Segment Information

9 Months Ended

Sep. 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 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
Third quarter ended September 30, 2023
Sales:
Third-party sales	$	957		$	1,644		$	2,601
Intersegment sales		381			4			385
Total sales	$	1,338		$	1,648		$	2,986
Segment Adjusted EBITDA	$	53		$	79		$	132
Supplemental information:
Depreciation, depletion, and amortization	$	89		$	69		$	158
Equity loss	$	(9	)	$	(15	)	$	(24	)
Third quarter ended September 30, 2022
Sales:
Third-party sales	$	891		$	1,976		$	2,867
Intersegment sales		412			10			422
Total sales	$	1,303		$	1,986		$	3,289
Segment Adjusted EBITDA	$	78		$	152		$	230
Supplemental information:
Depreciation, depletion, and amortization	$	74		$	70		$	144
Equity loss	$	(18	)	$	(5	)	$	(23	)

	Alumina			Aluminum			Total
Nine months ended September 30, 2023
Sales:
Third-party sales	$	2,708		$	5,242		$	7,950
Intersegment sales		1,199			11			1,210
Total sales	$	3,907		$	5,253		$	9,160
Segment Adjusted EBITDA	$	189		$	373		$	562
Supplemental information:
Depreciation, depletion, and amortization	$	246		$	207		$	453
Equity loss	$	(37	)	$	(88	)	$	(125	)
Nine months ended September 30, 2022
Sales:
Third-party sales	$	2,900		$	6,903		$	9,803
Intersegment sales		1,308			25			1,333
Total sales	$	4,208		$	6,928		$	11,136
Segment Adjusted EBITDA	$	738		$	1,461		$	2,199
Supplemental information:
Depreciation, depletion, and amortization	$	243		$	210		$	453
Equity (loss) income	$	(22	)	$	74		$	52

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

	Third quarter ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Total Segment Adjusted EBITDA	$	132		$	230		$	562		$	2,199
Unallocated amounts:
Transformation(1)		(29	)		(19	)		(54	)		(44	)
Intersegment eliminations		(4	)		23			19			133
Corporate expenses(2)		(33	)		(27	)		(87	)		(91	)
Provision for depreciation, depletion, and amortization		(163	)		(149	)		(469	)		(470	)
Restructuring and other charges, net (D)		(22	)		(652	)		(195	)		(702	)
Interest expense		(26	)		(25	)		(79	)		(80	)
Other (expenses) income, net (R)		(85	)		(35	)		(145	)		185
Other(3)		2			(75	)		(59	)		(188	)
Consolidated (loss) income before income taxes		(228	)		(729	)		(507	)		942
Benefit from (provision for) income taxes		35			(40	)		(39	)		(484	)
Net loss (income) attributable to noncontrolling interest		25			23			45			(186	)
Consolidated net (loss) income attributable to Alcoa Corporation	$	(168	)	$	(746	)	$	(501	)	$	272

(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:

	Third quarter ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Aluminum	$	1,666		$	1,990		$	5,336		$	7,033
Alumina		840			821			2,328			2,735
Energy		32			74			86			155
Bauxite		107			52			343			107
Other(1)		(43	)		(86	)		(137	)		(242	)
	$	2,602		$	2,851		$	7,956		$	9,788

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