Alcoa's operations consist of five worldwide segments: Alumina and Chemicals,
Primary Metals, Flat-Rolled Products, Engineered Products, and Packaging and Consumer.
Alcoa businesses that are not reported to management as part of one of these five
segments are aggregated and reported as 'Other.' Alcoa's management reporting
system measures the after-tax operating income (ATOI) of each segment.
Alumina and Chemicals
This segment consists of Alcoa's worldwide alumina and chemicals system that
includes the mining of bauxite, which is then refined into alumina. Alumina
is sold directly to internal and external smelter customers worldwide or is
processed into industrial chemical products. The industrial chemical products
are sold to a broad spectrum of markets including refractories, ceramics, abrasives,
chemicals processing, and other specialty applications. Alcoa's alumina operations
in Australia are a significant component of this segment. Slightly more than
half of Alcoa's alumina production is sold under supply contracts to third parties
worldwide, while the remainder is used internally.
Primary Metals
This segment consists of Alcoa's worldwide smelter system. Primary Metals receives
alumina primarily from the Alumina and Chemicals segment and produces aluminum
ingot to be 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.
Flat-Rolled Products
This segment's principal business is the production and sale of aluminum plate,
sheet, and foil. 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 transportation, building and construction,
and distributor markets (mainly used in the production of machinery and equipment
and consumer durables), of which approximately two-thirds is sold directly to
customers while the remainder is sold through distributors.
Engineered Products
This segment includes hard- and soft-alloy extrusions, including architectural
extrusions, super-alloy castings, steel and aluminum fasteners, aluminum forgings,
and wheels. These products serve the aerospace, automotive, commercial transportation,
industrial gas turbine, building and construction, and distributor markets (mainly
used in the production of machinery and equipment) and are sold directly to
customers and through distributors.
Packaging and Consumer
This segment includes consumer, foodservice, and flexible packaging products;
food and beverage closures; plastic sheet and film for the packaging industry;
and imaging and graphic communications for the packaging industry. The principal
products in this segment include aluminum foil; plastic wraps and bags; plastic
beverage and food closures; flexible and protective packaging products; design
and prepress services; gravure and flexographic image carrier products; thermoformed
plastic containers and extruded plastic sheet and film. Consumer products are
marketed under brands including Reynolds Wrap' , Diamond' , Baco' , and Cut-Rite'
wax paper. Seasonal increases generally occur in the third and fourth quarters
of the year for such products as consumer foil and plastic wraps and bags, while
seasonal slowdowns for closures generally occur in the fourth quarter of the
year. Products are generally sold directly to customers, consisting of supermarkets,
beverage companies, food processors, retail chains, and commercial food-service
distributors.
Other
This group includes other Alcoa businesses that are not included in the segments
previously mentioned. This group includes AFL, which produces electrical components
for the automotive industry, and produces fiber-optic cable and provides services
to the telecommunications industry; the residential building products operations,
Alcoa Home Exteriors; and automotive parts businesses. Products in this segment
are generally sold directly to customers or through distributors.
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