Q. Segment and Geographic Area Information

Alcoa is primarily a producer of aluminum products. Aluminum and alumina represent more than 80% of Alcoa's revenues. Nonaluminum products include precision castings and aerospace and industrial fasteners. Alcoa's segments are organized by product on a worldwide basis. Segment performance under Alcoa's management reporting system is evaluated based on a number of factors; however, the primary measure of performance is the after-tax operating income (ATOI) of each segment. Certain items such as the impact of LIFO inventory accounting; interest expense; noncontrolling interests; corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities, along with depreciation and amortization on corporate-owned assets); restructuring and other charges; discontinued operations; and other items, including intersegment profit eliminations and other metal adjustments, differences between tax rates applicable to the segments and the consolidated effective tax rate, the results of the soft alloy extrusions business in Brazil, and other nonoperating items such as foreign currency transaction gains/losses and interest income are excluded from segment ATOI. Segment assets exclude, among others, cash and cash equivalents; deferred income taxes; goodwill not allocated to businesses for segment reporting purposes; corporate fixed assets; LIFO reserves; and other items, including the assets of the soft alloy extrusions business in Brazil and assets classified as held for sale related to discontinued operations.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note A). Transactions among segments are established based on negotiation among the parties. Differences between segment totals and Alcoa's consolidated totals for line items not reconciled are in Corporate.

Alcoa's products are used worldwide in transportation (including aerospace, automotive, truck, trailer, rail, and shipping), packaging, building and construction, oil and gas, defense, and industrial applications. Total export sales from the U.S. included in continuing operations were $1,988 in 2011, $1,543 in 2010, and $1,530 in 2009.

Alcoa's operations consist of four worldwide reportable segments as follows:

Alumina. This segment represents a portion of Alcoa's upstream operations and consists of the Company's worldwide refinery system, including the mining of bauxite, which is then refined into alumina. Alumina is mainly sold directly to internal and external smelter customers worldwide or is sold to customers who process it into industrial chemical products. A portion of this segment's third-party sales are completed through the use of agents, alumina traders, and distributors. Slightly more than half of Alcoa's alumina production is sold under supply contracts to third parties worldwide, while the remainder is used internally by the Primary Metals segment.

Primary Metals. This segment represents a portion of Alcoa's upstream operations and consists of the Company's worldwide smelter system. Primary Metals receives alumina, mostly from the Alumina segment, and produces primary aluminum used by Alcoa's fabricating businesses, as well as sold to external customers, aluminum traders, and commodity markets. Results from the sale of aluminum powder, scrap, and excess power are also included in this segment, as well as the results of aluminum derivative contracts and buy/resell activity. Primary aluminum produced by Alcoa and used internally is transferred to other segments at prevailing market prices. The sale of primary aluminum represents more than 90% of this segment's third-party sales. Buy/resell activity refers to when this segment purchases metal from external or internal sources and resells such metal to external customers or the midstream and downstream segments in order to maximize smelting system efficiency and to meet customer requirements.

Flat-Rolled Products. This segment represents Alcoa's midstream operations, whose principal business is the production and sale of aluminum plate and sheet. A small portion of this segment's operations relate to foil produced from one plant in Brazil. This segment includes rigid container sheet (RCS), which is sold directly to customers in the packaging and consumer market and is used to produce aluminum beverage cans. Seasonal increases in RCS sales are generally experienced in the second and third quarters of the year. This segment also includes sheet and plate used in the aerospace, automotive, commercial transportation, and building and construction markets (mainly used in the production of machinery and equipment and consumer durables), which is sold directly to customers and through distributors. Approximately one-half of the third-party sales in this segment consist of RCS, while the other one-half of third-party sales are derived from sheet and plate and foil used in industrial markets. While the customer base for flat-rolled products is large, a significant amount of sales of RCS, sheet, and plate is to a relatively small number of customers.

Engineered Products and Solutions. This segment represents Alcoa's downstream operations and includes titanium, aluminum, and super alloy investment castings; forgings and fasteners; aluminum wheels; integrated aluminum structural systems; and architectural extrusions used in the aerospace, automotive, building and construction, commercial transportation, and power generation markets. These products are sold directly to customers and through distributors. Additionally, hard alloy extrusions products, which are also sold directly to customers and through distributors, serve the aerospace, automotive, commercial transportation, and industrial products markets.

The operating results and assets of Alcoa's reportable segments were as follows:


	Alumina			Primary Metals			Flat- Rolled Products			Engineered Products and Solutions		Total
2011
Sales:
Third-party sales	$	3,462		$	8,240		$	7,642		$	5,345	$	24,689
Intersegment sales		2,727			3,192			218			-		6,137
Total sales	$	6,189		$	11,432		$	7,860		$	5,345	$	30,826
Profit and loss:
Equity income (loss)	$	25		$	(7	)	$	(3	)	$	1	$	16
Depreciation, depletion, and amortization		444			556			237			158		1,395
Income taxes		179			92			104			260		635
ATOI		607			481			266			539		1,893
2010
Sales:
Third-party sales	$	2,815		$	7,070		$	6,277		$	4,584	$	20,746
Intersegment sales		2,212			2,597			180			-		4,989
Total sales	$	5,027		$	9,667		$	6,457		$	4,584	$	25,735
Profit and loss:
Equity income	$	10		$	1		$	-		$	2	$	13
Depreciation, depletion, and amortization		406			571			238			154		1,369
Income taxes		60			96			92			195		443
ATOI		301			488			220			415		1,424
2009
Sales:
Third-party sales	$	2,161		$	5,252		$	6,069		$	4,689	$	18,171
Intersegment sales		1,534			1,836			113			-		3,483
Total sales	$	3,695		$	7,088		$	6,182		$	4,689	$	21,654
Profit and loss:
Equity income (loss)	$	8		$	(26	)	$	-		$	2	$	(16	)
Depreciation, depletion, and amortization		292			560			227			177		1,256
Income taxes		(22	)		(365	)		48			139		(200	)
ATOI		112			(612	)		(49	)		315		(234	)

2011
Assets:
Capital expenditures	$	371		$	463		$	157		$	173	$	1,164
Equity investments		450			925			123			-		1,498
Goodwill		11			991			208			2,666		3,876
Total assets		9,782			11,867			4,559			5,831		32,039
2010
Assets:
Capital expenditures	$	295		$	380		$	104		$	125	$	904
Equity investments		413			741			60			-		1,214
Goodwill		12			993			207			2,523		3,735
Total assets		9,967			11,947			4,522			5,434		31,870

The following tables reconcile certain segment information to consolidated totals:


	2011			2010			2009
Sales:
Total segment sales	$	30,826		$	25,735		$	21,654
Elimination of intersegment sales		(6,137	)		(4,989	)		(3,483	)
Corporate*		262			267			268
Consolidated sales	$	24,951		$	21,013		$	18,439

*	For all periods presented, the Corporate amount includes third-party sales of three soft alloy extrusion facilities located in Brazil.


	2011			2010			2009
Net income (loss) attributable to Alcoa:
Total segment ATOI	$	1,893		$	1,424		$	(234	)
Unallocated amounts (net of tax):
Impact of LIFO		(38	)		(16	)		235
Interest expense		(340	)		(321	)		(306	)
Noncontrolling interests		(194	)		(138	)		(61	)
Corporate expense		(290	)		(291	)		(304	)
Restructuring and other charges		(196	)		(134	)		(155	)
Discontinued operations		(3	)		(8	)		(166	)
Other		(221	)		(262	)		(160	)
Consolidated net income (loss) attributable to Alcoa	$	611		$	254		$	(1,151	)


December 31,	2011			2010
Assets:
Total segment assets	$	32,039		$	31,870
Elimination of intersegment receivables		(483	)		(471	)
Unallocated amounts:
Cash and cash equivalents		1,939			1,543
Deferred income taxes		3,738			3,400
Corporate goodwill		1,375			1,387
Corporate fixed assets, net		943			930
LIFO reserve		(801	)		(742	)
Other		1,370			1,376
Consolidated assets	$	40,120		$	39,293

Geographic information for sales was as follows (based upon the country where the point of sale occurred):


	2011		2010		2009
Sales:
U.S.*	$	12,295	$	10,560	$	9,546
Australia		3,587		2,842		2,287
Spain		1,487		1,234		1,099
Brazil		1,371		1,182		897
Netherlands**		1,025		940		1,002
Norway		927		809		477
France		825		662		669
Russia		761		584		383
Hungary		665		505		419
Italy		537		418		394
United Kingdom		412		331		379
China		283		188		156
Germany		229		231		260
Other		547		527		471
	$	24,951	$	21,013	$	18,439

*	Sales that occurred in the U.S. include a portion of alumina from Alcoa's refineries in Suriname, Brazil, Australia, and Jamaica and aluminum from the Company's smelters in Canada.

**	Sales that occurred in the Netherlands include aluminum from Alcoa's smelter in Iceland.

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


December 31,	2011		2010
Long-lived assets:
Brazil	$	4,844	$	5,470
U.S.		4,573		4,528
Australia		3,390		3,380
Iceland		1,615		1,633
Canada		1,447		1,440
Norway		894		981
Russia		531		554
Spain		451		483
China		424		410
Jamaica		417		435
Other		830		869
	$	19,416	$	20,183