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Segment and Related Information (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Operating Results, Capital Expenditures and Assets of Alcoa's Reportable Segments

The operating results, capital expenditures, and assets of Alcoa Corporation’s reportable segments were as follows:

	Bauxite		Alumina			Aluminum			Total
2019
Sales:
Third-party sales	$	297	$	3,250		$	6,803		$	10,350
Intersegment sales		979		1,561			17			2,557
Total sales	$	1,276	$	4,811		$	6,820		$	12,907
Segment Adjusted EBITDA	$	504	$	1,097		$	25		$	1,626
Supplemental information:
Depreciation, depletion, and amortization	$	120	$	214		$	346		$	680
Equity income (loss)		—		6			(49	)		(43	)
2018
Sales:
Third-party sales	$	271	$	4,215		$	8,829		$	13,315
Intersegment sales		944		2,101			18			3,063
Total sales	$	1,215	$	6,316		$	8,847		$	16,378
Segment Adjusted EBITDA	$	426	$	2,373		$	451		$	3,250
Supplemental information:
Depreciation, depletion, and amortization	$	111	$	197		$	394		$	702
Equity income (loss)		—		32			(38	)		(6	)
2017
Sales:
Third-party sales	$	333	$	3,133		$	8,027		$	11,493
Intersegment sales		875		1,723			21			2,619
Total sales	$	1,208	$	4,856		$	8,048		$	14,112
Segment Adjusted EBITDA	$	424	$	1,289		$	1,026		$	2,739
Supplemental information:
Depreciation, depletion, and amortization	$	82	$	207		$	419		$	708
Equity loss		—		(5	)		(19	)		(24	)

2019
Assets:
Capital expenditures	$	53	$	137		$	152		$	342
Equity investments		212		293			587			1,092
Total assets		1,434		4,303			6,588			12,325
2018
Assets:
Capital expenditures	$	47	$	194		$	125		$	366
Equity investments		189		290			856			1,335
Total assets		1,448		4,643			7,715			13,806

Schedule of Reconciliation of Certain Segment Information to Consolidated Totals

The following tables reconcile certain segment information to consolidated totals:

	2019			2018			2017
Sales:
Total segment sales	$	12,907		$	16,378		$	14,112
Elimination of intersegment sales		(2,557	)		(3,063	)		(2,619	)
Other		83			88			159
Consolidated sales	$	10,433		$	13,403		$	11,652

Schedule of Segment Adjusted EBITDA to Consolidated Net (Loss) Income Attributable to Alcoa Corporation

	2019			2018			2017
Net (loss) income attributable to Alcoa Corporation:
Total Segment Adjusted EBITDA⁽¹⁾	$	1,626		$	3,250		$	2,739
Unallocated amounts:
Transformation⁽²⁾		(7	)		(3	)		(49	)
Intersegment eliminations^(1),(3)		150			(8	)		(80	)
Corporate expenses⁽⁴⁾		(101	)		(96	)		(131	)
Provision for depreciation, depletion, and amortization		(713	)		(733	)		(750	)
Restructuring and other charges, net (D)		(1,031	)		(527	)		(309	)
Interest expense (T)		(121	)		(122	)		(104	)
Other expenses, net (T)		(162	)		(64	)		(27	)
Other⁽⁵⁾		(79	)		(72	)		(89	)
Consolidated (loss) income before income taxes		(438	)		1,625			1,200
Provision for income taxes (P)		(415	)		(732	)		(592	)
Net income attributable to noncontrolling interest		(272	)		(643	)		(329	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(1,125	)	$	250		$	279

⁽¹⁾

As of January 1, 2019, the Company changed its accounting method for valuing certain inventories from LIFO to average cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented. See Note I. As a result, for the years ended December 31, 2018 and 2017, Total segment Adjusted EBITDA increased $47 and $14, respectively, and the Intersegment eliminations value above decreased $19 and increased $27, respectively.

⁽²⁾	Transformation includes, among other items, the Adjusted EBITDA of previously closed operations.

⁽³⁾

Concurrent with the change in inventory accounting method as of January 1, 2019, management elected to change the presentation of certain line items in the reconciliation of total Segment Adjusted EBITDA to Consolidated net (loss) income attributable to Alcoa Corporation. Corporate inventory accounting previously included the impact of LIFO, metal price lag and intersegment eliminations. The impact of LIFO has been eliminated with the change in inventory method. Metal price lag attributable to the Company’s rolled operations business is now netted within the Aluminum segment to simplify presentation of an impact that nets to zero in consolidation. Only intersegment eliminations remain as a reconciling line item and are labeled as such.

⁽⁴⁾	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.

⁽⁵⁾	Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on Alcoa Corporation’s Statement of Consolidated Operations that are not included in the Adjusted EBITDA of the reportable segments.

Schedule of Segment Reporting Information to Consolidated Assets

December 31,	2019			2018
Assets:
Total segment assets	$	12,325		$	13,806
Elimination of intersegment receivables		(170	)		(271	)
Unallocated amounts:
Cash and cash equivalents		879			1,113
Corporate fixed assets, net		519			520
Corporate goodwill		145			146
Deferred income taxes		642			560
Other		291			258
Consolidated assets	$	14,631		$	16,132

Schedule of Product Division Information

The following table represents the general commercial profile of the Company’s Bauxite, Alumina, Primary aluminum, and Flat-rolled aluminum product divisions (see text below table for Energy):

Product division	Pricing components	Shipping terms⁽⁴⁾	Payment terms⁽⁵⁾
Bauxite	Negotiated	FOB/CIF	LC Sight
Alumina:
Smelter-grade	API⁽¹⁾/spot	FOB	LC Sight/CAD/Net 30 days
Non-metallurgical	Negotiated	FOB/CIF	Net 30 days
Primary aluminum:
Common alloy ingot	LME + Regional premium⁽²⁾	DAP/CIF	Net 10 to 45 days
Value-add ingot	LME + Regional premium + Product premium⁽²⁾	DAP/CIF	Net 30 to 45 days
Flat-rolled aluminum	Metal + Conversion⁽³⁾	DAP	Negotiated

⁽¹⁾

API (Alumina Price Index) is a pricing mechanism that is calculated by the Company based on the weighted average of a prior month’s daily spot prices published by the following three indices: CRU Metallurgical Grade Alumina Price; Platts Metals Daily Alumina PAX Price; and Metal Bulletin Non-Ferrous Metals Alumina Index.

⁽²⁾

LME (London Metal Exchange) is a globally recognized exchange for commodity trading, including aluminum. The LME pricing component represents the underlying base metal component, based on quoted prices for aluminum on the exchange. The regional premium represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold in the United States). The product premium represents the incremental price for receiving physical metal in a particular shape (e.g., billet, rod, slab, etc.) or alloy.

⁽³⁾	Metal represents the underlying base metal component plus a regional premium (see footnote 2). Conversion represents the incremental price over the metal price component that is associated with converting primary or scrap aluminum into sheet.

⁽⁴⁾

CIF (cost, insurance, and freight) means that the Company pays for these items until the product reaches the buyer’s designated destination point related to transportation by vessel. DAP (delivered at place) means the same as CIF related to all methods of transportation. FOB (free on board) means that the Company pays for costs, insurance, and freight until the product reaches the seller’s designated shipping point.

⁽⁵⁾

The net number of days means that the customer is required to remit payment to the Company for the invoice amount within the designated number of days. LC Sight is a letter of credit that is payable immediately (usually within five to ten business days) after a seller meets the requirements of the letter of credit (i.e. shipping documents that evidence the seller performed its obligations as agreed to with a buyer). CAD (cash against documents) is a payment arrangement in which a seller instructs a bank to provide shipping and title documents to the buyer at the time the buyer pays in full the accompanying bill of exchange.

Schedule of Third-party Sales by Product Division

The following table details Alcoa Corporation’s Third-party sales by product division:

	2019			2018			2017
Sales:
Primary aluminum	$	5,426		$	6,787		$	6,168
Alumina		3,246			4,209			3,121
Flat-rolled aluminum		1,220			1,884			1,666
Energy		290			335			446
Bauxite		276			254			333
Other		(25	)		(66	)		(82	)
	$	10,433		$	13,403		$	11,652

Schedule of Geographic Information for Third-party Sales

Geographic information for Third-party sales was as follows (based upon the country where the point of sale originated):

	2019		2018		2017
Sales:
United States⁽¹⁾	$	4,606	$	5,887	$	5,313
Spain⁽²⁾		3,077		3,806		3,303
Australia		2,249		2,930		2,266
Brazil		428		498		569
Canada		5		216		150
Other		68		66		51
	$	10,433	$	13,403	$	11,652

⁽¹⁾	Sales of a portion of the alumina from refineries in Australia and Brazil and most of the aluminum from smelters in Canada occurred in the United States.

⁽²⁾	Sales of the aluminum produced from smelters in Iceland and Norway, as well as the off-take related to an interest in the Saudi Arabia joint venture (see Note H), occurred in Spain.

Schedule of Geographic Information for Long-Lived Assets

Geographic information for long-lived assets was as follows (based upon the physical location of the assets):

December 31,	2019		2018
Long-lived assets:
Australia	$	2,044	$	2,002
Brazil		1,596		1,729
United States		1,491		1,599
Iceland		1,160		1,216
Canada		1,047		1,064
Norway		365		381
Spain		209		321
Other		4		15
	$	7,916	$	8,327