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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Components of Income from Continuing Operations Before Income Taxes | The components of income from continuing operations before income taxes were as follows:
For the year ended December 31, | 2018 |  | 2017 |  | 2016
United States | $ | 518 |  |  | $ | 500 |  |  | $ | 84 |
Foreign | 350 |  |  | (30 | ) |  | 330 |
| $ | 868 |  |  | $ | 470 |  |  | $ | 414 |
Schedule of Provision for Income Taxes on Income from Continuing Operations | The provision for income taxes consisted of the following:
For the year ended December 31, | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |
Federal(1) | $ | 45 |  |  | $ | — |  |  | $ | — |
Foreign | 138 |  |  | 98 |  |  | 133 |
State and local | 4 |  |  | (2 | ) |  | 1 |
| 187 |  |  | 96 |  |  | 134 |
Deferred: |  |  |  |  |
Federal | 146 |  |  | 489 |  |  | 1,208 |
Foreign | (94 | ) |  | 37 |  |  | 136 |
State and local | (13 | ) |  | (78 | ) |  | (2 | )
| 39 |  |  | 448 |  |  | 1,342 |
Total | $ | 226 |  |  | $ | 544 |  |  | $ | 1,476 |
(1) | Includes U.S. taxes related to foreign income
Reconciliation of U.S. Federal Statutory Rate to Arconic's Effective Tax Rate | A reconciliation of the U.S. federal statutory rate to Arconic’s effective tax rate was as follows (the effective tax rate for all periods was a provision on income):
For the year ended December 31, | 2018 |  | 2017 |  | 2016
U.S. federal statutory rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
Taxes on foreign operations | 4.0 |  |  | (8.8 | ) |  | (11.5 | )
U.S. State and local taxes | 1.5 |  |  | 0.7 |  |  | (0.4 | )
Federal benefit of state tax | (0.3 | ) |  | 3.7 |  |  | 0.4 |
Permanent differences on restructuring and other charges and asset disposals(1) | (16.9 | ) |  | (167.4 | ) |  | (107.8 | )
Non-deductible acquisition costs | — |  |  | 0.3 |  |  | 8.4 |
Statutory tax rate and law changes(2) | 6.5 |  |  | 52.5 |  |  | (15.7 | )
Tax holidays | (1.6 | ) |  | (3.0 | ) |  | (0.8 | )
Changes in valuation allowances | 0.9 |  |  | 137.9 |  |  | 426.8 |
Impairment of goodwill | — |  |  | 53.5 |  |  | — |
Company-owned life insurance/split-dollar net premiums | — |  |  | — |  |  | 23.0 |
Changes in uncertain tax positions | 12.8 |  |  | 10.1 |  |  | 2.1 |
Prior year tax adjustments | (2.6 | ) |  | (0.9 | ) |  | (1.7 | )
Other | 0.7 |  |  | 2.1 |  |  | (1.3 | )
Effective tax rate | 26.0 | % |  | 115.7 | % |  | 356.5 | %
(1) | Additional losses were reported in Spain's 2017 tax return related to the Separation Transaction which are offset by an increased valuation allowance.
(2) | In 2018, the Company finalized its accounting for the Tax Cuts and Jobs Act of 2017 ("the 2017 Act”) and recorded an additional $59 charge. In December 2017, an estimated $272 tax charge was recorded with respect to the enactment of the 2017 Act. In December 2016, Spain and the United States enacted tax law changes which resulted in the remeasurement of certain deferred tax liabilities recorded by Arconic.
Schedule of Components of Net Deferred Tax Assets and Liabilities | The components of net deferred tax assets and liabilities were as follows:
| 2018 |  | 2017
December 31, | Deferred tax assets |  | Deferred tax liabilities |  | Deferred tax assets |  | Deferred tax liabilities
Depreciation | $ | 38 |  |  | $ | 694 |  |  | $ | 31 |  |  | $ | 693 |
Employee benefits | 836 |  |  | 27 |  |  | 936 |  |  | 23 |
Loss provisions | 94 |  |  | — |  |  | 134 |  |  | 14 |
Deferred income/expense | 22 |  |  | 1,102 |  |  | 19 |  |  | 1,144 |
Tax loss carryforwards | 3,159 |  |  | — |  |  | 3,305 |  |  | — |
Tax credit carryforwards | 579 |  |  | — |  |  | 638 |  |  | — |
Other | 94 |  |  | 20 |  |  | 24 |  |  | 33 |
| $ | 4,822 |  |  | $ | 1,843 |  |  | $ | 5,087 |  |  | $ | 1,907 |
Valuation allowance | (2,486 | ) |  | — |  |  | (2,584 | ) |  | — |
| $ | 2,336 |  |  | $ | 1,843 |  |  | $ | 2,503 |  |  | $ | 1,907 |
Schedule of Expiration Periods of Deferred Tax Assets | The following table details the expiration periods of the deferred tax assets presented above:
December 31, 2018 | Expires within 10 years |  | Expires within 11-20 years |  | No expiration(1) |  | Other(2) |  | Total
Tax loss carryforwards | $ | 300 |  |  | $ | 461 |  |  | $ | 2,398 |  |  | $ | — |  |  | $ | 3,159 |
Tax credit carryforwards | 497 |  |  | 70 |  |  | 12 |  |  | — |  |  | 579 |
Other | — |  |  | — |  |  | 64 |  |  | 1,020 |  |  | 1,084 |
Valuation allowance | (752 | ) |  | (287 | ) |  | (1,390 | ) |  | (57 | ) |  | (2,486 | )
| $ | 45 |  |  | $ | 244 |  |  | $ | 1,084 |  |  | $ | 963 |  |  | $ | 2,336 |
(1) | Deferred tax assets with no expiration may still have annual limitations on utilization.
(2) | Other represents deferred tax assets whose expiration is dependent upon the reversal of the underlying temporary difference. A substantial amount of Other relates to employee benefits that will become deductible for tax purposes over an extended period of time as contributions are made to employee benefit plans and payments are made to retirees.
Schedule of Changes in Valuation Allowance | The following table details the changes in the valuation allowance:
December 31, | 2018 |  | 2017 |  | 2016
Balance at beginning of year | $ | 2,584 |  |  | $ | 1,940 |  |  | $ | 1,291 |
Increase to allowance | 136 |  |  | 831 |  |  | 772 |
Release of allowance | (154 | ) |  | (246 | ) |  | (209 | )
Acquisitions and divestitures | — |  |  | (1 | ) |  | (1 | )
Tax apportionment, tax rate and tax law changes | (14 | ) |  | (24 | ) |  | 106 |
Foreign currency translation | (66 | ) |  | 84 |  |  | (19 | )
Balance at end of year | $ | 2,486 |  |  | $ | 2,584 |  |  | $ | 1,940 |
Reconciliation of Unrecognized Tax Benefits (Excluding Interest and Penalties) | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) was as follows:
December 31, | 2018 |  | 2017 |  | 2016
Balance at beginning of year | $ | 73 |  |  | $ | 28 |  |  | $ | 18 |
Additions for tax positions of the current year | — |  |  | 23 |  |  | 12 |
Additions for tax positions of prior years | 143 |  |  | 27 |  |  | — |
Reductions for tax positions of prior years | (42 | ) |  | — |  |  | — |
Settlements with tax authorities | — |  |  | — |  |  | (1 | )
Expiration of the statute of limitations | (6 | ) |  | (5 | ) |  | (1 | )
Foreign currency translation | (2 | ) |  | — |  |  | — |
Balance at end of year | $ | 166 |  |  | $ | 73 |  |  | $ | 28 |

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