ALCOA CORPORATION 
(dollars in millions, except per-share amounts, average realized prices, and average cost amounts; dry metric tons in millions (mdmt); metric tons in thousands (kmt))
Business Update Coronavirus In response to the ongoing coronavirus (COVID-19) pandemic,Alcoa implemented comprehensive measures to protect the health of the Company's workforce, prevent infection in our locations, mitigate impacts, and safeguard business continuity. As a result of these measures and the aluminum industry being classified as an essential business, all ofAlcoa's bauxite mines, alumina refineries, and aluminum manufacturing facilities continue to remain in operation. The Company continues, through its operations leadership team and global crisis response team, to ensure that each location's preparedness and response plans are up to date. The Company has not experienced any significant interruption from its supply sources, and the Company's locations have had minimal contractor- and employee-related disruptions to date. The magnitude and duration of the COVID-19 pandemic is unknown. The pandemic could have adverse future impacts on the Company's business, financial condition, operating results, and cash flows. Further adverse conditions or prolonged deterioration of conditions could negatively impact our financial condition and result in asset impairment charges, including long-lived assets or goodwill, or affect the realizability of deferred tax assets. As a result of the pandemic's impact on the macroeconomic environment, management evaluated the future recoverability of the Company's assets, including goodwill and long-lived assets, and the realizability of deferred tax assets while considering the Company's current market capitalization. Management concluded that no asset impairments and no additional valuation allowances were required throughMarch 31, 2021 .
Key Actions
OnNovember 30, 2020 , the Company entered into an agreement to sell its rolling mill located at Warrick Operations (Warrick Rolling Mill ), an integrated aluminum manufacturing site nearEvansville, Indiana (Warrick Operations), to Kaiser Aluminum Corporation (Kaiser). OnMarch 31, 2021 , the Company completed the sale for total consideration of approximately$670 , which includes the assumption of$72 in other postretirement benefit liabilities (subject to further post-closing adjustments). Additionally, as ofMarch 31, 2021 , the Company incurred transaction costs of$7 and capital expenditures of$8 related to site separation. The Company recorded a gain of$27 in Other income, net (pre- and after-tax) on the Statement of Consolidated Operations upon closure. The consideration and gain amounts are subject to customary post-closing adjustments.Alcoa retains ownership of the site's 269 kmt aluminum smelter and its electricity generating units at Warrick Operations with a market-based metal supply agreement with Kaiser. In addition to the$15 in spend noted above, in the first quarter of 2021 the Company recorded estimated liabilities of approximately$70 for future site separation commitments and remaining transaction costs associated with the sales agreement. Approximately half of the obligation is expected to be spent in 2021, with the remainder to be spent in 2022 and 2023. Additionally, the Company expects to incur$5 of additional capital expenditures for assets required for the Company to separately operate its portion of the site. InMarch 2021 , ANHBV, a wholly-owned subsidiary ofAlcoa Corporation , issued$500 aggregate principal amount of 4.125% Senior Notes due 2029 (the 2029 Notes) in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). The net proceeds of this issuance were approximately$493 reflecting a discount to the initial purchasers of the 2029 Notes, as well as issuance costs. The Company used the proceeds, together with cash on hand, to contribute$500 to itsU.S. defined benefit pension plans applicable to salaried and hourly employees onApril 1, 2021 , and to redeem in full$750 aggregate principal amount of the Company's outstanding 6.75% Senior Notes due 2024 (the 2024 Notes) onApril 7, 2021 , and to pay transaction-related fees and expenses. OnMarch 18, 2021 , the Company signed 5-year agreements to repower thePortland Aluminum Smelter in theState of Victoria, Australia . The agreements with three separate providers will commence onAugust 1, 2021 . Further, the Australian Federal Government has committed, subject to approval, to provide up to$15 (A$19 ) per year for four years to underwrite the smelter's participation in the Reliability and Emergency Reserve Trader (RERT) scheme. The arrangement will recognize the smelter's ability to rapidly shed load when required to help protect the power grid from unexpected interruptions when it is under duress.
See the below sections for additional details on the above described actions.
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In
The refinery and smelter have continued operations and the Company remains open to an agreement to further extend the strike suspension period. Although the ultimate outcome is currently unknown, the reactivation of the strike may negatively affect the Company's operating and financial results due to reduced refinery production and metal shipments. During 2019, the Company completed the divestiture of the Avilés and La Coruña (Spain) aluminum facilities toPARTER Capital Group AG (PARTER) in a sale process endorsed by the Spanish government and supported by the workers' representatives following a collective dismissal process. In 2020, PARTER sold its majority stake in the facilities to an unrelated party. The Company had no knowledge of the subsequent transaction prior to its announcement, and has filed a lawsuit asserting that the sale was in breach of the sale agreement betweenAlcoa and PARTER. Related to this divestiture, certain claims and investigations have been initiated by or at the request of the employees of the facilities against their current employers, the owners of the current employers, andAlcoa , alleging that the agreements of the collective dismissal process remain in force and thatAlcoa remains liable for related social benefits to the employees. The Company continues to believe it acted in good faith, in full compliance with the law and the agreements, with the endorsement of the Spanish government, and with the support of the workers' representatives throughout the sale process.
Results of Operations
In accordance with the recently adopted amendments to Item 303 of Regulation
S-K, Management has updated its comparison of interim periods to compare the
results of the most recent quarter against the results of the immediately
preceding sequential quarter in an effort to provide a more meaningful analysis
as we are not a seasonal business and to align the discussion with how
management reviews the results of the Company. The Company will continue to
present a comparison of the most recent year-to-date period and the
corresponding year-to-date period of the preceding fiscal year.
Selected Financial Data:
Quarter ended Three months ended
Sequential Year-to-date
March 31, December 31, March 31, March 31,
Statement of Operations 2021 2020 2021 2020
Sales $ 2,870 $ 2,392 $ 2,870 $ 2,381
Cost of goods sold (exclusive of
expenses below) 2,292 1,974 2,292 2,025
Selling, general administrative, and
other expenses 52 55 52 60
Research and development expenses 7 9 7 7
Provision for depreciation,
depletion, and amortization 182 170 182 170
Restructuring and other charges, net 7 60 7 2
Interest expense 42 43 42 30
Other (income) expenses, net (24 ) 44 (24 ) (132 )
Total costs and expenses 2,558 2,355 2,558 2,162
Income before income taxes 312 37 312 219
Provision for income taxes 93 20 93 80
Net income 219 17 219 139
Less: Net income attributable to
noncontrolling interest 44 21 44 59
Net income (loss) attributable to
Alcoa Corporation $ 175 $ (4 ) $ 175 $ 80
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Quarter ended Three months ended
March 31, December 31, March 31, March 31,
Selected Financial Metrics 2021 2020 2021 2020
Diluted income (loss) per share
attributable to Alcoa Corporation common shareholders
0.93 $ 0.43
Third-party shipments of alumina
(kmt) 2,472 2,312 2,472 2,365
Third-party shipments of aluminum
products (kmt) 831 735 831 725
Average realized price per metric
ton of alumina $ 308 $ 268 $ 308 $ 299
Average realized price per metric
ton of primary aluminum $ 2,308 $ 2,094 $ 2,308 $ 1,988
Average Alumina Price Index (API)(1) $ 301 $ 274 $ 301 $ 282
Average London Metal Exchange (LME)
15-day lag(2) $ 2,060 $ 1,870 $
2,060
(1) API (Alumina Price Index) is a pricing mechanism that is calculated by the
Company based on the weighted average of a prior month's daily spot prices
published by the following three indices: CRU Metallurgical
Price; Platts Metals Daily Alumina PAX Price; and Metal Bulletin
Non-Ferrous Metals Alumina Index.
(2) LME (
trading, including aluminum. The LME pricing component represents the
underlying base metal component, based on quoted prices for aluminum on the
exchange.
Sequential Period Comparison Year-to-date Comparison
Overview Net income attributable to Alcoa Net income attributable to Alcoa
Corporation increased $179 Corporation increased $95
primarily as a result of: primarily as a result of:
•Higher aluminum and alumina •Higher aluminum and alumina
prices prices
•Lower restructuring charges •Lower production and raw
•Gain on the sale of the Warrick material costs
Rolling Mill •Gain on the sale of the Warrick
Partially offset by: Rolling Mill
•Higher provision for income Partially offset by:
taxes due to higher earnings •Unfavorable currency movements
•Higher non-controlling interest as the U.S. dollar weakened
due primarily to higher earnings against most major currencies
in the alumina segment except the Brazilian real
•Higher energy costs mainly in
our Australian refineries due to
a new gas contract
•Absence of a gain related to the
divestiture of the Gum Springs
waste treatment facility
Sales Sales increased
a result of: a result of:
•Higher realized prices for •Higher realized prices for
aluminum and alumina aluminum and alumina
•Higher shipments due to the end •Restart of theBécancour smelter
of the strike at the San Ciprián •Higher shipments due to the end
smelter of the strike at the San Ciprián
•Higher alumina shipments on smelter
timing of vessels •Higher rolled products revenue
•Higher rolled products volume due to 9 kmt highershipments and
due to 7 kmt higher shipments and higher aluminum prices
higher aluminum prices Partially offset by:
•Curtailment of the Intalco
smelter
Cost of Cost of goods sold as a Cost of goods sold as a
goods sold percentage of sales decreased percentage of sales decreased
2.7% primarily as a result of: 5.2% primarily as a result of:
•Higher realized prices for •Higher realized prices for
aluminum and alumina aluminum and alumina
Partially offset by: Partially offset by:
•Higher energy costs at the •Higher energy costs at the
alumina refineries due to higher Australia alumina refineries due
spot prices during the first to a new gas contract
quarter •Net unfavorable foreign currency
movements due to a weaker U.S.
dollar against most major
currencies except the Brazilian
real
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Sequential Period Comparison Year-to-date Comparison
Selling, Selling, general administrative, Selling, general administrative, general and other selling expense and other selling expense administrative, decreased$3 primarily as a decreased$8 primarily as a and other result of: result of:
expenses •Lower external portfolio action •Lower personnel and travel costs
costs as the sale of the Warrick due to completion of the new
Rolling Mill has completed operating model at end of first
quarter 2020 and pandemic travel
limitations
•Absence of increase in bad debt
reserve
Provision for Depreciation increased $12 Depreciation increased $12
depreciation, primarily as a result of: primarily as a result of:
depletion, and •Higher depreciation at the •Higher depreciation at the
amortization Australian mines due to mine Australian mines due to mine
moves moves
•Foreign exchange impacts due to •Foreign exchangeimpacts due to
a weaker U.S. dollar, a weaker U.S. dollar against most
particularly against the major currencies except the
Australian dollar Brazilian real
Partially offset by: Partially offset by:
•Absence of depreciation at the •Absence ofdepreciation at the
Warrick Rolling Mill as it was Warrick Rolling Mill as it was
classified as held for sale classified as held for sale
Interest Interest expense decreased $1 Interest expense increased $12
expense primarily as a result of: primarily as a result of:
•Lower interest due to two fewer •Additional interest on the $750
days in the period notes that were issued in July
Partially offset by: 2020 at a rate of $5 .5%
•Additional interest on the $500 •Additional interest on the $500
notes that were issued in March notes that were issued in March
2021 at a rate of 4.125% 2021 at a rate of 4.125%
Other (income) Other (income) expenses, net Other (income) expenses, net
expenses, net increased $68 primarily as a decreased $108 primarily as a
result of: result of:
•Gain on the sale of the Warrick •The absence of gain related to
Rolling Mill the divestiture of a waste
•Lower non-service costs related processing facility at Gum
to pension and OPEB Springs
•Favorable foreign exchange Partially offset by:
revaluation impacts from the •Gain on the sale of the Warrick
sequential strengthening of the Rolling Mill
U.S. dollar at first quarter 2021 •Favorable mark tomarket results
end (despite weak U.S. dollar for on embedded credit derivative due
most of the quarter) to tightening credit spreads
•Higher equity earnings from the •Favorable foreign exchange
Ma'aden aluminum joint venture revaluation impacts from the
due to higher aluminum prices strengthening of the U.S. dollar
at first quarter 2021 end
•Higher equity earnings from the
Ma'aden joint venture due to
higher aluminum prices
•Lower non-service costs related
to pension and OPEB
Restructuring In the first quarter of 2021, the In the three-month period of
and other Company recorded net charges of 2021, the Company recorded net
charges, net $7 which was primarily related to charges of $7 which was primarily
$9 in settlements and related to $9 in settlements and
curtailments of certain other curtailments of certain other
postretirement benefits related postretirement benefits related
to the sale of the Warrick to the sale of the Warrick
Rolling Mill ; $6 related to Rolling Mill ; $6 related to
additional take or pay contract additional take or pay contract
costs at the Intalco and costs at the Intalco and
Wenatchee smelters; $3 related to Wenatchee smelters; $3 related to
remediation costs at a former remediation costs at a former
facility; and a $12 reversal of facility; and a $12 reversal of
remaining environmental and asset remaining environmental and asset
retirement obligation reserves at retirement obligation reserves at
a previously closed Tennessee a previously closed Tennessee
site due to the completion of site due to the completion of
demolition and the determination demolition and the determination
that remaining site remediation that remaining site remediation
is no longer required. is no longer required.
In the fourth quarter of 2020, In the three-month period of
the Company recorded net charges 2020, Alcoa Corporation recorded
of $60 which was primarily net charges of $2 comprised of
related to $52 in settlements and several insignificant items,
curtailments of certain pension including pension curtailment
and other postretirement charges of $3 .
benefits.
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Sequential Period Comparison Year-to-date Comparison
Provision for The Provision for income taxes in The Provision for income taxes in
income taxes the first quarter of 2021 was $93 the three-month period of 2021
on income before taxes of $312 or was $93 on income before taxes of
29.8%. In comparison, the fourth $312 or 29.8%. Incomparison, the
quarter of 2020 Provision for three-month period of 2020
income taxes was $20 on income Provision for income taxes was
before taxes of $37 or 53.7%. $80 on income before taxes of
$219 or 36.8%.
The increase in taxes is
attributable to the higher income The increase in taxes is
before taxes noted above, as well primarily attributable to the
as the distribution of earnings higher income before taxes noted
among tax jurisdictions. In the above.
current quarter, the Company had
lower losses in the jurisdictions In the three-month period in
where it maintains a full tax 2021, the Company had similar
valuation reserve bringing the losses in thejurisdictions where
effective tax rate down from the it maintains a full tax valuation
prior period. reserve but higher income in the
jurisdictions with statutory
rates of approximately 30%
pulling the overall tax rate
toward that mark.
Noncontrolling Net income attributable to Net income attributable to
interest noncontrolling interest was $44 noncontrolling interest was $44
in the first quarter of 2021 in the three-month period of 2021
compared with $21 in the fourth compared with $59 in the
quarter of 2020. These amounts three-month period of 2020.
are entirely related to Alumina
Limited's 40% ownership interest Net income attributed to
in several affiliated operating non-controlling interest
entities. decreased due to higher energy
costs at the Australia alumina
In the first quarter of 2021 refineries due to a new gas
these combined entities, contract, unfavorable foreign
particularly the Alumina segment exchange impacts as the U.S.
entities, generated higher net dollar weakened mainly against
income compared with the fourth the Australian dollar, partially
quarter of 2020. The favorable offset by higher alumina prices.
change in earnings was mainly
driven by higher alumina prices
(see Alumina under Segment
Information below).
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Segment InformationAlcoa 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 underAlcoa 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's Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Bauxite
Business Update. During the first quarter, the segment realized lower internal
bauxite pricing and lower earnings from minority owned mines. Further, the
Company successfully relocated the Willowdale mining operations to the next
planned location in the Darling range and operations have resumed. Additional
costs to finalize the move are anticipated through the third quarter of 2021.
The segment incurred higher depreciation expense in the first quarter related to
these mine moves.
Production in the below table can vary from Total shipments due primarily to
differences between the equity allocation of production and off-take agreements
with the respective equity investment. Operating costs in the table below
includes all production-related costs: conversion costs, such as labor,
materials, and utilities; depreciation, depletion, and amortization; and plant
administrative expenses.
Quarter ended Three months ended
March 31, December 31, March 31, March 31,
2021 2020 2021 2020
Production (mdmt) 11.9 12.2 11.9 11.6
Third-party shipments (mdmt) 1.5 1.9 1.5 1.4
Intersegment shipments (mdmt) 10.5 10.4 10.5 10.5
Total shipments (mdmt) 12.0 12.3 12.0 11.9
Third-party sales $ 58 $ 79 $ 58 $ 71
Intersegment sales 185 225 185 235
Total sales $ 243 $ 304 $ 243 $ 306
Segment Adjusted EBITDA $ 59 $ 120 $ 59 $ 120
Operating costs $ 237 $ 217 $ 237 $ 213
Average cost per dry metric ton of
bauxite $ 20 $ 18 $ 20 $ 18
Sequential Period Comparison Year-to-date Comparison
Production Production decreased 2% primarily Production increased 3% primarily
as a result of: as a result of:
•Slightly lower production across •Higher production across Alcoa
most of the portfolio due to two operated mines
fewer days in the period Partially offset by:
Partially offset by: •Slightly lower production at
•Better operational performance most equity-owned mines
at the Huntly mine •One less day in the period
Third-party sales Third-party sales decreased $21 Third-party sales decreased $13
primarily as a result of: primarily as a result of:
•Lower sales volumes •Lower average realized prices
•Lower royalties due to the •Lower royalties due to the
absence of a favorable true-up absence of a favorable true-up
that occurred in the fourth that occurred in the first
quarter 2020 quarter of 2020
•Lower average realized prices Partially offset by:
Partially offset by: •Higher sales volumes
•Unfavorable foreign currency
impacts due to a weaker U.S.
dollar against most currencies
except the Brazilian real
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Sequential Period Comparison Year-to-date Comparison
Intersegment Intersegment sales decreased $40 Intersegment sales decreased $50
sales primarily as a result of: primarily as a result of:
•Lower average realized prices on •Lower average realized prices on
sales with the Alumina segment sales with the Alumina segment
Partially offset by: •Lower sales volumes
•Higher trading volumes
Segment Segment adjusted EBITDA Segment adjusted EBITDA
Adjusted decreased 51% primarily as a decreased 51% primarily as a
EBITDA result of: result of:
•Lower average realized prices •Lower average realized prices
•Lower earnings from equity •Lower royalties due to the
investments absence of a favorable true up in
•Lower royalties due to the the first quarter of 2020
absence of a favorable true-up •Lower earnings from equity
that occurred in the fourth investments
quarter Partially offset by:
Partially offset by: •Higher third-party sales volumes
•Higher trading volumes
•Higher rehabilitation credits
Forward Look. For the second quarter of 2021, operations are expected to be consistent with the first quarter of 2021.
Alumina
Business Update. During the first quarter of 2021, the average API trended favorably, showing a 7% and 10% improvement over the first and fourth quarters of 2020, respectively. The alumina segment also experienced lower internal bauxite costs which were partially offset by higher energy costs in both periods.
AtMarch 31, 2021 , the Alumina segment had base capacity of 12,759 kmt with 214 kmt of curtailed refining capacity. There were no changes to base or curtailed capacity during 2020 or through the first three months of 2021. Total shipments include metric tons that were not produced by the Alumina segment. Such alumina was purchased to satisfy certain customer commitments. The Alumina segment bears the risk of loss of the purchased alumina until control of the product has been transferred to this segment's customer. Additionally, operating costs in the table below includes all production-related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses. Quarter ended
Three months ended
March 31 ,December 31 ,
2021 2020 2021 2020
Production (kmt) 3,327 3,371 3,327 3,298
Third-party shipments (kmt) 2,472 2,312 2,472 2,365
Intersegment shipments (kmt) 1,101 1,046 1,101 1,075
Total shipments (kmt) 3,573 3,358 3,573 3,440
Third-party sales 760 $ 620 760 $ 707
Intersegment sales 364 314 364 336
Total sales $ 1,124 $ 934 $ 1,124 $ 1,043
Segment Adjusted EBITDA $ 227 $ 97 $ 227 $ 193
Average realized third-party price
per metric ton of alumina $ 308 $ 268 $ 308 $ 299
Operating costs $ 886 $ 841 $ 886 $ 844
Average cost per metric ton of
alumina $ 248 $ 250 $ 248 $ 245
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Sequential Period Comparison Year-to-date Comparison
Production Production decreased 1% primarily Production increased 1% primarily
as a result of: as a result of:
•Slightly lower production across •Slightly higherproduction
most of the portfolio due to two across most of the portfolio due
fewer days in the period to better operationalperformance
Partially offset by: Partially offset by:
•Recovery in production at San •One less day in the period
Ciprián following the suspension
of a labor strikeThird-party Third-party sales increased 23% Third-party sales increased 7% sales primarily as a result of: primarily as a result of:
•160 kmt higher third-party •107 kmt higherthird-party
shipments shipments
•Higher average realized price of •Higher average realized price of
$40 /ton principally driven by a $9 /ton principally driven by a
higher average API (on a 30-day higher average API (on a 30-day
lag) lag)
Intersegment Intersegment sales increased 16% Intersegment sales increased 8%
sales primarily as a result of: primarily as a result of:
•Higher average realized price of •Higher average realized price of
$40 /ton $9 /ton
•Slightly higher demand from the •Slightly higher demand from the
Aluminum segment Aluminum segment
Segment Segment adjusted EBITDA increased Segment adjusted EBITDA increased
Adjusted $130 primarily as a result of: $34 primarily as a result of:
EBITDA •Higher average realized price of •Higher average realized price of
$40 /ton $9 /ton
•Lower costs for bauxite and •Lower costs for bauxite and
caustic soda caustic soda
Partially offset by: Partially offset by:
•Higher energy prices in •Higher energy prices in
Australia and Spain due to higher Australia due to a new gas
spot market prices contract
•Net unfavorable foreign currency
movements due to a weaker U.S.
dollar (particularly against the
Australian dollar)
Forward Look. For the second quarter of 2021 in comparison with the first quarter, we expect stable operations with higher production costs due to seasonal maintenance and energy costs.
Aluminum
Business Update. During the first quarter, metal prices increased and shipments remained strong, including improved demand for value-add products. The suspension of the labor strike at the San Ciprián smelter resulted in higher sales volumes from metal shipments that had been blocked during the strike. Total aluminum third-party shipments and total primary aluminum shipments include metric tons that were not produced by the Aluminum segment. Such aluminum was purchased by this segment to satisfy certain customer commitments. The Aluminum segment bears the risk of loss of the purchased aluminum until control of the product has been transferred to this segment's customer. Total aluminum information includes flat-rolled aluminum while Primary aluminum information does not. Operating costs includes all production-related costs: raw materials consumed; conversion costs, such as labor, materials, and utilities; depreciation and amortization; and plant administrative expenses. The average realized third-party price per metric ton of primary aluminum includes three elements: a) the underlying base metal component, based on quoted prices from the LME; b) the regional premium, which represents the incremental price over the base LME component that is associated with the physical delivery of metal to a particular region (e.g., the Midwest premium for metal sold inthe United States ); and c) the product premium, which represents the incremental price for receiving physical metal in a particular shape (e.g., billet, slab, rod, etc.) or alloy. 31
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Quarter ended Three months ended
March 31, December 31, March 31, March 31,
Total Aluminum information 2021 2020 2021 2020
Third-party aluminum shipments (kmt) 831 735 831 725
Third-party sales $ 2,047 $ 1,685 $ 2,047 $ 1,598
Intersegment sales 2 5 2 3
Total sales $ 2,049 $ 1,690 $ 2,049 $ 1,601
Segment Adjusted EBITDA $ 283 $ 181 $ 283 $ 62
Quarter ended Three months ended
March 31, December 31, March 31, March 31,
Primary Aluminum information 2021 2020 2021 2020
Production (kmt) 548 559 548 564
Third-party shipments (kmt) 748 660 748 652
Third-party sales $ 1,727 $ 1,380 $ 1,727 $ 1,297
Average realized third-party price
per metric ton $ 2,308 $ 2,094 $ 2,308 $ 1,988
Total shipments (kmt) 773 672 773 663
Operating costs $ 1,494 $ 1,281 $ 1,494 $ 1,327
Average cost per metric ton $ 1,933 $ 1,906 $ 1,933 $ 2,002
Sequential Period Comparison Year-to-date Comparison
Production Primary production decreased 2% Production decreased 3% primarily
as a result of: as a result of:
•Two fewer days in the period •Curtailment of Intalco completed
•Production per day remained flat in 3Q20
across portfolio •One less day in the period
Partially offset by:
•ABI restart completed in 3Q20
Third-party Third-party sales increased
•Increase in LME •Increase in LME
•Higher shipments due to the end •Restart of theBécancour smelter
of the strike at the San Ciprián •Higher shipments due to the end
smelter of the strike at the San Ciprián
•Higher rolled products sales on smelter
higher shipments and price •Higher rolled products sales on
•Increase in value-add primary higher shipments and price
aluminum sales volume of 10% •Increase in value-add primary
aluminum sales
Partially offset by:
•Curtailment of the Intalco
smelter
Segment Segment adjusted EBITDA increased Segment adjusted EBITDA increased
Adjusted $102 primarily as a result of: $221 primarily as a result of:
EBITDA •Increase in realized metal •Increase in realized metal
prices prices
Partially offset by: •Favorable impacts from the
•Higher alumina and raw material curtailment of Intalco and ABI
costs restart
Partially offset by:
•Unfavorable currency impacts
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The following table provides consolidated capacity and curtailed capacity (each
in kmt) for each smelter owned by
March 31, 2021 December 31, 2020 March 31, 2020
Facility Country Capacity (1) Curtailed Capacity (1) Curtailed Capacity (1) Curtailed
Portland Australia 197 30 197 30 197 30
São Luís (Alumar) Brazil 268 268 268 268 268 268
Baie Comeau Canada 280 - 280 - 280 -
Bécancour (3) Canada 310 - 310 - 310 49
Deschambault Canada 260 - 260 - 260 -
Fjarðaál Iceland 344 - 344 - 344 -
Lista Norway 94 - 94 - 94 -
Mosjøen Norway 188 - 188 - 188 -
San Ciprián Spain 228 - 228 - 228 -
Intalco (2) U.S. 279 279 279 279 279 49
Massena West U.S. 130 - 130 - 130 -
Warrick U.S. 269 108 269 108 269 108
Wenatchee U.S. 146 146 146 146 146 146
2,993 831 2,993 831 2,993 650
(1) These figures represent
Capacity based on its ownership interest in the respective smelter.
(2) On
of smelting capacity at the Intalco smelter. The full curtailment of 279
kmt, which includes 49 kmt of earlier-curtailed capacity, was completed
during the third quarter of 2020.
(3) Curtailed capacity at the Bécancour (Canada ) smelter decreased by 49 kmt
from the first quarter 2020 to the first quarter 2021 as a result of therestart process. The restart completed during the third quarter of 2020.
Forward Look. For the second quarter of 2021 in comparison to the first quarter, we expect sustained strong shipments and demand for value-add products, partially offset by unfavorable impacts from the absence of theWarrick Rolling Mill results, lower hydro sales from a seasonal decline in market prices, unfavorable impacts from current energy market conditions, and higher seasonal maintenance.
Reconciliation of Certain Segment Information
Reconciliation of Total Segment Third-Party Sales to Consolidated Sales
Quarter ended Three months ended
March 31, December 31, March 31, March 31,
2021 2020 2021 2020
Bauxite $ 58 $ 79 $ 58 $ 71
Alumina 760 620 760 707
Aluminum:
Primary aluminum 1,727 1,380 1,727 1,297
Other(1) 320 305 320 301
Total segment third-party sales 2,865 2,384 2,865 2,376
Other 5 8 5 5
Consolidated sales $ 2,870 $ 2,392 $ 2,870 $ 2,381 (1) Other includes third-party sales of flat-rolled aluminum and energy, as well
as realized gains and losses related to embedded derivative instruments
designated as cash flow hedges of forward sales of aluminum.
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Reconciliation of Total Segment Operating Costs to Consolidated Cost of Goods
Sold
Quarter ended Three months ended
March 31, December 31, March 31, March 31,
2021 2020 2021 2020
Bauxite $ 237 $ 217 $ 237 $ 213
Alumina 886 841 886 844
Primary aluminum 1,494 1,281 1,494 1,327
Other(1) 374 322 374 314
Total segment operating costs 2,991 2,661 2,991 2,698
Eliminations(2) (544 ) (549 ) (544 ) (566 )
Provision for depreciation,
depletion, amortization(3) (176 ) (164 ) (176 ) (163 )
Other(4) 21 26 21 56
Consolidated cost of goods sold
2,292$ 2,025
(1) Other largely relates to the Aluminum segment's flat-rolled aluminum product
division.
(2) Represents the elimination of cost of goods sold related to intersegment
sales between Bauxite and Alumina and between Alumina and Aluminum.
(3) Depreciation, depletion, and amortization is included in the operating costs
used to calculate average cost for each of the bauxite, alumina, and primary
aluminum product divisions (see Bauxite, Alumina, and Aluminum above).
However, for financial reporting purposes, depreciation, depletion, and
amortization is presented as a separate line item on
Statement of Consolidated Operations.
(4) Other includes costs related to Transformation and certain other items that
impact Cost of goods sold on
Operations that are not included in the operating costs of segments (see
footnotes 1 and 3 in the Reconciliation of Total Segment Adjusted EBITDA to
Consolidated Net Income (Loss) Attributable to
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Net Income
(Loss) Attributable to
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