Segment Information

6 Months Ended

Jun. 30, 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) for 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 Segment 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
Second quarter ended June 30, 2023
Sales:
Third-party sales	$	894		$	1,788		$	2,682
Intersegment sales		397			4			401
Total sales	$	1,291		$	1,792		$	3,083
Segment Adjusted EBITDA	$	33		$	110		$	143
Supplemental information:
Depreciation, depletion, and amortization	$	80		$	68		$	148
Equity loss	$	(11	)	$	(16	)	$	(27	)
Second quarter ended June 30, 2022
Sales:
Third-party sales	$	1,111		$	2,539		$	3,650
Intersegment sales		483			8			491
Total sales	$	1,594		$	2,547		$	4,141
Segment Adjusted EBITDA	$	358		$	596		$	954
Supplemental information:
Depreciation, depletion, and amortization	$	84		$	71		$	155
Equity (loss) income	$	(5	)	$	40		$	35

	Alumina			Aluminum			Total
Six months ended June 30, 2023
Sales:
Third-party sales	$	1,751		$	3,598		$	5,349
Intersegment sales		818			7			825
Total sales	$	2,569		$	3,605		$	6,174
Segment Adjusted EBITDA	$	136		$	294		$	430
Supplemental information:
Depreciation, depletion, and amortization	$	157		$	138		$	295
Equity loss	$	(28	)	$	(73	)	$	(101	)
Six months ended June 30, 2022
Sales:
Third-party sales	$	2,009		$	4,927		$	6,936
Intersegment sales		896			15			911
Total sales	$	2,905		$	4,942		$	7,847
Segment Adjusted EBITDA	$	660		$	1,309		$	1,969
Supplemental information:
Depreciation, depletion, and amortization	$	169		$	140		$	309
Equity (loss) income	$	(4	)	$	79		$	75

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

	Second quarter ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Total Segment Adjusted EBITDA	$	143		$	954		$	430		$	1,969
Unallocated amounts:
Transformation(1)		(17	)		(11	)		(25	)		(25	)
Intersegment eliminations		31			10			23			110
Corporate expenses(2)		(24	)		(35	)		(54	)		(64	)
Provision for depreciation, depletion, and amortization		(153	)		(161	)		(306	)		(321	)
Restructuring and other charges, net (D)		(24	)		75			(173	)		(50	)
Interest expense		(27	)		(30	)		(53	)		(55	)
Other (expenses) income, net (R)		(6	)		206			(60	)		220
Other(3)		(22	)		(100	)		(61	)		(113	)
Consolidated (loss) income before income taxes		(99	)		908			(279	)		1,671
Provision for income taxes		(22	)		(234	)		(74	)		(444	)
Net loss (income) attributable to noncontrolling interest		19			(125	)		20			(209	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(102	)	$	549		$	(333	)	$	1,018

(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:

	Second quarter ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Aluminum	$	1,824		$	2,624		$	3,670		$	5,071
Alumina		774			1,064			1,488			1,914
Energy		26			40			54			81
Bauxite		109			27			236			55
Other(1)		(49	)		(111	)		(94	)		(184	)
	$	2,684		$	3,644		$	5,354		$	6,937

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