Alcoa Corporation (NYSE: AA) details $3,100M AliGroup acquisition and new bridge financing
Alcoa Corporation reported stronger results for the second quarter of 2026, with sales of $3,966M versus $3,018M a year earlier and net income attributable to Alcoa of $407M versus $164M. Diluted EPS was $1.53 compared with $0.62. For the first half of 2026, sales were $7,159M and net income attributable to Alcoa was $832M.
At June 30, 2026, Alcoa held $1,352M in cash and cash equivalents, total assets of $16,853M, long-term debt of $2,224M, and total equity of $7,370M. Cash provided from operations was $429M for the first six months, with capital expenditures of $305M. As of July 27, 2026, 263,909,445 common shares were outstanding.
Alcoa agreed to acquire South32’s AliGroup assets for $3,100M in cash plus approximately 17 million Alcoa shares (valued at about $1,000M) and up to $750M in contingent payments, with a 5% per annum ticking fee on the cash portion. The deal, expected to close in the first half of 2027, is supported by $3,100M of bridge financing commitments, which the company plans to refinance with permanent funding. Alcoa also advanced portfolio actions including a gallium joint venture in Australia and steps to regain full ownership of the San Ciprián operations.
Positive
- AliGroup acquisition scale: Alcoa agreed to buy South32’s AliGroup assets for $3,100M cash, approximately 17 million Alcoa shares valued at about $1,000M, and up to $750M contingent consideration, expanding its bauxite, alumina, and aluminum footprint, which management expects to be earnings per share and free cash flow accretive.
Negative
- Financing and dilution burden: The AliGroup transaction relies on $3,100M of bridge financing commitments, a $3,100M cash outlay, issuance of about 17 million new shares, up to $750M in contingent payments, and a 5% per annum ticking fee on the cash portion.
Filing Explained
The filing states that Alcoa converted a mandatory convertible note and paid to acquire San Ciprián’s remaining 25% interest; the transaction is expected to make Alcoa the 100% owner on
Key Figures
Key Terms
Segment Adjusted EBITDA financial
locked box mechanism financial
mezzanine equity financial
ticking fee financial
bridge financing financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Alcoa (AA) perform financially in the second quarter of 2026?
What are the key terms of Alcoa (AA)'s planned AliGroup acquisition?
How will Alcoa (AA) finance the AliGroup transaction?
What changes did Alcoa (AA) report for the San Ciprián operations?
What is the status of Alcoa (AA)'s Ma’aden investment and related fair value impacts?
What does Alcoa’s (AA) balance sheet look like at June 30, 2026?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the Quarterly Period Ended
OR
For the transition period from ____ to _____
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Securities registered pursuant to Section 12(b) of the Act:
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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.
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).
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.
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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
As of July 27, 2026,
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Controls and Procedures |
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PART II – OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Mine Safety Disclosures |
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Item 5. |
Other Information |
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Exhibits |
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SIGNATURES |
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Cautionary Statement on 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 Alcoa Corporation’s proposed transaction to acquire South32 Limited’s equity interests in its bauxite, alumina, and aluminum assets (the proposed transaction and equity interests referred to as the Transaction and AliGroup, respectively); the ability of the parties to complete the Transaction on the expected timeline or at all considering the closing conditions; the expected benefits of the Transaction, including the anticipated synergies and earnings per share and free cash flow accretion; the competitive ability and position following completion of the Transaction; the ability to complete any proposed debt financing in connection with the Transaction; 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); statements about strategies, outlook, and business and financial prospects (including related to production and shipments); 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: (a) the non-satisfaction or non-waiver, on a timely basis or otherwise, of one or more closing conditions to the Transaction; (b) the prohibition or delay of the consummation of the Transaction by a governmental entity; (c) the risk that the Transaction may not be completed in the expected time frame or at all; (d) unexpected costs, charges or expenses resulting from the Transaction; (e) uncertainty of the expected financial performance following completion of the Transaction; (f) uncertainty of any contingent payment required to be made in connection with the Transaction following completion; (g) failure to realize the anticipated benefits of the Transaction; (h) the occurrence of any event that could give rise to termination of the Transaction; (i) potential litigation in connection with the Transaction or other settlements or investigations that may affect the timing or occurrence of the Transaction or result in significant costs of defense, indemnification and liability; (j) the impact of global economic conditions on the aluminum industry and aluminum end-use markets; (k) 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 the London Metal Exchange (LME) or other commodities; (l) the disruption of market-driven balancing of global aluminum supply and demand by non-market forces; (m) competitive and complex conditions in global markets;
(n) our ability to obtain, maintain, or renew permits or approvals necessary for our mining operations; (o) rising energy costs and interruptions or uncertainty in energy supplies; (p) unfavorable changes in the cost, quality, or availability of raw materials or other key inputs, or by disruptions in the supply chain; (q) economic, political, and social conditions, including the impact of trade policies, tariffs, and adverse industry publicity; (r) legal proceedings, investigations, or changes in foreign and/or U.S. federal, state, or local laws, regulations, or policies; (s) changes in tax laws or exposure to additional tax liabilities; (t) climate change, climate change legislation or regulations, and efforts to reduce emissions and build operational resilience to extreme weather conditions; (u) disruptions in the global economy caused by ongoing regional conflicts and wars; (v) fluctuations in foreign currency exchange rates and interest rates, inflation and other economic factors in the countries in which we operate; (w) global competition within and beyond the aluminum industry; (x) our ability to achieve our strategies or expectations relating to environmental, social, and governance considerations; (y) claims, costs, and liabilities related to health, safety and environmental laws, regulations, and other requirements in the jurisdictions in which we operate; (z) liabilities resulting from impoundment structures, which could impact the environment or cause exposure to hazardous substances or other damage; (aa) dilution of the ownership position of the Company’s stockholders (including as a result of the Transaction), price volatility, and other impacts on the price of Alcoa common stock by the secondary listing of the Alcoa common stock on the Australian Securities Exchange; (bb) our ability to obtain or maintain adequate insurance coverage; (cc) our ability to execute on our strategy to reduce complexity and optimize our asset portfolio and to realize the anticipated benefits from announced plans, programs, initiatives relating to our portfolio, capital investments, and developing technologies; (dd) our ability to integrate and achieve intended results from joint ventures, other strategic alliances, and strategic business transactions; (ee) significant declines in the market value of our marketable securities; (ff) our ability to fund capital expenditures; (gg) deterioration in our credit profile or increases in interest rates; (hh) impacts on our current and future operations due to our indebtedness and our ability to reduce indebtedness; (ii) our ability to continue to return capital to our stockholders through the payment of cash dividends and/or the repurchase of our common stock; (jj) cyber attacks, security breaches, system failures, software or application vulnerabilities, or other cyber incidents; (kk) labor market conditions, union disputes and other employee relations issues; and (ll) the other risk factors discussed in Alcoa’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and other reports filed by Alcoa Corporation with the U.S. Securities and Exchange Commission, including those described in this report.
We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. 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. Neither Alcoa nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Alcoa Corporation and Subsidiaries
Statement of Consolidated Operations (unaudited)
(in millions, except per-share amounts)
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Sales (E) |
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Cost of goods sold (exclusive of expenses below) |
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Selling, general administrative, and other expenses |
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Research and development expenses |
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Provision for depreciation, depletion, and amortization |
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Restructuring and other charges, net (D) |
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Interest expense |
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Other expenses (income), net (O) |
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Total costs and expenses |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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Less: Net income (loss) attributable to noncontrolling interest |
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NET INCOME ATTRIBUTABLE TO ALCOA |
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$ |
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$ |
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$ |
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$ |
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EARNINGS PER SHARE ATTRIBUTABLE TO ALCOA |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
1
Alcoa Corporation and Subsidiaries
Statement of Consolidated Comprehensive Income (unaudited)
(in millions)
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Alcoa Corporation |
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Noncontrolling interest |
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Total |
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2026 |
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2025 |
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2026 |
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2025 |
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2026 |
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2025 |
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Net income (loss) |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income, net of tax (G): |
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Change in unrecognized net actuarial gain/loss |
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Foreign currency translation adjustments |
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Net change in unrecognized gains/losses on cash |
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Total Other comprehensive income, net of tax |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Alcoa Corporation |
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Noncontrolling interest |
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Total |
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Six months ended |
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Six months ended |
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Six months ended |
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2026 |
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2025 |
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2026 |
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2025 |
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2026 |
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2025 |
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Net income (loss) |
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$ |
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$ |
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$ |
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) |
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$ |
( |
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$ |
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$ |
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Other comprehensive income (loss), net of tax (G): |
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Change in unrecognized net actuarial gain/loss |
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Foreign currency translation adjustments |
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Net change in unrecognized gains/losses on cash |
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Total Other comprehensive income (loss), net of tax |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
2
Alcoa Corporation and Subsidiaries
Consolidated Balance Sheet (unaudited)
(in millions)
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June 30, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents (L) |
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$ |
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$ |
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Receivables from customers (H) |
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Other receivables |
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Inventories (I) |
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Fair value of derivative instruments (L) |
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Prepaid expenses and other current assets |
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Total current assets |
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Properties, plants, and equipment |
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Less: accumulated depreciation, depletion, and amortization |
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Properties, plants, and equipment, net |
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Investments |
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Noncurrent marketable securities (C & L) |
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Deferred income taxes |
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Fair value of derivative instruments (L) |
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Other noncurrent assets (O) |
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Total assets |
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$ |
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$ |
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LIABILITIES |
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Current liabilities: |
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Accounts payable, trade |
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$ |
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$ |
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Accrued compensation and retirement costs |
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Taxes, including income taxes |
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Fair value of derivative instruments (L) |
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Other current liabilities |
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Long-term debt due within one year (J & L) |
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Total current liabilities |
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Long-term debt, less amount due within one year (J & L) |
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Accrued pension benefits (K) |
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Accrued other postretirement benefits (K) |
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Asset retirement obligations |
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Environmental remediation (N) |
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Fair value of derivative instruments (L) |
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Noncurrent income taxes |
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Other noncurrent liabilities and deferred credits |
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Total liabilities |
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CONTINGENCIES AND COMMITMENTS (N) |
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MEZZANINE EQUITY |
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Noncontrolling interest (C) |
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EQUITY |
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Common stock |
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Additional capital |
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Retained earnings (deficit) |
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( |
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Accumulated other comprehensive loss (G) |
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( |
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( |
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Total equity |
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Total liabilities, mezzanine equity, and equity |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
3
Alcoa Corporation and Subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
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Six months ended June 30, |
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2026 |
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2025 |
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CASH FROM OPERATIONS |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash from operations: |
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Depreciation, depletion, and amortization |
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Deferred income taxes |
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( |
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Equity loss (income), net of dividends |
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Restructuring and other charges, net (D) |
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Net loss from investing activities – asset and investment sales (O) |
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Mark-to-market loss on noncurrent marketable securities (O) |
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Net periodic pension benefit cost (K) |
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Stock-based compensation |
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Loss (gain) on mark-to-market derivative financial contracts |
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Other |
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Changes in assets and liabilities, excluding effects of divestitures and |
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(Increase) decrease in receivables |
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( |
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Increase in inventories |
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Decrease in prepaid expenses and other current assets |
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Decrease in accounts payable, trade |
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Increase (decrease) in accrued expenses |
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Increase (decrease) in taxes, including income taxes |
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( |
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Pension contributions (K) |
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|
( |
) |
|
|
( |
) |
Increase in noncurrent assets |
|
|
( |
) |
|
|
( |
) |
Decrease in noncurrent liabilities |
|
|
( |
) |
|
|
( |
) |
CASH PROVIDED FROM OPERATIONS |
|
|
|
|
|
|
||
FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Additions to debt (J) |
|
|
|
|
|
|
||
Payments on debt (J) |
|
|
( |
) |
|
|
( |
) |
Dividends paid on Alcoa preferred stock |
|
|
|
|
|
( |
) |
|
Dividends paid on Alcoa common stock |
|
|
( |
) |
|
|
( |
) |
Payments related to tax withholding on stock-based compensation awards |
|
|
( |
) |
|
|
( |
) |
Financial contributions for the divestiture of businesses |
|
|
|
|
|
( |
) |
|
Contributions from noncontrolling interest (C) |
|
|
|
|
|
|
||
Other |
|
|
( |
) |
|
|
( |
) |
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES |
|
|
( |
) |
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from the sale of assets |
|
|
|
|
|
|
||
Additions to investments |
|
|
( |
) |
|
|
( |
) |
Sale of investments |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
CASH USED FOR INVESTING ACTIVITIES |
|
|
( |
) |
|
|
( |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH |
|
|
( |
) |
|
|
|
|
Net change in cash and cash equivalents and restricted cash |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents and restricted cash at beginning of year |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of the consolidated financial statements.
4
Alcoa Corporation and Subsidiaries
Statement of Changes in Consolidated Mezzanine Equity and Equity (unaudited)
(in millions)
|
Mezzanine equity |
|
|
Alcoa Corporation shareholders |
|
|
|
|||||||||||||||
|
Non- |
|
|
Preferred |
|
Common |
|
Additional |
|
Retained (deficit) earnings |
|
Accumulated |
|
Total |
|
|||||||
Balance at January 1, 2025 |
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
|||
Net income |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Other comprehensive income (G) |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
||
Net effect of tax withholding for |
|
— |
|
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
Dividends paid on Alcoa preferred |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Dividends paid on Alcoa common |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Joint venture formation (C) |
|
|
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
|
( |
) |
|
Balance at March 31, 2025 |
$ |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||
Net (loss) income |
|
( |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Other comprehensive income (G) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
||
Dividends paid on Alcoa preferred |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Dividends paid on Alcoa common |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Balance at June 30, 2025 |
$ |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at January 1, 2026 |
$ |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
||||
Net (loss) income |
|
( |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Other comprehensive (loss) income (G) |
|
( |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
||
Net effect of tax withholding for |
|
— |
|
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
Dividends paid on Alcoa common |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Balance at March 31, 2026 |
$ |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
Net income |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
|||
Other comprehensive income (G) |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Stock-based compensation |
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
||
Dividends paid on Alcoa common |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Balance at June 30, 2026 |
$ |
|
|
$ |
— |
|
$ |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|||||
The accompanying notes are an integral part of the consolidated financial statements.
5
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 2025 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, 2025, 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 the Company include the accounts of Alcoa Corporation and companies in which Alcoa Corporation has a controlling interest, including those that comprise the San Ciprián (Spain) joint venture (see Note C). Intercompany transactions have been eliminated. The equity method of accounting is used for investments in affiliates and other joint ventures over which the Company 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.
B. Recently Adopted and Recently Issued Accounting Guidance
In May 2026, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2026-02 which provides recognition, measurement, presentation, and disclosure requirements for entities that generate, purchase, or receive environmental credits or have regulatory environmental compliance obligations that may be settled with environmental credits. The guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. Management does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
In December 2025, the FASB issued ASU No. 2025-10 which establishes authoritative guidance on the accounting for government grants received by business entities. The guidance is effective for annual periods beginning after December 15, 2028, and interim periods within those annual periods. Early adoption is permitted. Management does not expect the adoption of this guidance to have a material impact on the Company’s financial position or results of operations.
In November 2024, the FASB issued ASU No. 2024-03 which requires detailed disclosures about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) included within commonly presented expense captions (including cost of goods sold; selling, general administrative, and other expenses; and research and development expenses). The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The adoption of this guidance will not have a material impact on the Company’s financial position or results of operations and will provide enhanced disclosures regarding expenses beginning in the Company’s Annual Report on Form 10-K for the year ended December 31, 2027.
6
C. Acquisitions, Divestitures, and Joint Ventures
AliGroup Acquisition
On June 30, 2026, Alcoa entered into an Umbrella Implementation Deed (Deed) with South32 Limited (South32) to acquire South32’s equity interests in its bauxite, alumina, and aluminum assets (referred to as AliGroup) for consideration consisting of $
The Transaction includes South32’s
The Transaction utilizes a locked box mechanism under which the purchase price is based on AliGroup’s financial position as of March 31, 2026 (the Locked Box Date), and Alcoa is entitled to the economic benefits and risks of ownership from the Locked Box Date through the closing date. Customary protections apply to prevent leakage of value from AliGroup between the Locked Box Date and the closing date, subject to customary exceptions for permitted leakage.
The Transaction is expected to close in the first half of 2027, subject to the satisfaction or waiver of closing conditions, including approval by South32’s shareholders, receipt of required regulatory approvals, and other customary conditions specified in the Deed.
In connection with the Transaction, on June 30, 2026, the Company obtained commitments for bridge financing of up to $
The Company expects to incur transaction-related costs, including advisory, legal, accounting, valuation, and financing fees, which are expensed as incurred. During the second quarter and six-month period of 2026, the Company recognized transaction-related costs of $
Gallium Joint Venture
In the second quarter of 2026, Alcoa and government and industry partners of Australia, Japan, and the United States reached a final investment decision for a gallium production plant at the Wagerup refinery in Australia. Following the final investment decision, Japan Australia Gallium Associates Pty Ltd (JAGA), a joint venture between the Japan Organization for Metals and Energy Security (JOGMEC) and Sojitz Corporation, and a joint U.S., Australia, and Alcoa special purpose vehicle (SPV) formed a joint venture to fund construction and the first 24 months of operations of the plant. Alcoa contributed $
7
Saudi Arabia Joint Venture
On July 1, 2025, Alcoa completed the sale of its
The shares of Ma’aden are presented as Noncurrent marketable securities on the Consolidated Balance Sheet, as they are subject to transfer and sale restrictions, including a restriction requiring Alcoa to hold the shares for a minimum of
Subsequent to July 1, 2025, the fair value of the shares is based on the unadjusted quoted price on the Saudi Exchange (Tadawul). In the second quarter and six-month period of 2026, the Company recorded mark-to-market losses of $
San Ciprián Joint Venture
On March 31, 2025, Alcoa and Trento Equity Holdings, S.L.U. (Trento EQT), formerly known as IGNIS Equity Holdings, SL, entered into a joint venture agreement (the Agreement) with respect to the San Ciprián operations, whereby Alcoa holds a
Under the terms of the Agreement, Alcoa and Trento EQT contributed $
The Agreement also provides Trento EQT a put option, pursuant to which Trento EQT may require the Company to purchase its
Subsequent to June 30, 2026, the Company converted the mandatory convertible note of $
8
D. Restructuring and Other Charges, Net
In the second quarter and six-month period of 2026, Alcoa Corporation recorded Restructuring and other charges, net, of ($
In the second quarter and six-month period of 2025, Alcoa Corporation recorded Restructuring and other charges, net, of $
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 |
|
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Alumina |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Aluminum |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Segment total |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Corporate |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Total Restructuring and other charges, net |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Activity and reserve balances for Restructuring and other charges, net related to Severance and employee termination costs and Other costs were as follows:
|
|
Severance |
|
|
Other |
|
|
Total |
|
|||
Balance at December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Restructuring and other charges, net |
|
|
|
|
|
|
|
|
|
|||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Reversals and other |
|
|
|
|
|
|
|
|
|
|||
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Restructuring and other charges, net |
|
|
|
|
|
|
|
|
|
|||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Reversals and other |
|
|
|
|
|
|
|
|
|
|||
Balance at June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Restructuring and other charges, net related to Accrued pension benefits, Accrued other postretirement benefits, Asset retirement obligations, Environmental remediation, and Other noncurrent assets 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 $
9
E. Segment Information – Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. The Company has
The operating results, capital expenditures, and assets 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, 2026 |
|
|
|
|
|
|
|
|
|
|
|||
Sales: |
|
|
|
|
|
|
|
|
|
|
|||
Third-party sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|||
Total sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Adjusted operating costs(1) |
|
|
|
|
|
|
|
|
|
|
|||
Other segment items(2) |
|
|
|
|
|
|
|
|
|
|
|||
Segment Adjusted EBITDA |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion, and amortization |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Equity income |
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|||
Second quarter ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
Sales: |
|
|
|
|
|
|
|
|
|
|
|||
Third-party sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|||
Total sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Adjusted operating costs(1) |
|
|
|
|
|
|
|
|
|
|
|||
Other segment items(2) |
|
|
|
|
|
|
|
|
|
|
|||
Segment Adjusted EBITDA |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion, and amortization |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Equity (loss) income |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|||
10
|
|
|
Alumina |
|
|
Aluminum |
|
|
Total |
|
|||
Six months ended June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|||
Sales: |
|
|
|
|
|
|
|
|
|
|
|||
Third-party sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|||
Total sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Adjusted operating costs(1) |
|
|
|
|
|
|
|
|
|
|
|||
Other segment items(2) |
|
|
|
|
|
|
|
|
|
|
|||
Segment Adjusted EBITDA |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion, and amortization |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Equity income |
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|||
Six months ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
Sales: |
|
|
|
|
|
|
|
|
|
|
|||
Third-party sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Intersegment sales |
|
|
|
|
|
|
|
|
|
|
|||
Total sales |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Adjusted operating costs(1) |
|
|
|
|
|
|
|
|
|
|
|||
Other segment items(2) |
|
|
|
|
|
|
|
|
|
|
|||
Segment Adjusted EBITDA |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation, depletion, and amortization |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Equity income (loss) |
|
|
|
|
|
|
( |
) |
|
|
|
||
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Alumina |
|
|
Aluminum |
|
|
Total |
|
|||
June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|
|||
Equity investments |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Segment assets |
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|
|||
Equity investments |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Segment assets |
|
|
|
|
|
|
|
|
|
|
|||
11
The following table reconciles Total Segment Adjusted EBITDA to Consolidated net income attributable to Alcoa Corporation:
|
|
Second quarter ended |
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
2026 |
|
|
2025 |
|
||||
Total Segment Adjusted EBITDA |
|
$ |
|
|
$ |
|
$ |
|
|
$ |
|
||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
||||
Transformation(1) |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Intersegment eliminations |
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate expenses(2) |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Provision for depreciation, depletion, and amortization |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Restructuring and other charges, net (D) |
|
|
|
|
|
( |
) |
|
( |
) |
|
|
( |
) |
|
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Other (expenses) income, net (O) |
|
|
( |
) |
|
|
|
|
( |
) |
|
|
|
||
Other(3) |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Consolidated income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
||||
Provision for income taxes |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Net (income) loss attributable to noncontrolling interest |
|
|
( |
) |
|
|
|
|
|
|
|
|
|||
Consolidated net income attributable to Alcoa Corporation |
|
$ |
|
|
$ |
|
$ |
|
|
$ |
|
||||
The following table details Alcoa Corporation’s Sales by product division:
|
|
Second quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Aluminum |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Alumina |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bauxite |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other(1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
F. Earnings Per Share
For the second quarter and six-month period of 2026, basic earnings per share (EPS) amounts were 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.
For the second quarter and six-month period of 2025, basic EPS was calculated using the two-class method and earnings were allocated to Alcoa common stock and preferred stock based on the pro-rata share of each class outstanding and resulted in dividends paid on preferred stock of $
In the fourth quarter of 2025, all issued and outstanding shares of preferred stock were converted into common stock, and
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 |
|
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Average shares outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average shares outstanding – diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
13
G. Accumulated Other Comprehensive Loss
The following table details the activity of the three components that comprise Accumulated other comprehensive loss for Alcoa Corporation’s shareholders and Noncontrolling interest:
|
|
Alcoa Corporation |
|
|
Noncontrolling interest |
|
||||||||||
|
|
Second quarter ended |
|
|
Second quarter ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Pension and other postretirement benefits (K) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrecognized net actuarial gain/loss and |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Tax (expense) benefit(2) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Total Other comprehensive income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Amortization of net actuarial gain/loss and |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total amount reclassified from Accumulated |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Balance at end of period |
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance at end of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges (L) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net change from periodic revaluations |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Tax benefit(2) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Net amount reclassified to earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aluminum contracts(3) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Financial contracts(4) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Foreign exchange contracts(3) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Sub-total |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Tax expense(2) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Total amount reclassified from Accumulated |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Balance at end of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Accumulated other comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
14
|
|
Alcoa Corporation |
|
|
Noncontrolling interest |
|
||||||||||
|
|
Six months ended |
|
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Pension and other postretirement benefits (K) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrecognized net actuarial gain/loss and |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax (expense) benefit(2) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Total Other comprehensive income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Amortization of net actuarial gain/loss and |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total amount reclassified from Accumulated |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Balance at end of period |
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Joint venture formation (C) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Balance at end of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges (L) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net change from periodic revaluations |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Tax benefit(2) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Net amount reclassified to earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aluminum contracts(3) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Financial contracts(4) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Foreign exchange contracts(3) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Sub-total |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Tax expense(2) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Total amount reclassified from Accumulated |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total Other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Balance at end of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Accumulated other comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||
15
H. Receivables
A wholly-owned special purpose entity (SPE) of the Company has an agreement with a financial institution to transfer up to $
Alcoa Corporation guarantees the performance obligations of the Company subsidiaries, and unsold customer receivables are pledged as collateral to secure the sold receivables. The SPE held unsold customer receivables of $
The Company continues to service the customer receivables and as customer payments are collected by the Company, the SPE transfers additional receivables to the financial institution rather than remitting cash.
In the second quarter and six-month period of 2026, the Company sold gross customer receivables of $
Cash collections from previously sold receivables yet to be reinvested of $
I. Inventories
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Finished goods |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Bauxite and alumina |
|
|
|
|
|
|
||
Purchased raw materials |
|
|
|
|
|
|
||
Operating supplies |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
J. Debt
Short-term Borrowings
Inventory Repurchase Agreements
The Company periodically enters into inventory repurchase agreements whereby the Company sells aluminum to a third party and agrees to subsequently repurchase substantially similar inventory. Upon shipment of inventory, the Company does not record the sale and reflects cash received in Short-term borrowings within Other current liabilities on the Consolidated Balance Sheet. The cash received and subsequently paid under these agreements is included in Cash (used for) provided from financing activities on the Statement of Consolidated Cash Flows.
During the second quarter and six-month period of 2026, the Company recorded borrowings of $
There were
16
144A Debt
Redemption
On May 15, 2026, Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa Corporation, redeemed the remaining $
Credit Facilities
Revolving Credit Facility
The Company and ANHBV, a wholly-owned subsidiary of Alcoa Corporation and the borrower, have a $
As of June 30, 2026, 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
Japanese Yen Revolving Credit Facility
The Company and ANHBV had a $
Bridge Financing
In connection with the Transaction (see Note C), on June 30, 2026, the Company obtained commitments for bridge financing of up to $
17
K. Pension and Other Postretirement Benefits
The components of net periodic benefit cost were as follows:
|
|
Second quarter ended |
|
|
Six months ended |
|
||||||||||
Pension benefits |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest cost(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected return on plan assets(1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Recognized net actuarial loss(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net periodic benefit cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Second quarter ended |
|
|
Six months ended |
|
||||||||||
Other postretirement benefits |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest cost(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Recognized net actuarial loss(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of prior service benefit(1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net periodic benefit cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
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 2026, management made such elections related to the Company’s U.S. plans and intends to do so for the remainder of 2026. As a result, Alcoa’s minimum required contribution to defined benefit pension plans in 2026 is estimated to be approximately $
In the second quarter and six-month period of 2025, $
18
L. 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 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:
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, alumina, 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 or alumina prices, 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 commodities.
Alcoa Corporation’s commodity and derivative activities are subject to the management, direction, and control of the Strategic Risk Management Committee (SRMC), which consists of at least
Alcoa Corporation’s aluminum, alumina, foreign exchange, natural gas, and electricity contracts are predominantly classified as Level 1 or Level 2 under the fair value hierarchy, and are predominantly 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.
19
The following tables present the detail for Level 1, 2, and 3 derivatives (see additional Level 3 information in further tables below):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Assets |
|
|
Liabilities |
|
|
Assets |
|
|
Liabilities |
|
||||
Level 1 and 2 derivative instruments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Level 1 derivative instruments (undesignated) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Level 3 derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: Current |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
2026 |
|
|
2025 |
|
||||||||||
Second quarter ended June 30, |
|
Unrealized gain (loss) recognized in Other comprehensive income (loss) |
|
|
Realized loss reclassified from Accumulated other comprehensive loss to earnings |
|
|
Unrealized loss recognized in Other comprehensive income (loss) |
|
|
Realized loss reclassified from Accumulated other comprehensive loss to earnings |
|
||||
Level 1 and 2 derivative instruments |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Level 3 derivative instruments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
For the second quarter of 2026, the realized loss of $
|
|
2026 |
|
|
2025 |
|
||||||||||
Six months ended June 30, |
|
Unrealized gain (loss) recognized in Other comprehensive income (loss) |
|
|
Realized loss reclassified from Accumulated other comprehensive loss to earnings |
|
|
Unrealized loss recognized in Other comprehensive income (loss) |
|
|
Realized loss reclassified from Accumulated other comprehensive loss to earnings |
|
||||
Level 1 and 2 derivative instruments |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Level 3 derivative instruments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
For the six-month period of 2026, the realized loss of $
The following table presents the outstanding quantities of derivative instruments classified as Level 1 or Level 2:
|
Classification |
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Aluminum (in kmt) |
Commodity buy forwards |
|
|
|
|
|
|
||
Aluminum (in kmt) |
Commodity sell forwards |
|
|
|
|
|
|
||
Alumina (in kmt) |
Commodity sell forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of euro) |
Foreign exchange buy forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of euro) |
Foreign exchange sell forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of euro) (undesignated) |
Foreign exchange buy forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of euro) (undesignated) |
Foreign exchange sell forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of Norwegian krone) |
Foreign exchange buy forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of Brazilian real) |
Foreign exchange buy forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of Australian dollar) |
Foreign exchange buy forwards |
|
|
|
|
|
|
||
Foreign currency (in millions of Saudi riyal) (undesignated) |
Foreign exchange swap |
|
|
|
|
|
|
||
Natural gas (in millions of megawatt hours) |
Commodity buy forwards |
|
|
|
|
|
|
||
Electricity (in millions of megawatt hours) |
Commodity buy forwards |
|
|
|
|
|
|
||
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 alumina derivative instruments to manage exposures to changes in the fair value of certain firm commitments for the purchases or sales of alumina (expires
20
Alcoa Corporation uses Level 1 foreign exchange forward and swap contracts to mitigate the risk of foreign exchange exposure related to euro power purchases in Norway (expires
Alcoa Corporation uses Level 1 and 2 natural gas and electricity forward contracts to mitigate the risk of price fluctuations on associated purchases in Spain (expires
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; megawatts in MW):
|
|
June 30, 2026 |
|
|
Unobservable Input |
|
Unobservable Input Range |
||
Asset Derivatives |
|
|
|
|
|
|
|
|
|
Financial contract (undesignated) |
|
$ |
|
|
Interrelationship of forward energy price and the contract price, and the |
|
Electricity |
2026: $ |
|
|
|
|
|
estimated MW of renewable energy produced (per month) |
|
Electricity |
2026: |
||
Total Asset Derivatives |
|
$ |
|
|
|
|
|
|
|
Liability Derivatives |
|
|
|
|
|
|
|
|
|
Financial contract (undesignated) |
|
$ |
|
|
Interrelationship of forward energy price, LME forward price and the |
|
Electricity |
2026: $ |
|
|
|
|
|
Consumer Price Index |
|
LME (per mt) |
2026: $ |
||
Power contract |
|
|
|
|
MWh of energy needed to produce the forecasted mt of aluminum |
|
LME (per mt) |
2026: $ |
|
|
|
|
|
|
|
Electricity |
Rate of |
||
Power contracts |
|
|
|
|
MWh of energy needed to produce the forecasted mt of aluminum |
|
LME (per mt) |
2026: $ |
|
|
|
|
|
|
|
Midwest premium |
2026: $ |
||
|
|
|
|
|
|
Electricity |
Rate of |
||
Power contract |
|
|
|
|
MWh of energy needed to produce the forecasted mt of aluminum |
|
LME (per mt) |
2026: $ |
|
|
|
|
|
|
|
|
Electricity |
Rate of |
|
Power contract (undesignated)(1) |
|
|
|
|
Estimated spread between the 30-year debt yield of Alcoa and the counterparty |
|
Credit spread |
||
Total Liability Derivatives |
|
$ |
|
|
|
|
|
|
|
21
The fair values of Level 3 derivative instruments recorded in the accompanying Consolidated Balance Sheet were as follows:
Asset Derivatives |
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
||
Current—financial contract |
|
$ |
|
|
$ |
|
||
Noncurrent—financial contract |
|
|
|
|
|
|
||
Total derivatives not designated as hedging instruments |
|
$ |
|
|
$ |
|
||
Total Asset Derivatives |
|
$ |
|
|
$ |
|
||
Liability Derivatives |
|
|
|
|
|
|
||
Derivatives designated as hedging instruments: |
|
|
|
|
|
|
||
Current—power contracts |
|
$ |
|
|
$ |
|
||
Noncurrent—power contracts |
|
|
|
|
|
|
||
Total derivatives designated as hedging instruments |
|
$ |
|
|
$ |
|
||
Derivatives not designated as hedging instruments: |
|
|
|
|
|
|
||
Current—financial contract |
|
$ |
|
|
$ |
|
||
Total derivatives not designated as hedging instruments |
|
$ |
|
|
$ |
|
||
Total Liability Derivatives |
|
$ |
|
|
$ |
|
||
Assuming market rates remain constant with the rates at June 30, 2026, a realized loss of $
At June 30, 2026 and December 31, 2025, the embedded derivatives in power contracts designated as cash flow hedges of forward sales of aluminum hedge
The following tables present a reconciliation of activity for Level 3 derivative instruments:
|
|
Assets |
|
|
Second quarter ended June 30, 2026 |
|
Financial contracts |
|
|
April 1, 2026 |
|
$ |
|
|
Total gains or losses included in: |
|
|
|
|
Other expenses, net (unrealized/realized) |
|
|
( |
) |
Settlements and other |
|
|
|
|
June 30, 2026 |
|
$ |
|
|
Change in unrealized gains or losses included in earnings |
|
|
|
|
Other expenses, net |
|
$ |
( |
) |
|
|
Liabilities |
|
|||||||||
Second quarter ended June 30, 2026 |
|
Power contracts |
|
|
Financial contracts |
|
|
Embedded credit derivative |
|
|||
April 1, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Total gains or losses included in: |
|
|
|
|
|
|
|
|
|
|||
Sales (realized) |
|
|
( |
) |
|
|
|
|
|
|
||
Other expenses (income), net (unrealized/realized) |
|
|
|
|
|
|
|
|
( |
) |
||
Other comprehensive loss (unrealized) |
|
|
|
|
|
|
|
|
|
|||
Settlements and other |
|
|
|
|
|
( |
) |
|
|
|
||
June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Change in unrealized gains or losses included in earnings |
|
|
|
|
|
|
|
|
|
|||
Other expenses (income), net |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
22
|
|
Assets |
|
|
Six months ended June 30, 2026 |
|
Financial contracts |
|
|
January 1, 2026 |
|
$ |
|
|
Total gains or losses included in: |
|
|
|
|
Other expenses, net (unrealized/realized) |
|
|
( |
) |
Settlements and other |
|
|
|
|
June 30, 2026 |
|
$ |
|
|
Change in unrealized gains or losses included in earnings |
|
|
|
|
Other expenses, net |
|
$ |
( |
) |
|
|
Liabilities |
|
|||||||||
Six months ended June 30, 2026 |
|
Power contracts |
|
|
Financial contracts |
|
|
Embedded credit derivative |
|
|||
January 1, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Total gains or losses included in: |
|
|
|
|
|
|
|
|
|
|||
Sales (realized) |
|
|
( |
) |
|
|
|
|
|
|
||
Other expenses, net (unrealized/realized) |
|
|
|
|
|
|
|
|
|
|||
Other comprehensive loss (unrealized) |
|
|
|
|
|
|
|
|
|
|||
Settlements and other |
|
|
|
|
|
( |
) |
|
|
|
||
June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Change in unrealized gains or losses included in earnings |
|
|
|
|
|
|
|
|
|
|||
Other expenses, net |
|
$ |
|
|
$ |
|
|
$ |
|
|||
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, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying value |
|
|
Fair value |
|
|
Carrying value |
|
|
Fair value |
|
||||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted cash |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncurrent marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt due within one year |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, less amount due within one year |
|
|
|
|
|
|
|
|
|
|
|
|
||||
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.
Noncurrent marketable securities. Noncurrent marketable securities represent shares of Ma’aden acquired by Alcoa in July 2025 (see Note C). The fair value of the shares is based on the unadjusted quoted price on the Saudi Exchange (Tadawul). The fair value amounts for Noncurrent marketable securities were classified in Level 1 of the fair value hierarchy.
Short-term borrowings and Long-term debt, including amount due within one year. The fair value of Long-term debt, less amount 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.
23
M. Income Taxes – Alcoa Corporation’s estimated annualized effective tax rate (AETR) for 2026 as of June 30, 2026 differs from the U.S. federal statutory rate of
|
|
Six months ended |
||||||||
|
|
2026 |
|
|
|
2025 |
|
|
||
Income before income taxes |
|
$ |
|
|
|
$ |
|
|
||
Estimated annualized effective tax rate |
|
|
|
% |
|
|
|
% |
||
Income tax expense |
|
$ |
|
|
|
$ |
|
|
||
Unfavorable (favorable) tax impact related to losses in jurisdictions with no tax benefit |
|
|
|
|
|
|
( |
) |
|
|
Discrete tax expense |
|
|
|
|
|
|
|
|
||
Provision for income taxes |
|
$ |
|
|
|
$ |
|
|
||
The Company benefits from the Advanced Manufacturing Tax Credit available under Section 45X, enacted as part of the U.S. Inflation Reduction Act of 2022 (IRA). On October 24, 2024, the U.S. Treasury finalized the Proposed Regulations under Section 45X with important modifications including the ability to include the cost of certain direct and indirect materials in the cost base of the credit. The Proposed Regulation on the definition of aluminum was not finalized; however, management believes that commercial grade aluminum continues to qualify for the Section 45X credit. The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, provides for a progressive phase-out of Section 45X credits beginning in 2031 and fully eliminates such credits beginning in 2034.
In the second quarter and six-month period of 2026, the Company recorded benefits of $
In March 2026, the Company recorded a valuation allowance of $
24
N. 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.
Balance at December 31, 2024 |
|
$ |
|
|
Liabilities incurred |
|
|
||
Cash payments |
|
|
( |
) |
Reversals of previously recorded liabilities |
|
|
( |
) |
Foreign currency translation and other |
|
|
||
Balance at December 31, 2025 |
|
|
|
|
Liabilities incurred |
|
|
|
|
Cash payments |
|
|
( |
) |
Reversals of previously recorded liabilities |
|
|
( |
) |
Foreign currency translation and other |
|
|
|
|
Balance at June 30, 2026 |
|
$ |
|
|
At June 30, 2026 and December 31, 2025, the current portion of the remediation reserve balance was $
During the second quarter and six-month period of 2026, the Company incurred liabilities of $
During the second quarter and six-month period of 2025, the Company incurred liabilities of $
Payments related to remediation expenses applied against the reserve were $
The estimated timing of cash outflows from the environmental remediation reserve at June 30, 2026 was as follows:
2026 (excluding the six months ended June 30, 2026) |
$ |
|
|
2027 – 2031 |
|
|
|
Thereafter |
|
|
|
Total |
$ |
|
25
Reserve balances at June 30, 2026 and December 31, 2025, associated with significant sites with active remediation underway or for future remediation were $
Huntly, Australia—The reserve associated with enforceable undertakings with the Department of Climate Change, Energy, the Environment and Water (DCCEEW) relates to mining activities for the period from
Kwinana, Australia—The reserve associated with the 2025 closure of the Kwinana refinery is for subsurface remediation, investigation of potential site contamination, transportation of refinery waste, and ground water monitoring. Remediation work is expected in 2026. The final remediation plan is currently being developed, which may result in a change to the existing reserve.
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 by the end of 2030.
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 up to
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.
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 2027 and will take three to
Ferndale, Washington—The reserve associated with the 2023 closure of the Intalco aluminum smelter in Ferndale, Washington is for subsurface remediation and 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
Tax
Brazil (AWAB)—In 2012, Alcoa World Alumina Brasil Ltda. (AWAB) requested monetization of value added tax credits of $
Separately, during 2022 through 2024, the RFB completed inspections of credits claimed for 2012 through 2014, allowing certain credits which were similar to those disallowed for 2009 through 2011. The decisions on the 2012 through 2014 credits provide support for management’s view that there is no basis for the disallowance of the credits for tax years 2009 through 2011. Additionally, in connection with these inspections, the RFB disallowed credits of $
The Company is unable to reasonably predict the outcome for these matters. The estimated range of reasonably possible loss is $
26
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.
O. Other Financial Information
Other Expenses (Income), Net
|
|
Second quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Equity loss |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Foreign currency losses (gains), net |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Net loss from asset sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of investments |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Mark-to-market loss on noncurrent marketable securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss (gain) on mark-to-market derivative instruments |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Non-service costs – pension and other postretirement benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
In the second quarter and six-month period of 2026, Other, net primarily related to an insurance settlement reached during the first quarter 2026 for property damage incurred in 2024 (six-month period only) and interest income on interest bearing accounts (both periods). Proceeds from the insurance settlement were received in the second quarter of 2026 and included in investing activities on the Statement of Consolidated Cash Flows.
In the second quarter and six-month period of 2025, Other, net primarily related to interest income on interest bearing accounts and a deposit related to the Australia tax matter with the Australian Tax Office that closed in Alcoa’s favor on April 30, 2025. See Part II Item 8 of Alcoa Corporation’s Annual Report on Form 10-K in Note S to the Consolidated Financial Statements for the year ended December 31, 2025 for more information on the Australia tax matter.
Other Noncurrent Assets
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Value added tax credits |
|
$ |
|
|
$ |
|
||
Deferred mining costs, net |
|
|
|
|
|
|
||
Prepaid gas transmission contract |
|
|
|
|
|
|
||
Gas supply prepayment |
|
|
|
|
|
|
||
Prepaid pension benefit |
|
|
|
|
|
|
||
IRA Section 45X credit |
|
|
|
|
|
|
||
Noncurrent restricted cash |
|
|
|
|
|
|
||
Intangibles, net |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
27
Cash and Cash Equivalents and Restricted Cash
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Current restricted cash |
|
|
|
|
|
|
||
Noncurrent restricted cash |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Restricted cash includes commitments included in the viability agreement reached with the workers’ representatives of the San Ciprián smelter in December 2021 and updated in February 2023. At June 30, 2026, the Company had restricted cash of $
Restricted cash also includes initial funding received by Alcoa, as operator, from the joint venture partners upon formation of the gallium joint venture in June 2026 (see Note C).
Supplier Finance Programs
At June 30, 2026 and December 31, 2025, qualifying supplier invoices outstanding under supplier finance programs were $
28
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
During the second quarter of 2026, Alcoa delivered strong operational and financial performance and continued to execute on its strategic priorities, including the announced agreement to acquire South32 Limited’s (South32) equity interests in its bauxite, alumina, and aluminum assets. The Company set year-to-date production records at four aluminum smelters and at one alumina refinery, progressed multiple smelter capacity restarts, and completed negotiations for new multi-year collective bargaining agreements in Australia, the U.S., and Canada.
Average alumina prices decreased 1 percent and average aluminum prices increased 15 percent in the second quarter of 2026 compared with the first quarter of 2026. In addition, the average Midwest premium increased 10 percent and the average Rotterdam premium increased 47 percent sequentially. Alumina prices continued to be impacted by refinery expansions, primarily in China and Indonesia, in addition to impacts from Middle East conflict disruptions. The aluminum price and regional premium increases were driven by low inventory levels and supply disruptions, which included impacts related to the Middle East conflict.
Since the Middle East conflict began, the region has experienced announced curtailments of more than 2,500 kmt of annual smelting capacity and nearly 2,000 kmt of refining capacity. Additionally, the disruption of transit through the Strait of Hormuz has restricted the inflow of raw materials and caused vessel constraints globally. During the second quarter of 2026, the Company continued to support its customers in managing the logistics for certain alumina shipments. The conflict in the Middle East also caused increases in energy costs; Alcoa has limited its exposure to volatility in spot energy through long-term natural gas and electricity contracts and financial hedges.
AliGroup Acquisition
On June 30, 2026, Alcoa entered into an Umbrella Implementation Deed (Deed) with South32 to acquire South32’s equity interests in its bauxite, alumina, and aluminum assets (referred to as AliGroup) for consideration consisting of $3,100 of cash and approximately 17 million shares of Alcoa common stock (which may, in part, be delivered in the form of Alcoa CHESS Depositary Interests (CDIs)) with an agreed value as of the execution of the Deed of approximately $1,000 (based on the volume weighted average price over the 10 trading days ended June 26, 2026 of $58.79 per share), subject to customary adjustments set forth in the Deed (the Transaction). In addition, Alcoa agreed to pay South32 a ticking fee equal to 5 percent per annum on the $3,100 cash consideration for the period from South32 shareholder approval through the closing date. Alcoa also agreed to pay South32 up to an aggregate $750 in cash contingent on average alumina and aluminum prices exceeding the respective agreed strike prices for each of four successive, annual periods, beginning July 1, 2026 for a specific portion of the related alumina and aluminum production volumes of the acquired assets. The Deed also contains customary representations and warranties, covenants, indemnification obligations, and termination fees for transactions of this nature.
The Transaction reinforces Alcoa’s position as a leading pure-play upstream aluminum company, while strengthening its global portfolio with complementary assets to the Company’s existing portfolio. The acquisition will add a high-quality, low-cost, and globally diversified set of mining, refining, and smelting assets, with greater scale and integration expected to reduce complexity, lower costs, and improve competitiveness while strengthening supply chain resilience across key jurisdictions. Alcoa’s proven operating model, technical expertise, and commercial capabilities are expected to unlock meaningful operational improvements and synergies across the combined portfolio. The Company expects these assets to enhance financial results across business cycles and sustainably improve Alcoa’s position on the global alumina and aluminum cost curves.
The Transaction includes South32’s 86% interests in the Boddington bauxite mine and the Worsley alumina refinery in Australia; 100% interests in the Hillside aluminum smelter and idled Bayside smelter property in South Africa; and interests of 33% in the Mineração Rio do Norte (MRN) bauxite mine, 36% in the Alumar refinery, and 40% interest in the Alumar smelter, each in Brazil.
The Transaction utilizes a locked box mechanism under which the purchase price is based on AliGroup’s financial position as of March 31, 2026 (the Locked Box Date), and Alcoa is entitled to the economic benefits and risks of ownership from the Locked Box Date through the closing date. Customary protections apply to prevent leakage of value from AliGroup between the Locked Box Date and the closing date, subject to customary exceptions for permitted leakage.
The Transaction is expected to close in the first half of 2027, subject to the satisfaction or waiver of closing conditions, including approval by South32’s shareholders, receipt of required regulatory approvals, and other customary conditions specified in the Deed.
In connection with the Transaction, on June 30, 2026, the Company obtained commitments for bridge financing of up to $3,100. The financing consists of commitments for a senior unsecured 364-day bridge term loan credit facility that would be available upon closing of the Transaction, subject to customary conditions, including the consummation of the Transaction in accordance with the terms of the Deed. The facility also contains customary representations, warranties, covenants, and indemnification provisions. The Company currently intends to replace the bridge financing with permanent financing prior to the closing date.
29
The Company expects to incur transaction-related costs, including advisory, legal, accounting, valuation, and financing fees, which are expensed as incurred. During the six-month period of 2026, the Company recognized transaction-related costs of $13, which were included in Selling, general and administrative expenses on the accompanying Statement of Consolidated Operations.
Australia Mine Approvals
During the second quarter of 2026, the Company continued to work collaboratively with stakeholders to advance mine approvals for its next major mine regions (Myara North and Holyoake) and the rolling five-year mine plan (2023-2027) referred to the Western Australia Environmental Protection Authority (WA EPA) in 2023 by a third party. Recent engagement with government stakeholders provided insight into important steps remaining in the approvals process. The Company anticipates mining in new major mine regions will commence no earlier than 2029. Until then, the Company expects bauxite quality will remain similar to recent grades.
The Company has contingency plans to support operations if Ministerial decisions are delayed beyond 2026. Based on current plans, approval delays extending through the first half of 2027 are not expected to materially affect bauxite supply or quality, or operating costs. For longer delays, the Company could implement additional operational measures, including modifications to mining activities and refinery operating rates, to mitigate potential impacts.
Additionally, during the second quarter of 2026, the Company continued engagement with government stakeholders related to the 2025-2029 mine plan, which the Company aims to have in place in 2026. The WA government has indicated it intends to issue an updated Section 6 exemption order aligned with the 2025-2029 plan, to replace the exemption granted in 2023 that allows Alcoa’s mining operations to continue while the WA EPA assessment is undertaken.
Gallium Joint Venture
On July 14, 2026, Alcoa and government and industry partners of Australia, Japan, and the United States announced the final investment decision for a gallium production plant at the Wagerup refinery in Australia. The Company contributed $24 to the joint venture upon formation in June 2026, which reflects Alcoa’s total expected contribution. Alcoa’s participation in the joint venture, including its role as construction and operating manager, is not expected to have a material impact on the Company’s financial position or results of operations.
San Ciprián Operations
Subsequent to June 30, 2026, the Company converted the mandatory convertible note of $153 (€130), provided to the San Ciprián operations in December 2025, and acquired Trento EQT’s remaining ownership interest for $28 (€25). As a result, Alcoa will hold a 100% ownership interest in the San Ciprián operations as of August 1, 2026 and recognize earnings attributable to noncontrolling interest through July 31, 2026.
Other Matters
On May 15, 2026, Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa Corporation, redeemed the remaining $219 aggregate principal amount of its 6.125% notes due in 2028 (the 2028 Notes). The notes were redeemed at a price equal to 100 percent of the principal amount, plus accrued and unpaid interest, using cash on hand.
In July 2026, a new four-year collective bargaining agreement was ratified with the Australian Workers Union (AWU) representing approximately 1,400 employees across the mining and refining operations in Western Australia.
In June 2026, a new four-year collective bargaining agreement was ratified with the United Steelworkers (USW) at the Company’s U.S. smelters, representing approximately 1,000 employees at Warrick, Indiana and Massena, New York.
In May 2026, new five-year collective bargaining agreements were ratified with the United Steelworkers in Canada (Syndicat des Métallos) at the Aluminerie de Bécancour Inc. (ABI) smelter in Québec, Canada, representing approximately 1,000 employees.
See the below sections for additional details on the above-described actions.
30
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, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Sales |
|
$ |
3,966 |
|
|
$ |
3,193 |
|
|
$ |
7,159 |
|
|
$ |
6,387 |
|
Cost of goods sold (exclusive of expenses below) |
|
|
2,967 |
|
|
|
2,512 |
|
|
|
5,479 |
|
|
|
5,090 |
|
Selling, general administrative, and other expenses |
|
|
101 |
|
|
|
83 |
|
|
|
184 |
|
|
|
153 |
|
Research and development expenses |
|
|
11 |
|
|
|
10 |
|
|
|
21 |
|
|
|
24 |
|
Provision for depreciation, depletion, and amortization |
|
|
173 |
|
|
|
162 |
|
|
|
335 |
|
|
|
301 |
|
Restructuring and other charges, net |
|
|
(4 |
) |
|
|
18 |
|
|
|
14 |
|
|
|
19 |
|
Interest expense |
|
|
36 |
|
|
|
35 |
|
|
|
71 |
|
|
|
109 |
|
Other expenses (income), net |
|
|
200 |
|
|
|
(126 |
) |
|
|
74 |
|
|
|
(138 |
) |
Total costs and expenses |
|
|
3,484 |
|
|
|
2,694 |
|
|
|
6,178 |
|
|
|
5,558 |
|
Income before income taxes |
|
|
482 |
|
|
|
499 |
|
|
|
981 |
|
|
|
829 |
|
Provision for income taxes |
|
|
73 |
|
|
|
82 |
|
|
|
155 |
|
|
|
130 |
|
Net income |
|
|
409 |
|
|
|
417 |
|
|
|
826 |
|
|
|
699 |
|
Less: Net income (loss) attributable to noncontrolling interest |
|
|
2 |
|
|
|
(8 |
) |
|
|
(6 |
) |
|
|
(13 |
) |
Net income attributable to Alcoa Corporation |
|
$ |
407 |
|
|
$ |
425 |
|
|
$ |
832 |
|
|
$ |
712 |
|
|
|
Quarter ended |
|
|
Six months ended |
|
||||||||||
Selected Financial Metrics |
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Diluted income per share attributable to Alcoa |
|
$ |
1.53 |
|
|
$ |
1.60 |
|
|
$ |
3.13 |
|
|
$ |
2.69 |
|
Third-party shipments of alumina (kmt) |
|
|
1,618 |
|
|
|
1,611 |
|
|
|
3,229 |
|
|
|
4,300 |
|
Third-party shipments of aluminum (kmt) |
|
|
726 |
|
|
|
613 |
|
|
|
1,339 |
|
|
|
1,243 |
|
Average realized price per metric ton of alumina |
|
$ |
334 |
|
|
$ |
324 |
|
|
$ |
329 |
|
|
$ |
475 |
|
Average realized price per metric ton of aluminum |
|
$ |
4,752 |
|
|
$ |
4,209 |
|
|
$ |
4,504 |
|
|
$ |
3,177 |
|
Average Alumina Price Index (API)(1) |
|
$ |
307 |
|
|
$ |
309 |
|
|
$ |
308 |
|
|
$ |
494 |
|
Average London Metal Exchange (LME) 15-day lag(2) |
|
$ |
3,585 |
|
|
$ |
3,120 |
|
|
$ |
3,352 |
|
|
$ |
2,533 |
|
Overview
Sequential period comparison
Net income attributable to Alcoa Corporation decreased $18 primarily as a result of:
Partially offset by:
31
Year-to-date comparison
Net income attributable to Alcoa Corporation increased $120 primarily as a result of:
Partially offset by:
Sales
Sequential period comparison
Sales increased $773 primarily as a result of:
Partially offset by:
Year-to-date comparison
Sales increased $772 primarily as a result of:
Partially offset by:
Cost of goods sold
Sequential period comparison
Cost of goods sold as a percentage of sales decreased 4 percent primarily as a result of:
Partially offset by:
32
Year-to-date comparison
Cost of goods sold as a percentage of sales decreased 3 percent primarily as a result of:
Partially offset by:
Selling, general administrative, and other expenses
Sequential period comparison
Selling, general administrative, and other expenses increased $18 primarily as a result of increased fees for professional services.
Year-to-date comparison
Selling, general administrative, and other expenses increased $31 primarily as a result of:
Provision for depreciation, depletion, and amortization
Sequential period comparison
The Provision for depreciation, depletion, and amortization increased $11 primarily as a result of:
Year-to-date comparison
The Provision for depreciation, depletion, and amortization increased $34 primarily as a result of:
Partially offset by:
Interest expense
Sequential period comparison
Interest expense increased $1 primarily as a result of:
Year-to-date comparison
Interest expense decreased $38 primarily as a result of:
Partially offset by:
33
Other expenses (income), net
Sequential period comparison
Other expenses (income), net was $200 in the second quarter of 2026 compared with ($126) in the first quarter of 2026. The unfavorable change of $326 was primarily a result of:
Year-to-date comparison
Other expenses (income), net was $74 in the six-month period of 2026 compared with ($138) in the six-month period of 2025. The unfavorable change of $212 was primarily a result of:
Partially offset by:
Restructuring and other charges, net
Sequential period comparison
In the second quarter of 2026, Restructuring and other charges, net of ($4) primarily related to:
In the first quarter of 2026, Restructuring and other charges, net of $18 primarily related to:
Year-to-date comparison
In the six-month period of 2026, Restructuring and other charges, net of $14 primarily related to:
In the six-month period of 2025, Restructuring and other charges, net of $19 primarily related to:
Partially offset by:
34
Provision for income taxes
Sequential period comparison
The Provision for income taxes in the second quarter of 2026 was $73 on income before taxes of $482 or 15.1 percent. In comparison, the first quarter of 2026 Provision for income taxes was $82 on income before taxes of $499 or 16.4 percent.
The decrease in tax expense of $9 is primarily attributable to the absence of a valuation allowance of $22 recorded against certain deferred tax assets of a wholly-owned subsidiary in Canada during the first quarter of 2026, and an overall reduction in income in jurisdictions where taxes are paid, partially offset by the impact of the increased annualized effective tax rate when applied to current period earnings.
Year-to-date comparison
The Provision for income taxes in the six-month period of 2026 was $155 on income before taxes of $981 or 15.8 percent. In comparison, the six-month period of 2025 Provision for income taxes was $130 on income before taxes of $829 or 15.7 percent.
The increase in tax expense of $25 is primarily attributable to a valuation allowance of $22 recorded against certain deferred tax assets of a wholly-owned subsidiary in Canada during the first quarter of 2026.
Noncontrolling interest
On March 31, 2025, Alcoa and Trento EQT entered into a joint venture agreement with respect to the San Ciprián operations. Alcoa holds a 75% ownership interest and continues as managing operator, while Trento EQT holds the remaining 25% interest. Alcoa began recognizing earnings attributable to Trento EQT’s ownership interest within Noncontrolling interest in the second quarter of 2025.
Subsequent to June 30, 2026, the Company converted the mandatory convertible note of $153 (€130), provided to the San Ciprián operations in December 2025, and acquired Trento EQT’s remaining ownership interest for $28 (€25). As a result, Alcoa will hold a 100% ownership interest in the San Ciprián operations as of August 1, 2026 and recognize earnings attributable to noncontrolling interest through July 31, 2026.
Net income (loss) attributable to noncontrolling interest was $2 in the second quarter of 2026 compared with $(8) in the first quarter of 2026. The change is primarily a result of higher average realized price of aluminum.
Net income (loss) attributable to noncontrolling interest was $(6) in the six-month period of 2026 compared with $(13) in the six-month period of 2025. The change is primarily a result of higher average realized price of aluminum, partially offset by lower average realized price of alumina.
35
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. The primary measure of performance is 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 Chief Operating Decision Maker regularly reviews Segment Adjusted EBITDA to assess performance and allocate resources.
Alumina
Business Update. The average API of $307 per metric ton decreased 1 percent compared to the prior quarter. Compared to the six-month period of 2025, the average API decreased 38 percent year-over-year.
In the second quarter of 2026, the Alumina segment experienced higher energy prices, primarily fuel oil and diesel, related to the Middle East conflict.
Subsequent to June 30, 2026, the Pinjarra (Australia) refinery recovered stability and operating levels following operational instability that began in late March 2026 and was further exacerbated by gas supply disruptions associated with Cyclone Narelle.
Capacity. The Alumina segment had a base capacity of 11,653 kmt with 1,014 kmt of curtailed refining capacity. There was no change in curtailed capacity in 2026.
In the table below, 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.
Adjusted operating costs include all production related costs for alumina produced and shipped: raw materials consumed; conversion costs, such as labor, materials, and utilities; and plant administrative expenses. Other segment items include costs associated with trading activity, the purchase of bauxite from offtake or other supply agreements, and commercial shipping services; other direct and non-production related charges; Selling, general administrative, and other expenses; and Research and development expenses.
|
|
Quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Bauxite production (mdmt) |
|
|
8.3 |
|
|
|
9.1 |
|
|
|
17.4 |
|
|
|
18.8 |
|
Third-party bauxite shipments (mdmt) |
|
|
1.5 |
|
|
|
2.1 |
|
|
|
3.6 |
|
|
|
5.9 |
|
Alumina production (kmt) |
|
|
2,218 |
|
|
|
2,355 |
|
|
|
4,573 |
|
|
|
4,706 |
|
Third-party alumina shipments (kmt) |
|
|
1,618 |
|
|
|
1,611 |
|
|
|
3,229 |
|
|
|
4,300 |
|
Intersegment alumina shipments (kmt) |
|
|
1,142 |
|
|
|
1,186 |
|
|
|
2,328 |
|
|
|
2,182 |
|
Produced alumina shipments (kmt) |
|
|
2,288 |
|
|
|
2,206 |
|
|
|
4,494 |
|
|
|
4,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Third-party bauxite sales |
|
$ |
85 |
|
|
$ |
124 |
|
|
$ |
209 |
|
|
$ |
451 |
|
Third-party alumina sales |
|
|
552 |
|
|
|
533 |
|
|
|
1,085 |
|
|
|
2,063 |
|
Total segment third-party sales |
|
$ |
637 |
|
|
$ |
657 |
|
|
$ |
1,294 |
|
|
$ |
2,514 |
|
Intersegment alumina sales |
|
|
453 |
|
|
|
445 |
|
|
|
898 |
|
|
|
1,179 |
|
Total sales |
|
$ |
1,090 |
|
|
$ |
1,102 |
|
|
$ |
2,192 |
|
|
$ |
3,693 |
|
Adjusted operating costs |
|
|
843 |
|
|
|
737 |
|
|
|
1,580 |
|
|
|
1,493 |
|
Other segment items |
|
|
343 |
|
|
|
405 |
|
|
|
748 |
|
|
|
1,397 |
|
Segment Adjusted EBITDA |
|
$ |
(96 |
) |
|
$ |
(40 |
) |
|
$ |
(136 |
) |
|
$ |
803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average realized third-party price per metric ton of alumina |
|
$ |
334 |
|
|
$ |
324 |
|
|
$ |
329 |
|
|
$ |
475 |
|
Adjusted operating cost per metric ton of produced alumina shipped |
|
$ |
368 |
|
|
$ |
334 |
|
|
$ |
352 |
|
|
$ |
318 |
|
36
Production
Sequential period comparison
Alumina production decreased 6 percent primarily as a result of:
Year-to-date comparison
Alumina production decreased 3 percent primarily as a result of:
Third-party sales
Sequential period comparison
Third-party sales decreased $20 primarily as a result of:
Partially offset by:
Year-to-date comparison
Third-party sales decreased $1,220 primarily as a result of:
Intersegment alumina sales
Sequential period comparison
Intersegment alumina sales increased $8 primarily as a result of:
Partially offset by:
Year-to-date comparison
Intersegment alumina sales decreased $281 primarily as a result of:
Partially offset by:
Segment Adjusted EBITDA
Sequential period comparison
Segment Adjusted EBITDA decreased $56 primarily as a result of:
Year-to-date comparison
Segment Adjusted EBITDA decreased $939 primarily as a result of:
37
Forward Look. For the third quarter of 2026 in comparison to the second quarter of 2026, the Alumina segment expects favorable production costs related to the recovery of stability at the Pinjarra refinery and lower energy prices, primarily diesel and fuel oil, to be partially offset by planned maintenance in Brazil.
The Company has decreased its 2026 projection for alumina production to range between 9.5 and 9.6 million metric tons, a reduction of between 0.2 and 0.3 million metric tons from the prior projection. The Company has also decreased its 2026 projection for alumina shipments to range between 11.5 and 11.6 million metric tons, a reduction of between 0.3 and 0.4 million metric tons from the prior projection. The reductions are due to lower production at the Pinjarra refinery related to instability experienced primarily in the second quarter of 2026. The overall difference between production and shipments reflects trading volumes and externally sourced alumina to fulfill customer contracts.
Aluminum
Business Update. In the second quarter of 2026, the Aluminum segment experienced record Segment Adjusted EBITDA of $1,073 and Segment Adjusted EBITDA as a percentage of sales of 32 percent. Aluminum prices increased sequentially with LME prices on a 15-day lag averaging $3,585 per metric ton in the second quarter of 2026. Additionally, the average Midwest premium increased 10 percent and the average Rotterdam premium increased 47 percent sequentially.
San Ciprián Smelter
The restart of the San Ciprián smelter was completed on April 7, 2026. At June 30, 2026, in connection with the viability agreement reached with the workers’ representatives of the San Ciprián smelter in December 2021 and subsequently updated in February 2023, the Company had restricted cash of $75 available for capital improvement commitments and restart costs incurred (which is subject to review by the workers’ representatives prior to release) at the site.
Capacity Restarts
During the second quarter of 2026, the Company continued to progress the restart of the Alumar (Brazil) smelter. The site was operating at approximately 93 percent of the site’s total annual capacity of 268 kmt (Alcoa share) as of June 30, 2026.
In the second quarter of 2026, the Company completed the restart of one potline (31 kmt) at the Lista smelter in Norway that began in the first quarter of 2026. The line was curtailed in August 2022.
In the second quarter of 2026, the Company completed the restart of 15 kmt of previously curtailed capacity at the Portland smelter in Australia that began in the first quarter of 2026.
In the table below, 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 customers. Additionally, Total shipments in 2025 included offtake from a joint venture supply agreement with Ma’aden prior to its termination in the first quarter of 2025. The contract was terminated in accordance with Alcoa’s sale of its 25.1% ownership in the Saudi Arabia joint venture to Ma’aden, which was completed on July 1, 2025.
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.
Adjusted operating costs include all production related costs for aluminum produced and shipped: raw materials consumed; conversion costs, such as labor, materials, and utilities; and plant administrative expenses. Other segment items include costs associated with trading activity and energy assets; other direct and non-production related charges, including tariff costs; Selling, general administrative, and other expenses; and Research and development expenses.
38
|
|
Quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Aluminum production (kmt) |
|
|
636 |
|
|
|
607 |
|
|
|
1,243 |
|
|
|
1,136 |
|
Total aluminum shipments (kmt) |
|
|
726 |
|
|
|
613 |
|
|
|
1,339 |
|
|
|
1,243 |
|
Produced aluminum shipments (kmt) |
|
|
680 |
|
|
|
580 |
|
|
|
1,260 |
|
|
|
1,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Third-party aluminum sales |
|
$ |
3,446 |
|
|
$ |
2,582 |
|
|
$ |
6,028 |
|
|
$ |
3,948 |
|
Other(1) |
|
|
(116 |
) |
|
|
(46 |
) |
|
|
(162 |
) |
|
|
(91 |
) |
Total segment third-party sales |
|
$ |
3,330 |
|
|
$ |
2,536 |
|
|
$ |
5,866 |
|
|
$ |
3,857 |
|
Intersegment sales |
|
|
5 |
|
|
|
5 |
|
|
|
10 |
|
|
|
9 |
|
Total sales |
|
$ |
3,335 |
|
|
$ |
2,541 |
|
|
$ |
5,876 |
|
|
$ |
3,866 |
|
Adjusted operating costs |
|
|
1,688 |
|
|
|
1,430 |
|
|
|
3,118 |
|
|
|
3,152 |
|
Other segment items |
|
|
574 |
|
|
|
417 |
|
|
|
991 |
|
|
|
483 |
|
Segment Adjusted EBITDA |
|
$ |
1,073 |
|
|
$ |
694 |
|
|
$ |
1,767 |
|
|
$ |
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average realized third-party price per metric ton of aluminum |
|
$ |
4,752 |
|
|
$ |
4,209 |
|
|
$ |
4,504 |
|
|
$ |
3,177 |
|
Adjusted operating cost per metric ton of produced aluminum shipped |
|
$ |
2,481 |
|
|
$ |
2,468 |
|
|
$ |
2,475 |
|
|
$ |
2,746 |
|
Production
Sequential period comparison
Production increased 5 percent primarily as a result of:
Year-to-date comparison
Production increased 9 percent primarily as a result of:
Third-party sales
Sequential period comparison
Third-party sales increased $794 primarily as a result of:
Partially offset by:
Year-to-date comparison
Third-party sales increased $2,009 primarily as a result of:
Partially offset by:
39
Segment Adjusted EBITDA
Sequential period comparison
Segment Adjusted EBITDA increased $379 primarily as a result of:
Partially offset by:
Year-to-date comparison
Segment Adjusted EBITDA increased $1,536 primarily as a result of:
Partially offset by:
The following table provides consolidated capacity and curtailed capacity (each in kmt) for each smelter owned by Alcoa Corporation:
|
|
|
|
June 30, 2026 |
|
|
March 31, 2026 |
|
|
June 30, 2025 |
|
|||||||||||||||
Facility |
|
Country |
|
Capacity(1) |
|
|
Curtailed |
|
|
Capacity(1) |
|
|
Curtailed |
|
|
Capacity(1) |
|
|
Curtailed |
|
||||||
Portland(2) |
|
Australia |
|
|
197 |
|
|
|
13 |
|
|
|
197 |
|
|
|
24 |
|
|
|
197 |
|
|
|
33 |
|
São Luís (Alumar)(3) |
|
Brazil |
|
|
268 |
|
|
|
20 |
|
|
|
268 |
|
|
|
25 |
|
|
|
268 |
|
|
|
25 |
|
Baie-Comeau |
|
Canada |
|
|
324 |
|
|
|
— |
|
|
|
324 |
|
|
|
— |
|
|
|
324 |
|
|
|
— |
|
Bécancour |
|
Canada |
|
|
350 |
|
|
|
— |
|
|
|
350 |
|
|
|
— |
|
|
|
350 |
|
|
|
— |
|
Deschambault |
|
Canada |
|
|
287 |
|
|
|
— |
|
|
|
287 |
|
|
|
— |
|
|
|
287 |
|
|
|
— |
|
Fjarðaál |
|
Iceland |
|
|
351 |
|
|
|
— |
|
|
|
351 |
|
|
|
— |
|
|
|
351 |
|
|
|
— |
|
Lista(4) |
|
Norway |
|
|
95 |
|
|
|
— |
|
|
|
95 |
|
|
|
5 |
|
|
|
95 |
|
|
|
15 |
|
Mosjøen |
|
Norway |
|
|
200 |
|
|
|
— |
|
|
|
200 |
|
|
|
— |
|
|
|
200 |
|
|
|
— |
|
San Ciprián(5) |
|
Spain |
|
|
228 |
|
|
|
— |
|
|
|
228 |
|
|
|
4 |
|
|
|
228 |
|
|
|
214 |
|
Massena West |
|
U.S. |
|
|
130 |
|
|
|
— |
|
|
|
130 |
|
|
|
— |
|
|
|
130 |
|
|
|
— |
|
Warrick |
|
U.S. |
|
|
215 |
|
|
|
54 |
|
|
|
215 |
|
|
|
54 |
|
|
|
215 |
|
|
|
54 |
|
|
|
|
|
|
2,645 |
|
|
|
87 |
|
|
|
2,645 |
|
|
|
112 |
|
|
|
2,645 |
|
|
|
341 |
|
Forward Look. For the third quarter of 2026 in comparison to the second quarter of 2026, the Aluminum segment expects lower production costs, primarily related to operating efficiencies at higher production levels, to fully offset unfavorable raw material costs, primarily on higher market prices for carbon materials, and lower third-party energy sales.
Alcoa expects 2026 total Aluminum segment production and shipments to remain unchanged from its prior projection, ranging between 2.4 and 2.6 million metric tons, and between 2.6 and 2.8 million metric tons, respectively.
40
Reconciliations of Certain Segment Information
Reconciliation of Total Segment Third-Party Sales to Consolidated Sales
|
|
Quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Alumina |
|
$ |
637 |
|
|
$ |
657 |
|
|
$ |
1,294 |
|
|
$ |
2,514 |
|
Aluminum |
|
|
3,330 |
|
|
|
2,536 |
|
|
|
5,866 |
|
|
|
3,857 |
|
Total segment third-party sales |
|
$ |
3,967 |
|
|
$ |
3,193 |
|
|
$ |
7,160 |
|
|
$ |
6,371 |
|
Other |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
16 |
|
Consolidated sales |
|
$ |
3,966 |
|
|
$ |
3,193 |
|
|
$ |
7,159 |
|
|
$ |
6,387 |
|
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net Income Attributable to Alcoa Corporation
|
|
Quarter ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
March 31, |
|
|
June 30, |
|
|
June 30, |
|
||||
Total Segment Adjusted EBITDA |
|
$ |
977 |
|
|
$ |
654 |
|
|
$ |
1,631 |
|
|
$ |
1,034 |
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transformation(1) |
|
|
(23 |
) |
|
|
(27 |
) |
|
|
(50 |
) |
|
|
(33 |
) |
Intersegment eliminations |
|
|
2 |
|
|
|
7 |
|
|
|
9 |
|
|
|
238 |
|
Corporate expenses(2) |
|
|
(60 |
) |
|
|
(39 |
) |
|
|
(99 |
) |
|
|
(82 |
) |
Provision for depreciation, depletion, and amortization |
|
|
(173 |
) |
|
|
(162 |
) |
|
|
(335 |
) |
|
|
(301 |
) |
Restructuring and other charges, net |
|
|
4 |
|
|
|
(18 |
) |
|
|
(14 |
) |
|
|
(19 |
) |
Interest expense |
|
|
(36 |
) |
|
|
(35 |
) |
|
|
(71 |
) |
|
|
(109 |
) |
Other (expenses) income, net |
|
|
(200 |
) |
|
|
126 |
|
|
|
(74 |
) |
|
|
138 |
|
Other(3) |
|
|
(9 |
) |
|
|
(7 |
) |
|
|
(16 |
) |
|
|
(37 |
) |
Consolidated income before income taxes |
|
|
482 |
|
|
|
499 |
|
|
|
981 |
|
|
|
829 |
|
Provision for income taxes |
|
|
(73 |
) |
|
|
(82 |
) |
|
|
(155 |
) |
|
|
(130 |
) |
Net (income) loss attributable to noncontrolling interest |
|
|
(2 |
) |
|
|
8 |
|
|
|
6 |
|
|
|
13 |
|
Consolidated net income attributable to Alcoa Corporation |
|
$ |
407 |
|
|
$ |
425 |
|
|
$ |
832 |
|
|
$ |
712 |
|
Environmental Matters
See Part I Item 1 of this Form 10-Q in Note N to the Consolidated Financial Statements under caption Environmental Matters.
41
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. Further, the Company has flexibility related to its use of cash; the Company has no significant debt maturities until 2029 and no significant cash contribution requirements related to its pension plan obligations.
In connection with the Transaction, on June 30, 2026, the Company obtained commitments for bridge financing of up to $3,100. The financing consists of commitments for a senior unsecured 364-day bridge term loan credit facility that would be available upon closing of the Transaction, subject to customary conditions, including the consummation of the Transaction in accordance with the terms of the Deed. The facility also contains customary representations, warranties, covenants, and indemnification provisions. The Company currently intends to replace the bridge financing with permanent financing prior to the closing date.
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 U.S., global, or macroeconomic events, such as ongoing regional conflicts, high inflation, and changing U.S. or global monetary or trade 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 $429 in the six-month period of 2026 compared with $563 in the same period in 2025. Notable changes included:
The Company utilizes a Receivables Purchase Agreement facility to sell up to $175 of certain receivables through a wholly-owned special purpose entity (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 secure the sold receivables. At June 30, 2026, the SPE held unsold customer receivables of $812 pledged as collateral against the sold receivables.
The Company continues to service the customer receivables and as customer payments are collected by the Company, the SPE transfers additional receivables to the financial institution rather than remitting cash.
In the six-month period of 2026, the Company sold gross customer receivables of $396 and reinvested collections of $396 from previously sold receivables. In the six-month period of 2025, the Company sold gross customer receivables of $447 and reinvested collections of $447 from previously sold receivables. There were no cash remittances to or from the financial institution in either period.
Cash collections from previously sold receivables yet to be reinvested of $36 were included in Accounts payable, trade on the Consolidated Balance Sheet as of June 30, 2026. Cash received from sold receivables under the agreement are presented within operating activities on the Statement of Consolidated Cash Flows. See Part I Item 1 of this Form 10-Q in Note H to the Consolidated Financial Statements.
42
Financing Activities
Cash used for financing activities was $293 in the six-month period of 2026 compared with $10 of cash provided from financing activities in the same period in 2025.
The use of cash in the six-month period of 2026 was primarily $219 to redeem the remaining aggregate principal amount of the 2028 Notes (see below), $53 of dividends paid on stock, and $9 of net short-term borrowings (see below).
The source of cash in the six-month period of 2025 was primarily $985 net proceeds from the issuance of the 2030 Notes and 2032 Notes and $27 of contributions from Trento EQT (see Noncontrolling interest above), partially offset by $890 to settle tender offers on the 2027 Notes and 2028 Notes, $53 of dividends paid on stock, and $42 of net payments on short-term borrowings.
Short-term Borrowings
The Company periodically enters into inventory repurchase agreements whereby the Company sells aluminum to a third party and agrees to subsequently repurchase substantially similar inventory. Upon shipment of inventory, the Company does not record the sale and reflects cash received in Short-term borrowings within Other current liabilities on the Consolidated Balance Sheet. The cash received and subsequently paid under these agreements is included in Cash (used for) provided from financing activities on the Statement of Consolidated Cash Flows.
During the six-month period of 2026, the Company recorded borrowings of $104 and repurchased $113 of inventory related to these agreements. During the six-month period of 2025, the Company recorded borrowings of $51 and repurchased $93 of inventory related to these agreements.
There were no net borrowings from inventory repurchase agreements as of June 30, 2026.
144A Debt
On May 15, 2026, ANHBV redeemed the remaining $219 aggregate principal amount of its 2028 Notes. The notes were redeemed at a price equal to 100 percent of the principal amount, plus accrued and unpaid interest, using cash on hand.
Credit Facilities
Revolving Credit Facility
The Company and ANHBV, a wholly-owned subsidiary of Alcoa Corporation and the borrower, have 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, most recently amended and restated in June 2022 and amended in July 2026, is scheduled to mature in June 2028. Subject to the terms and conditions under the Revolving Credit Facility, the Company or ANHBV may borrow funds or issue letters of credit. Under the terms of the January 2024 amendment (Amendment No. 1), the Company agreed to provide collateral for its obligations under the Revolving Credit Facility. In August 2025, Alcoa Corporation, ANHBV, and certain subsidiaries of the Company entered into Amendment No. 2 to the Revolving Credit Facility to allow for certain changes in the Company’s legal structure and update certain exceptions to collateral requirements. In May 2026, Alcoa Corporation, ANHBV, and certain subsidiaries of the Company entered into Amendment No. 3 to the Revolving Credit Facility extending maturity from June 2027 to June 2028 and modifying certain pricing provisions. In July 2026, Alcoa Corporation, ANHBV, and certain subsidiaries of the Company entered into Amendment No. 4 to the Revolving Credit Facility to exclude from the events of default certain repayments of indebtedness that may occur in connection with the Transaction (see AliGroup Acquisition above). 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, 2025 for more information on the Revolving Credit Facility.
As of June 30, 2026, 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, 2026, and no amounts were borrowed during the six-month periods of 2026 and 2025 under the Revolving Credit Facility.
Japanese Yen Revolving Credit Facility
The Company and ANHBV had a $200 revolving credit facility available to be drawn in Japanese yen (the Japanese Yen Revolving Credit Facility) that matured on April 24, 2026 with no amounts outstanding at expiration. No amounts were borrowed during the six-month periods of 2026 and 2025 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, 2025 for more information on the Japanese Yen Revolving Credit Facility.
43
Bridge Financing
In connection with the Transaction (see AliGroup Acquisition above), on June 30, 2026, the Company obtained commitments for bridge financing of up to $3,100. The financing consists of commitments for a senior unsecured 364-day bridge term loan credit facility that would be available upon closing of the Transaction, subject to customary conditions, including the consummation of the Transaction in accordance with the terms of the Deed. The facility also contains customary representations, warranties, covenants, and indemnification provisions. The Company currently intends to replace the bridge financing with permanent financing prior to the closing date.
Dividend
On May 7, 2026, 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 19, 2026. In June 2026, the Company paid cash dividends of $26.
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 that the major credit rating agencies assign to Alcoa Corporation’s debt. Each agency’s rating is on a consolidated basis; therefore, the rating assessment applies to Alcoa Corporation, ANHBV, and Alumina Pty Ltd.
On March 11, 2026, Fitch Ratings affirmed Alcoa’s long-term debt rating as BB+ and revised the outlook from stable to positive.
On March 3, 2026, Standard and Poor’s Global Ratings upgraded the rating of Alcoa’s long-term debt to BB+ from BB and revised the outlook from positive to stable.
On February 6, 2026, Moody’s Investor Service affirmed the rating of Alcoa’s long-term debt as Ba1 and affirmed the outlook as stable.
Ratings are not a recommendation to buy or hold any of Alcoa’s 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 $332 in the six-month period of 2026 compared with $240 for the same period in 2025.
In the six-month period of 2026, the use of cash was primarily attributable to capital expenditures of $305, cash contributions to the ELYSIS® partnership of $31, and a cash contribution upon formation of the gallium joint venture $24 (see Gallium Joint Venture above).
In the six-month period of 2025, the use of cash was primarily attributable to capital expenditures of $224 and cash contributions to the ELYSIS partnership of $29, partially offset by cash received of $11 for the sale of a non-core investment.
Recently Adopted and Recently Issued Accounting Guidance
See Part I Item 1 of this Form 10-Q in Note B to the Consolidated Financial Statements.
Dissemination of Company Information
Alcoa Corporation intends to make future announcements regarding company developments and financial performance through its website, https://www.alcoa.com, as well as through press releases, filings with the U.S. Securities and Exchange Commission, conference calls, media broadcasts, and webcasts. The Company does not incorporate the information contained on, or accessible through, its corporate website into this quarterly report.
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, 2025. Our exposure to market risk has not changed materially since December 31, 2025. See Part I Item 1 of this Form 10-Q in Note L 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, 2026.
(b) Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting during the second quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
44
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
(dollars in millions)
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.
U.S. Securities and Exchange Commission 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.
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, 2025. See Part I Item 1 of this Form 10-Q in Note N to the Consolidated Financial Statements for additional information regarding legal proceedings.
Item 1A. Risk Factors.
(dollars in millions)
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, 2025. The information below includes additional risks relating to Alcoa’s proposed transaction to acquire South32 Limited’s (South32) equity interests in its bauxite, alumina, and aluminum assets (the Transaction), pursuant to the Umbrella Implementation Deed (the Deed), dated as of June 30, 2026.
The Transaction may be delayed or may not be completed, which could adversely affect Alcoa’s business, financial condition, results of operations, and stock price.
Completion of the Transaction is subject to various closing conditions, including approval by South32 shareholders, regulatory and governmental approvals, effectiveness of the Registration Statement on Form S-4, approvals for listing Alcoa common stock and quotation of CHESS Depositary Interests (CDIs) to be issued, and other customary conditions specified in the Deed.
The regulatory and governmental approvals may not be obtained, may be delayed, or may be obtained only subject to conditions that are not acceptable to Alcoa or South32 or consistent with the terms of the Deed. Alcoa and South32 may waive certain of these conditions and also have termination rights under the Deed, in certain circumstances. If the Deed is terminated or any closing condition is not satisfied or, where waivable, waived, the Transaction will not be completed.
Alcoa expects to incur significant costs associated with the Transaction. Alcoa’s fees and expenses related to the Transaction include financial advisor fees, filing fees, legal and accounting fees, and regulatory taxes and fees.
If the Transaction is delayed or not completed, Alcoa may not realize the expected benefits of the Transaction and may be adversely affected by negative reactions from financial markets, customers, suppliers, employees, or other business partners; the incurrence of significant transaction-related costs, including costs that are payable regardless of whether the Transaction is completed; potential termination fee obligations; and litigation relating to the Transaction, its termination, or efforts to compel performance under the Deed. Any of these factors could adversely affect Alcoa’s business, financial condition, results of operations, cash flows, or stock price.
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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 consideration payable in the Transaction includes shares of Alcoa common stock representing approximately 6 percent of Alcoa’s outstanding shares post issuance. Consequently, the Company’s existing stockholders will own a smaller proportion of Alcoa common stock.
The issuance of new shares of Alcoa common stock could adversely affect the market price of Alcoa common stock. In addition, South32 shareholders, who will receive Alcoa common stock, may decide to sell some or all of their shares following completion of the Transaction, and South32 may ultimately effect a sale or distribution of the Alcoa common stock it receives, each of 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 Transaction, including as a result of factors over which the Company has no control.
The market price of Alcoa common stock following completion of the Transaction may also be affected by a variety of factors, including whether expected benefits of the Transaction are realized; transaction-related costs are greater than expected; or Alcoa’s financial position, results of operations, or cash flows meet the expectations of investors and financial analysts. Consequently, the market price of Alcoa common stock may decline following completion of the Transaction.
Alcoa may not realize the intended benefits of the Transaction, and integration may disrupt Alcoa’s current plans or operations.
Alcoa may not successfully integrate the acquired operations or otherwise realize the expected benefits of the Transaction. Integration may result in operational disruptions, increased costs, delays in realizing expected synergies, or financial and operating performance that differs from expectations. As a result, the Transaction may not be accretive to earnings per share, improve Alcoa’s balance sheet position, or enhance Alcoa’s ability to generate additional free cash flow.
Integration efforts may also divert management’s attention from existing operations; disrupt customer, supplier, and other business relationships; present challenges in integrating employees, information technology, communications, and other systems; result in previously unknown liabilities; or require unforeseen expenses.
Financing the Transaction may require substantial indebtedness, and permanent financing may not be available on favorable terms, which will increase available capital and credit-related risks.
In connection with the Transaction, the Company obtained commitments for bridge financing of up to $3,100 consisting of a senior unsecured 364-day bridge term loan credit facility available upon closing of the Transaction, subject to customary conditions, including the consummation of the Transaction in accordance with the terms of the Deed. The Company intends to replace the bridge financing with permanent financing prior to the closing date.
Market conditions, volatility in the credit markets, changes in interest rates, or changes in Alcoa’s credit profile, and other factors outside of Alcoa’s control, could increase borrowing costs or limit the availability of permanent financing on terms acceptable to the Company. If permanent financing is not available on favorable terms or in a timely manner, Alcoa may be required to utilize all or a portion of the bridge financing, resulting in higher borrowing costs and reduced financial flexibility. In addition, if attractive debt financing cannot be obtained, Alcoa may seek alternative sources of funding, including the issuance of equity securities, which could dilute existing stockholders.
The increased indebtedness Alcoa expects to incur in connection with the Transaction may, among other impacts, reduce Alcoa’s flexibility to respond to changing business and economic conditions, increase borrowing costs, and limit Alcoa’s ability to pursue strategic opportunities, further increasing capital and credit-related risks. In addition, financing arrangements governing such indebtedness may impose operating and financial restrictions. Risks, uncertainties, and events beyond Alcoa’s control could affect its ability to comply with applicable covenants, and failure to comply could result in a default, trigger cross-default provisions, permit lenders to accelerate debt maturities, or impair Alcoa’s ability to obtain additional financing or satisfy its obligations.
Any of these factors could adversely affect Alcoa’s financial condition, results of operations, cash flows, credit profile, and the anticipated benefits of the Transaction.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(dollars in millions, except per-share amounts)
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 |
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Total Number of Shares Purchased |
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Weighted Average Price Paid Per Share |
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Total Number of Shares Purchased as Part of Publicly Announced Program |
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Approximate Dollar Value of Shares that May Yet be Purchased Under the Program(1) |
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April 1 to April 30 |
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— |
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— |
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— |
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$ |
500 |
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May 1 to May 31 |
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— |
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— |
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— |
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500 |
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June 1 to June 30 |
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— |
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— |
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— |
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500 |
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Total |
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— |
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— |
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— |
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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 4. Mine Safety Disclosures.
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this report.
Item 5. Other Information.
Trading Arrangements
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Item 6. Exhibits.
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2.1**† |
Umbrella Implementation Deed, dated as of June 30, 2026, by and among, inter alios, Alcoa Corporation and South32 Limited (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 2, 2026 (File No. 1-37816)) |
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10.1 |
Amendment No. 3, dated as of May 4, 2026, which includes, as Exhibit A thereto, the Revolving Credit Agreement, dated as of September 16, 2016, as amended as of October 26, 2016, as amended and restated as of November 14, 2017, as amended and restated as of November 21, 2018, as amended as of August 16, 2019, as amended as of April 21, 2020, as amended as of June 24, 2020, as amended as of March 4, 2021, as amended and restated as of June 27, 2022, as amended as of January 17, 2024, as amended as of August 4, 2025 and as amended as of May 4, 2026, among Alcoa Corporation, Alcoa Global Holding B.V., Alcoa Nederland Holding B.V., the lenders and issuers from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders and issuers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed May 4, 2026 (File No. 1-37816)) |
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10.2 |
Amendment No. 4, dated as of July 14, 2026, to the Revolving Credit Agreement, dated as of September 16, 2016, as amended as of October 26, 2016, as amended and restated as of November 14, 2017, as amended and restated as of November 21, 2018, as amended as of August 16, 2019, as amended as of April 21, 2020, as amended as of June 24, 2020, as amended as of March 4, 2021, as amended and restated as of June 27, 2022, as amended as of January 17, 2024, as amended as of August 4, 2025, as amended as of May 4, 2026, and as amended as of July 14, 2026, among Alcoa Corporation, Alcoa Global Holding B.V., Alcoa Nederland Holding B.V., the lenders and issuers from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders and issuers (filed herewith) |
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10.3* |
Terms and Conditions for Deferred Fee Restricted Share Units Director Awards, effective May 6, 2026 (filed herewith) |
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10.4* |
Terms and Conditions for Restricted Share Units Annual Director Awards, effective May 6, 2026 (filed herewith) |
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10.5* |
Alcoa Corporation Stock and Incentive Compensation Plan (as Amended and Restated) (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on May 7, 2026 (File No. 1-37816)) |
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31.1 |
Certification of Principal Executive Officer required by Rule 13a-14(a) or 15d-14(a) (filed herewith) |
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31.2 |
Certification of Principal Financial Officer required by Rule 13a-14(a) or 15d-14(a) (filed herewith) |
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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) |
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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) |
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95.1 |
Mine Safety Disclosure (filed herewith) |
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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 |
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101.SCH |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document |
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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.
** Portions of this exhibit have been redacted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the Commission an unredacted copy of the exhibit upon request.
† Certain schedules, exhibits, and appendices of this exhibit have been omitted in accordance with 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.
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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.
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Alcoa Corporation |
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July 30, 2026 |
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/s/ Molly S. Beerman |
Date |
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Molly S. Beerman |
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Executive Vice President and Chief Financial Officer |
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(Principal Financial Officer) |
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July 30, 2026 |
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/s/ Renee R. Henry |
Date |
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Renee R. Henry |
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Senior Vice President and Controller |
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(Principal Accounting Officer) |
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