Alcoa Welcomes Clarification of Advanced Manufacturing Tax Credit and Updates Fourth Quarter 2023 Outlook

PITTSBURGH--(BUSINESS WIRE)--Alcoa Corporation (NYSE: AA) welcomes the U.S. Treasury Department’s (Treasury) announced guidance on Section 45X of the Advanced Manufacturing Tax Credit, enacted as part of the Inflation Reduction Act (IRA).

The Notice of Proposed Rulemaking (the Notice) clarifies that commercial grade aluminum can qualify for the credit, which was designed to incentivize domestic production of critical materials important for the transition to clean energy. In the fourth quarter of 2023, the Company expects to record a benefit in Cost of goods sold between $35 million and $40 million (after-tax), or $0.20 to $0.22 per share, related to its Massena smelter in New York and its Warrick smelter in Indiana.

Alcoa intends to submit written comments to Treasury regarding the definition of production costs as requested in the Notice. Alcoa appreciates the leadership of the Biden administration in implementing the IRA and this guidance on Section 45X.

Unrelated, the Company expects to record a valuation allowance on certain deferred tax assets in Brazil which will result in a charge to tax expense of $140 million to $150 million, or $0.78 to $0.84 per share. Approximately $100 million of this charge, or $0.56 per share, is discrete, resulting in a net loss of $40 to $50 million, or an impact to Adjusted loss per share in the fourth quarter of 2023 of $0.22 to $0.28.

About Alcoa Corporation

Alcoa (NYSE: AA) is a global industry leader in bauxite, alumina and aluminum products with a vision to reinvent the aluminum industry for a sustainable future. Our purpose is to turn raw potential into real progress, underpinned by Alcoa Values that encompass integrity, operating excellence, care for people and courageous leadership. Since developing the process that made aluminum an affordable and vital part of modern life, our talented Alcoans have developed breakthrough innovations and best practices that have led to improved safety, sustainability, efficiency, and stronger communities wherever we operate.

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