Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

E. Segment Information – Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. Beginning in January 2023, the financial information provided to the chief operating decision maker (CODM) for the activities of the bauxite mines and the alumina refineries was combined, and accordingly the Company changed its operating segments. Beginning with the first quarter of 2023, the Company reported its financial results in the following two segments: (i) Alumina, and (ii) Aluminum. Segment information for all prior periods presented has been updated to reflect the new segment structure. Segment performance under Alcoa Corporation’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) of 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 Adjusted EBITDA may not be comparable to similarly titled measures of other companies. The CODM function regularly reviews the financial information, including Sales and Adjusted EBITDA, of these two operating segments to assess performance and allocate resources.

The operating results of Alcoa Corporation’s reportable segments were as follows (differences between segment totals and consolidated amounts are in Corporate):

	Alumina			Aluminum			Total
First quarter ended March 31, 2023
Sales:
Third-party sales	$	857		$	1,810		$	2,667
Intersegment sales		421			3			424
Total sales	$	1,278		$	1,813		$	3,091
Segment Adjusted EBITDA	$	103		$	184		$	287
Supplemental information:
Depreciation, depletion, and amortization	$	77		$	70		$	147
Equity loss	$	(17	)	$	(57	)	$	(74	)
First quarter ended March 31, 2022
Sales:
Third-party sales	$	898		$	2,388		$	3,286
Intersegment sales		413			7			420
Total sales	$	1,311		$	2,395		$	3,706
Segment Adjusted EBITDA	$	302		$	713		$	1,015
Supplemental information:
Depreciation, depletion, and amortization	$	85		$	69		$	154
Equity income	$	1		$	39		$	40

The following table reconciles total Segment Adjusted EBITDA to Consolidated net (loss) income attributable to Alcoa Corporation:

	First quarter ended March 31,
	2023			2022
Total Segment Adjusted EBITDA	$	287		$	1,015
Unallocated amounts:
Transformation(1)		(8	)		(14	)
Intersegment eliminations		(8	)		100
Corporate expenses(2)		(30	)		(29	)
Provision for depreciation, depletion, and amortization		(153	)		(160	)
Restructuring and other charges, net (D)		(149	)		(125	)
Interest expense		(26	)		(25	)
Other (expenses) income, net (Q)		(54	)		14
Other(3)		(39	)		(13	)
Consolidated (loss) income before income taxes		(180	)		763
Provision for income taxes		(52	)		(210	)
Net loss (income) attributable to noncontrolling interest		1			(84	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(231	)	$	469

(1)Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

(2)Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center.

(3)Other includes certain items that are not included in the Adjusted EBITDA of the reportable segments.

The following table details Alcoa Corporation’s Sales by product division:

	First quarter ended March 31,
	2023			2022
Aluminum	$	1,846		$	2,447
Alumina		714			850
Energy		28			41
Bauxite		127			28
Other(1)		(45	)		(73	)
	$	2,670		$	3,293

(1)Other includes realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.