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Segment and Geographic Area Information | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Segment and Geographic Area Information | Segment and Geographic Area Information Arconic is a global leader in lightweight metals engineering and manufacturing. Arconic’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, 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 in 2017 was 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. Prior period information has been recast to conform to current year presentation. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Items required to reconcile Combined segment adjusted EBITDA to Net loss attributable to Arconic include: the Provision for depreciation and amortization; Impairment of goodwill; Restructuring and other charges; 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); other items, including intersegment profit eliminations; Other income, net; Interest expense; Income tax expense; and the results of discontinued operations. The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note A). Transactions among segments are established based on negotiation among the parties. Differences between segment totals and Arconic’s consolidated totals for line items not reconciled are in Corporate. Arconic’s operations consist of three worldwide reportable segments as follows: Engineered Products and Solutions. This segment produces products that are used mostly in the aerospace (commercial and defense), industrial, commercial transportation, and power generation end markets. Such products include fastening systems (titanium, steel, and nickel superalloys) and seamless rolled rings (mostly nickel superalloys); investment castings (nickel superalloys, titanium, and aluminum), including airfoils and forged jet engine components (e.g., jet engine disks); and extruded, machined and formed aircraft parts (titanium and aluminum), all of which are sold directly to customers and through distributors. More than 75% of the third-party sales in this segment are from the aerospace end market. A small part of this segment also produces various forged, extruded, and machined metal products (titanium, aluminum and steel) for the oil and gas, automotive, and land and sea defense end markets. Seasonal decreases in sales are generally experienced in the third quarter of the year due to the European summer slowdown across all end markets. Global Rolled Products. This segment produces aluminum sheet and plate for a variety of end markets. This segment includes sheet and plate sold directly to customers and through distributors in the aerospace, automotive, commercial transportation, packaging, building and construction, and industrial products (mainly used in the production of machinery and equipment and consumer durables) end markets. A small portion of this segment also produces aseptic foil for the packaging end market. While the customer base for flat-rolled products is large, a significant amount of sales of sheet and plate is to a relatively small number of customers. Transportation and Construction Solutions. This segment produces products that are used mostly in the commercial transportation and nonresidential building and construction end markets. Such products include integrated aluminum structural systems, architectural extrusions, and forged aluminum commercial vehicle wheels, which are sold directly to customers and through distributors. A small part of this segment also produces aluminum products for the industrial products end market. The operating results and assets of Arconic’s reportable segments were as follows:
| Engineered Products and Solutions | Global Rolled Products | Transportation and Construction Solutions | Total
2017 |  |  |  |
Sales: |  |  |  |
Third-party sales | $ | 5,935 |  | $ | 4,992 |  | $ | 1,985 |  | $ | 12,912 |
Intersegment sales | — |  | 148 |  | — |  | 148 |
Total sales | $ | 5,935 |  | $ | 5,140 |  | $ | 1,985 |  | $ | 13,060 |
Profit and loss: |  |  |  |
Depreciation and amortization | 268 |  | 205 |  | 50 |  | 523 |
Adjusted EBITDA | 1,224 |  | 599 |  | 321 |  | 2,144 |
2016 |  |  |  |
Sales: |  |  |  |
Third-party sales | $ | 5,728 |  | $ | 4,864 |  | $ | 1,802 |  | $ | 12,394 |
Intersegment sales | — |  | 118 |  | — |  | 118 |
Total sales | $ | 5,728 |  | $ | 4,982 |  | $ | 1,802 |  | $ | 12,512 |
Profit and loss: |  |  |  |
Depreciation and amortization | $ | 255 |  | $ | 201 |  | $ | 48 |  | $ | 504 |
Adjusted EBITDA | 1,195 |  | 577 |  | 291 |  | 2,063 |
2015 |  |  |  |
Sales: |  |  |  |
Third-party sales | $ | 5,342 |  | $ | 5,253 |  | $ | 1,882 |  | $ | 12,477 |
Intersegment sales | — |  | 125 |  | — |  | 125 |
Total sales | $ | 5,342 |  | $ | 5,378 |  | $ | 1,882 |  | $ | 12,602 |
Profit and loss: |  |  |  |
Depreciation and amortization | $ | 233 |  | $ | 203 |  | $ | 43 |  | $ | 479 |
Adjusted EBITDA | 1,111 |  | 512 |  | 271 |  | 1,894 |
2017 |  |  |  |
Assets: |  |  |  |
Capital expenditures | $ | 308 |  | $ | 178 |  | $ | 57 |  | $ | 543 |
Goodwill | 3,949 |  | 193 |  | 60 |  | 4,202 |
Total assets | 10,252 |  | 4,179 |  | 1,068 |  | 15,499 |
2016 |  |  |  |
Assets: |  |  |  |
Capital expenditures | $ | 333 |  | $ | 293 |  | $ | 63 |  | $ | 689 |
Goodwill | 4,579 |  | 181 |  | 57 |  | 4,817 |
Total assets | 10,542 |  | 3,891 |  | 982 |  | 15,415 |
The following tables reconcile certain segment information to consolidated totals:
| 2017 | 2016 | 2015
Sales: |  |  |
Total segment sales | $ | 13,060 |  | $ | 12,512 |  | $ | 12,602 |
Elimination of intersegment sales | (148 | ) | (118 | ) | (125 | )
Corporate | 48 |  | — |  | (64 | )
Consolidated sales | $ | 12,960 |  | $ | 12,394 |  | $ | 12,413 |
| 2017 | 2016 | 2015
Combined segment adjusted EBITDA | $ | 2,144 |  | $ | 2,063 |  | $ | 1,894 |
Unallocated amounts: |  |  |
Depreciation and amortization | (551 | ) | (535 | ) | (508 | )
Impairment of goodwill | (719 | ) | — |  | (25 | )
Restructuring and other charges | (165 | ) | (155 | ) | (214 | )
Impact of LIFO | (110 | ) | (18 | ) | 101 |
Metal price lag | 72 |  | 27 |  | (175 | )
Corporate expense | (274 | ) | (454 | ) | (371 | )
Other | (71 | ) | (109 | ) | (74 | )
Operating income | 326 |  | 819 |  | 628 |
Interest expense | (496 | ) | (499 | ) | (473 | )
Other income, net | 640 |  | 94 |  | 28 |
Income from continuing operations before income taxes | 470 |  | 414 |  | 183 |
Provision for income taxes | (544 | ) | (1,476 | ) | (339 | )
Discontinued operations | — |  | 121 |  | (165 | )
Net income attributable to noncontrolling interest | — |  | — |  | (1 | )
Net loss attributable to Arconic | $ | (74 | ) | $ | (941 | ) | $ | (322 | )
December 31, | 2017 | 2016
Assets: |  |
Total segment assets | $ | 15,499 |  | $ | 15,415 |
Unallocated amounts: |  |
Cash and cash equivalents | 2,150 |  | 1,863 |
Deferred income taxes | 743 |  | 1,234 |
Corporate goodwill | 333 |  | 331 |
Corporate fixed assets, net | 310 |  | 308 |
LIFO reserve | (481 | ) | (371 | )
Fair value of derivative contracts | 91 |  | 24 |
Investment in common stock of Alcoa Corporation | — |  | 1,020 |
Other | 73 |  | 214 |
Consolidated assets | $ | 18,718 |  | $ | 20,038 |
Sales by major product grouping were as follows:
| 2017 | 2016 | 2015
Sales: |  |  |
Flat-rolled aluminum | $ | 4,992 |  | $ | 4,864 |  | $ | 5,253 |
Fastening systems and rings | 2,102 |  | 2,060 |  | 2,168 |
Investment castings | 1,983 |  | 1,870 |  | 1,812 |
Other extruded and forged products | 1,565 |  | 1,495 |  | 1,332 |
Architectural aluminum systems | 1,065 |  | 1,010 |  | 951 |
Aluminum wheels | 805 |  | 689 |  | 790 |
Other | 448 |  | 406 |  | 107 |
| $ | 12,960 |  | $ | 12,394 |  | $ | 12,413 |
Geographic information for sales was as follows (based upon the country where the point of sale occurred):
| 2017 | 2016 | 2015
Sales: |  |  |
United States | $ | 8,167 |  | $ | 7,823 |  | $ | 8,044 |
France | 965 |  | 930 |  | 802 |
Hungary | 739 |  | 619 |  | 622 |
United Kingdom | 721 |  | 711 |  | 698 |
China | 615 |  | 582 |  | 565 |
Russia | 500 |  | 433 |  | 455 |
Germany | 309 |  | 284 |  | 264 |
Brazil | 285 |  | 250 |  | 297 |
Canada | 261 |  | 262 |  | 180 |
Japan | 141 |  | 145 |  | 138 |
Italy | 37 |  | 127 |  | 139 |
Other | 220 |  | 228 |  | 209 |
| $ | 12,960 |  | $ | 12,394 |  | $ | 12,413 |
Geographic information for long-lived assets was as follows (based upon the physical location of the assets):
December 31, | 2017 | 2016
Long-lived assets: |  |
United States | $ | 4,005 |  | $ | 3,966 |
China | 347 |  | 336 |
Russia | 276 |  | 295 |
United Kingdom | 259 |  | 232 |
Hungary | 227 |  | 194 |
France | 159 |  | 118 |
Germany | 88 |  | 64 |
Canada | 63 |  | 58 |
Brazil | 62 |  | 97 |
Other | 108 |  | 139 |
| $ | 5,594 |  | $ | 5,499 |

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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 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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