Alcoa 8-K Signals Potential Restructuring or Asset Disposal

TL;DR

**Alcoa filed an 8-K on Jan 8 for exit/disposal costs, signaling potential restructuring.**

AI Summary

Alcoa Corporation filed an 8-K on January 8, 2024, to report an event related to 'Cost Associated with Exit or Disposal Activities' and 'Financial Statements and Exhibits'. This filing indicates that Alcoa is likely undergoing a restructuring or asset disposal, which could impact its financial performance. For investors, this matters because such activities can lead to one-time charges, affecting short-term earnings, but potentially improving long-term efficiency and profitability by streamlining operations.

Why It Matters

This filing suggests Alcoa is making strategic changes to its operations, which could lead to improved efficiency or, conversely, significant one-time costs. Investors should monitor for details on the scope and financial impact of these activities.

Risk Assessment

Risk Level: medium — The filing indicates potential restructuring, which can involve both opportunities for efficiency and risks of significant one-time costs or operational disruptions.

Analyst Insight

A smart investor would closely monitor Alcoa's upcoming financial reports for specific details on the nature and financial impact of these 'Exit or Disposal Activities' to assess long-term strategic benefits versus short-term costs.

Key Numbers

• $0.01 — par value per share (par value of Alcoa's Common Stock)

Key Players & Entities

• Alcoa Corporation (company) — the registrant filing the 8-K
• January 8, 2024 (date) — date of earliest event reported
• New York Stock Exchange (company) — exchange where Alcoa's Common Stock is registered
• AA (company) — trading symbol for Alcoa's Common Stock
• $0.01 (dollar_amount) — par value per share of Common Stock

Forward-Looking Statements

• Alcoa will provide more detailed financial information regarding the 'Exit or Disposal Activities' in its next quarterly or annual report. (Alcoa Corporation) — high confidence, target: Q1 2024 Earnings Report
• The 'Cost Associated with Exit or Disposal Activities' will result in a one-time charge impacting Alcoa's Q1 2024 earnings. (Alcoa Corporation) — medium confidence, target: Q1 2024 Earnings Report

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share AA New York Stock Exchang
• $180 million — ll record restructuring charges between $180 million and $200 million related to the curtail
• $200 million — turing charges between $180 million and $200 million related to the curtailment of the Refin
• $76 million — oncontrolling interest) will be between $76 million and $84 million, or $0.42 to $0.47 per
• $84 m — terest) will be between $76 million and $84 million, or $0.42 to $0.47 per share. The
• $0.42 — between $76 million and $84 million, or $0.42 to $0.47 per share. The charges include
• $0.47 — 76 million and $84 million, or $0.42 to $0.47 per share. The charges include approxim
• $81 million — hare. The charges include approximately $81 million for water management costs, $55 million
• $55 million — $81 million for water management costs, $55 million for employee related costs, $26 million
• $26 million — $55 million for employee related costs, $26 million for asset retirement obligations, and $
• $18 million — n for asset retirement obligations, and $18 million of other costs. Alcoa's share of relate
• $115 million — f related cash outlays of approximately $115 million (which includes existing employee relat
• $80 million — tions) is expected to be spent in 2024 ($80 million) and 2025 ($35 million). The Refinery
• $35 million — e spent in 2024 ($80 million) and 2025 ($35 million). The Refinery is an asset owned by th
• $70 million — net income improvement of approximately $70 million (pre-tax and noncontrolling interest),

Filing Documents

• a53878971.htm (8-K) — 36KB
• a53878971ex99_1.htm (EX-99.1) — 14KB
• 0001157523-24-000034.txt ( ) — 197KB
• aa-20240108.xsd (EX-101.SCH) — 4KB
• aa-20240108_lab.xml (EX-101.LAB) — 23KB
• aa-20240108_pre.xml (EX-101.PRE) — 16KB
• a53878971_htm.xml (XML) — 4KB

05 Costs Associated with Exit or Disposal Activities

Item 2.05 Costs Associated with Exit or Disposal Activities. On January 8, 2024, Alcoa Corporation (the "Company") approved the full curtailment of the Kwinana alumina refinery (the "Refinery") located in Western Australia beginning in the second quarter of 2024. The Refinery has an annual nameplate capacity of 2.2 million metric tons and has been operating at approximately 80 percent of its nameplate capacity since January of 2023. 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 current market conditions. In the first quarter of 2024, Alcoa will record restructuring charges between $180 million and $200 million related to the curtailment of the Refinery. Alcoa's share (after-tax and noncontrolling interest) will be between $76 million and $84 million, or $0.42 to $0.47 per share. The charges include approximately $81 million for water management costs, $55 million for employee related costs, $26 million for asset retirement obligations, and $18 million of other costs. Alcoa's share of related cash outlays of approximately $115 million (which includes existing employee related liabilities and asset retirement obligations) is expected to be spent in 2024 ($80 million) and 2025 ($35 million). The Refinery is an asset owned by the Alcoa World Alumina and Chemicals (AWAC) joint venture among Alcoa and Alumina Limited, in which Alcoa holds a sixty percent ownership interest and Alumina Limited holds a forty percent ownership interest. The Refinery currently has approximately 800 employees and this number will be reduced to approximately 250 in the third quarter of 2024, when alumina production will cease. Certain processes will continue until about the third quarter of 2025, when the employee number will be further reduced to approximately 50. Beginning in the third quarter of 2024, the curtailment is expected to result in an

Forward-Looking Statements

Forward-Looking Statements This Current Report on Form 8-K contains statements that relate to future events and expectations, including those relating to the curtailment of the Refinery and the Company's expectations regarding the timing of the curtailment and types and estimates of associated costs and financial impacts, 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 "aim," "ambition," "anticipates," "believes," "could," "develop," "endeavors," "estimates," "expects," "forecasts," "goal," "intends," "may," "outlook," "plans," "potential," "projects," "reach," "seeks," "sees," "should," "targets," "will," "working," "would," or other words of similar meaning. All statements by the Company that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements. 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 the Company 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. Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission. The Company 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.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Description 99.1 Press release of Alcoa Corporation dated January 8, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) The internet addresses in the press release attached as Exhibit 99.1 hereto are included only as inactive textual references and are not intended to be active links to the information therein. Information contained on such websites or platforms, or that can be accessed therein, do not constitute a part of this report.

SIGNATURES

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 hereunto duly authorized. ALCOA CORPORATION Date: January 8, 2024 By: /s/ Marissa P. Earnest Marissa P. Earnest Senior Vice President, Chief Governance Counsel and Secretary

View Full Filing

View this 8-K filing on SEC EDGAR