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8-K - FORM 8-K - Alcoa Corp | d292009d8k.htm |
3 Quarter Supplemental Financial Information Alcoa Corporation December 1, 2016 Exhibit 99.1 rd |
This
presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as
anticipates, believes, could,
estimates, expects, forecasts, goal,
intends, may, outlook, plans, projects, seeks, sees, should, targets, will, would, or other words of
similar meaning. All statements by Alcoa Corporation that reflect expectations,
assumptions or projections about the future, other than statements of
historical fact, are forward-looking statements, including, without limitation,
forecasts concerning global demand growth for aluminum, supply/demand
balances; statements, projections or forecasts of future financial results or operating
performance; and statements about strategies, outlook, business and
financial prospects. Forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and changes in
circumstances that are difficult to predict. Although Alcoa Corporation believes that
the expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these expectations will be
attained and it is possible that actual results may differ materially from
those indicated by these forward-looking statements due to a variety of risks and
uncertainties. Such risks and uncertainties include, but are not limited to: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal
Exchange- based prices and premiums, as applicable, for primary
aluminum, alumina, and other products, and fluctuations in indexed-based and spot prices for alumina; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served by Alcoa
Corporation; (d) the impact of changes in foreign currency exchange rates
on costs and results; (e) increases in energy costs; (f) changes in discount rates or investment returns on pension assets; (g) the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in
profitability and margins, fiscal discipline, or strengthening of
competitiveness and operations anticipated from restructuring programs and productivity improvement, cash sustainability, technology advancements, and other initiatives; (h) the inability to realize expected benefits, in each case as planned and
by targeted completion dates, from acquisitions, divestitures, facility
closures, curtailments, or expansions, or joint ventures; (i) political, economic, and regulatory risks in the countries in which Alcoa Corporation operates or sells products; (j) the outcome of contingencies, including legal proceedings, government
or regulatory investigations, and environmental remediation; (k) the
impact of cyber attacks and potential information technology or data security breaches; and (l) the other risk factors discussed in Alcoa Corporations registration statement on Form 10 and other reports filed by Alcoa
Corporation with the U.S. Securities and Exchange Commission. Alcoa
Corporation disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law. Market projections are subject to the risks discussed above
and other risks in the market.
Forward-looking statements
Important information 2 |
This
presentation includes unaudited non-GAAP financial measures (GAAP means accounting principles generally accepted in the United States of America) as defined in Regulation G under the Securities Exchange Act of 1934, including Adjusted EBITDA. Alcoa Corporation believes that the
presentation of non-GAAP financial measures helps investors by
providing additional information with respect to the operating performance of Alcoa Corporation and the ability of Alcoa Corporation to meet its financial obligations. The presentation of non-GAAP financial measures is not
intended to be a substitute for, and should not be considered in
isolation from, the financial measures reported in accordance with GAAP. See the appendix for a reconciliation of the non-GAAP financial measures included in this presentation to their comparable GAAP financial measures.
Alcoa Corporation has not
provided a reconciliation of any forward-looking non-GAAP financial measures to
the most directly comparable GAAP financial measures due primarily to the
variability and complexity in making accurate forecasts and projections, as not all of the information for a quantitative reconciliation is available to the company without unreasonable effort. References to historical EBITDA herein means adjusted EBITDA, for which we have provided calculations and
reconciliations in the Appendix.
Non-GAAP financial measures
Important information (continued)
3 |
$M,
Except Realized Prices and Per Share Amounts 3Q15
2Q16 3Q16 Prior Year Change Sequential Change Realized Aluminum Price ($ / MT) - Cast Products segment $1,906 $1,854 $1,873 ($33) $19 Realized Alumina Price ($ / MT) - Alumina segment $314 $265 $248 ($66) ($17) Revenue $2,679 $2,323 $2,329 ($350) $6 Cost of Goods Sold $2,239 $1,938 $1,964 ($275) $26 COGS % Revenue 83.6% 83.4% 84.3% 0.7% pts. 0.9% pts SG&A and R&D Expenses $109 $97 $100 ($9) $3 SG&A and R&D % Revenue 4.1% 4.2% 4.3% 0.2% pts. 0.1% pts EBITDA $331 $288 $265 ($66) ($23) Other Expenses / (Income), Net $4 ($23) ($106) ($110) ($83) Restructuring and Other Charges $54 $8 $17 ($37) $9 Effective Tax Rate 550.0% 115.3% 86.8% (463.2% pts.) (28.5% pts.) Net (Loss) Income ($63) ($9) $14 $77 $23 Less: Net Income attributable to noncontrolling interest $61 $43 $20 ($41) ($23) Net Loss attributable to Alcoa Corp. ($124) ($52) ($6) $118 $46 Pro Forma Earnings Per Share ($0.68) ($0.28) ($0.04) $0.64 $0.24 Quarterly income statement summary 4 1. SG&A refers to selling, general administrative, and other expenses and R&D refers to research and development expenses. 2Q16 R&D
spend is lower by $10M compared to previous 2Q16 reports; the previously
reported amount for R&D included an immaterial error due to an over-allocation of $10M of expenses. 2. See appendix for EBITDA
reconciliations. 3. 3Q16 includes a $118 gain on the sale of property near the Intalco
smelter. 1
3 2 |
Key financial metrics Three months ending September 30, 2016 3Q16 Segment financial summary 5 5 Segment 3 Party Revenue $M $M Adj. EBITDA 1,2 $M Adj. EBITDA Margin % Bauxite $93 $285 $97 34.0% Alumina $585 $902 $74 8.2% Aluminum $918 $61 6.6% Cast Products $1,294 $1,385 $71 5.1% Rolled Products $237 $237 $3 1.3% Energy $77 $118 $45 38.1% Corporate $43 ($1,516) ($86) Transformation $43 $43 ($24) Corp. Pension / OPEB ($8) Impact of LIFO and metal price lag $6 Other ($1,559) ($60) Alcoa Corporation Total $2,329 $2,329 $265 11.4% 1. Before intersegment eliminations. 2. See appendix for adjusted EBITDA reconciliations. 3. Represents the elimination of revenue generated from product sales from one Alcoa Corporation segment to another (e.g., sales from the Aluminum
segment to the Cast Products segment).
rd 1 Total Revenue 3 |
Key financial metrics Nine months ending September 30, 2016 2016 Nine months YTD segment financial summary 6 6 Segment 3 Party Revenue $M $M Adj. EBITDA 1,2 $M Adj. EBITDA Margin % Bauxite $224 $773 $273 35.3% Alumina $1,682 $2,612 $189 7.2% Aluminum $15 $2,822 $144 5.1% Cast Products $3,864 $4,061 $215 5.3% Rolled Products $683 $683 $18 2.6% Energy $209 $336 $122 36.3% Corporate $104 ($4,506) ($234) Transformation $104 $104 ($89) Corp. Pension / OPEB ($36) Impact of LIFO and metal price lag $37 Other ($4,610) ($146) Alcoa Corporation Total $6,781 $6,781 $727 10.7% 1. Before intersegment eliminations. 2. See appendix for adjusted EBITDA reconciliations. 3. Represents the elimination of revenue generated from product sales from one Alcoa Corporation segment to another (e.g., sales from the Aluminum
segment to the Cast Products segment).
rd 1 Total Revenue 3 |
Reconciliations |
3Q16
Segment adjusted EBITDA reconciliation 8
($ in millions) For the three months ended September 30, 2016 Alcoa Corporation - Segments Bauxite Alumina Aluminum Cast Products Rolled Products Energy After-tax operating income (ATOI) $55 $16 $10 $44 ($9) $23 Add: Depreciation, depletion, and amortization 21 48 72 10 5 15 Equity loss (income) - 9 (5) 2 10 - Income taxes 22 7 (9) 15 (3) 7 Other (1) (6) (7) - - - Adjusted EBITDA $97 $74 $61 $71 $3 $45 Total sales $285 $902 $918 $1,385 $237 $118 Adjusted EBITDA margin 34.0% 8.2% 6.6% 5.1% 1.3% 38.1% Alcoa Corporations definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an
add-back for depreciation, depletion, and amortization. Net margin is
equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and
other non-operating items. Adjusted EBITDA is a non-GAAP
financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa Corporations operating performance and the Companys ability to meet its financial obligations. The Adjusted EBITDA presented
may not be comparable to similarly titled measures of other companies. |
Nine
months segment adjusted EBITDA reconciliation 9
($ in millions) For the nine months ended September 30, 2016 Alcoa Corporation - Segments Bauxite Alumina Aluminum Cast Products Rolled Products Energy After-tax operating income (ATOI) $156 $21 ($16) $133 ($25) $59 Add: Depreciation, depletion, and amortization 57 143 222 31 17 43 Equity loss (income) - 30 (12) 5 31 - Income taxes 61 7 (43) 46 (5) 20 Other (1) (12) (7) - - - Adjusted EBITDA $273 $189 $144 $215 $18 $122 Total sales $773 $2,612 $2,822 $4,061 $683 $336 Adjusted EBITDA margin 35.3% 7.2% 5.1% 5.3% 2.6% 36.3% Alcoa Corporations definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an
add-back for depreciation, depletion, and amortization. Net margin is
equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. The Other line in the table above includes gains/losses on asset sales and
other non-operating items. Adjusted EBITDA is a non-GAAP
financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Alcoa Corporations operating performance and the Companys ability to meet its financial obligations. The Adjusted EBITDA presented
may not be comparable to similarly titled measures of other companies. |
Adjusted EBITDA reconciliation
10 (in millions) Sep YTD 2016 Q3 2016 Q2 2016 Q3 2015 Sales Sales to unrelated parties $6,028 $2,075 $2,061 $2,445 Sale to related parties 753 254 262 234 Total sales $6,781 $2,329 $2,323 $2,679 Adjusted EBITDA Net Loss attributable to Alcoa Corporation $(261) $(6) $(52) $(124) Add: Net income attributable to non-controlling interest 58 20 43 61 Provision for income taxes 178 92 68 77 Other (income) expenses, net (90) (106) (23) 4 Interest expense 197 67 66 69 Restructuring and other charges 109 17 8 54 Provision for depreciation, depletion, and amortization 536 181 178 190 Adjusted EBITDA $727 $265 $288 $331 Alcoa Corporations definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin
plus an add-back for depreciation, depletion, and amortization.
Net margin is equivalent to Sales minus the following items: Cost of goods
sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation, depletion, and amortization. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this
measure is meaningful to investors because Adjusted EBITDA provides
additional information with respect to Alcoa Corporations operating
performance and the Companys ability to meet its financial obligations. The
Adjusted EBITDA presented may not be comparable to similarly titled
measures of other companies. |