Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Information

E. Segment Information – Alcoa Corporation is a producer of bauxite, alumina, and aluminum products. The Company has three operating and reportable segments, which are organized by product on a global basis: 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 earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) 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 chief operating decision maker function regularly reviews the financial information, including Sales and Adjusted EBITDA, of these three 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):

	Bauxite		Alumina			Aluminum		Total
Second quarter ended June 30, 2022
Sales:
Third-party sales	$	34	$	1,077		$	2,539	$	3,650
Intersegment sales		165		489			8		662
Total sales	$	199	$	1,566		$	2,547	$	4,312
Segment Adjusted EBITDA	$	5	$	343		$	596	$	944
Supplemental information:
Depreciation, depletion, and amortization	$	35	$	49		$	71	$	155
Equity (loss) income	$	—	$	(5	)	$	40	$	35
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

	Bauxite		Alumina			Aluminum		Total
Six months ended June 30, 2022
Sales:
Third-party sales	$	77	$	1,932		$	4,927	$	6,936
Intersegment sales		335		907			15		1,257
Total sales	$	412	$	2,839		$	4,942	$	8,193
Segment Adjusted EBITDA	$	43	$	605		$	1,309	$	1,957
Supplemental information:
Depreciation, depletion, and amortization	$	70	$	99		$	140	$	309
Equity (loss) income	$	—	$	(4	)	$	79	$	75
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

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

	Second quarter ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Total Segment Adjusted EBITDA	$	944		$	625		$	1,957		$	1,194
Unallocated amounts:
Transformation(1)		(11	)		(13	)		(25	)		(24	)
Intersegment eliminations		20			35			122			28
Corporate expenses(2)		(35	)		(28	)		(64	)		(54	)
Provision for depreciation, depletion, and amortization		(161	)		(161	)		(321	)		(343	)
Restructuring and other charges, net (D)		75			(33	)		(50	)		(40	)
Interest expense		(30	)		(67	)		(55	)		(109	)
Other income, net (Q)		206			105			220			129
Other(3)		(100	)		(2	)		(113	)		(8	)
Consolidated income before income taxes		908			461			1,671			773
Provision for income taxes		(234	)		(111	)		(444	)		(204	)
Net income attributable to noncontrolling interest		(125	)		(41	)		(209	)		(85	)
Consolidated net income attributable to Alcoa Corporation	$	549		$	309		$	1,018		$	484

⁽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,
	2022			2021			2022			2021
Primary aluminum	$	2,624		$	2,112		$	5,071		$	3,839
Alumina		1,064			684			1,914			1,444
Energy		40			49			81			88
Bauxite		27			34			55			86
Flat-rolled aluminum(1)		—			—			—			320
Other(2)		(111	)		(46	)		(184	)		(74	)
	$	3,644		$	2,833		$	6,937		$	5,703

⁽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.