Third Quarter 2021 Highlights

• Sales of $1.9 billion, up 34% year over year, and up 5% from prior quarter
• Net income of $16 million, or $0.15 per share, compared with $5 million, or $0.05 per share, in third quarter 2020
• Adjusted EBITDA of $171 million, up 4% year over year, and down 9% from prior quarter
• Repurchased nearly 3 million shares at a cost of approximately $97 million for year-to-date repurchases of $106 million toward $300 million authorization

Arconic Corporation (NYSE: ARNC) (“Arconic” or “the Company”) today reported third quarter 2021 results. Revenue was $1.9 billion, up 5% from the prior quarter, primarily due to higher aluminum prices and the start of packaging sales in the U.S., partially offset by weaker than expected ground transportation sales. The Company reported net income of $16 million, or $0.15 per share, compared with $5 million, or $0.05 per share, in third quarter 2020.

Third quarter 2021 Adjusted EBITDA was $171 million, an increase of 4% year over year and a decline of 9% sequentially, driven by productivity issues related to labor shortages, higher energy costs, and ongoing weakness in automotive due to semiconductor supply issues. Cash used for operations was $42 million and capital expenditures were $51 million. At quarter-end, the cash balance was $349 million with total available liquidity of approximately $1.1 billion, and debt was $1.6 billion.

Tim Myers, Chief Executive Officer, said, “Demand for our products remains very strong across all end markets even as the pandemic continues to affect our operations. Ongoing labor shortages in the U.S. limited our ability to serve existing orders, particularly in the industrial market. As we exited the third quarter, our industrial backlog was more than $60 million above typical levels or roughly five times greater than normal. We are aggressively addressing these issues and expect to work down the backlog by the end of the year and return to sequential Adjusted EBITDA growth in the fourth quarter.”

Mr. Myers continued, “The Company grew Adjusted EBITDA year over year and executed on our capital allocation plan, repurchasing approximately $97 million in shares. Looking forward, we are focused on achieving sustained Adjusted EBITDA growth as demand continues to increase across our end markets. Today we announced two investments that underpin that growth. As profitability continues to increase and legacy cash obligations decline in 2022, our ability to allocate capital to additional shareholder returns and organic investments will create value for all stakeholders.”

Outlook

The Company is updating its full-year 2021 outlook to reflect the impact of increased metal prices on revenue and working capital. Arconic revenue expectations are now in the range of $7.5 billion to $7.7 billion for full-year 2021 compared with the prior expected range of $7.3 billion to $7.6 billion. This assumes an average annual LME aluminum price of $2,510/mt and Midwest Premium of $610/mt for the full year, increased from prior assumptions for LME of $2,330/mt and Midwest Premium of $540/mt. Expected Adjusted EBITDA range has been tightened to $710 million to $730 million from the prior range of $710 million to $750 million. Adjusted free cash flow outlook for full-year 2021 is now expected to be approximately $50 million compared with the prior view of approximately $250 million. At quarter end, combined LME plus Midwest Premium price had increased approximately $1,300/mt compared with year-end 2020 resulting in $250-$300 million of working capital pressure for full-year 2021. Adjusted free cash flow outlook excludes a $250 million contribution to U.S. pension plans in April in connection with the $1 billion partial annuitization of U.S. pension obligations, and approximately $350 million in other funding of legacy pension, OPEB, and environmental liabilities.

Share Repurchase Program

The Company repurchased nearly 3 million shares in third quarter 2021 at an average price of $34.13 for a total of approximately $97 million. Since the start of the program in May 2021 through September 30, 2021, the Company has repurchased approximately 3.1 million shares for a total of approximately $106 million toward the $300 million two-year authorization.

Arconic will hold its quarterly conference call at 10:00 AM Eastern Time on November 2, 2021, to present third quarter financial results. The call will be webcast on the Arconic website. Call information and related details are available at www.arconic.com under “Investors.”

About Arconic

Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh, Pennsylvania, is a leading provider of aluminum sheet, plate, and extrusions, as well as innovative architectural products, that advance the ground transportation, aerospace, building and construction, industrial and packaging end markets.

Dissemination of Company Information

Arconic intends to make future announcements regarding Company developments and financial performance through its website at www.arconic.com

Forward-Looking Statements

This release 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 "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning. All statements that reflect Arconic’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, relating to the condition of, or trends or developments in, the ground transportation, aerospace, building and construction, industrial, packaging and other end markets; Arconic’s future financial results, operating performance, working capital, cash flows, liquidity and financial position; cost savings and restructuring programs; Arconic's strategies, outlook, business and financial prospects; share repurchases; costs associated with pension and other post-retirement benefit plans; projected sources of cash flow; potential legal liability; the potential impact of inflationary price pressures; the potential impact of the COVID-19 pandemic; the timing and levels of potential recovery from the COVID-19 pandemic within our end markets; and the impact of actions to mitigate the impact of the COVID-19 pandemic. These statements reflect beliefs and assumptions that are based on Arconic’s perception of historical trends, current conditions and expected future developments, as well as other factors Arconic believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and changes in circumstances, many of which are beyond Arconic’s control. Such risks and uncertainties include, but are not limited to: (a) continuing uncertainty regarding the duration and impact of the COVID-19 pandemic on our business and the businesses of our customers and suppliers including labor shortages and increased quarantine rates; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the end markets we serve; (d) the inability to achieve the level of revenue growth, cash generation, cost savings, benefits of our management of legacy liabilities, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; (e) adverse changes in discount rates or investment returns on pension assets; (f) competition from new product offerings, disruptive technologies, industry consolidation or other developments; (g) the loss of significant customers or adverse changes in customers’ business or financial condition; (h) manufacturing difficulties or other issues that impact product performance, quality or safety; (i) the impact of pricing volatility in raw materials and inflationary pressures on our costs of production; (j) a significant downturn in the business or financial condition of a key supplier or other supply chain disruptions; (k) challenges to or infringements on our intellectual property rights; (l) the inability to successfully implement our re-entry into the U.S. packaging market or to realize the expected benefits of other strategic initiatives or projects; (m) the inability to identify or successfully respond to changing trends in our end markets; (n) the impact of potential cyber attacks and information technology or data security breaches; (o) geopolitical, economic, and regulatory risks relating to our global operations, including compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (p) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation and compliance matters; and (q) the other risk factors summarized in Arconic’s Form 10-K for the year ended December 31, 2020 and other reports filed with the U.S. Securities and Exchange Commission (SEC). The above list of factors is not exhaustive or necessarily in order of importance. Market projections are subject to the risks discussed above and in this release, and other risks in the market. The statements in this release are made as of the date of this release, even if subsequently made available by Arconic on its website or otherwise. Arconic disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

Non-GAAP Financial Measures

Some of the information included in this release is derived from Arconic’s consolidated financial information but is not presented in Arconic’s financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these financial measures are considered “non-GAAP financial measures” under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to any measure of performance or financial condition as determined in accordance with GAAP, and investors should consider Arconic’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of Arconic. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Non-GAAP financial measures presented by Arconic may not be comparable to non-GAAP financial measures presented by other companies. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the schedules to this release. Arconic has not provided reconciliations of any forward-looking non-GAAP financial measures, such as adjusted EBITDA, free cash flow, and adjusted free cash flow, to the most directly comparable GAAP financial measures because such reconciliations are not available without unreasonable efforts due to the variability and complexity with respect to the charges and other components excluded from the non-GAAP measures, such as the effects of metal price lag, foreign currency movements, gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. These reconciling items are in addition to the inherent variability already included in the GAAP measures, which includes, but is not limited to, price/mix and volume. Arconic believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

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