ARNC - Arconic Reports First Quarter 2023 Results

First Quarter Segment Performance

Sales by Segment (in millions)

Quarter ended

March 31, 2023

March 31, 2022

Rolled Products

$

1,504

$

1,804

Building and Construction Systems

308

291

Extrusions

120

97

Adjusted EBITDA (in millions)

Quarter ended

March 31, 2023

March 31, 2022

Rolled Products

$

117

$

176

Building and Construction Systems

54

44

Extrusions

(4)

(5)

Subtotal

167

215

Corporate

(10)

(10)

Adjusted EBITDA

$

157

$

205

Arconic Corporation and subsidiaries

Statement of Consolidated Operations (unaudited)

(dollars in millions, except per-share amounts)

Quarter ended

March 31,
2023

December 31,
2022

March 31,
2022

Sales

$

1,929

$

1,942

$

2,191

Cost of goods sold (exclusive of expenses below) ⁽¹⁾

1,724

1,744

1,956

Selling, general administrative, and other expenses

72

46

65

Research and development expenses

9

10

9

Provision for depreciation and amortization

53

56

60

Restructuring and other charges ⁽²⁾

—

337

5

Operating income (loss)

71

(251

)

96

Interest expense

25

26

25

Other expenses, net

11

32

17

Income (Loss) before income taxes

35

(309

)

54

Provision (Benefit) for income taxes

10

(36

)

12

Net income (loss)

25

(273

)

42

Less: Net income attributable to noncontrolling interest ⁽³⁾

—

—

—

NET INCOME (LOSS) ATTRIBUTABLE TO ARCONIC CORPORATION

$

25

$

(273

)

$

42

EARNINGS PER SHARE ATTRIBUTABLE TO ARCONIC CORPORATION COMMON STOCKHOLDERS:

Basic:

Net income (loss)

$

0.25

$

(2.70

)

$

0.40

Weighted-average number of shares

99,408,330

100,956,393

105,407,022

Diluted:

Net income (loss)

$

0.24

$

(2.70

)

$

0.39

Weighted-average number of shares ⁽⁴⁾

102,084,961

100,956,393

108,504,118

COMMON STOCK OUTSTANDING AT THE END OF THE PERIOD

99,424,955

99,432,194

105,784,425

(1)

In the quarter ended March 31, 2023, Arconic recorded both a $74 charge and a $74 benefit in Cost of goods sold to establish a liability for a settlement in principle and a receivable for insurance reimbursement, respectively, related to a litigation matter. In the quarter ended December 31, 2022, Arconic recorded both a $61 charge and a $53 benefit in Cost of goods sold to establish a liability for a then-potential settlement and a receivable for an anticipated insurance reimbursement, respectively, related to a litigation matter.

(2)

On November 15, 2022, Arconic completed the sale of 100% of its operations in Russia to Promishlennie Investitsii LLC, the majority owner of VSMPO-AVISMA Corporation, for cash proceeds of $230. The transaction closed after the Company received all required approvals, resulting in the receipt of the cash consideration in exchange for all of Arconic’s net assets in Russia. These net assets included $203 of cash held in Russia that was not available for distribution to the parent company because of injunctions imposed as a result of litigation initiated in March 2020 by the Federal Antimonopoly Service of The Russian Federation (“FAS”). The Company recorded a loss of $306 ($304 after-tax) in the fourth quarter of 2022 in connection with this transaction. At a hearing on December 22, 2022, the Samara Court dismissed the litigation.

In addition, in the quarter ended December 31, 2022, Restructuring and other charges includes $31 related to the settlement of a portion of the Company’s U.S. defined benefit pension plan obligations as a result of elections by certain plan participants to receive lump-sum benefit payments.

(3)

Prior to the sale of Arconic’s operations in Russia (see footnote 2), VSMPO-AVISMA Corporation owned a limited portion of one of the legal entities included in the sale. VSMPO-AVISMA Corporation’s share of net income (loss) of this legal entity was reported in this line item. Subsequent to the sale, there is no longer a noncontrolling interest in Arconic Corporation and its subsidiaries.

(4)

For periods in which the Company generates net income, the diluted weighted-average number of shares include common share equivalents associated with outstanding employee stock awards. For periods in which the Company generates a net loss, the diluted weighted-average number of shares does not include any common share equivalents as their effect is anti-dilutive.

Arconic Corporation and subsidiaries

Consolidated Balance Sheet (unaudited)

(in millions)

March 31,
2023

December 31,
2022

ASSETS

Current assets:

Cash and cash equivalents

$

197

$

261

Receivables from customers, less allowances of $1 in both 2023 and 2022

926

791

Other receivables

153

183

Inventories

1,662

1,622

Fair value of hedging instruments and derivatives

7

21

Prepaid expenses and other current assets ⁽¹⁾

141

124

Total current assets

3,086

3,002

Properties, plants, and equipment

7,014

6,957

Less: accumulated depreciation and amortization

4,651

4,596

Properties, plants, and equipment, net

2,363

2,361

Goodwill

294

292

Operating lease right-of-use-assets

117

115

Deferred income taxes

187

188

Other noncurrent assets

56

57

Total assets

$

6,103

$

6,015

LIABILITIES

Current liabilities:

Short term debt ⁽²⁾

$

50

$

—

Accounts payable, trade

1,554

1,578

Accrued compensation and retirement costs

108

119

Taxes, including income taxes

36

43

Environmental remediation

36

40

Operating lease liabilities

35

34

Fair value of hedging instruments and derivatives

29

7

Other current liabilities ⁽¹⁾

177

150

Total current liabilities

2,025

1,971

Long-term debt

1,597

1,597

Accrued pension benefits

586

586

Accrued other postretirement benefits

297

302

Environmental remediation

40

45

Operating lease liabilities

84

83

Deferred income taxes

6

3

Other noncurrent liabilities

71

71

Total liabilities

4,706

4,658

STOCKHOLDERS’ EQUITY

Common stock

1

1

Additional capital

3,379

3,373

Accumulated deficit

(709

)

(734

)

Treasury stock

(347

)

(346

)

Accumulated other comprehensive loss

(927

)

(937

)

Total stockholders’ equity ⁽³⁾

1,397

1,357

Total liabilities and stockholders’ equity

$

6,103

$

6,015

(1)

In the quarter ended March 31, 2023, Arconic established both a liability of $74 (reported in Other current liabilities) for a settlement in principle and a receivable of $74 (reported in Prepaid expenses and other current assets) for an insurance reimbursement of the settlement in principle with respect to a litigation matter. See footnote 1 to the Statement of Consolidated Operations for the quarter ended March 31, 2023 included in this release.

(2)

Arconic maintains a five-year credit agreement, dated May 13, 2020, with a syndicate of lenders named therein and Deutsche Bank AG New York Branch as administrative agent (the “ABL Credit Agreement”). The ABL Credit Agreement provides for a $1,200 senior secured asset-based revolving credit facility (the “ABL Credit Facility”) to be used, generally for working capital or other general corporate purposes. In the quarter ended March 31, 2023, the Company borrowed $150 and repaid $100 under this facility.

(3)

See footnote 3 to the Statement of Consolidated Operations included in this release.

Arconic Corporation and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(dollars in millions)

Quarter ended

March 31,
2023

December 31,
2022

March 31,
2022

OPERATING ACTIVITIES

Net income (loss)

$

25

$

(273

)

$

42

Adjustments to reconcile net income (loss) to cash (used for) provided from operations:

Depreciation and amortization

53

56

60

Deferred income taxes

20

(29

)

(4

)

Restructuring and other charges ⁽¹⁾

—

337

5

Net periodic pension benefit cost

17

28

16

Stock-based compensation

6

(4

)

5

Other

22

14

12

Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:

(Increase) in receivables ⁽²⁾

(107

)

(32

)

(110

)

(Increase) Decrease in inventories

(34

)

21

(206

)

(Increase) in prepaid expenses and other current assets

(24

)

(49

)

(10

)

Increase in accounts payable, trade

5

76

116

(Decrease) Increase in accrued expenses

(9

)

63

(28

)

(Decrease) Increase in taxes, including income taxes

(22

)

(17

)

1

Pension contributions

(10

)

(9

)

(4

)

Decrease (Increase) in noncurrent assets

8

(9

)

1

Increase in noncurrent liabilities

11

15

1

CASH (USED FOR) PROVIDED FROM OPERATIONS

(39

)

188

(103

)

FINANCING ACTIVITIES

Net change in short term borrowings (original maturities of three months or less) ⁽³⁾

50

(150

)

100

Repurchases of common stock ⁽⁴⁾

(1

)

(46

)

(16

)

Other

—

(1

)

(12

)

CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES

49

(197

)

72

INVESTING ACTIVITIES

Capital expenditures

(82

)

(70

)

(95

)

Proceeds from the sale of assets and businesses ⁽⁵⁾

7

27

—

Other

—

—

1

CASH USED FOR INVESTING ACTIVITIES

(75

)

(43

)

(94

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

1

1

—

Net change in cash and cash equivalents and restricted cash

(64

)

(51

)

(125

)

Cash and cash equivalents and restricted cash at beginning of period ⁽⁶⁾

261

312

335

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD ⁽⁶⁾

197

261

210

(1)

See footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release.

(2)

Arconic has two separate arrangements, each with a single financial institution, to sell certain customer receivables outright without recourse on a continuous basis. All such sales are at the Company’s discretion. The first arrangement, which was executed in January 2022, relates to certain of Arconic’s U.S. operations and automatically renews each year unless terminated in accordance with the provisions of the underlying purchase agreement. The second arrangement, which was executed in July 2022, relates to certain of the Company’s European operations. Under both arrangements, Arconic serves in an administrative capacity, including collection of the receivables from the respective customers and remittance of these cash collections to the respective financial institution. Accordingly, upon the sale of customer receivables to the financial institutions, the Company removes the underlying trade receivables from its Consolidated Balance Sheet and includes the reduction as a positive amount in the (Increase) in receivables line item within Operating Activities on its Statement of Consolidated Cash Flows. In the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022, the Company sold customer receivables of $151, $156, and $221, respectively, collected cash from customers of $129, $314, and $158, respectively, and remitted cash to the financial institutions of $116, $314, and $158, respectively.

(3)

Arconic maintains a five-year credit agreement, dated May 13, 2020, with a syndicate of lenders named therein and Deutsche Bank AG New York Branch as administrative agent (the “ABL Credit Agreement”). The ABL Credit Agreement provides for a $1,200 senior secured asset-based revolving credit facility (the “ABL Credit Facility”) to be used, generally, for working capital or other general corporate purposes. In the quarters ended March 31, 2023, December 31, 2022, and March 31, 2022, the Company borrowed $150, $25, and $100, respectively, and in the quarters ended March 31, 2023 and December 31, 2022, repaid $100 and $175, respectively, under the ABL Credit Facility.

(4)

On November 16, 2022, Arconic announced that its Board of Directors approved a new share repurchase program authorizing the Company to repurchase shares of its outstanding common stock up to an aggregate transactional value of $200 over a two-year period expiring November 17, 2024. In the quarters ended March 31, 2023 and December 31, 2022, the Company repurchased 35,615 and 2,071,835, respectively, shares of its common stock under this program.

In the quarter ended March 31, 2022, the Company repurchased 505,982 shares of its common stock under its previous share repurchase program, which was authorized in May 2021 and completed in August 2022. Cumulatively, the Company repurchased 9,776,177 shares of its common stock for $300 under this program. In connection with the authorization of the new program, Arconic’s previous repurchase program was terminated.

(5)

In the quarter ended December 31, 2022, the Company received $230 in cash proceeds related to the sale of its operations in Russia less $203 in cash held by its operations in Russia that was not available for distribution to the parent company because of injunctions imposed as a result of litigation initiated in March 2020. See footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release.

(6)

Cash and cash equivalents and restricted cash at beginning of period for all periods presented and Cash and cash equivalents and restricted cash at end of period for all periods presented includes Restricted cash of less than $0.03.

Arconic Corporation and subsidiaries

Segment Adjusted EBITDA Reconciliation (unaudited)

(in millions)

Quarter ended

March 31,
2023

December 31,
2022

March 31,
2022

Total Segment Adjusted EBITDA ⁽¹⁾

$

167

$

152

$

215

Unallocated amounts:

Corporate expenses ⁽²⁾

(9

)

(6

)

(9

)

Stock-based compensation expense

(6

)

4

(5

)

Metal price lag ⁽³⁾

—

8

(36

)

Unrealized (losses) gains on mark-to-market hedging instruments and derivatives

(20

)

(10

)

2

Provision for depreciation and amortization

(53

)

(56

)

(60

)

Restructuring and other charges ⁽⁴⁾

—

(337

)

(5

)

Other ⁽⁵⁾

(8

)

(6

)

(6

)

Operating income (loss)

71

(251

)

96

Interest expense

(25

)

(26

)

(25

)

Other expenses, net

(11

)

(32

)

(17

)

(Provision) Benefit for income taxes

(10

)

36

(12

)

Net income attributable to noncontrolling interest ⁽⁶⁾

—

—

—

Consolidated net income (loss) attributable to Arconic Corporation

$

25

$

(273

)

$

42

(1)

Arconic’s profit or loss measure for its reportable segments is Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization). The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus each of (i) Cost of goods sold, (ii) Selling, general administrative, and other expenses, and (iii) Research and development expenses, plus each of (i) Stock-based compensation expense, (ii) Metal price lag (see footnote 3), and (iii) Unrealized (gains) losses on mark-to-market hedging instruments and derivatives. Arconic’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments.

Total Segment Adjusted EBITDA is the sum of the respective Segment Adjusted EBITDA for each of the Company’s three reportable segments: Rolled Products, Building and Construction Systems, and Extrusions. This amount is being presented for the sole purpose of reconciling Segment Adjusted EBITDA to the Company’s Consolidated net income (loss).

(2)

Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities.

(3)

Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions.

(4)

See footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release.

(5)

Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on the Company’s Statement of Consolidated Operations that are not included in Segment Adjusted EBITDA, including those described as “Other special items” (see footnote 4 to the reconciliation of Adjusted EBITDA within Calculation of Non-GAAP Financial Measures included in this release).

(6)

See footnote 3 to the Statement of Consolidated Operations included in this release.

Arconic Corporation and subsidiaries

Calculation of Non-GAAP Financial Measures (unaudited)

(in millions)

Adjusted EBITDA

Quarter ended

March 31,
2023

December 31,
2022

March 31,
2022

Net income (loss) attributable to Arconic Corporation

$

25

$

(273

)

$

42

Add:

Net income attributable to noncontrolling interest ⁽¹⁾

—

—

—

Provision (Benefit) for income taxes

10

(36

)

12

Other expenses, net

11

32

17

Interest expense

25

26

25

Restructuring and other charges ⁽²⁾

—

337

5

Provision for depreciation and amortization

53

56

60

Stock-based compensation

6

(4

)

5

Metal price lag ⁽³⁾

—

(8

)

36

Unrealized losses (gains) on mark-to-market hedging instruments and derivatives

20

10

(2

)

Other special items ⁽⁴⁾

7

14

5

Adjusted EBITDA

$

157

$

154

$

205

Sales

$

1,929

$

1,942

$

2,191

Adjusted EBITDA Margin

8.1

%

7.9

%

9.4

%

Arconic’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for the following items: Provision for depreciation and amortization; Stock-based compensation; Metal price lag (see footnote 3); Unrealized (gains) losses on mark-to-market hedging instruments and derivatives; and Other special items. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items are composed of restructuring and other charges, discrete income tax items, and other items as deemed appropriate by management. There can be no assurances that additional special items will not occur in future periods. Adjusted EBITDA provides additional information with respect to Arconic’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies.

(1)

See footnote 3 to the Statement of Consolidated Operations included in this release.

(2)

See footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release.

(3)

Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions.

(4)

Other special items include the following:

• for the quarter ended March 31, 2023, costs related to several legal matters, including Grenfell Tower ($3) and other ($1), and other items ($3);

• for the quarter ended December 31, 2022, a charge related to environmental remediation matters ($9), costs related to several legal matters ($1), and other items ($4);

• for the quarter ended March 31, 2022, costs related to several legal matters ($2), costs related to the packaging restart at the Tennessee rolling mill ($2), and other items ($1).

Adjusted EBITDA excluding Russian operations ⁽¹⁾

Quarter ended

Quarter ended

December 31, 2022

March 31, 2022

As reported

Russia ⁽¹⁾

As recast ⁽¹⁾

As reported

Russia ⁽¹⁾

As recast ⁽¹⁾

Net (loss) income attributable to Arconic Corporation

$

(273

)

$

7

$

(280

)

$

42

$

6

$

36

Add:

Net income attributable to noncontrolling interest ⁽²⁾

—

—

—

—

—

—

(Benefit) Provision for income taxes

(36

)

—

(36

)

12

2

10

Other expenses (income), net

32

(1

)

33

17

4

13

Interest expense

26

—

26

25

—

25

Restructuring and other charges ⁽³⁾

337

—

337

5

—

5

Provision for depreciation and amortization

56

3

53

60

6

54

Stock-based compensation

(4

)

—

(4

)

5

—

5

Metal price lag ⁽⁴⁾

(8

)

—

(8

)

36

—

36

Unrealized losses (gains) on mark-to-market hedging instruments and derivatives

10

—

10

(2

)

—

(2

)

Other special items ⁽⁵⁾

14

—

14

5

—

5

Adjusted EBITDA

$

154

$

9

$

145

$

205

$

18

$

187

Sales

$

1,942

$

116

$

1,826

$

2,191

$

233

$

1,958

Adjusted EBITDA Margin

7.9

%

7.8

%

7.9

%

9.4

%

7.7

%

9.6

%

(1)

Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation of Adjusted EBITDA included in this release for (i) the Company’s definition of Adjusted EBITDA and (ii) management’s rationale for the presentation of this non-GAAP measure. The “As reported” column presents a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

Adjusted EBITDA excluding Russian operations is also a non-GAAP financial measure. On November 15, 2022, Arconic completed the sale of 100% of its operations in Russia (see footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release). Accordingly, management believes the presentation of Adjusted EBITDA excluding Russian operations is meaningful to investors because such measure provides context as to the contribution made by the Company’s former operations in Russia relative to Arconic’s total financial performance. Additionally, this measure provides a historical basis with which to compare the Company’s financial performance in future periods.

The “Russia” column presents the unaudited combined financial information of Arconic’s subsidiaries that held the Company’s former operations in Russia prepared from the historical accounting records of these legal entities. This information is not equivalent to that which would be presented as consolidated financial information prepared in accordance with accounting principles generally accepted in the United States of America if these subsidiaries were to be presented as a standalone consolidated reporting entity. Other amounts related to Arconic’s former operations in Russia recorded in the historical accounting records of other legal entities included in the Company’s consolidated group, such as the loss on the sale of the previously mentioned former subsidiaries recorded by the direct parent company of these legal entities, were presented in the “As recast” column. However, the amount presented as Adjusted EBITDA excluding Russian operations is the same whether these amounts related to Arconic’s former operations in Russia are presented in the “Russia” column or the “As recast” column.

The amounts in the “As recast” column are equal to the amounts in the “As reported” column less the amounts in the “Russia” column. Consequently, there are limitations in the usefulness of the amounts presented in the “As recast” column for Net (loss) income attributable to Arconic Corporation and (Benefit) Provision for income taxes. For example, the (Benefit) Provision for income taxes would need to be recalculated on a “without” approach to consider the consolidated company excluding the former operations in Russia, the impact of which may extend beyond subtracting the amount for (Benefit) Provision for income taxes presented in the “Russia” column from the consolidated amount in the “As reported” column. Conversely, the amount presented for Adjusted EBITDA excluding Russia does not contain any such limitations.

(2)

See footnote 3 to the Statement of Consolidated Operations included in this release.

(3)

See footnote 2 to the Statement of Consolidated Operations for the quarter ended December 31, 2022 included in this release.

(4)

See footnote 3 to the reconciliation of Adjusted EBITDA for the quarterly periods presented included in this release.

(5)

See footnote 4 to the reconciliation of Adjusted EBITDA for the quarterly periods presented included in this release.

Adjusted EBITDA to
Free Cash Flow Bridge

Quarter ended

March 31,
2023

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

Adjusted EBITDA ⁽¹⁾

$

157

$

154

$

143

$

204

$

205

Change in working capital ⁽²⁾

(136

)

65

2

(49

)

(200

)

Cash payments for:

Environmental remediation

(10

)

(4

)

(1

)

(2

)

(4

)

Pension contributions

(10

)

(9

)

(9

)

(9

)

(4

)

Other postretirement benefits

(7

)

(7

)

(7

)

(8

)

(8

)

Restructuring actions

—

—

(2

)

(1

)

(2

)

Interest

(29

)

(24

)

(30

)

(23

)

(29

)

Income taxes

(4

)

1

(3

)

(23

)

(4

)

Capital expenditures

(82

)

(70

)

(47

)

(33

)

(95

)

Other ⁽³⁾

—

12

(2

)

73

(57

)

Free Cash Flow ⁽⁴⁾

$

(121

)

$

118

$

44

$

129

$

(198

)

(1)

Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation of Adjusted EBITDA included in this release for (i) Arconic’s definition of Adjusted EBITDA, (ii) management’s rationale for the presentation of this non-GAAP measure, and (iii) a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure.

(2)

Arconic’s definition of working capital is Receivables plus Inventories less Accounts payable, trade.

(3)

Other includes the impact of metal price lag as follows: 1Q23-; 4Q22-$8; 3Q22-$15; 2Q22-$30; and 1Q22-$(36). See footnote 3 to the reconciliation of Adjusted EBITDA included in this release for additional information on metal price lag.

(4)

Arconic’s definition of Free Cash Flow is Cash from operations less capital expenditures. Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures, which are both necessary to maintain and expand the Company’s asset base and expected to generate future cash flows from operations. It is important to note that Free Cash Flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.

• 1Q23: Cash used for operations of $(39) less capital expenditures of $82 = free cash flow of $(121)

• 4Q22: Cash provided from operations of $188 less capital expenditures of $70 = free cash flow of $118

• 3Q22: Cash provided from operations of $91 less capital expenditures of $47 = free cash flow of $44

• 2Q22: Cash provided from operations of $162 less capital expenditures of $33 = free cash flow of $129

• 1Q22: Cash used for operations of $(103) less capital expenditures of $95 = free cash flow of $(198)

Reconciliation of Organic Revenue

(in millions)

Quarter Ended March 31, 2022

Total

Revenue

$

2,192

Less:

Sales – Russian Operations

233

Organic Revenue

$

1,959

Quarter Ended March 31, 2023

Revenue

$

1,932

Less:

Sales – Russian Operations

n/a

Aluminum price impact

(128

)

Foreign currency impact

(19

)

Organic Revenue

$

2,079