Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

E. Segment Information – Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. The Company’s operations consist of three worldwide reportable segments: Bauxite, Alumina, and Aluminum. 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 believes that the presentation of Adjusted EBITDA is useful to investors because such measure provides both additional information about the operating performance of Alcoa Corporation and insight on the ability of Alcoa Corporation to meet its financial obligations. The presentation of Adjusted EBITDA is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. Alcoa Corporation’s Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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

	Bauxite		Alumina			Aluminum			Total
Second quarter ended June 30, 2021
Sales:
Third-party sales	$	39	$	688		$	2,102		$	2,829
Intersegment sales		179		343			3			525
Total sales	$	218	$	1,031		$	2,105		$	3,354
Segment Adjusted EBITDA	$	41	$	124		$	460		$	625
Supplemental information:
Depreciation, depletion, and amortization	$	32	$	50		$	73		$	155
Equity (loss) income	$	—	$	(1	)	$	28		$	27
Second quarter ended June 30, 2020
Sales:
Third-party sales	$	66	$	603		$	1,475		$	2,144
Intersegment sales		245		289			2		$	536
Total sales	$	311	$	892		$	1,477		$	2,680
Segment Adjusted EBITDA	$	131	$	88		$	(34	)	$	185
Supplemental information:
Depreciation, depletion, and amortization	$	30	$	37		$	79		$	146
Equity loss	$	—	$	(8	)	$	(12	)	$	(20	)

	Bauxite		Alumina			Aluminum			Total
Six months ended June 30, 2021
Sales:
Third-party sales	$	97	$	1,448		$	4,149		$	5,694
Intersegment sales		364		707			5			1,076
Total sales	$	461	$	2,155		$	4,154		$	6,770
Segment Adjusted EBITDA	$	100	$	351		$	743		$	1,194
Supplemental information:
Depreciation, depletion, and amortization	$	89	$	96		$	146		$	331
Equity (loss) income		—		(6	)		41			35
Six months ended June 30, 2020
Sales:
Third-party sales	$	137	$	1,310		$	3,073		$	4,520
Intersegment sales		480		625			5			1,110
Total sales	$	617	$	1,935		$	3,078		$	5,630
Segment Adjusted EBITDA	$	251	$	281		$	28		$	560
Supplemental information:
Depreciation, depletion, and amortization	$	64	$	86		$	160		$	310
Equity loss		—		(17	)		(7	)		(24	)

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

	Second quarter ended June 30,						Six months ended June 30,
	2021			2020			2021			2020
Total Segment Adjusted EBITDA	$	625		$	185		$	1,194		$	560
Unallocated amounts:
Transformation(1)		(13	)		(10	)		(24	)		(26	)
Intersegment eliminations		35			30			28			22
Corporate expenses(2)		(28	)		(21	)		(54	)		(48	)
Provision for depreciation, depletion, and amortization		(161	)		(152	)		(343	)		(322	)
Restructuring and other charges, net (D)		(33	)		(37	)		(40	)		(39	)
Interest expense		(67	)		(32	)		(109	)		(62	)
Other income (expenses), net (Q)		105			(51	)		129			81
Other(3)		(2	)		(17	)		(8	)		(52	)
Consolidated income (loss) before income taxes		461			(105	)		773			114
Provision for income taxes		(111	)		(45	)		(204	)		(125	)
Net income attributable to noncontrolling interest		(41	)		(47	)		(85	)		(106	)
Consolidated net income (loss) attributable to Alcoa Corporation	$	309		$	(197	)	$	484		$	(117	)

⁽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 impact Cost of goods sold on Alcoa Corporation’s Statement of Consolidated Operations 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,
	2021			2020			2021			2020
Primary aluminum	$	2,112		$	1,202		$	3,839		$	2,499
Alumina		684			600			1,444			1,307
Flat-rolled aluminum(1)		—			271			320			543
Energy		49			22			88			74
Bauxite		34			61			86			120
Other(2)		(46	)		(8	)		(74	)		(14	)
	$	2,833		$	2,148		$	5,703		$	4,529

⁽¹⁾  Flat-rolled aluminum represented sales of the Warrick Rolling Mill through the sale of the facility on March 31, 2021 (see Note C).

⁽²⁾  Other includes realized gains and losses related to embedded derivative instruments designated as cash flow hedges of forward sales of aluminum.