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Separation Transaction and Discontinued Operations | 6 Months Ended
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Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Separation Transaction and Discontinued Operations | G. Separation Transaction and Discontinued Operations On November 1, 2016, Arconic completed the Separation Transaction. Alcoa Inc., which was re-named Arconic Inc., continued to own the Engineered Products and Solutions, the Global Rolled Products (except for the Warrick, IN rolling operations and the equity interest in the rolling mill at the joint venture in Saudi Arabia), and the Transportation and Construction Solutions segments. Alcoa Corporation included the Alumina and Primary Metals segments and the Warrick, IN rolling operations and equity interest in the rolling mill at the joint venture in Saudi Arabia, both of which were formerly part of Arconic’s Global Rolled Products segment. The results of operations of Alcoa Corporation for the second quarter and six months ended June 30, 2016 are presented as discontinued operations in the Statement of Consolidated Operations. Arconic completed the Separation Transaction by distribution on November 1, 2016 of 80.1% of the outstanding common stock of Alcoa Corporation to the Company’s shareholders of record as of the close of business on October 20, 2016. Arconic retained 19.9% of the Alcoa Corporation common stock (36,311,767 shares). In February 2017, the Company sold 23,353,000 shares of Alcoa Corporation common stock at $38.03 per share, which resulted in cash proceeds of $888 which were recorded in Sale of investments within Investing Activities in the Statement of Consolidated Cash Flows and a gain of $351, which was recorded in Other income, net in the accompanying Statement of Consolidated Operations. In April and May 2017, the Company acquired a portion of its outstanding notes held by two investment banks (the “Investment Banks”) in exchange for cash and the Company’s remaining 12,958,767 Alcoa Corporation shares (valued at $35.91 per share) (the “Debt-for-Equity Exchange”) (See Note L). A gain of $167 on the Debt-for-Equity Exchange was recorded in Other income, net in the accompanying Statement of Consolidated Operations. The share exchange had no impact on the Statement of Consolidated Cash Flows. The Company had recorded the retained interest as a cost method investment in Investment in common stock of Alcoa Corporation in the accompanying Consolidated Balance Sheet. The fair value of Arconic’s retained interest in Alcoa Corporation was $0 and $1,020 at June 30, 2017 and December 31, 2016, respectively. The fair value was based on the closing stock price of Alcoa Corporation as of June 30, 2017, and December 31, 2016 multiplied by the number of shares of Alcoa Corporation common stock owned by the Company at those respective dates. As of May 4, 2017, the Company no longer maintains a retained interest in Alcoa Corporation common stock. In connection with the Separation Transaction, on October 31, 2016, Arconic and Alcoa Corporation entered into a Toll Processing and Services Agreement (the “Toll Processing Agreement”) pursuant to which Arconic provides can body stock from its Tennessee operations to Alcoa Corporation’s Warrick, Indiana rolling mill. Aluminum for the can body stock is supplied by Alcoa Corporation. The Toll Processing Agreement expires on December 31, 2018, unless sooner terminated by the parties. Tolling revenues for the second quarter and six months ended June 30, 2017 and accounts receivable at June 30, 2017 were not material to the consolidated results of operations and financial position, respectively. As part of the Separation Transaction, Arconic had recorded a receivable in the December 2016 Consolidated Balance Sheet for the net after-tax proceeds from Alcoa Corporation’s sale of the Yadkin Hydroelectric Project. The transaction closed in the first quarter of 2017 and the Company received proceeds of $238 in the first quarter of 2017 and the remaining $5 in the second quarter of 2017. The $243 proceeds were included in Other within Investing Activities in the Statement of Consolidated Cash Flows. The results of operations of Alcoa Corporation are presented as discontinued operations in the Statement of Consolidated Operations as summarized below:
|  | Second quarter ended June 30, 2016 |  |  | Six months ended June 30, 2016 |
Sales |  | $ | 2,061 |  |  | $ | 3,953 |
Cost of goods sold (exclusive of expenses below) |  |  | 1,683 |  |  |  | 3,324 |
Selling, general administrative, and other expenses |  |  | 47 |  |  |  | 102 |
Research and development expenses |  |  | 7 |  |  |  | 18 |
Provision for depreciation, depletion and amortization |  |  | 177 |  |  |  | 352 |
Restructuring and other charges |  |  | 9 |  |  |  | 86 |
Interest expense |  |  | 5 |  |  |  | 11 |
Other (income) expense, net |  |  | (21 | ) |  |  | 26 |
Income from discontinued operations before income taxes |  |  | 154 |  |  |  | 34 |
Provision for income taxes |  |  | 29 |  |  |  | 8 |
Income from discontinued operations after income taxes |  |  | 125 |  |  |  | 26 |
Less: Net income from discontinued operations attributable to noncontrolling interests |  |  | 43 |  |  |  | 38 |
Net income (loss) from discontinued operations |  | $ | 82 |  |  | $ | (12 | )
The cash flows related to Alcoa Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows for all periods presented. The following table presents depreciation, depletion and amortization, restructuring and other charges, and purchases of property, plant and equipment of the discontinued operations related to Alcoa Corporation:
|  | Six months ended June 30, |
|  | 2016 |
Depreciation, depletion and amortization |  | $ | 352 |
Restructuring and other charges |  | $ | 86 |
Capital expenditures |  | $ | 172 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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