Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

L. Debt

Short-term borrowings

Inventory Repurchase Agreement

In March 2023, the Company entered into an inventory repurchase agreement whereby the Company sold aluminum to a third party and agreed to subsequently repurchase substantially similar inventory. The Company did not record a sale upon shipment of the inventory and the cash received of $25 was recorded in Short-term borrowings within Other current liabilities on the Consolidated Balance Sheet as of March 31, 2023. The inventory sold of $25 was pledged as collateral and was reflected in Prepaid expenses and other current assets on the Consolidated Balance Sheet.

During the second quarter and six-month period of 2023, the Company repurchased $15 of inventory related to this agreement, resulting in an increase to Inventories and decrease to Prepaid expenses and other current assets on the Consolidated Balance Sheet.

The cash received and subsequently paid under the inventory repurchase agreement is included in Cash provided from (used for) financing activities on the Statement of Consolidated Cash Flows for the six-month period of 2023.

Credit Facilities

Revolving Credit Facility

The Company has an unsecured $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 on September 16, 2016 and amended and restated in 2022, is scheduled to mature in June 2027. Subject to the terms and conditions under the Revolving Credit Facility, the Company or Alcoa Nederland Holding B.V. (ANHBV), a wholly-owned subsidiary of Alcoa Corporation, may borrow funds or issue letters of credit. 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, 2022 for more information on the Revolving Credit Facility.

As of June 30, 2023, the Company was in compliance with all covenants. The Company may access the entire amount of commitments under the Revolving Credit Facility. There were no borrowings outstanding at June 30, 2023 and December 31, 2022, and no amounts were borrowed during the second quarter and six-month period of 2023 and 2022 under the Revolving Credit Facility.

Japanese Yen Revolving Credit Facility

In April 2023, the Company entered into a one-year unsecured revolving credit facility for $250 (available to be drawn in Japanese yen). Subject to the terms and conditions under the facility, the Company or ANHBV may borrow funds. The facility includes covenants that are substantially the same as those included in the Revolving Credit Facility. If Alcoa Corporation or ANHBV, as applicable, fails to have a rating of at least Ba1 from Moody’s Investor Service (Moody’s) and BB+ from Standard and Poor’s Global Ratings (S&P), then no lending party to this facility would have any commitment or obligation to lend.

As of June 30, 2023, the Company was in compliance with all covenants. The Company may access the entire amount of commitments under the facility. There were no borrowings outstanding at June 30, 2023 and no amounts were borrowed during the second quarter and six-month period of 2023.