FORM8-K ALCOACORPORATION

Transcription

1 UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C FORM8-K CURRENTREPORT PursuanttoSection13or15(d)of TheSecuritiesExchangeActof1934 DateofReport(Dateofearliesteventreported):October17,(October11,) ALCOACORPORATION (Exactnameofregistrantasspecifiedinitscharter) Delaware (Stateorotherjurisdiction (Commission (IRSEmployer ofincorporation) FileNumber) IdentificationNo.) 201IsabellaStreet,Suite500,Pittsburgh,Pennsylvania (Addressofprincipalexecutiveoffices) (ZipCode) (Registrant stelephonenumber,includingareacode) Notapplicable (Formernameorformeraddress,ifchangedsincelastreport) ChecktheappropriateboxbelowiftheForm8-Kfilingisintendedtosimultaneouslysatisfythefilingobligationoftheregistrantunderanyofthefollowing provisions: WrittencommunicationspursuanttoRule425undertheSecuritiesAct(17CFR ) SolicitingmaterialpursuanttoRule14a-12undertheExchangeAct(17CFR240.14a-12) Pre-commencementcommunicationspursuanttoRule14d-2(b)undertheExchangeAct(17CFR240.14d-2(b)) Pre-commencementcommunicationspursuanttoRule13e-4(c)undertheExchangeAct(17CFR240.13e-4(c)) IndicatebycheckmarkwhethertheregistrantisanemerginggrowthcompanyasdefinedinRule405oftheSecuritiesActof1933( ofthischapter)or Rule12b-2oftheSecuritiesExchangeActof1934( b-2ofthischapter). Emerginggrowthcompany Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanynewor revisedfinancialaccountingstandardsprovidedpursuanttosection13(a)oftheexchangeact.

2 Item2.02ResultsofOperationsandFinancialCondition. OnOctober17,,AlcoaCorporation(the Company )issuedapressreleaseannouncingitsthirdquarterfinancialresults.acopyofthepress releaseisattachedheretoasexhibit99.1andisincorporatedbyreferenceintothisitem2.02. TheinformationcontainedinthisItem2.02,includingExhibit99.1attachedhereto,shallnotbedeemed filed forpurposesofsection18ofthesecurities ExchangeActof1934,asamended,norshallitbedeemedincorporatedbyreferenceintoanyfilingmadeundertheSecuritiesActof1933,asamended,exceptas expresslysetforthbyspecificreferenceinsuchfiling. Item5.02DepartureofDirectorsorCertainOfficers;ElectionofDirectors;AppointmentofCertainOfficers;CompensatoryArrangementsof CertainOfficers. (b)onoctober11,,thecompanyandmr.tómasm.sigurðssonmutuallydeterminedthat,effectivenovember1,(the EffectiveDate ),Mr. Sigurðsson will assume the role of Senior Vice President, Strategic Alliances, having primary responsibility for managing and developing the Company s key strategicrelationships,andwillnolongerserveasthecompany schiefoperatingofficer.mr.sigurðssonwillcontinuetoreporttothechiefexecutiveofficer. AspartofareorganizationtofurtheremphasizetheimportanceoftheCompany soperationsanditsoperator-centricphilosophy, asoftheeffectivedate, the presidents of the Company s three business segments will report directly to the Chief Executive Officer and the position of Chief Operating Officer will be eliminated. Item8.01OtherEvents. OnOctober17,,theCompanyannouncedthatitsBoardofDirectorsauthorizedacommonstockrepurchaseprogramunderwhichtheCompanymay purchaseupto$200millionofitsoutstandingcommonstock,dependingoncashflowavailability,marketconditions,andotherfactors.repurchasesunderthe programmaybemadeusingavarietyofmethods,whichmayincludeopenmarketpurchases,privatelynegotiatedtransactions,orpursuanttoa10b5-1plan.this programdoesnothaveapredeterminedexpirationdate.thecompanyintendstoretiretherepurchasedsharesofcommonstock.asofseptember30,,the Companyhad186,490,966issuedandoutstandingsharesofcommonstock. Item9.01FinancialStatementsandExhibits. (d)exhibits.thefollowingisfurnishedasanexhibittothisreport: Exhibit number Description 99.1 PressreleaseofAlcoaCorporationdatedOctober17, 2

3 SIGNATURES PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned hereuntodulyauthorized. ALCOACORPORATION Date: October17, By: /s/jeffreyd.heeter 3 JeffreyD.Heeter ExecutiveVicePresident,GeneralCounsel andsecretary

4 Exhibit99.1 AlcoaCorporationReportsThirdQuarterResults Company Announces $200 million Stock Repurchase Program PITTSBURGH--(BUSINESSWIRE)--October17,--AlcoaCorporation(NYSE:AA): Netlossof$41million,or$0.22pershare,includespreviouslyannouncedactionsonpensionandotherpostemploymentbenefits(OPEB) Excludingspecialitems,adjustednetincomeof$119million,or$0.63pershare $795millionofadjustedearningsbeforeinterest,tax,depreciation,andamortization(EBITDA)excludingspecialitems Revenueof$3.4billion $1.0billioncashbalanceand$1.8billionofdebt,fornetdebtof$0.8billion,asofSeptember30, Continuingtoreducecomplexity,drivereturns,andstrengthenthebalancesheet;used$194millioninavailablecashinthird-quartertoreducenetpension liabilityanddebt;pensionandopebobligationsnowat$2.2billion,downfrom$3.5billionatyear-end2017 Tightenedtherangeforfull-yearprojectionofadjustedEBITDAexcludingspecialitemstobetween$3.1billionand$3.2billion,fromtheprior quarter sestimateof$3.0billionto$3.2billion Projectingfull-yearglobaldeficitsforbothaluminaandaluminumin;surplusforbauxite LaunchedformalconsultationprocessforcollectivedismissalsofemployeesattwoSpanishsmelters Strengtheningorganizationtosupportoperator-centricapproach M, except per share amounts 3Q17 2Q18 3Q18 Revenue $ 2,964 $ 3,579 $ 3,390 Netincome(loss)attributabletoAlcoaCorporation $ 113 $ 75 $ (41) EarningspershareattributabletoAlcoaCorporation $ 0.60 $ 0.39 $ (0.22) Adjustednetincome $ 135 $ 286 $ 119 Adjustedearningspershare $ 0.72 $ 1.52 $ 0.63 AdjustedEBITDAexcludingspecialitems 2 $ 582 $ 904 $ Based on actual YTD results; outlook for unpriced sales at $2,000 LME, $500 API, $0.20 Midwest premium and updated regional premiums, and currencies. 2 On January 1,, Alcoa Corporation adopted guidance issued by the Financial Accounting Standards Board to the presentation of net periodic benefit cost related to pension and other postretirement benefit plans. This guidance requires the non-service cost components of net periodic benefit cost to be reported separately from the service cost component in an entity s income statement. Additionally, this guidance is required to be applied retrospectively. Accordingly, previously reported amounts for Cost of goods sold, Selling, general administrative, and other expenses, and Other expenses (income), net on Alcoa Corporation s consolidated income statement have been recast to reflect these changes. As a result, previously reported amounts for Adjusted EBITDA on both a consolidated basis and for each of the Company s three segments have been updated to reflect these changes. See the financial schedules to this release for additional information.

5 AlcoaCorporation(NYSE:AA),agloballeaderinbauxite,alumina,andaluminumproducts,todayreportedthirdquarterresultsandannounceda$200 millioncommonstockrepurchaseprogramaspartofthecompany scapitalallocationframework. Inthethirdquarterof,Alcoaalsoused$194millioninavailablecashtofurtherreduceitsnetpensionliabilityanddebtandfinishedthequarterwithacash balanceof$1.0billiononseptember30,.thisyear,thecompanyhasreduceditsnetpensionandopebliabilityto$2.2billionasofseptember30,down from$3.5billionatyear-end2017. Today sstockbuybackannouncement,oursmallernetpensionandopebliability,andourresultssincelaunchingalcoacorporationnearlytwoyearsagoall pointtothesuccessofourstrategicpriorities, saidpresidentandchiefexecutiveofficerroyharvey. Byreducingcomplexity,drivingreturns,andstrengtheningthebalancesheet,we vemadealcoaamuchstrongercompanyevenascommoditymarketsremain volatile, Harveysaid. We repleasedtoannounceaprogramtoreturncashtostockholders,andwelookforwardtoimprovingourcompanyfurtheras comestoanend. AlcoatightenedtheCompany sprojectionforfull-yearadjustedebitdaexcludingspecialitemstorangebetween$3.1billionand$3.2billion. 1 Thelowendof theforecastis$100millionhigherthanthepriorquarter sestimate.theupdatedoutlookreflectsrecentmarketprices,includingregionalpremiums,costsofraw materials,energy,andexpectedoperationalperformance. Inthirdquarter,Alcoareportedanetlossof$41million,or$0.22pershare,comparedtonetincomeof$75million,or$0.39pershare,insecondquarter.Thethirdquarterresultsincludeanegativeimpactof$160millionforspecialitems,dueprimarilytoa$174millionnetsettlementcharge(non-cash)from additionalactionsonu.s.pensionandopebobligations. Excludingtheimpactofspecialitems,thirdquarteradjustednetincomewas$119million,or$0.63pershare,down58percentsequentiallyfrom$286 million,or$1.52pershare. Inthirdquarter,Alcoareported$795millionofadjustedEBITDAexcludingspecialitems,down12percentfrom$904millioninsecondquarter, primarilyduetoloweraluminumprices. Alcoareportedthirdquarterrevenueof$3.4billion,down5percentsequentially,primarilyduetolowerrealizedaluminumpricesanddecreasedaluminum productshipments,somewhatoffsetbyhigherrealizedaluminapricesandfavorablepricingforenergysales. Cashfromoperationswas$288millionandfreecashflowwas$206million;bothreflect$100millioninadditionalcontributionsmadetocertainU.S.defined benefitpensionplansinthequarter.alsointhethirdquarterof,cashusedforfinancingactivitieswas$280million,whichincludes$94millionfortheearly repaymentofthemajorityoftheremainingoutstandingloansfrombrazil snationalbankforeconomicandsocialdevelopment,andcashusedforinvesting activitieswas$83million. AlcoaendedthequarteronSeptember30withcashonhandof$1.0billionanddebtof$1.8billion,fornetdebtof$0.8billion.TheCompanyreported26days workingcapital,a9-dayincreasefromthirdquarter2017,reflectinghigherrawmaterialcostsininventoryandlowerdayspayableoutstanding. CommonStockRepurchaseProgram TheCompanytodayannouncedthatitsBoardofDirectorsauthorizedacommonstockrepurchaseprogramunderwhichAlcoamaypurchaseupto$200millionof itsoutstandingcommonstock,dependingoncashflowavailability,marketconditions,andotherfactors.thisprogramdoesnothaveapredeterminedexpiration date. TheCompanyintendstoretiretherepurchasedsharesofcommonstock.AsofSeptember30,,theCompanyhad186,490,966issuedandoutstandingshares ofcommonstock. 2

6 MarketUpdate TheCompanycontinuestoprojectafull-yearglobaldeficitforbothaluminumandaluminaandasurplusforbauxite. Inaluminum,theCompanyexpectsaglobaldeficitrangingbetween1.0millionand1.4millionmetrictons,downfromlastquarter sestimateofbetween1.1 millionand1.5millionmetrictons.globalaluminumdemandgrowthisprojectedtobebetween3.75and4.75percentin,downfromthesecondquarter estimateofbetween4.25and5.25percent,drivenbychina. Inalumina,Alcoaisprojectingahigherglobaldeficitofbetween400thousandand1.2millionmetrictons,comparedtolastquarter sdeficitexpectationof between200thousandand1.0millionmetrictons. TheglobalmarketforbauxiteisexpectedtobeinasurplusforfullyearwithincreasedstockpilegrowthdespitehigherdemandfromChina. SpainCollectiveDismissalProcess AlcoatodayannounceditsintentiontobeginaformalconsultationprocessforcollectivedismissalsthatwouldaffectallemployeesatitsAvilésandLaCoruña aluminumplantsinspain,whicharetheleastproductivewithinthealcoasystemduetotheirinherentstructuralissues.avilésemploys317employeesandla Coruña369.PerSpanishlaw,Alcoawillinitiateamandatory30-dayconsultationperiodwiththeworkers representativestoachievethebestpossibleoutcomefor thecompanyanditsworkforce. AnanalysisofAlcoa soperationsinspainfoundthatorganizationalimprovementscouldbeachievedifthecompanyceasedproductionatitsavilésandla CoruñafacilitiesandreorganizedproductionatasingleplantinSanCiprián,whichproducesbothaluminaandaluminum. OrganizationalChanges TofurthersupportAlcoa soperationsandthecompany soperator-centricapproach,alcoaannouncesthat,effectivenovember1,,thepresidentsofits Bauxite,Alumina,andAluminumsegmentswillreporttoHarvey. Asofthesamedate,TómasSigurðssonwillassumetheroleofSeniorVicePresident,StrategicAlliances.Sigurðsson,whowillcontinuetoreporttoHarvey,will haveprimaryresponsibilityformanaginganddevelopingthecompany skeystrategicrelationships.sigurðssonwillnolongerserveasthecompany schief OperatingOfficer,andtherolewillbeeliminated. ConferenceCall Alcoawillholditsquarterlyconferencecallat5:00p.m.EasternDaylightTime(EDT)onWednesday,October17,topresentthirdquarterfinancialresults anddiscussthebusiness,thecapitalallocationprogramandmarketconditions. ThecallwillbewebcastviatheCompany shomepageonwww.alcoa.com.presentationmaterialsforthecallwillbeavailableforviewingonthesamewebsiteat approximately4:15p.m.edtonoctober17.callinformationandrelateddetailsareavailableunderthe Investors sectionofwww.alcoa.com. DisseminationofCompanyInformation Alcoaintendstomakefutureannouncementsregardingcompanydevelopmentsandfinancialperformancethroughitswebsite, AboutAlcoaCorporation Alcoa(NYSE:AA)isaglobalindustryleaderinbauxite,alumina,andaluminumproducts,andisbuiltonafoundationofstrongvaluesandoperatingexcellence datingbacknearly130yearstotheworld-changingdiscoverythatmadealuminumanaffordableandvitalpartofmodernlife.sincedevelopingthealuminum industry,andthroughoutourhistory,ourtalentedalcoanshavefollowedonwithbreakthroughinnovationsandbestpracticesthathaveledtoefficiency,safety, sustainability,andstrongercommunitieswhereverweoperate. 3

7 Forward-LookingStatements Thispressreleasecontainsstatementsthatrelatetofutureeventsandexpectationsand,assuch,constituteforward-lookingstatementswithinthemeaningofthe PrivateSecuritiesLitigationReformActof1995.Forward-lookingstatementsincludethosecontainingsuchwordsas anticipates, believes, could, estimates, expects, forecasts, goal, intends, may, outlook, plans, projects, seeks, sees, should, targets, will, would, orotherwords ofsimilarmeaning.allstatementsbyalcoacorporationthatreflectexpectations,assumptionsorprojectionsaboutthefuture,otherthanstatementsofhistorical fact,areforward-lookingstatements,including,withoutlimitation,forecastsconcerningglobaldemandgrowthforbauxite,alumina,andaluminum,and supply/demandbalances;statements,projectionsorforecastsoffutureortargetedfinancialresultsoroperatingperformance;statementsaboutstrategies,outlook, andbusinessandfinancialprospects;andstatementsaboutreturnofcapital.thesestatementsreflectbeliefsandassumptionsthatarebasedonalcoacorporation s perceptionofhistoricaltrends,currentconditions,andexpectedfuturedevelopments,aswellasotherfactorsthatmanagementbelievesareappropriateinthe circumstances.forward-lookingstatementsarenotguaranteesoffutureperformanceandaresubjecttoknownandunknownrisks,uncertainties,andchangesin circumstancesthataredifficulttopredict.althoughalcoacorporationbelievesthattheexpectationsreflectedinanyforward-lookingstatementsarebasedon reasonableassumptions,itcangivenoassurancethattheseexpectationswillbeattainedanditispossiblethatactualresultsmaydiffermateriallyfromthose indicatedbytheseforward-lookingstatementsduetoavarietyofrisksanduncertainties.suchrisksanduncertaintiesinclude,butarenotlimitedto:(a)material adversechangesinaluminumindustryconditions,includingglobalsupplyanddemandconditionsandfluctuationsinlondonmetalexchange-basedpricesand premiums,asapplicable,forprimaryaluminumandotherproducts,andfluctuationsinindexed-basedandspotpricesforalumina;(b)deteriorationinglobal economicandfinancialmarketconditionsgenerally;(c)unfavorablechangesinthemarketsservedbyalcoacorporation;(d)theimpactofchangesinforeign currencyexchangeratesoncostsandresults;(e)increasesinenergycosts;(f)declinesinthediscountratesusedtomeasurepensionliabilitiesorlower-thanexpectedinvestmentreturnsonpensionassets,orunfavorablechangesinlawsorregulationsthatgovernpensionplanfunding;(g)theinabilitytoachieve improvementinprofitabilityandmargins,costsavings,cashgeneration,revenuegrowth,fiscaldiscipline,orstrengtheningofcompetitivenessandoperations anticipatedfromoperationalandproductivityimprovements,cashsustainability,technologyadvancements,andotherinitiatives;(h)theinabilitytorealize expectedbenefits,ineachcaseasplannedandbytargetedcompletiondates,fromacquisitions,divestitures,facilityclosures,curtailments,restarts,expansions,or jointventures;(i)political,economic,trade,andregulatoryrisksinthecountriesinwhichalcoacorporationoperatesorsellsproducts;(j)labordisputesandwork stoppages;(k)theoutcomeofcontingencies,includinglegalproceedings,governmentorregulatoryinvestigations,andenvironmentalremediation;(l)theimpact ofcyberattacksandpotentialinformationtechnologyordatasecuritybreaches;and(m)theotherriskfactorsdescribedinitem1aofalcoacorporation sform 10-KforthefiscalyearendedDecember31,2017andotherreportsfiledbyAlcoaCorporationwiththeU.S.SecuritiesandExchangeCommission(SEC).Alcoa Corporationdisclaimsanyobligationtoupdatepubliclyanyforward-lookingstatements,whetherinresponsetonewinformation,futureeventsorotherwise, exceptasrequiredbyapplicablelaw.marketprojectionsaresubjecttotherisksdescribedaboveandotherrisksinthemarket. Non-GAAPFinancialMeasures SomeoftheinformationincludedinthisreleaseisderivedfromAlcoaCorporation sconsolidatedfinancialinformationbutisnotpresentedinalcoa Corporation sfinancialstatementspreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheunitedstatesofamerica(gaap).certainofthese dataareconsidered non-gaapfinancialmeasures undersecregulations.alcoacorporationbelievesthatthepresentationofnon-gaapfinancialmeasuresis usefultoinvestorsbecausesuchmeasuresprovidebothadditionalinformationabouttheoperatingperformanceofalcoacorporationandinsightontheabilityof AlcoaCorporationtomeetitsfinancialobligationsbyadjustingthemostdirectlycomparableGAAPfinancialmeasurefortheimpactof,amongothers, special items asdefinedbythecompany,non-cashitemsinnature,and/ornonoperatingexpenseorincomeitems.thepresentationofnon-gaapfinancialmeasuresis notintendedtobeasubstitutefor,andshouldnotbeconsideredinisolationfrom,thefinancialmeasuresreportedinaccordancewithgaap.reconciliationstothe mostdirectlycomparablegaapfinancialmeasuresandmanagement srationalefortheuseofthenon-gaapfinancialmeasurescanbefoundintheschedulesto thisrelease. ThisreleaseincludesarangeofforecastedAdjustedEBITDAfortheCompany.AlcoaCorporationhasnotprovidedareconciliationofthisforward-looking non-gaapfinancialmeasuretothemostdirectlycomparablegaapfinancialmeasureforthefollowingreasons.thecompany sfinancialresultsareheavily dependentonmarket-drivenfactors,suchaslme-basedpricesforaluminum,index-andspot-basedpricesforalumina,andforeigncurrencyexchangerates.as such,thecompanymayexperiencesignificantvolatilityonadailybasisrelatedtoitsforecastedadjustedebitda.managementappliesestimatedsensitivities, suchasthoserelatingtoaluminumandaluminapricesandforeigncurrencyexchangerates,tothecomponentsthatcompriseadjustedebitda.however,a similaranalysiscannotbeperformedrelatingtothecomponentsnecessarytoreconcileadjustedebitdatothemostdirectlycomparablegaapfinancial measurewithoutunreasonableeffortduetotheadditionalvariabilityandcomplexityassociatedwithforecastingsuchitems.consequently,managementbelieves suchreconciliationwouldimplyadegreeofprecisionthatwouldbeconfusingand/orpotentiallymisleadingtoinvestors. 4

8 AlcoaCorporationandsubsidiaries StatementofConsolidatedOperations(unaudited) (dollarsinmillions,exceptper-shareamounts) Quarterended September30, June30, September30, 2017 Sales $ 2,964 $ 3,579 $ 3,390 Costofgoodssold(exclusiveofexpensesbelow)(1) 2,340 2,632 2,534 Selling,generaladministrative,andotherexpenses(1) Researchanddevelopmentexpenses Provisionfordepreciation,depletion,andamortization Restructuringandothercharges (10) Interestexpense Otherexpenses,net(1) Totalcostsandexpenses 2,676 3,169 2,984 Incomebeforeincometaxes Provisionforincometaxes Netincome Less:Netincomeattributabletononcontrollinginterest NETINCOME(LOSS)ATTRIBUTABLETOALCOACORPORATION $ 113 $ 75 $ (41) EARNINGSPERSHAREATTRIBUTABLETOALCOACORPORATIONCOMMONSHAREHOLDERS: Basic: Netincome(loss) $ 0.61 $ 0.40 $ (0.22) Averagenumberofshares 184,594, ,398, ,479,038 Diluted: Netincome(loss) $ 0.60 $ 0.39 $ (0.22) Averagenumberofshares 187,155, ,708, ,479,038 (1) OnJanuary1,,AlcoaCorporationadoptedguidanceissuedbytheFinancialAccountingStandardsBoardtothepresentationofnetperiodicbenefitcostrelatedtopensionandother postretirementbenefitplans.thisguidancerequiresthatanentityreporttheservicecostcomponentofnetperiodicbenefitcostinthesamelineitem(s)onitsincomestatementasother compensationcostsarisingfromservicesrenderedbythepertinentemployeesduringareportingperiod.theothercomponentsofnetperiodicbenefitcost(seenotentotheconsolidated FinancialStatementsincludedinPartIIItem8oftheCompany sannualreportonform10-kfortheyearendeddecember31,2017)arerequiredtobereportedseparatelyfromthe servicecostcomponent.inotherwords,theseothercomponentsmaybeaggregatedandpresentedasaseparatelineitemortheymaybereportedinexistinglineitemsontheincome statementotherthansuchlineitemsthatincludetheservicecostcomponent.previously,alcoacorporationreportedallcomponentsofnetperiodicbenefitcost,exceptforcertain settlements,curtailments,andspecialterminationbenefits,incostofgoodssold(businessemployees)andselling,generaladministrative,andotherexpenses(corporateemployees) consistentwiththelocationofothercompensationcostsrelatedtotherespectiveemployees.thenon-servicecostcomponentsnotedasexceptionsarereportedinrestructuringandother charges,asapplicable.uponadoptionofthisguidance,managementbeganreportingthenon-servicecostcomponentsofnetperiodicbenefitcost,exceptforcertainsettlements, curtailments,andspecialterminationbenefitsthatwillcontinuetobereportedinrestructuringandothercharges,inotherexpenses,netonthecompany sstatementofconsolidated Operations.ForthequartersendedSeptember30,andJune30,,thenon-servicecostcomponentsreportedinOtherexpenses,netwas$32and$39,respectively.Additionally,the StatementofConsolidatedOperationsforthequarterendedSeptember30,2017wasrecasttoreflectthereclassificationofthenon-servicecostcomponentsofnetperiodicbenefitcostto Otherexpenses,netfrombothCostofgoodssoldandSelling,generaladministrative,andotherexpenses.Asaresult,forthequarterendedSeptember30,2017,Costofgoodssold decreasedby$21andotherexpenses,netchangedby$21frompreviouslyreportedamounts(thedecreasetoselling,generaladministrative,andotherexpenseswasnotmaterial). 5

9 AlcoaCorporationandsubsidiaries StatementofConsolidatedOperations(unaudited),continued (dollarsinmillions,exceptper-shareamounts) Ninemonthsended September30, 2017 Sales $ 8,478 $ 10,059 Costofgoodssold(exclusiveofexpensesbelow)(1) 6,652 7,547 Selling,generaladministrative,andotherexpenses(1) Researchanddevelopmentexpenses Provisionfordepreciation,depletion,andamortization Restructuringandothercharges Interestexpense Other(income)expenses,net(1) (3) 32 Totalcostsandexpenses 7,535 8,831 Incomebeforeincometaxes 943 1,228 Provisionforincometaxes Netincome Less:Netincomeattributabletononcontrollinginterest NETINCOMEATTRIBUTABLETOALCOACORPORATION $ 413 $ 184 EARNINGSPERSHAREATTRIBUTABLETOALCOACORPORATIONCOMMONSHAREHOLDERS: Basic: Netincome $ 2.24 $ 0.99 Averagenumberofshares 184,212, ,259,129 Diluted: Netincome $ 2.21 $ 0.97 Averagenumberofshares 186,656, ,655,070 Commonstockoutstandingattheendoftheperiod 184,969, ,490,966 (1) OnJanuary1,,AlcoaCorporationadoptedguidanceissuedbytheFinancialAccountingStandardsBoardtothepresentationofnetperiodicbenefitcostrelatedtopensionandother postretirementbenefitplans.thisguidancerequiresthatanentityreporttheservicecostcomponentofnetperiodicbenefitcostinthesamelineitem(s)onitsincomestatementasother compensationcostsarisingfromservicesrenderedbythepertinentemployeesduringareportingperiod.theothercomponentsofnetperiodicbenefitcost(seenotentotheconsolidated FinancialStatementsincludedinPartIIItem8oftheCompany sannualreportonform10-kfortheyearendeddecember31,2017)arerequiredtobereportedseparatelyfromthe servicecostcomponent.inotherwords,theseothercomponentsmaybeaggregatedandpresentedasaseparatelineitemortheymaybereportedinexistinglineitemsontheincome statementotherthansuchlineitemsthatincludetheservicecostcomponent.previously,alcoacorporationreportedallcomponentsofnetperiodicbenefitcost,exceptforcertain settlements,curtailments,andspecialterminationbenefits,incostofgoodssold(businessemployees)andselling,generaladministrative,andotherexpenses(corporateemployees) consistentwiththelocationofothercompensationcostsrelatedtotherespectiveemployees.thenon-servicecostcomponentsnotedasexceptionsarereportedinrestructuringandother charges,asapplicable.uponadoptionofthisguidance,managementbeganreportingthenon-servicecostcomponentsofnetperiodicbenefitcost,exceptforcertainsettlements, curtailments,andspecialterminationbenefitsthatwillcontinuetobereportedinrestructuringandothercharges,inother(income)expenses,netonthecompany sstatementof ConsolidatedOperations.FortheninemonthsendedSeptember30,,thenon-servicecostcomponentsreportedinOtherexpenses,netwas$109.Additionally,theStatementof ConsolidatedOperationsfortheninemonthsendedSeptember30,2017wasrecasttoreflectthereclassificationofthenon-servicecostcomponentsofnetperiodicbenefitcosttoOther (income),netfrombothcostofgoodssoldandselling,generaladministrative,andotherexpenses.asaresult,fortheninemonthsendedseptember30,2017,costofgoodssolddecreased by$61,selling,generaladministrative,andotherexpensesdecreasedby$3,andother(income),netchangedby$64frompreviouslyreportedamounts. 6

10 AlcoaCorporationandsubsidiaries ConsolidatedBalanceSheet(unaudited) (inmillions) December31, September30, 2017 ASSETS Currentassets: Cashandcashequivalents $ 1,358 $ 1,022 Receivablesfromcustomers 811 1,017 Otherreceivables Inventories 1,453 1,666 Fairvalueofderivativeinstruments Prepaidexpensesandothercurrentassets(1) Totalcurrentassets 4,238 4,193 Properties,plants,andequipment 23,046 21,839 Less:accumulateddepreciation,depletion,andamortization 13,908 13,484 Properties,plants,andequipment,net 9,138 8,355 Investments 1,410 1,381 Deferredincometaxes Fairvalueofderivativeinstruments Othernoncurrentassets 1,719 1,615 Totalassets $ 17,447 $ 16,185 LIABILITIES Currentliabilities: Accountspayable,trade $ 1,898 $ 1,711 Accruedcompensationandretirementcosts Taxes,includingincometaxes Fairvalueofderivativeinstruments Othercurrentliabilities Long-termdebtduewithinoneyear 16 4 Totalcurrentliabilities 3,252 3,004 Long-termdebt,lessamountduewithinoneyear 1,388 1,820 Accruedpensionbenefits 2,341 1,210 Accruedotherpostretirementbenefits 1, Assetretirementobligations Environmentalremediation Fairvalueofderivativeinstruments 1, Noncurrentincometaxes Othernoncurrentliabilitiesanddeferredcredits Totalliabilities 10,649 8,900 EQUITY AlcoaCorporationshareholders equity: Commonstock 2 2 Additionalcapital 9,590 9,656 Retainedearnings Accumulatedothercomprehensiveloss (5,182) (4,740) TotalAlcoaCorporationshareholders'equity 4,523 5,216 Noncontrollinginterest 2,275 2,069 Totalequity 6,798 7,285 Totalliabilitiesandequity $ 17,447 $ 16,185 (1) Thislineitemincludes$7and$4ofrestrictedcashasofDecember31,2017andSeptember30,,respectively. 7

11 AlcoaCorporationandsubsidiaries StatementofConsolidatedCashFlows(unaudited) (inmillions) Ninemonthsended September30, 2017 CASHFROMOPERATIONS Netincome $ 615 $ 659 Adjustmentstoreconcilenetincometocashfromoperations: Depreciation,depletion,andamortization Deferredincometaxes 64 (16) Equityearnings,netofdividends 1 (11) Restructuringandothercharges Netgainfrominvestingactivities assetsales (115) Netperiodicpensionbenefitcost Stock-basedcompensation Other 31 (64) Changesinassetsandliabilities,excludingeffectsofacquisitions,divestitures,andforeigncurrencytranslationadjustments: (Increase)inreceivables (112) (209) (Increase)ininventories (102) (279) Decreaseinprepaidexpensesandothercurrentassets 62 3 Increase(Decrease)inaccountspayable,trade 109 (135) (Decrease)inaccruedexpenses (320) (288) Increaseintaxes,includingincometaxes Pensioncontributions(1) (82) (940) (Increase)innoncurrentassets (88) (89) Increase(Decrease)innoncurrentliabilities 11 (58) CASHPROVIDEDFROM(USEDFOR)OPERATIONS 769 (87) FINANCINGACTIVITIES Cashpaidtoformerparentcompanyrelatedtoseparation(2) (247) Netchangeinshort-termborrowings(originalmaturitiesofthreemonthsorless) 2 Additionstodebt(originalmaturitiesgreaterthanthreemonths)(1) Paymentsondebt(originalmaturitiesgreaterthanthreemonths) (55) (105) Proceedsfromtheexerciseofemployeestockoptions Contributionsfromnoncontrollinginterest Distributionstononcontrollinginterest (244) (566) Other (6) (8) CASH(USEDFOR)PROVIDEDFROMFINANCINGACTIVITIES (453) 6 INVESTINGACTIVITIES Capitalexpenditures (255) (251) Proceedsfromthesaleofassetsandbusinesses 243 Additionstoinvestments (44) (6) CASHUSEDFORINVESTINGACTIVITIES(3) (56) (257) EFFECTOFEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTSANDRESTRICTEDCASH (3) 8 (1) Netchangeincashandcashequivalentsandrestrictedcash(3) 268 (339) Cashandcashequivalentsandrestrictedcashatbeginningofyear(3) 859 1,365 CASHANDCASHEQUIVALENTSANDRESTRICTEDCASHATENDOFPERIOD (3) $ 1,127 $ 1,026 (1) OnMay17,,AlcoaNederlandHoldingB.V.,awholly-ownedsubsidiaryofAlcoaCorporation,issued$500in6.125%seniornotesdue2028.Thegrossproceedsfromthedebt issuancewereusedtomakediscretionarycontributionstothreeofalcoacorporation su.s.definedbenefitpensionplans.accordingly,fortheninemonthsendedseptember30,,the Pensioncontributionslineitemincludesacashoutflowof$500andtheAdditionstodebtlineitemincludesacashinflowof$492(netofan$8initialpurchasersdiscount). (2) OnNovember1,2016,AlcoaCorporationseparatedfromitsformerparentcompany(nownamedArconicInc.)intoastandalone,publicly-tradedcompany.Inaccordancewiththetermsof therelatedseparationanddistributionagreement,alcoacorporationpaidtoarconicinc.thenetafter-taxproceedsof$243fromthesaleoftheyadkinhydroelectricproject. (3) OnJanuary1,,AlcoaCorporationadoptedguidanceissuedbytheFinancialAccountingStandardsBoardtothepresentationofrestrictedcashinthestatementofcashflows.This guidancerequiresthatrestrictedcashbeaggregatedwithcashandcashequivalentsinboththebeginning-of-periodandend-of-periodlineitemsatthebottomofthestatementofcashflows. Previously,thechangeinrestrictedcashbetweenthebeginning-of-periodandend-ofperiodwasreflectedaseitheraninvesting,financing,operating,ornon-cashactivitybasedonthe underlyingnatureofthetransaction.accordingly,forthecompany sstatementofconsolidatedcashflowsfortheninemonthsendedseptember30,,thecashandcashequivalents andrestrictedcashatbeginningofyearandcashandcashequivalentsandrestrictedcashatendofperiodlineitemsincluderestrictedcashof$7and$4,respectively.additionally,the Company sstatementofconsolidatedcashflowsfortheninemonthsendedseptember30,2017wasrecasttoreflectthischangeinpresentation.asaresult,thecashandcashequivalents andrestrictedcashatbeginningofyearandcashandcashequivalentsandrestrictedcashatendofperiodlineitemsincluderestrictedcashof$6and$8,respectively.thechangeof$2is reflectedintheeffectofexchangeratechangesoncashandcashequivalentsandrestrictedcashlineitem. 8

12 AlcoaCorporationandsubsidiaries SegmentInformation(unaudited) (dollarsinmillions,exceptrealizedprices;drymetrictonsinmillions(mdmt);metrictonsinthousands(kmt)) 1Q17 2Q17 3Q17 4Q Q18 2Q18 3Q18 Bauxite: Production(1)(mdmt) Third-partyshipments(mdmt) Intersegmentshipments(mdmt) Third-partysales $ 70 $ 80 $ 104 $ 79 $ 333 $ 47 $ 77 $ 67 Intersegmentsales $ 219 $ 208 $ 221 $ 227 $ 875 $ 249 $ 226 $ 224 AdjustedEBITDA(2),(3) $ 110 $ 97 $ 112 $ 105 $ 424 $ 110 $ 100 $ 106 Depreciation,depletion,andamortization $ 18 $ 19 $ 24 $ 21 $ 82 $ 29 $ 27 $ 27 Alumina: Production(kmt) 3,211 3,249 3,305 3,331 13,096 3,173 3,227 3,160 Third-partyshipments(kmt) 2,255 2,388 2,271 2,306 9,220 2,376 2,285 2,233 Intersegmentshipments(kmt) 947 1,152 1,153 1,223 4,475 1,097 1,031 1,083 Averagerealizedthird-partypricepermetrictonofalumina $ 325 $ 314 $ 314 $ 406 $ 340 $ 385 $ 467 $ 493 Third-partysales $ 734 $ 749 $ 713 $ 937 $ 3,133 $ 914 $1,068 $1,101 Intersegmentsales $ 361 $ 384 $ 398 $ 580 $ 1,723 $ 454 $ 536 $ 544 AdjustedEBITDA(2),(3) $ 297 $ 227 $ 203 $ 562 $ 1,289 $ 392 $ 638 $ 660 Depreciationandamortization $ 49 $ 53 $ 53 $ 52 $ 207 $ 53 $ 49 $ 48 Equityincome(loss) $ 1 $ (6) $ (5) $ 5 $ (5) $ (1) $ 14 $ 10 Aluminum: Primaryaluminumproduction(kmt) , Third-partyaluminumshipments(4)(kmt) , Averagerealizedthird-partypricepermetrictonofprimaryaluminum $2,080 $2,199 $2,237 $2,365 $ 2,224 $2,483 $2,623 $2,465 Third-partysales $1,806 $1,988 $2,090 $2,143 $ 8,027 $2,111 $2,413 $2,198 Intersegmentsales $ 4 $ 3 $ 9 $ 5 $ 21 $ 4 $ 4 $ 6 AdjustedEBITDA(2),(3) $ 217 $ 234 $ 315 $ 246 $ 1,012 $ 153 $ 231 $ 73 Depreciationandamortization $ 101 $ 108 $ 106 $ 104 $ 419 $ 106 $ 108 $ 91 Equity(loss)income $ (7) $ 3 $ (7) $ (8) $ (19) $ $ (8) $ (5) ReconciliationoftotalsegmentAdjustedEBITDAtoconsolidatednetincome(loss)attributabletoAlcoa Corporation: TotalsegmentAdjustedEBITDA(2) $ 624 $ 558 $ 630 $ 913 $ 2,725 $ 655 $ 969 $ 839 Unallocatedamounts: Transformation(5),(6) (20) (28) (11) 10 (49) (2) (1) 1 Corporateinventoryaccounting(5),(7) (17) 14 (9) (95) (107) 31 (32) (17) Corporateexpenses(3),(8) (33) (34) (33) (31) (131) (27) (26) (22) Provisionfordepreciation,depletion,andamortization (179) (190) (194) (187) (750) (194) (192) (173) Restructuringandothercharges (10) (12) 10 (297) (309) 19 (231) (177) Interestexpense (26) (25) (26) (27) (104) (26) (32) (33) Otherincome(expenses),net(3) 79 (28) (48) (30) (27) (21) (9) (2) Other(3),(5),(9) (18) (31) (40) (89) (23) (36) (10) Consolidatedincomebeforeincometaxes , Provisionforincometaxes (110) (99) (119) (272) (600) (138) (180) (251) Netincomeattributabletononcontrollinginterest (83) (63) (56) (140) (342) (124) (155) (196) Consolidatednetincome(loss)attributabletoAlcoaCorporation $ 225 $ 75 $ 113 $ (196) $ 217 $ 150 $ 75 $ (41) 9

13 ThedifferencebetweensegmenttotalsandconsolidatedamountsisinCorporate. (1) Theproductionamountsdonotincludeadditionalbauxite(approximately3mdmtperannum)thatAlcoaWorldAluminaandChemicalsisentitledtoreceive(i.e.anamountinexcessofits equityownershipinterest)fromcertainotherpartnersatthemineinguinea. (2) AlcoaCorporation sdefinitionofadjustedebitda(earningsbeforeinterest,taxes,depreciation,andamortization)isnetmarginplusanadd-backfordepreciation,depletion,and amortization.netmarginisequivalenttosalesminusthefollowingitems:costofgoodssold;selling,generaladministrative,andotherexpenses;researchanddevelopmentexpenses;and Provisionfordepreciation,depletion,andamortization.TheAdjustedEBITDApresentedmaynotbecomparabletosimilarlytitledmeasuresofothercompanies. (3) OnJanuary1,,AlcoaCorporationadoptedguidanceissuedbytheFinancialAccountingStandardsBoardtothepresentationofnetperiodicbenefitcostrelatedtopensionandother postretirementbenefitplans.thisguidancerequiresthenon-servicecostcomponentsofnetperiodicbenefitcosttobereportedseparatelyfromtheservicecostcomponentinanentity s incomestatement.additionally,thisguidanceisrequiredtobeappliedretrospectively.accordingly,previouslyreportedamountsforcostofgoodssold,selling,generaladministrative,and otherexpenses,andotherexpenses(income),netonalcoacorporation sstatementofconsolidatedoperationshavebeenrecasttoreflectthesechanges.asaresult,previouslyreported amountsforadjustedebitdaonbothaconsolidatedbasisandforeachofthecompany sthreesegmentshavebeenupdatedtoreflectthesechanges.seefootnote1tothestatementof ConsolidatedOperationsincludedinthisreleaseforadditionalinformation. (4) TheAluminumsegment sthird-partyaluminumshipmentsarecomposedofbothprimaryaluminumandflat-rolledaluminum. (5) Effectiveinthefirstquarterof,managementelectedtochangethepresentationofcertainlineitemsinthereconciliationoftotalsegmentAdjustedEBITDAtoconsolidatednetincome (loss)attributabletoalcoacorporationtoprovideadditionaltransparencytothenatureofthesereconcilingitems.accordingly,transformation(seefootnote6),whichwaspreviously reportedwithinother,ispresentedasaseparatelineitem.additionally,impactoflifo(lastin,firstout)andmetalpricelag,whichwerepreviouslyreportedasseparatelineitems,arenow combinedandreportedinanewlineitemlabeledcorporateinventoryaccounting(seefootnote7).also,theimpactofintersegmentprofiteliminations,whichwaspreviouslyreported withinother,isreportedinthenewcorporateinventoryaccountinglineitem.theapplicableinformationforallpriorperiodspresentedwasrecasttoreflectthesechanges. (6) Transformationincludes,amongotheritems,theAdjustedEBITDAofpreviouslyclosedoperations. (7) CorporateinventoryaccountingiscomposedoftheimpactsofLIFOinventoryaccounting,metalpricelag,andintersegmentprofiteliminations.Metalpricelagdescribesthetiming differencecreatedwhentheaveragepriceofmetalsolddiffersfromtheaveragecostofthemetalwhenpurchasedbyalcoacorporation srolledaluminumoperations.ingeneral,whenthe priceofmetalincreases,metalpricelagisfavorable,andwhenthepriceofmetaldecreases,metalpricelagisunfavorable. (8) Corporateexpensesarecomposedofgeneraladministrativeandotherexpensesofoperatingthecorporateheadquartersandotherglobaladministrativefacilities,aswellasresearchand developmentexpensesofthecorporatetechnicalcenter. (9) OtherincludescertainitemsthatimpactCostofgoodssoldandSelling,generaladministrative,andotherexpensesonAlcoaCorporation sstatementofconsolidatedoperationsthatarenot includedintheadjustedebitdaofthereportablesegments,includingthosedescribedas Otherspecialitems (seefootnote2tothereconciliationofadjustedincomewithincalculation offinancialmeasuresincludedinthisrelease). 10

14 AlcoaCorporationandsubsidiaries CalculationofFinancialMeasures(unaudited) (inmillions,exceptper-shareamounts) AdjustedIncome Income(Loss) DilutedEPS (4) Quarterended Quarterended September30, June30, September30, September30, June30, September30, Netincome(loss)attributabletoAlcoaCorporation $ 113 $ 75 $ (41) $ 0.60 $ 0.39 $ (0.22) Specialitems: Restructuringandothercharges (10) Discretetaxitems(1) Otherspecialitems(2) (42) Taximpact(3) (11) (43) (1) Noncontrollinginterestimpact(3) (6) (13) Subtotal NetincomeattributabletoAlcoaCorporation asadjusted $ 135 $ 286 $ NetincomeattributabletoAlcoaCorporation asadjustedisanon-gaapfinancialmeasure.managementbelievesthatthismeasureismeaningfultoinvestorsbecausemanagementreviews theoperatingresultsofalcoacorporationexcludingtheimpactsofrestructuringandothercharges,discretetaxitems,andotherspecialitems(collectively, specialitems ).Therecanbeno assurancesthatadditionalspecialitemswillnotoccurinfutureperiods.tocompensateforthislimitation,managementbelievesthatitisappropriatetoconsiderbothnetincome(loss) attributabletoalcoacorporationdeterminedundergaapaswellasnetincomeattributabletoalcoacorporation asadjusted. (1) Discretetaxitemsincludethefollowing: forthequarterendedseptember30,2017,anetchargeforseveralsmallitems; forthequarterendedjune30,,anetchargeforseveralsmallitems;and forthequarterendedseptember30,,achargetoestablishareserverelatedtoanoutstandingincometaxdisputeinvolvingaformerspanishconsolidatedtaxgrouppreviouslyowned byalcoacorporation sformerparentcompany($30)andanetbenefitforseveralsmallitems($4). (2) Otherspecialitemsincludethefollowing: forthequarterendedseptember30,2017,costsrelatedtothepartialrestartofthewarrick(indiana)smelter($17),settlementoflegacytaxmattersinbrazil($11),anetunfavorablechange incertainmark-to-marketenergyderivativeinstruments($11),afavorabletaximpactrelatedtotheinterimperiodtreatmentofoperationallossesincertainjurisdictionsforwhichnotax benefitwasrecognized($8),anunfavorableimpactduetothenear-termpowermarketexposureasaresultofrenegotiatingahedgingcontractrelatedtoforecastedfuturespotmarketpower purchasesfortheportlandsmelter($8),andafavorabletaximpactresultingfromthedifferencebetweenalcoa sconsolidatedestimatedannualeffectivetaxrateandthestatutoryrates applicabletospecialitems($3); forthequarterendedjune30,,alossonacontractorarbitrationmatter($29),anetunfavorablechangeincertainmark-to-marketenergyderivativeinstruments($6),afavorabletax impactrelatedtotheinterimperiodtreatmentofoperationallossesincertainjurisdictionsforwhichnotaxbenefitwasrecognized($5),costsrelatedtothepartialrestartofthewarrick (Indiana)smelter($2),andcosts,primarilycontractorservices,relatedtoaworkstoppageatanon-U.S.smelter($2);and forthequarterendedseptember30,,afavorabletaximpactresultingfromthedifferencebetweenalcoa sconsolidatedestimatedannualeffectivetaxrateandthestatutoryrates applicabletospecialitems($47),anunfavorabletaximpactrelatedtotheinterimperiodtreatmentofoperationallossesincertainjurisdictionsforwhichnotaxbenefitwasrecognized($9), anetfavorablechangeincertainmark-to-marketenergyderivativeinstruments($8),costs,primarilycontractorservices,relatedtoaworkstoppageatanon-u.s.smelter($3),andcosts relatedtothepartialrestartofthewarrick(indiana)smelter($1). (3) Thetaximpactonspecialitemsisbasedontheapplicablestatutoryratesinthejurisdictionswherethespecialitemsoccurred.Thenoncontrollinginterestimpactonspecialitemsrepresents Alcoa spartner sshareofcertainspecialitems. (4) Inanygivenperiod,theaveragenumberofsharesapplicabletodilutedEPSforNetincome(loss)attributabletoAlcoaCorporationcommonshareholdersmayexcludecertainshare equivalentsastheireffectisanti-dilutive.however,certainoftheseshareequivalentsmaybecomedilutiveintheepscalculationapplicabletonetincomeattributabletoalcoacorporation commonshareholders asadjustedduetoalargerand/orpositivenumerator.specifically: forthequarterendedseptember30,2017,noadditionalshareequivalentsweredilutivebasedonnetincomeattributabletoalcoacorporationcommonshareholders asadjusted,resulting inadilutedaveragenumberofsharesof187,155,231; forthequarterendedjune30,,noadditionalshareequivalentsweredilutivebasedonnetincomeattributabletoalcoacorporationcommonshareholders asadjusted,resultingina dilutedaveragenumberofsharesof188,708,013;and forthequarterendedseptember30,,shareequivalentsassociatedwithoutstandingemployeestockoptionsandawardsweredilutivebasedonnetincomeattributabletoalcoa Corporationcommonshareholders asadjusted,resultinginadilutedaveragenumberofsharesof188,726,

15 AlcoaCorporationandsubsidiaries CalculationofFinancialMeasures(unaudited),continued (inmillions) AdjustedEBITDA Quarterended September30, June30, September30, 2017 Netincome(loss)attributabletoAlcoaCorporation $ 113 $ 75 $ (41) Add: Netincomeattributabletononcontrollinginterest Provisionforincometaxes Otherexpenses,net(1) Interestexpense Restructuringandothercharges (10) Provisionfordepreciation,depletion,andamortization AdjustedEBITDA(1) $ 546 $ 874 $ 791 Specialitems(2) AdjustedEBITDA,excludingspecialitems(1) $ 582 $ 904 $ 795 AlcoaCorporation sdefinitionofadjustedebitda(earningsbeforeinterest,taxes,depreciation,andamortization)isnetmarginplusanadd-backfordepreciation,depletion,and amortization.netmarginisequivalenttosalesminusthefollowingitems:costofgoodssold;selling,generaladministrative,andotherexpenses;researchanddevelopmentexpenses;and Provisionfordepreciation,depletion,andamortization.AdjustedEBITDAisanon-GAAPfinancialmeasure.Managementbelievesthatthismeasureismeaningfultoinvestorsbecause AdjustedEBITDAprovidesadditionalinformationwithrespecttoAlcoaCorporation soperatingperformanceandthecompany sabilitytomeetitsfinancialobligations.theadjusted EBITDApresentedmaynotbecomparabletosimilarlytitledmeasuresofothercompanies. (1) OnJanuary1,,AlcoaCorporationadoptedguidanceissuedbytheFinancialAccountingStandardsBoardtothepresentationofnetperiodicbenefitcostrelatedtopensionandother postretirementbenefitplans.thisguidancerequiresthenon-servicecostcomponentsofnetperiodicbenefitcosttobereportedseparatelyfromtheservicecostcomponentinanentity s incomestatement.additionally,thisguidanceisrequiredtobeappliedretrospectively.accordingly,previouslyreportedamountsforcostofgoodssold,selling,generaladministrative,and otherexpenses,andotherexpenses(income),netonalcoacorporation sstatementofconsolidatedoperationshavebeenrecasttoreflectthesechanges.asaresult,forthequarterended September30,2017,Otherexpenses,netchangedby$21.Moreover,previouslyreportedamountsforAdjustedEBITDAandAdjustedEBITDA,excludingspecialitemshavebeenupdated toreflectthesechanges.seefootnote1tothestatementofconsolidatedoperationsincludedinthisreleaseforadditionalinformation. (2) Specialitemsincludethefollowing(seereconciliationofAdjustedIncomeaboveforadditionalinformation): forthequarterendedseptember30,2017,costsrelatedtothepartialrestartofthewarrick(indiana)smelter($17),settlementoflegacytaxmattersinbrazil($11),andanunfavorable impactduetothenear-termpowermarketexposureasaresultofrenegotiatingahedgingcontractrelatedtoforecastedfuturespotmarketpowerpurchasesfortheportlandsmelter($8); forthequarterendedjune30,,alossonacontractorarbitrationmatter($26),costsrelatedtothepartialrestartofthewarrick(indiana)smelter($2),andcosts,primarilycontractor services,relatedtoaworkstoppageatanon-u.s.smelter($2);and forthequarterendedseptember30,,costs,primarilycontractorservices,relatedtoaworkstoppageatanon-u.s.smelter($3)andcostsrelatedtothepartialrestartofthewarrick (Indiana)smelter($1). 12

16 AlcoaCorporationandsubsidiaries CalculationofFinancialMeasures(unaudited),continued (inmillions) FreeCashFlow Quarterended September30, June30, September30, 2017 * Cashfromoperations $384 $(430) $288 Capitalexpenditures (96) (95) (82) Freecashflow $288 $(525) $206 FreeCashFlowisanon-GAAPfinancialmeasure.Managementbelievesthatthismeasureismeaningfultoinvestorsbecausemanagementreviewscashflowsgeneratedfromoperationsafter takingintoconsiderationcapitalexpenditures,whicharebothnecessarytomaintainandexpandalcoacorporation sassetbaseandexpectedtogeneratefuturecashflowsfromoperations.itis importanttonotethatfreecashflowdoesnotrepresenttheresidualcashflowavailablefordiscretionaryexpendituressinceothernon-discretionaryexpenditures,suchasmandatorydebt servicerequirements,arenotdeductedfromthemeasure. * CashfromoperationsforthequarterendedJune30,includesa$500cashoutflowfordiscretionarycontributionsmadetothreeofAlcoaCorporation su.s.definedbenefitpension plans.the$500wasfundedwiththegrossproceedsof6.125%seniornotesdue2028issuedinmay. NetDebt June30, September30, Long-termdebtduewithinoneyear $13 $4 Long-termdebt,lessamountduewithinoneyear 1,916 1,820 Totaldebt $1,929 $1,824 Less:Cashandcashequivalents 1,089 1,022 Netdebt $840 $802 Netdebtisanon-GAAPfinancialmeasure.ManagementbelievesthatthismeasureismeaningfultoinvestorsbecausemanagementassessesAlcoaCorporation sleveragepositionafter consideringavailablecashthatcouldbeusedtorepayoutstandingdebt. CONTACT: AlcoaCorporation InvestorContact: JamesDwyer, James.Dwyer@alcoa.com or MediaContact: MonicaOrbe, Monica.Orbe@alcoa.com 13