Segment Information

9 Months Ended

Sep. 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
Third quarter ended September 30, 2021
Sales:
Third-party sales	$	56	$	756		$	2,295		$	3,107
Intersegment sales		172		349			8			529
Total sales	$	228	$	1,105		$	2,303		$	3,636
Segment Adjusted EBITDA	$	23	$	148		$	613		$	784
Supplemental information:
Depreciation, depletion, and amortization	$	30	$	47		$	72		$	149
Equity (loss) income	$	—	$	(1	)	$	38		$	37
Third quarter ended September 30, 2020
Sales:
Third-party sales	$	56	$	697		$	1,607		$	2,360
Intersegment sales		236		329			2		$	567
Total sales	$	292	$	1,026		$	1,609		$	2,927
Segment Adjusted EBITDA	$	124	$	119		$	116		$	359
Supplemental information:
Depreciation, depletion, and amortization	$	33	$	41		$	80		$	154
Equity loss	$	—	$	(4	)	$	(6	)	$	(10	)

	Bauxite		Alumina			Aluminum			Total
Nine months ended September 30, 2021
Sales:
Third-party sales	$	153	$	2,204		$	6,444		$	8,801
Intersegment sales		536		1,056			13			1,605
Total sales	$	689	$	3,260		$	6,457		$	10,406
Segment Adjusted EBITDA	$	123	$	499		$	1,356		$	1,978
Supplemental information:
Depreciation, depletion, and amortization	$	119	$	143		$	218		$	480
Equity (loss) income		—		(7	)		79			72
Nine months ended September 30, 2020
Sales:
Third-party sales	$	193	$	2,007		$	4,680		$	6,880
Intersegment sales		716		954			7			1,677
Total sales	$	909	$	2,961		$	4,687		$	8,557
Segment Adjusted EBITDA	$	375	$	400		$	144		$	919
Supplemental information:
Depreciation, depletion, and amortization	$	97	$	127		$	240		$	464
Equity loss		—		(21	)		(13	)		(34	)

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

	Third quarter ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Total Segment Adjusted EBITDA	$	784		$	359		$	1,978		$	919
Unallocated amounts:
Transformation(1)		(10	)		(11	)		(34	)		(37	)
Intersegment eliminations		(8	)		(35	)		20			(13	)
Corporate expenses(2)		(30	)		(24	)		(84	)		(72	)
Provision for depreciation, depletion, and amortization		(156	)		(161	)		(499	)		(483	)
Restructuring and other charges, net (D)		(33	)		(5	)		(73	)		(44	)
Interest expense		(58	)		(41	)		(167	)		(103	)
Other income (expenses), net (Q)		18			(45	)		147			36
Other(3)		(10	)		(15	)		(18	)		(67	)
Consolidated income before income taxes		497			22			1,270			136
Provision for income taxes		(127	)		(42	)		(331	)		(167	)
Net income attributable to noncontrolling interest		(33	)		(29	)		(118	)		(135	)
Consolidated net income (loss) attributable to Alcoa Corporation	$	337		$	(49	)	$	821		$	(166	)

⁽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:

	Third quarter ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Primary aluminum	$	2,255		$	1,311		$	6,094		$	3,810
Alumina		752			697			2,196			2,004
Flat-rolled aluminum(1)		—			284			320			827
Energy		117			26			205			100
Bauxite		52			50			138			170
Other(2)		(67	)		(3	)		(141	)		(17	)
	$	3,109		$	2,365		$	8,812		$	6,894

⁽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.