
Derivatives designated as hedging instruments:
Current-power contracts	$	245		$	210
Noncurrent-power contracts		945			1,087
Total derivatives designated as hedging instruments	$	1,190		$	1,297
Derivatives not designated as hedging instruments:
Noncurrent-embedded credit derivative		1			-
Total derivatives not designated as hedging instruments	$	1		$	-
Total Liability Derivatives	$	1,191		$	1,297

Assuming market rates remain constant with the rates at June 30, 2024, a realized loss of $245related to power contracts is expected to be recognized in Sales over the next 12 months.

At June 30, 2024 and December 31, 2023, the power contracts with embedded derivatives designated as cash flow hedges include hedges of forecasted aluminum sales of 1,344kmt and 1,456kmt, respectively.

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


	Assets
Second quarter ended June 30, 2024	Financial contracts
April 1, 2024	$	12
Total gains or losses included in:
Other income, net (unrealized/realized)		55
Settlements and other		(33	)
June 30, 2024	$	34
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2024:
Other income, net	$	55


	Liabilities
Second quarter ended June 30, 2024	Power contracts		Embedded credit derivative
April 1, 2024	$	1,120		$	-
Total gains or losses included in:
Sales (realized)		(76	)		-
Other expenses, net (unrealized/realized)		-			1
Other comprehensive income (unrealized)		146			-
June 30, 2024	$	1,190		$	1
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2024:
Other expenses, net	$	-		$	1


	Assets
Six months ended June 30, 2024	Financial contracts
January 1, 2024	$	16
Total gains or losses included in:
Other income, net (unrealized/realized)		50
Settlements and other		(32	)
June 30, 2024	$	34
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2024:
Other income, net	$	50


	Liabilities
Six months ended June 30, 2024	Power contracts		Embedded credit derivative
January 1, 2024	$	1,297		$	-
Total gains or losses included in:
Sales (realized)		(133	)		-
Other expenses, net (unrealized/realized)		-			1
Other comprehensive income (unrealized)		26			-
June 30, 2024	$	1,190		$	1
Change in unrealized gains or losses included in earnings for derivative instruments held at June 30, 2024:
Other expenses, net	$	-		$	1

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, 2024		December 31, 2023
	Carrying value		Fair value			Carrying value		Fair value
Cash and cash equivalents	$	1,396		$	1,396		$	944	$	944
Restricted cash		97			97			103		103
Short-term borrowings		31			31			56		56
Long-term debt due within one year		79			79			79		79
Long-term debt, less amount due within one year		2,469			2,477			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.

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


	Six months ended June 30,
	2024				2023
Loss before income taxes	$	(233	)			$	(279	)
Estimated annualized effective tax rate		105.1		%			(29.3	)	%
Income tax (benefit) expense	$	(245	)			$	82
Unfavorable (favorable) tax impact related to losses in jurisdictions with no tax benefit		288					(11	)
Discrete tax expense		-					3
Provision for income taxes	$	43				$	74

Alcoa Australia Holdings Pty Ltd (AAH), a wholly-owned indirect subsidiary of Alcoa, made an election prior to July 31, 2024 that results in Alcoa's other wholly-owned Australian subsidiaries joining AAH's tax consolidated group (the AAH Tax Consolidated Group). As a result of the acquisition of Alumina Limited, Alumina Limited and all of its Australian subsidiaries, as well as AofA and all of its subsidiaries, joined the AAH Tax Consolidated Group on August 1, 2024. Alcoa will recognize a deferred tax asset of approximately $100related to the portion of Alumina Limited's Australian net operating loss carryforwards that the Company has determined are more likely than not to be realized as a result of the consolidated return election.

The Inflation Reduction Act of 2022 (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. In December 2023, the U.S. Treasury issued guidance on Section 45X of the 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 incentivize domestic production of critical materials important for the global transition to renewable energy. In the second quarter and six-month period of 2024, the Company recorded benefits of $10and $20in Cost of goods sold, respectively, related to its Massena West smelter (New York) and its Warrick smelter (Indiana). As of June 30, 2024, benefits of $36were included in Other receivables and $20were included in Other noncurrent assets on the Consolidated Balance Sheet. As of December 31, 2023, benefits of $36were included in Other receivables on the 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 December31, 2022	$	284
Liabilities incurred		39
Cash payments		(55	)
Reversals of previously recorded liabilities		(1	)
Foreign currency translation and other		1
Balance at December 31, 2023		268
Liabilities incurred		1
Cash payments		(16	)
Foreign currency translation and other		(1	)
Balance at June 30, 2024	$	252

At June 30, 2024 and December 31, 2023, the current portion of the environmental remediation reservebalance was $61and $66, respectively.

Payments related to remediation expenses applied against the reserve were $10and $16in the second quarter and six-month period of 2024, respectively. These amounts include mandated expenditures as well as those not required by any regulatory authority or third party.

During the second quarter and six-month period of 2023, the Company incurred liabilities of $4and $18, respectively. The Company incurred liabilities of $14for 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 $4for the second quarter of 2023for ongoing remediation work at various other sites, 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 $16and $23in the second quarter and six-month period of 2023, 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 $1during the six-month period of 2023 due to the determination that certain remaining site remediation is no longer required.

The estimated timing of cash outflows from the environmental remediation reserve at June 30, 2024 was as follows:


2024 (excluding the six months ended June 30, 2024)	$	48
2025 - 2029		119
Thereafter		85
Total	$	252

Reserve balances at June 30, 2024and December 31, 2023, associated with significant sites with active remediation underway or for future remediation were $199and $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 2029.

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 fourto eight yearsto 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 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 is expected to be completed no later than May 2028. 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. The full site remediation project design, 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 by the end of 2026.

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 2026 and will take threeto five yearsto 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 yearsof post-closure maintenance and monitoring. The final remediation plan is under 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 32other sites that are planned or underway. These activities will be completed at various times in the next three to five years, after which ongoing monitoring and other activities may be required. At June 30, 2024and December 31, 2023, the reserve balance associated with these activities was $53and $57, respectively.

Tax

Brazil (AWAB)-Under Brazilian law, taxpayers who generate non-cumulative federal value added tax credits related to exempt exports may either request a refund in cash (monetization) or offset them against other federal taxes owed. In 2012, AWAB requested monetization of $136(R$273) from the Brazilian Federal Revenue Office (RFB) and received $68(R$136) that year. In March 2013, AWAB was notified by the RFB that approximately $110(R$220) of value added tax credits previously claimed were being disallowed and a penalty of 50% was assessed. $41(R$82) of the cash received in 2012 related to the disallowed amount. The value added tax credits were claimed by AWAB for both fixed assets and export sales related to the Juruti bauxite mine and 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$66). In its decision, the RFB allowed credits of $10(R$53) that were similar to those previously disallowed for 2009 through 2011. 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. 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 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 $0to $55(R$305). 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 $143(A$214). The Notices also included claims for compounded interest on the tax amount totaling approximately $474(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 $86(A$128).

AofA disagreed with the Notices and with the ATO's proposed position on penalties. During 2020, AofA lodged formal objections to the Notices, provided a submission on the ATO's imposition of interest and 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. 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. At a directions hearing on September 26, 2023, the ATO was granted an additional extension to 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 was completed in June 2024, and AofA is awaiting the AAT's decision.

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 June 30, 2024the related balance was $72(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, 2024 and December 31, 2023, total reductions in cash tax payments were $209(A$312) and $199(A$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.

Legal Proceedings

St. Croix Proceedings-Prior to 2012, Alcoa Inc., the Company's former parent company, was served with two multi-plaintiff actions alleging personal injury or property damage from Hurricane Georges or winds blowing material from the Company's former St. Croix alumina facility. These actions were subsequently consolidated into the Red Dust Claims docket in 2017.

In March 2022, the Superior Court of the Virgin Islands issued an amended case management order dividing complaints filed in the Red Dust docket into groups of 50 complaints, designated Groups A through I. The parties selected 10 complaints from Group A to proceed to trial as the Group A lead cases. In May 2024, the Court issued an amended case management order with regard to the Group A lead cases scheduling trials to begin in November 2024. Trials with regard to the Group A lead cases will continue through July 2025. The Court further ordered the parties to participate in mediation on or before August 31, 2024. After completing its case analysis in the second quarter of 2024, the Company recorded a reserve for its estimate of probable loss and a related receivable for insurance proceeds with no material impact to the results of operations.

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, governance, 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.

P. Other Financial Information

Other (Income) Expenses, Net


	Second quarter ended June 30,			Six months ended June 30,
	2024			2023			2024		2023
Equity (gain) loss	$	(22	)		$	44		$	5		$	139
Foreign currency losses (gains), net		57				(39	)		81			(55	)
Net loss from asset sales		6				1			17			15
Net (gain) loss on mark-to-market derivative instruments		(54	)			9			(49	)		(17	)
Non-service costs - pension and other postretirement benefits		4				3			8			6
Other, net		(13	)			(12	)		(25	)		(28	)
	$	(22	)		$	6		$	37		$	60

Other Noncurrent Assets


	June 30, 2024		December 31, 2023
Prepaid gas transmission contract	$	296		$	297
Value added tax credits		287			336
Gas supply prepayment		261			283
Deferred mining costs, net		186			187
Prepaid pension benefit		153			125
Goodwill		144			146
Noncurrent prepaid tax asset		72			73
Noncurrent restricted cash		53			71
Intangibles, net		35			37
Other		114			95
	$	1,601		$	1,650

Cash and Cash Equivalents and Restricted Cash


	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	1,396		$	944
Current restricted cash		44			32
Noncurrent restricted cash		53			71
	$	1,493		$	1,047

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 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, 2024 and December 31, 2023, qualifying supplier invoices outstanding under these programs were $123and $104, respectively, and have payment terms ranging from 50 to 110days. These obligations are included in Accounts payable, trade on the accompanying Consolidated Balance Sheet.

R. Subsequent Events

On August 1, 2024, the Company completed the acquisition of Alumina Limited (see Note C).

On July 31, 2024, the Board of Directors declared a quarterly cash dividend of $0.10per share of the Company's common stock and Series A convertible preferred stock, to be paid on August 29, 2024to stockholders of record as of the close of business on August 12, 2024. Dividends on Alcoa's common and preferred shares are paid in U.S. dollars. Dividends on CDIs paid in a currency other than U.S. dollar will be determined using foreign currency exchange rates as of August 22, 2024.

In May 2022, the Company received a Notice of Violation (NOV) from the U.S. Environmental Protection Agency (the EPA). The NOV alleges violations under the Clean Air Act at the Company's Intalco smelter from when the smelter was operational. The EPA referred the matter to the U.S. Department of Justice, Environment and Natural Resources Division (the DOJ) in May 2022. The DOJ and the Company agreed to a stipulated settlement, which was filed with the United States District Court for the Western District of Washington at Seattle on July 18, 2024, requiring the Company to pay a civil fine of $5. An accrual for this matter was included within Other current liabilities on the Consolidated Balance Sheet as of June 30, 2024.

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

Alcoa continued to progress the acquisition of Alumina Limited during the second quarter of 2024 and announced the completion of the acquisition on August 1, 2024. 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 and financial flexibility and strategic optionality.

Additionally, Alcoa continued to execute initiatives to further enhance its operations and reduce controllable costs. The Company's smelters in Canada and Norway set year-to-date production records, and the Alumar smelter established stability and increased operating capacity to approximately 72 percent. The full curtailment of the Kwinana refinery in Australia was completed in June 2024, as planned.

Alumina Limited Acquisition

On August 1, 2024, Alcoa completed the acquisition of all of the ordinary shares of Alumina Limited (Alumina Shares) through a wholly owned subsidiary, AAC Investments Australia 2 Pty Ltd. Alumina Limited holds a 40% ownership interest in the AWAC joint venture. Under the Scheme Implementation Deed (the Agreement) entered into in March 2024, as amended in May 2024, holders of Alumina Shares received 0.02854 Alcoa CHESS Depositary Interests (CDIs) for each Alumina Share (the Agreed Ratio), except that i) holders of Alumina Shares represented by American Depositary Shares, each of which represented 4 Alumina Shares, received 0.02854 shares of Alcoa common stock and ii) a certain shareholder received, for certain of their Alumina Shares, 0.02854 shares of Alcoa non-voting convertible preferred stock. The Alcoa CDIs are quoted on the Australian Stock Exchange under the trading symbol AAI.

At closing, Alumina Shares outstanding of 2,760,056,014 and 141,625,403 were exchanged for 78,772,422 and 4,041,989 shares of Alcoa common stock and Alcoa preferred stock, respectively. Based on Alcoa's closing share price as of July 26, 2024, the Agreed Ratio implies a value of A$1.45 per Alumina Share and aggregate purchase consideration of approximately $2,800 for Alumina Limited.

For Alcoa shareholders, the transaction enhances Alcoa's vertical integration along the value chain across bauxite mining, alumina refining, and aluminum smelting, increases Alcoa's economic interest in its bauxite and alumina assets, simplifies governance, and reaffirms Alcoa's commitment to Western Australia. In addition to the implied premium over prior share prices, Alumina Limited shareholders' ownership is diversified to a large-scale, global upstream aluminum portfolio.

The transaction consisted in substance of the acquisition of Alumina Limited's noncontrolling interest in AWAC, the assumption of Alumina Limited's indebtedness (approximately $385 as of August 1, 2024), and the recognition of deferred tax assets (approximately $100) related to Alumina Limited's prior net operating losses. The accounting for the transaction is not yet complete and the final value of assets and liabilities acquired is subject to change. Alcoa's fees and expenses related to the transaction include financial advisor fees, filing fees, legal and accounting fees, and regulatory fees. The Company expects to incur approximately $35 of transaction costs related to the transaction. In the third quarter of 2024, Net income attributable to noncontrolling interest will be reported through July 31, 2024 and cease thereafter.

Additionally, under the terms of the Agreement, Alcoa agreed to provide a shareholder loan to AWAC in place of required capital contributions by Alumina Limited if Alumina Limited's net debt position exceeded $420 prior to the acquisition closing. Alcoa was not required to and did not provide any shareholder loans to AWAC under this provision.

Portfolio Actions

Kwinana Refinery

In June 2024, Alcoa completed the full curtailment of the Kwinana refinery, as planned, which was announced in January 2024. The Company's decision to fully curtail the 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.

Prior to the curtailment, the refinery had been operating at approximately 80 percent of its annual nameplate capacity of 2.2 million metric tons since January 2023, when the Company reduced production in response to a domestic natural gas shortage in Western Australia due to production challenges experienced by key gas suppliers.

As of March 2024, the refinery had approximately 780 employees and this number will be reduced to approximately 250 in the third quarter of 2024 to manage certain processes that will continue until about the third quarter of 2025. At that time, the employee number will be further reduced to approximately 50.

Alumar Smelter

During the second quarter of 2024, the Company resumed the controlled pace for the restart of the Alumar smelter and continued actions to improve the smelter's overall performance, after the smelter experienced operational instability in the prior quarter. The site was operating at approximately 72 percent of the site's total annual capacity of 268 kmt (Alcoa share) as of June 30, 2024.

San Ciprián Operations

During the second quarter of 2024, Alcoa continued its focus on improving the competitiveness of both the San Ciprián refinery and smelter, while progressing the process for the potential sale of the complex. Alcoa completed the restart of approximately 6 percent of pots at the San Ciprián smelter in the first quarter of 2024, in compliance with the February 2023 updated viability agreement.

Improving the competitiveness of the complex is dependent on finding competitive energy for both the smelter and refinery. While electricity and gas prices have declined since the global energy crisis in 2022, power prices remain uneconomical due to (i) a lack of material indirect carbon dioxide cost compensation from the Spanish government; (ii) substantial transmission costs; and (iii) permitting delays and adjustments to renewable power generation projects associated with two long-term power purchase agreements with renewable energy providers that Alcoa entered into in 2022. Additionally, Alcoa initiated a process for the potential sale of the complex during the first quarter of 2024 which is expected to conclude in the second half of 2024. Any long-term solution for the complex requires the support of the government and workers' representatives.

The refinery and smelter incurred substantial losses in the first half of 2024 and in prior years, which have been funded with internal credit lines that are nearing their limits and for which the operations have no ability to repay. The operations have approximately $100 of available funding with cash on hand and availability under internal credit lines. Although aluminum and alumina prices improved during the first half of 2024, the San Ciprián complex remains unviable based on current and forward market assumptions for delivered energy in Spain and sales prices. While the Company had restricted cash of $86 remaining at June 30, 2024 (see Aluminum below) to be made available for capital improvements at the site and 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 complex, the San Ciprián operations are expected to incur losses in 2024 and Alcoa anticipates that available funding will be exhausted by the end 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 its Warrick Operations site in Indiana that began in October 2023, and incurred restart expenses of $3.

Other Matters

In March 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 Green Finance Framework, which prioritizes climate change mitigation expenditures related to circular or low carbon products, pollution prevention technologies, renewable energy, and water management. The Company is utilizing net proceeds from the issuance, which can be allocated to qualifying expenditures on a two-year look back and three-year look forward, 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 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 net proceeds to significant capital investments in breakthrough technologies as those are not expected to occur within the applicable time period.

During the first quarter of 2024, the Company initiated and fully deployed a productivity and competitiveness program across its global operations and functions. The program is part of the Company's objective to improve overall competitiveness and profitability and includes a target to save approximately 5 percent of operating costs, exclusive of raw materials, energy and transportation costs, which are already under active management and cost control programs. Total savings are expected to approximate $100 on a run rate basis and to be achieved by the first quarter of 2025.

The Company paid a quarterly cash dividend of $0.10 per share of the Company's common stock in June 2024, totaling $18.

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

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
	Sequential			Year-to-date
Statement of Operations	June 30, 2024			March 31, 2024			June 30, 2024		June 30, 2023
Sales	$	2,906			$	2,599		$	5,505		$	5,354
Cost of goods sold (exclusive of expenses below)		2,533				2,404			4,937			4,919
Selling, general administrative, and other expenses		69				60			129			106
Research and development expenses		13				11			24			16
Provision for depreciation, depletion, and amortization		163				161			324			306
Restructuring and other charges, net		18				202			220			173
Interest expense		40				27			67			53
Other (income) expenses, net		(22	)			59			37			60
Total costs and expenses		2,814				2,924			5,738			5,633
Income (loss) before income taxes		92				(325	)		(233	)		(279	)
Provision for (benefit from) income taxes		61				(18	)		43			74
Net income (loss)		31				(307	)		(276	)		(353	)
Less: Net income (loss) attributable to noncontrolling interest		11				(55	)		(44	)		(20	)
Net income (loss) attributable to Alcoa Corporation	$	20			$	(252	)	$	(232	)	$	(333	)


	Quarter ended		Six months ended
Selected Financial Metrics	June 30, 2024		March 31, 2024			June 30, 2024		June 30, 2023
Diluted income (loss) per share attributable to Alcoa Corporation common shareholders	$	0.11		$	(1.41	)	$	(1.29	)	$	(1.87	)
Third-party shipments of alumina (kmt)		2,267			2,397			4,664			4,065
Third-party shipments of aluminum (kmt)		677			634			1,311			1,223
Average realized price per metric ton of alumina	$	399		$	372		$	385		$	367
Average realized price per metric ton of aluminum	$	2,858		$	2,620		$	2,743		$	3,000
Average Alumina Price Index (API)(1)	$	392		$	356		$	374		$	351
Average London Metal Exchange (LME) 15-day lag(2)	$	2,486		$	2,201		$	2,343		$	2,331

(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.

Overview

Sequential period comparison

Net income (loss) attributable to Alcoa Corporation was $20 in the second quarter of 2024 compared with $(252) in the first quarter of 2024. The favorable change of $272 is primarily a result of:

•

Higher average realized price of aluminum and alumina

•

Lower restructuring charges

•

Favorable mark-to-market results on derivative instruments

•

Favorable equity earnings

Partially offset by:

•

Higher taxes on higher earnings

•

Unfavorable currency revaluation impacts

•

Increased interest expense

Year-to-date comparison

Net income (loss) attributable to Alcoa Corporation was $(232) in the six-month period of 2024 compared with $(333) in the six-month period of 2023. The favorable change of $101 is primarily a result of:

•

Favorable raw material and energy costs

•

Lower equity losses

Partially offset by:

•

Lower average realized price of aluminum

•

Unfavorable currency revaluation impacts

•

Decrease in value add product sales

Sales

Sequential period comparison

Sales increased $307 primarily as a result of:

•

Higher average realized price of aluminum and alumina

•

Higher shipments of aluminum

•

Higher volumes and price from bauxite offtake and supply agreements

Partially offset by:

•

Lower shipments of alumina

Year-to-date comparison

Sales increased $151 primarily as a result of:

•

Higher shipments of aluminum and alumina

•

Higher average realized price of alumina

•

Increased offtake from an aluminum joint venture supply agreement

Partially offset by:

•

Lower average realized price of aluminum

•

Lower volumes and price from bauxite offtake and supply agreements

•

Lower trading activities

•

Decrease in value add product sales

Cost of goods sold

Sequential period comparison

Cost of goods sold as a percentage of sales decreased 5% primarily as a result of:

•

Higher average realized price of aluminum and alumina

•

Lower production costs primarily in the Aluminum segment

Partially offset by:

•

Higher energy costs primarily due to unfavorable natural gas prices

Year-to-date comparison

Cost of goods sold as a percentage of sales decreased 2% primarily as a result of:

•

Favorable raw material costs

•

Higher average realized price of alumina

•

Lower energy costs across both segments

Partially offset by:

•

Lower average realized price of aluminum

•

Decrease in value add product sales

•

Higher production costs primarily in the Alumina segment

Selling, general administrative, and other expenses

Selling, general administrative, and other expenses increased $9 in comparison to the first quarter of 2024 and increased $23 in comparison to the six-month period of 2023. Both the sequential and year-to-date increases are primarily a result of higher labor costs.

Provision for depreciation, depletion, and amortization

Sequential period comparison

Depreciation increased $2 primarily as a result of:

•

Higher depreciation due to the write off of assets for projects no longer being pursued

Year-to-date comparison

Depreciation increased $18 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 increased $13 in comparison to the first quarter of 2024 and increased $14 in comparison to the six-month period of 2023. Both the sequential and year-to-date increases are primarily a result of additional interest on the $750 7.125% Senior Notes issued in March 2024.

Other (income) expenses, net

Sequential period comparison

Other (income) expenses, net was $(22) in the second quarter of 2024 compared with $59 in the first quarter of 2024. The favorable change of $81 was primarily a result of:

•

Favorable mark-to-market results on derivative instruments due to higher power prices in the current quarter

•

Increase in equity income from the Ma'aden aluminum joint venture primarily due to higher aluminum prices

•

Lower ELYSIS capital contributions, reducing loss recognition

•

Decrease in equity losses from the Ma'aden bauxite and alumina joint venture primarily due to lower raw material and production costs, and higher alumina prices

Partially offset by:

•

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

Year-to-date comparison

Other (income) expenses, net was $37 in the six-month period of 2024 compared with $60 in the six-month period of 2023. The favorable change of $23 was primarily a result of:

•

Decrease in equity losses from the Ma'aden aluminum joint venture primarily due to the absence of a charge for a utility settlement and higher shipments

•

Mark-to-market results on derivative instruments primarily due to higher power prices in the current year

•

Lower ELYSIS capital contributions, reducing loss recognition

•

Decrease in equity losses from the Ma'aden bauxite and alumina joint venture primarily due to higher shipments, higher alumina prices, and lower production costs

Partially offset by:

•

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

Restructuring and other charges, net

Sequential period comparison

In the second quarter of 2024, Restructuring and other charges, net of $18 primarily related to:

•

$8 for the curtailment of the Kwinana refinery

•

$8 for Wenatchee take-or-pay energy contract

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

•

$197 for the curtailment of the Kwinana refinery

•

$4 for Wenatchee take-or-pay energy contract

Year-to-date comparison

In the six-month period of 2024, Restructuring and other charges, net of $220 primarily related to:

•

$205 for the curtailment of the Kwinana refinery

•

$12 for Wenatchee take-or-pay energy contract

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 restart agreement for the San Ciprián aluminum smelter

•

$21 for the settlement of certain pension benefits

Provision for (benefit from) income taxes

Sequential period comparison

The Provision for income taxes in the second quarter of 2024 was $61 on income before taxes of $92 or 66.3%. In comparison, the first quarter of 2024 Benefit from income taxes was $(18) on a loss before taxes of $(325) or 5.5%.

The increase in tax expense of $79 is primarily attributable to higher income in the jurisdictions where taxes are paid. Additionally, the Company had losses in jurisdictions where it maintains a full tax valuation allowance.

Year-to-date comparison

The Provision for income taxes in the six-month period of 2024 was $43 on a loss before taxes of $(233) or (18.5)%. In comparison, the six-month period of 2023 Provision for income taxes was $74 on a loss before taxes of $(279) or (26.5)%.

The decrease in tax expense of $31 is primarily attributable to lower income in the jurisdictions where taxes are paid.

Noncontrolling interest

Sequential period comparison

Net income (loss) attributable to noncontrolling interest was $11 in the second quarter of 2024 compared with $(55) in the first quarter of 2024. These amounts are entirely related to Alumina Limited's 40% ownership interest in several affiliated operating entities. Alcoa will recognize Net income (loss) attributable to Noncontrolling interest through the closing of the Alumina Limited acquisition.

The change is primarily a result of lower restructuring costs, favorable mark-to-market results on derivative instruments, and higher average realized price of alumina, partially offset by higher production costs and higher taxes.

Year-to-date comparison

Net income (loss) attributable to noncontrolling interest was $(44) in the six-month period of 2024 compared with $(20) in the six-month period of 2023. These amounts are entirely related to Alumina Limited's 40% ownership interest in several affiliated operating entities. Alcoa will recognize Net income (loss) attributable to Noncontrolling interest through the closing of Alumina Limited acquisition.

The change is primarily a result of higher restructuring costs, higher elimination of intercompany profit in inventory, and higher production costs, partially offset by higher average realized price of alumina, lower raw material and energy costs, and favorable mark-to-market results on derivative instruments.

Segment Information

Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. The Company has two operating and reportable segments: (i) Alumina and (ii) Aluminum. 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 Adjusted EBITDA, of these two operating segments to assess performance and allocate resources.

Alumina

Business Update. The average API of $392 per metric ton trended favorably compared to the prior quarter reflecting a 10% sequential increase.

In the second quarter of 2024, Alcoa recorded restructuring charges of $8 related to the curtailment of the refinery including $6 for water management costs and $2 for contract terminations. In the first quarter of 2024, Alcoa recorded restructuring charges of $197 including $123 for water management costs, $41 for employee related costs, $15 for asset retirement obligations, $13 for take-or-pay contracts, and $5 for asset impairments. Related cash outlays of approximately $225 (which includes existing employee related liabilities and asset retirement obligations) are expected through 2025, with approximately $145 to be spent in 2024. The Company spent $22 and $24 against the reserve in the second quarter and six-month period of 2024, respectively.

Capacity.The Alumina segment had a base capacity of 13,843 kmt with 3,204 kmt of curtailed refining capacity. In the second quarter of 2024, curtailed capacity increased 1,752 kmt due to the full curtailment of the Kwinana refinery (see above).

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
	June 30, 2024		March 31, 2024			June 30, 2024		June 30, 2023
Bauxite production (mdmt)		9.5			10.1			19.6		19.9
Third-party bauxite shipments (mdmt)		1.5			1.0			2.5		3.7
Alumina production (kmt)		2,539			2,670			5,209		5,314
Third-party alumina shipments (kmt)		2,267			2,397			4,664		4,065
Intersegment alumina shipments (kmt)		1,025			943			1,968		1,983
Total alumina shipments (kmt)		3,292			3,340			6,632		6,048
Third-party bauxite sales	$	96		$	64		$	160	$	249
Third-party alumina sales		914			897			1,811		1,502
Total segment third-party sales	$	1,010		$	961		$	1,971	$	1,751
Intersegment alumina sales		457			395			852		818
Total sales	$	1,467		$	1,356		$	2,823	$	2,569
Segment Adjusted EBITDA	$	186		$	139		$	325	$	136
Average realized third-party price per metric ton of alumina	$	399		$	372		$	385	$	367
Operating costs	$	1,189		$	1,163		$	2,352	$	2,176
Average cost per metric ton of alumina shipped	$	361		$	348		$	355	$	360

Production

Sequential period comparison

Alumina production decreased 5% primarily as a result of:

•

Full curtailment of the Kwinana refinery in June 2024

Year-to-date comparison

Alumina production decreased 2% primarily as a result of:

•

Full curtailment of the Kwinana refinery in June 2024

•

Reduced production at the Australia refineries due to lower bauxite grade

Partially offset by:

•

Increased production at the Alumar refinery due to the absence of unplanned equipment maintenance

•

Increased production at the San Ciprián refinery as the refinery was operating at 50 percent capacity in the six-month period of 2024 and 30 to 50 percent capacity in the six-month period of 2023

Third-party sales

Sequential period comparison

Third-party sales increased $49 primarily as a result of:

•

Higher average realized price of $27/ton principally driven by a higher average API

•

Higher volumes and price from bauxite offtake and supply agreements

•

Increased trading activity

Partially offset by:

•

Lower shipments of alumina primarily due to the full curtailment of the Kwinana refinery

•

Unfavorable currency impacts

Year-to-date comparison

Third-party sales increased $220 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

•

Higher average realized price of $18/ton principally driven by a higher average API

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

Intersegment sales

Sequential period comparison

Intersegment sales increased $62 primarily as a result of:

•

Higher alumina shipments primarily due to the Warrick smelter restart

•

Higher average API on sales to the Aluminum segment

Year-to-date comparison

Intersegment sales increased $34 primarily as a result of:

•

Higher average API on sales to the Aluminum segment

Partially offset by

•

Lower alumina shipments primarily due to lower production at the Australia refineries

Segment Adjusted EBITDA

Sequential period comparison

Segment Adjusted EBITDA increased $47 primarily as a result of:

•

Higher average realized price of $27/ton principally driven by a higher average API

Partially offset by:

•

Higher production costs primarily related to seasonal maintenance and costs associated with the Kwinana curtailment

•

Higher energy costs primarily due to unfavorable natural gas prices

Year-to-date comparison

Segment Adjusted EBITDA increased $189 primarily as a result of:

•

Favorable raw material costs primarily on lower prices for caustic soda

•

Higher average realized price of $18/ton principally driven by a higher average API

•

Favorable currency impacts

•

Lower energy costs primarily due to favorable natural gas prices

Partially offset by:

•

Higher production costs primarily related to operating certain of the Australia refineries with lower grade bauxite

Forward Look.For the third quarter of 2024 in comparison to the second quarter of 2024, the Alumina segment anticipates increased production costs related to lower bauxite grades in Australia.

The Company expects total 2024 alumina 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, 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 increased sequentially with LME prices on a 15-day lag averaging $2,486 per metric ton in the second quarter of 2024.

In April 2024, the U.S. Treasury, in coordination with the United Kingdom, announced sanctions on Russian aluminum. The sanctions ban imports into the U.S. and the United Kingdom of Russian Federation origin aluminum produced on or after April 13, 2024, and restrict activity at the London Metal Exchange and the Chicago Mercantile Exchange.

In March 2024, Alcoa completed the restart of approximately 54,000 mtpy of capacity at its Warrick Operations site in Indiana that began in October 2023. Alcoa incurred restart expenses of $3 during the first quarter of 2024.

San Ciprián Smelter

In March 2024, Alcoa completed the restart of approximately 6 percent of total pots at the San Ciprián smelter as required by the February 2023 updated viability agreement. The Company incurred restart expenses $2 during the six-month period 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 June 30, 2024 to be made available for capital improvements at the site and smelter restart costs. The workers' representatives have rejected the use of this cash to fund operating losses at 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 costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses.


	Quarter ended			Six months ended
	June 30, 2024			March 31, 2024			June 30, 2024		June 30, 2023
Production (kmt)		543				542			1,085			1,041
Total shipments (kmt)		677				634			1,311			1,223
Third-party aluminum sales	$	1,934			$	1,661		$	3,595		$	3,670
Other(1)		(39	)			(23	)		(62	)		(72	)
Total segment third-party sales	$	1,895			$	1,638		$	3,533		$	3,598
Intersegment sales		3				4			7			7
Total sales	$	1,898			$	1,642		$	3,540		$	3,605
Segment Adjusted EBITDA	$	233			$	50		$	283		$	294
Average realized third-party price per metric ton	$	2,858			$	2,620		$	2,743		$	3,000
Operating costs	$	1,643			$	1,568		$	3,211		$	3,281
Average cost per metric ton of aluminum shipped	$	2,427			$	2,474		$	2,450		$	2,682

(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.

Production

Sequential period comparison

Production was consistent with the first quarter's strong output

Year-to-date comparison

Production increased 4% primarily as a result of:

•

Warrick smelter and Alumar smelter restarts

Third-party sales

Sequential period comparison

Third-party sales increased $257 primarily as a result of:

•

Higher average realized price of $238/ton driven by a higher average LME (on a 15-day lag) and higher regional premiums

•

Higher shipments, primarily due to the timing of shipments and restart of capacity at the Warrick smelter in the first quarter of 2024

Year-to-date comparison

Third-party sales decreased $65 primarily as a result of:

•

Lower average realized price of $257/ton driven by lower regional premiums and the absence of gains from the Alumar smelter restart hedge program which ended in December 2023

•

Lower trading activities

•

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

•

Unfavorable currency impacts

Partially offset by:

•

Higher shipments, primarily due to the Alumar smelter and Warrick smelter restarts

•

Increased offtake from a joint venture supply agreement

Segment Adjusted EBITDA

Sequential period comparison

Segment Adjusted EBITDA increased $183 primarily as a result of:

•

Higher average realized price

Partially offset by:

•

Unfavorable raw material costs primarily on higher average alumina input costs

Year-to-date comparison

Segment Adjusted EBITDA decreased $11 primarily as a result of:

•

Lower average realized price

•

Decrease in value add product sales

Partially offset by:

•

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

•

Lower energy costs, primarily in Brazil

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


		June 30, 2024		March 31, 2024		June 30, 2023
Facility	Country	Capacity(1)		Curtailed		Capacity(1)	Curtailed	Capacity(1)		Curtailed
Portland(2)	Australia		197		35		197		42		197	49
São Luís (Alumar)(3)	Brazil		268		75		268		84		268	118
Baie Comeau	Canada		324		-		324		-		314	-
Bécancour	Canada		350		-		350		-		350	-
Deschambault	Canada		287		-		287		-		287	-
Fjarðaál	Iceland		351		-		351		-		351	-
Lista	Norway		95		31		95		31		95	31
Mosjøen	Norway		200		-		200		-		200	-
San Ciprián(4)	Spain		228		214		228		214		228	228
Massena West	U.S.		130		-		130		-		130	-
Warrick(5)	U.S.		215		54		215		54		269	162
			2,645		409		2,645		425		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)

In the fourth quarter of 2023, the Company began the restart of 16,000 mtpy of previously curtailed capacity at the Portland smelter in 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.

(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, 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 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 also approved the permanent closure of 54,000 mtpy of previously curtailed capacity (which had not operated since 2016).

Forward Look.For the third quarter of 2024 in comparison to the second quarter of 2024, the Aluminum segment expects lower raw material 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, respectively.

Reconciliations of Certain Segment Information

Reconciliation of Total Segment Third-Party Sales to Consolidated Sales


	Quarter ended		Six months ended
	June 30, 2024		March 31, 2024			June 30, 2024		June 30, 2023
Alumina	$	1,010		$	961		$	1,971	$	1,751
Aluminum		1,895			1,638			3,533		3,598
Total segment third-party sales	$	2,905		$	2,599		$	5,504	$	5,349
Other		1			-			1		5
Consolidated sales	$	2,906		$	2,599		$	5,505	$	5,354

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


	Quarter ended			Six months ended
	June 30, 2024			March 31, 2024			June 30, 2024		June 30, 2023
Alumina	$	1,189			$	1,163		$	2,352		$	2,176
Aluminum		1,643				1,568			3,211			3,281
Other(1)		233				198			431			516
Total segment operating costs		3,065				2,929			5,994			5,973
Eliminations(2)		(431	)			(391	)		(822	)		(847	)
Provision for depreciation, depletion, and amortization(3)		(158	)			(155	)		(313	)		(295	)
Other(4)		57				21			78			88
Consolidated cost of goods sold	$	2,533			$	2,404		$	4,937		$	4,919

(1)

Other largely relates to the Aluminum segment's energy product 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 Income (Loss) Attributable to Alcoa Corporation below).

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


	Quarter ended			Six months ended
	June 30, 2024			March 31, 2024			June 30, 2024		June 30, 2023
Total Segment Adjusted EBITDA	$	419			$	189		$	608		$	430
Unallocated amounts:
Transformation(1)		(16	)			(14	)		(30	)		(25	)
Intersegment eliminations		(29	)			(8	)		(37	)		23
Corporate expenses(2)		(41	)			(34	)		(75	)		(54	)
Provision for depreciation, depletion, and amortization		(163	)			(161	)		(324	)		(306	)
Restructuring and other charges, net		(18	)			(202	)		(220	)		(173	)
Interest expense		(40	)			(27	)		(67	)		(53	)
Other income (expenses), net		22				(59	)		(37	)		(60	)
Other(3)		(42	)			(9	)		(51	)		(61	)
Consolidated income (loss) before income taxes		92				(325	)		(233	)		(279	)
(Provision for) benefit from income taxes		(61	)			18			(43	)		(74	)
Net (income) loss attributable to noncontrolling interest		(11	)			55			44			20
Consolidated net income (loss) attributable to Alcoa Corporation	$	20			$	(252	)	$	(232	)	$	(333	)

(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 O to the Consolidated Financial Statements in Part I Item 1 of this Form 10-Q.

Liquidity and Capital Resources

Management believes that the Company's cash on hand, projected cash flows, and liquidity options, combined with its strategic actions, will be adequate to fund its short-term (at least 12 months) and long-term operating and investing needs. The Company plans to opportunistically access liquidity sources to support its cash position and ongoing cash needs. Further, the Company has flexibility related to its use of cash; other than the Alumina Limited debt assumed as of August 1, 2024, the Company has no significant debt maturities until 2027 and no significant cash contribution requirements related to its pension plan obligations. Alcoa is considering potential repayment or refinancing options for the Alumina Limited debt assumed.

Although management believes that Alcoa's projected cash 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 ongoing 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 provided from operations was $64 in the six-month period of 2024 compared with cash used for operations of $176 in the same period of 2023. Notable changes to sources and (uses) of cash included:

•

$124 favorable change in net loss, excluding the impacts from restructuring charges, primarily due to lower raw material and energy costs, partially offset by lower aluminum pricing; and,

•

$183 less income taxes paid on prior year earnings, as well as on lower current year earnings in the jurisdictions where taxes are paid.

During 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. At June 30, 2024, the noncurrent liability resulting from the cumulative interest deductions was $209 (A$312). See description of the tax dispute in Note O 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 $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, 2024, the SPE held unsold customer receivables of $239 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 period of 2024, the Company sold gross customer receivables of $600 and reinvested collections of $584 from previously sold receivables, resulting in net cash proceeds from the financial institution of $16. In the six-month period of 2023, the Company sold gross customer receivables of $174 and reinvested collections of $127 from previously sold receivables, resulting in net cash proceeds from the financial institution of $47. Cash collections from previously sold receivables yet to be reinvested of $89 were included in Accounts payable, trade on the accompanying Consolidated Balance Sheet as of June 30, 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.

Financing Activities

Cash provided from financing activities was $679 in the six-month period of 2024 compared with $16 in the same period of 2023.

The source of cash in the six-month period of 2024 was primarily $737 net proceeds from the bond issuance (see below) and $33 of net contributions from Alumina Limited (see Noncontrolling interest above), partially offset by $37 of dividends paid and $25 of net payments on short-term borrowings (see below).

Short-term Borrowings

During the six-month period of 2024, the Company recorded borrowings of $45 and repurchased $70 of inventory related to these agreements. During the six-month period of 2023, the Company recorded borrowings of $25 and repurchased $15 of inventory related to these agreements.

The cash received and subsequently paid under the inventory repurchase agreements is included in Cash provided from financing activities on the Statement of Consolidated Cash 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 net proceeds of 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 Part I Item 1 of this Form 10-Q.

Credit Facilities

Revolving Credit Facility

The Company has 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 in September 2016, amended and restated in June 2022 and amended 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 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, 2023 for more information on the Revolving Credit Facility.

As of June 30, 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, 2024, and no amounts were borrowed during the six-month periods of 2024 and 2023 under the Revolving Credit Facility.

Japanese Yen Revolving Credit Facility

The Company entered into a $250 revolving credit facility available to be drawn in Japanese yen (the Japanese Yen Revolving Credit Facility) in April 2023. The Japanese Revolving Credit Facility was amended 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. Under the current terms of the January 2024 amendment, the Company agreed to provide collateral for its obligations under the Japanese Yen 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, 2023 for more information on the Japanese Yen Revolving Credit Facility.

As of June 30, 2024, the Company was in compliance with all financial covenants. The Company may access the entire amount of commitments under the Japanese Revolving Credit Facility. There were no borrowings outstanding at June 30, 2024. During the six-month period of 2024, $201 (29,686 JPY) was borrowed and $196 (29,686 JPY) was repaid. No amounts were borrowed during the six-month period of 2023 under the Japanese Yen Revolving Credit Facility.

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

Alumina Limited Revolving Credit Facility

In connection with the acquisition of Alumina Limited, the Company assumed approximately $385 of indebtedness as of August 1, 2024, representing the amount drawn on Alumina Limited's revolving credit facility.

Alumina Limited has a $500 revolving credit facility with tranches maturing in October 2025 ($100), January 2026 ($150), July 2026 ($150), and June 2027 ($100). Alumina Limited's facility contains a financial covenant limiting the incurrence of indebtedness. As of June 30, 2024, Alumina Limited was in compliance with such covenant and could access the remaining commitments under the facility.

Dividend

On July 31, 2024, the Board of Directors declared a quarterly cash dividend of $0.10 per share of the Company's common stock and Series A convertible preferred stock, to be paid on August 29, 2024 to stockholders of record as of the close of business on August 12, 2024. Dividends on Alcoa's common and preferred shares are paid in U.S. dollars. Dividends on CDIs paid in a currency other than U.S. dollar will be determined using foreign currency exchange rates as of August 22, 2024.

On May 9, 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 21, 2024. In June 2024, the Company paid cash dividends of $18.

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 $281 in the six-month period of 2024 compared with $222 for the same period of 2023.

In the six-month period of 2024, the use of cash was primarily attributable to $265 related to capital expenditures and $17 of cash contributions to the ELYSIS partnership.

In the six-month period of 2023, the use of cash was primarily attributable to $198 related to capital expenditures and $36 of cash contributions to the ELYSIS partnership.

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, 2023. Our exposure to market risk has not changed materially since December 31, 2023. Refer to Part I Item 1 of this Form 10-Q in Note M 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, 2024.

(b) Changes in Internal Control over Financial Reporting

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

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, governance, 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.

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, 2023.

In March 2022, the Superior Court of the Virgin Islands issued an amended case management order dividing complaints filed in the Red Dust docket into groups of 50 complaints, designated Groups A through I. The parties selected 10 complaints from Group A to proceed to trial as the Group A lead cases. In May 2024, the Court issued an amended case management order with regard to the Group A lead cases scheduling trials to begin in November 2024. Trials with regard to the Group A lead cases will continue through July 2025. The Court further ordered the parties to participate in mediation on or before August 31, 2024. See "St. Croix Proceedings" under Part I Item 1 of this Form 10-Q in Note O to the Consolidated Financial Statements and "St. Croix Proceedings - Abednego and Abraham cases" under Part I Item 3 Legal Proceedings of Alcoa Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for additional information regarding this legal proceeding.

Environmental Matters

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.

Intalco (Washington) Notice of Violation-In May 2022, the Company received a Notice of Violation (NOV) from the U.S. Environmental Protection Agency (the EPA). The NOV alleges violations under the Clean Air Act at the Company's Intalco smelter from when the smelter was operational. The EPA referred the matter to the U.S. Department of Justice, Environment and Natural Resources Division (the DOJ) in May 2022. The DOJ and the Company agreed to a stipulated settlement, which was filed with the United States District Court for the Western District of Washington at Seattle on July 18, 2024, requiring the Company to pay a civil fine of $5.

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, 2023. The information below includes additional risks relating to the completion of the Alumina Limited acquisition.

The issuance of shares of Alcoa common stock dilutes the ownership position of the Company's existing stockholders and the price of Alcoa common stock may be affected.

The Alumina Limited shareholders now beneficially own approximately 31.5% of the fully diluted shares of Alcoa common stock (including the shares of Alcoa common stock issuable upon conversion of the shares of non-voting convertible preferred stock). Consequently, the Company's existing stockholders own a smaller proportion of Alcoa common stock and of the Company's voting power than the proportion of Alcoa common stock and of the Company's voting power owned before the completion of the Alumina Limited acquisition and, as a result, have less influence on the Company's management and policies.

The issuance of the new shares of Alcoa common stock could have the effect of depressing the market price for Alcoa common stock. In addition, Alumina Limited shareholders may decide not to hold and instead to sell the new shares of Alcoa common stock or CDIs received, which could have the effect of depressing the market price for Alcoa common stock. The price of Alcoa common stock and CDIs may fluctuate significantly in the days following the completion of the acquisition, including as a result of factors over which the Company has no control.

The secondary listing of the Alcoa common stock on the ASX via CDIs could lead to price variations and other impacts on the price of Alcoa common stock.

Alcoa common stock is listed as CDIs on the ASX in addition to Alcoa Corporation's existing primary listing on the New York Stock Exchange (NYSE).

Dual listing may result in price variations between Alcoa Corporation's securities listed on the different exchanges due to a number of factors, including that Alcoa common stock listed on the NYSE is traded in U.S. dollars and CDIs listed on the ASX are traded in Australian dollars, inherently introducing exchange rate volatility, and differences between the trading schedules and time zones of the two exchanges, among other factors. A decrease in the price of Alcoa Corporation's securities in one market may result in a decrease in the price of Alcoa Corporation's securities in the other market. Dual listing also presents the Company with the opportunity to raise additional funds through the issuance of CDIs, which could cause dilution to stockholders.

Alcoa Corporation's exposure to fluctuations in foreign currency exchange rates has increased.

Alcoa Corporation has been subject to foreign currency exchange risk because it conducts business operations in several foreign countries, including Australia, through its foreign subsidiaries or affiliates, which conduct business in their respective local currencies. As the Alumina Limited acquisition is completed, Alcoa Corporation's international operations account for a more significant portion of Alcoa Corporation's overall operations than previously and Alcoa Corporation's exposure to fluctuations in foreign currency exchange rates has increased.

The integration of Alumina Limited will subject Alcoa Corporation to liabilities that exist or may exist at Alumina Limited.

The integration of Alumina Limited with Alcoa Corporation may pose special risks, including write-offs and unanticipated costs or charges, and will subject Alcoa Corporation to liabilities that exist or may exist at Alumina Limited, including liabilities relating to Alumina Limited's revolving credit facility and potential tax liabilities. Although Alcoa Corporation and its advisers conducted due diligence on the operations of Alumina Limited, there can be no guarantee that Alcoa Corporation is aware of all liabilities of Alumina Limited. These liabilities, and any additional risks and uncertainties related to the transaction not currently known to Alcoa Corporation or that Alcoa Corporation may currently deem immaterial or unlikely to occur, could negatively impact Alcoa Corporation's business, financial condition, and results of operations.

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		-		-		-

(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.

Item 5. Other Information.

Trading Arrangements

None of the Company's directors or "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 endedJune 30, 2024.

Item 6. Exhibits.



2.1	Deed of Amendment and Restatement of the Scheme Implementation Deed, dated as of May 20, 2024, by and among Alcoa Corporation, AAC Investments Australia 2 Pty Ltd and Alumina Limited (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed May 20, 2024 (File No. 1-37816))

3.1	Certificate of Designation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed August 1, 2024 (File No. 1-37816))

3.2	Amended and Restated Bylaws of Alcoa Corporation, as adopted on July 31, 2024 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed August 1, 2024 (File No. 1-37816))

10.1	Alcoa Corporate Non-Employee Director Compensation Policy, effective August 1, 2024 (filed herewith)*

10.2	Terms and Conditions for Deferred Fee Restricted Share Units Director Awards, effective August 1, 2024 (filed herewith)*

10.3	Terms and Conditions for Restricted Share Units Annual Director Awards, effective August 1, 2024 (filed herewith)*

10.4	Alcoa Corporation 2016 Deferred Fee Plan for Directors, effective December 2016, as amended and restated on December 5, 2018, effective August 1, 2024 (filed herewith)*

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

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

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 (furnished herewith)

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 (furnished herewith)

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 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.

Certain 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

August 2, 2024						/s/ Molly S. Beerman
Date						Molly S. Beerman
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)


August 2, 2024						/s/ Renee R. Henry
Date						Renee R. Henry
						Senior Vice President and Controller
						(Principal Accounting Officer)

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