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Segment Information | 3 Months Ended
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Mar. 31, 2017
Segment Reporting [Abstract] |
Segment Information | I. Segment Information Arconic is a producer of multi-material products including sheet, plate, precision castings, forgings, rolled rings, extrusions, wheels and fasteners. Arconic’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. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2017, the Company changed its primary measure of segment performance from after-tax operating income (ATOI) to adjusted earnings before interest, tax, depreciation and amortization (“adjusted EBITDA”). Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is adjusted EBITDA. Arconic’s definition of adjusted EBITDA is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. The adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Items required to reconcile combined segment adjusted EBITDA to consolidated net income attributable to Arconic include: the impact of LIFO inventory accounting; metal price lag (the timing difference created when the average price of metal sold differs from the average cost of the metal when purchased by the respective segment - generally, when the price of metal increases, metal price lag is favorable, and when the price of metal decreases, metal price lag is unfavorable); corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities and corporate research and development expenses); the provision for depreciation and amortization; interest expense; restructuring and other charges; other income, net; the results of discontinued operations; income tax expense; and other items, including intersegment profit eliminations. Prior period information has been recast to conform to current year presentation. The operating results of Arconic’s reportable segments were as follows:
|  | Engineered |  |  |  |  |  | Transportation |  |  |  |
|  | Products and |  |  | Global Rolled |  |  | and Construction |  |  | Combined |
|  | Solutions |  |  | Products |  |  | Solutions |  |  | Segment |
First quarter ended |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Third-party sales |  | $ | 1,485 |  |  | $ | 1,249 |  |  | $ | 449 |  |  | $ | 3,183 |
Intersegment sales |  |  | — |  |  |  | 34 |  |  |  | — |  |  |  | 34 |
Total sales |  | $ | 1,485 |  |  | $ | 1,283 |  |  | $ | 449 |  |  | $ | 3,217 |
Profit and loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 64 |  |  |  | 50 |  |  |  | 12 |  |  |  | 126 |
Adjusted EBITDA |  |  | 306 |  |  |  | 171 |  |  |  | 72 |  |  |  | 549 |
First quarter ended |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Third-party sales |  | $ | 1,449 |  |  | $ | 1,184 |  |  | $ | 429 |  |  | $ | 3,062 |
Intersegment sales |  |  | — |  |  |  | 29 |  |  |  | — |  |  |  | 29 |
Total sales |  | $ | 1,449 |  |  | $ | 1,213 |  |  | $ | 429 |  |  | $ | 3,091 |
Profit and loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 65 |  |  |  | 50 |  |  |  | 11 |  |  |  | 126 |
Adjusted EBITDA |  |  | 305 |  |  |  | 155 |  |  |  | 64 |  |  |  | 524 |
The following table reconciles combined segment adjusted EBITDA to consolidated net income attributable to Arconic:
|  | First quarter ended |
|  | March 31, |
|  | 2017 |  |  | 2016 |
Combined segment adjusted EBITDA |  | $ | 549 |  |  | $ | 524 |
Unallocated amounts: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (133 | ) |  |  | (133 | )
Interest expense |  |  | (115 | ) |  |  | (121 | )
Restructuring and other charges |  |  | (73 | ) |  |  | (16 | )
Other income, net |  |  | 354 |  |  |  | 12 |
Discontinued operations |  |  | — |  |  |  | (94 | )
Income taxes |  |  | (162 | ) |  |  | (51 | )
Impact of LIFO |  |  | (19 | ) |  |  | (12 | )
Metal price lag |  |  | 22 |  |  |  | — |
Corporate expense |  |  | (91 | ) |  |  | (76 | )
Other |  |  | (10 | ) |  |  | (17 | )
Consolidated net income attributable to Arconic |  | $ | 322 |  |  | $ | 16 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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