Total Segment Profit and Cash Grew Sequentially on Higher Alumina and Aluminum Pricing





Tuesday, January 24, 2017 4:10 pm EST

NEW YORK--(BUSINESS WIRE)--Alcoa Corporation (NYSE:AA):

4Q 2016 Results 1
• Net loss of $125 million, or $(0.68) per share, as a result of costs to streamline portfolio
• Excluding special items, adjusted net income of $26 million, or $0.14 per share
• Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), excluding special items of $335 million, up 18 percent sequentially on rising alumina pricing
• Revenue of $2.5 billion, up 9 percent sequentially, reflecting higher volume in the Company’s rolled products business, and higher alumina pricing
• $853 million cash balance and $1.4 billion of debt for net debt of $0.6 billion as of December 31, 2016


$M, except per share amounts 3Q16 4Q16 FY15 FY16
Revenue $ 2,329 $ 2,537 $ 11,199 $ 9,318
Net loss attributable to Alcoa Corporation $ (10 ) $ (125 ) $ (863 ) $ (400 )
Earnings per share attributable to Alcoa Corporation $ (0.06 ) $ (0.68 ) $ (4.73 ) $ (2.19 )
Adjusted (loss) income $ (95 ) $ 26 $ 103 $ (227 )
Adjusted earnings per share $ (0.52 ) $ 0.14 $ 0.57 $ (1.24 )
Adjusted EBITDA excluding special items $ 284 $ 335 $ 1,840 $ 1,108

1 Prior to November 1, 2016, Alcoa Corporation’s financial statements were prepared on a carve-out basis, as the underlying operations of the Company were previously consolidated as part of Alcoa Corporation’s former parent company’s financial statements. Accordingly, the financial results of Alcoa Corporation for full year 2015 and the first ten months of 2016 (including the third quarter 2016 and the first month of the fourth quarter 2016) were also prepared on a carve-out basis. The carve-out financial statements of Alcoa Corporation are not necessarily indicative of Alcoa Corporation’s combined results of operations, financial position, and cash flows had it been a standalone company during the referenced periods. See the Combined Financial Statements included in Exhibit 99.1 to Alcoa Corporation’s Form 10 registration statement and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2016 filed with the United States Securities and Exchange Commission on October 11, 2016 and December 1, 2016, respectively, for additional information.

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Alcoa Corporation (NYSE:AA), a global leader in bauxite, alumina, and aluminum products, today reported fourth quarter 2016 results that reflect profit growth at the combined segment level and an improved cash position, driven by higher alumina and aluminum pricing.

Since launching as an independent company on November 1, 2016, Alcoa has increased its cash position by $198 million and closed the fourth quarter 2016 with a cash balance of $853 million.

“Alcoa’s first reporting period as a new, standalone, publicly-traded company points to our ability to deliver shareholder value,” said Roy Harvey, Chief Executive Officer of Alcoa. “Rising alumina and aluminum prices improved the bottom line, our alumina segment had exceptional profit growth in a stronger market environment and doubled margins, while our bauxite business also increased profits and reported robust margins. In addition, we continued to streamline our portfolio and generated cash to strengthen the balance sheet.”

Mr. Harvey added: “We’ve entered 2017 focused on our strategic priorities. We will reduce complexity and costs across Alcoa, remain disciplined with cash, and focus on smart investments with strong returns.”

In fourth quarter 2016, Alcoa reported a net loss of $125 million, or $(0.68) per share. Results include $151 million of special items primarily related to the permanent closure of Suralco’s refinery and mines in Suriname and the impairment of Alcoa of Australia Limited’s (AofA) interests in a Western Australia (WA) gas field. Fourth quarter 2016 results compare to a net loss of $10 million, or $(0.06) per share, in third quarter 2016.

Excluding the impact of special items, fourth quarter 2016 adjusted net income was $26 million, or $0.14 per share. In third quarter 2016, Alcoa reported an adjusted net loss of $95 million, or $(0.52) per share, excluding special items.

Alcoa reported fourth quarter 2016 adjusted EBITDA excluding special items of $335 million, up 18 percent from third quarter 2016. Higher alumina and metal prices drove the sequential change in adjusted EBITDA, more than offsetting increased costs primarily tied to energy.

In fourth quarter 2016, Alcoa reported revenue of $2.5 billion, up 9 percent sequentially, reflecting higher volumes in the Company’s rolled products business, as well as rising alumina and aluminum pricing.

In the fourth quarter, the Company achieved a seasonal low of 13 days working capital.

2016 Full-Year Results

In 2016, Alcoa reported a net loss of $400 million, or $(2.19) per share. Excluding special items, the Company reported an adjusted net loss of $227 million, or $(1.24) per share. The full year net loss was driven largely by costs associated with portfolio restructuring decisions, including the closure of the Warrick smelter and the Suralco refinery and mines, and the impairment of the WA gas field.

Adjusted EBITDA excluding special items for 2016 was $1.1 billion, compared to $1.8 billion in 2015, due to lower alumina and aluminum pricing during the first three quarters and incremental costs to operate the Warrick, IN rolling mill as a cold metal plant, partially offset by net productivity improvements. Revenue in 2016 was $9.3 billion, down 17 percent from 2015, reflecting lower pricing and volumes in alumina and aluminum, slightly offset by higher third-party bauxite shipments.

In 2016, Alcoa invested in return-seeking capital projects of $82 million, and controlled sustaining capital expenditures to $322 million. Return on capital in 2016 was 5.3 percent.

4Q 2016 Business Update

In the fourth quarter, Alcoa continued to successfully build its third-party bauxite business and to further streamline its portfolio.

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