Alcoa 2015 Annual Report Download - page 96

transportation end market are expected to decline while improvements in Europe are anticipated. Additionally, net
productivity improvements are anticipated.
Reconciliation of ATOI to Consolidated Net (Loss) Income Attributable to Alcoa
Items required to reconcile total segment ATOI to consolidated net (loss) income attributable to Alcoa include: the
impact of LIFO inventory accounting; metal price lag; 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; and
other items, including intersegment profit eliminations, differences between tax rates applicable to the segments and
the consolidated effective tax rate, and other nonoperating items such as foreign currency transaction gains/losses and
interest income.
The following table reconciles total segment ATOI to consolidated net (loss) income attributable to Alcoa:
2015 2014 2013
Total segment ATOI $1,906 $1,968 $ 1,267
Unallocated amounts (net of tax):
Impact of LIFO 136 (54) 52
Metal price lag (133) 78 (45)
Interest expense (324) (308) (294)
Noncontrolling interests (125) 91 (41)
Corporate expense (266) (284) (274)
Impairment of goodwill (25) - (1,731)
Restructuring and other charges (943) (894) (607)
Other (548) (329) (612)
Consolidated net (loss) income attributable to Alcoa $ (322) $ 268 $(2,285)
The significant changes in the reconciling items between total segment ATOI and consolidated net (loss) income
attributable to Alcoa for 2015 compared with 2014 consisted of:
• a change in the Impact of LIFO, mostly due to lower prices for both aluminum, driven by both lower base
metal prices (LME) and regional premiums, and alumina (decrease in price at December 31, 2015 indexed to
December 31, 2014 compared to an increase in price at December 31, 2014 indexed to December 31, 2013);
• a change in Metal price lag, the result of lower prices for aluminum;
• an increase in Interest expense, principally caused by an 8% higher average debt level, which was largely
attributable to higher outstanding long-term debt due to the September 2014 issuance of $1,250 in 5.125%
Notes, somewhat offset by the absence of fees paid associated with the execution and termination of a 364-
day senior unsecured bridge term loan facility related to the then-planned acquisition of Firth Rixson ($8);
• a change in Noncontrolling interests, due to the change in results of AWAC, primarily driven by improved
operating results and lower restructuring and other charges related to a number of portfolio actions (e.g.
capacity reductions and a divestiture), slightly offset by the absence of a gain on the sale of a mining interest
in Suriname ($11 was noncontrolling interest’s share);
• a decline in Corporate expense, largely attributable to decreases in various expenses, including lower
acquisition costs ($13), partially offset by expenses related to the planned separation of Alcoa ($24);
• an increase in Restructuring and other charges, mostly the result of a charge for legal matters in Italy,
partially offset by lower restructuring and other charges associated with a number of portfolio actions (e.g.
capacity reductions and divestitures); and
• a change in Other, primarily due to a discrete income tax charge for valuation allowances on certain deferred
tax assets in the United States and Iceland ($190), write-downs of inventories related to various shutdown
and curtailment actions ($75), a net discrete income tax charge for a valuation allowance on certain deferred
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