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Segment and Geographic Area Information | 12 Months Ended
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Dec. 31, 2018
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, building and construction, industrial applications, defense, and packaging. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2018, the Company changed its primary measure of segment performance from Adjusted earnings before interest, tax, depreciation, and amortization (“Adjusted EBITDA”) to Segment operating profit, which more closely aligns segment performance with Operating income as presented in the Statement of Consolidated Operations. Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Arconic’s definition of Segment operating profit is Operating income excluding Special items. Special items include Restructuring and other charges and Impairment of goodwill. Segment operating profit also includes certain items that, under the previous segment performance measure, were recorded in Corporate, such as the impact of LIFO inventory accounting, metal price lag, intersegment profit eliminations, and derivative activities. Segment operating profit may not be comparable to similarly titled measures of other companies. Differences between segment totals and consolidated Arconic are in Corporate. Prior period financial information has been recast to conform to current year presentation. 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 primarily in the aerospace (commercial and defense), industrial, commercial transportation, and power generation end markets. Such products include fastening systems (titanium, steel, and nickel superalloys); 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. Sheet and plate is sold directly to customers and through distributors related to 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 both 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
2018 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 6,316 |  |  | $ | 5,604 |  |  | $ | 2,126 |  |  | $ | 14,046 |
Intersegment sales | — |  |  | 160 |  |  | — |  |  | 160 |
Total sales | $ | 6,316 |  |  | $ | 5,764 |  |  | $ | 2,126 |  |  | $ | 14,206 |
Profit and loss: |  |  |  |  |  |  |
Segment operating profit | $ | 891 |  |  | $ | 386 |  |  | $ | 304 |  |  | $ | 1,581 |
Restructuring and other charges | 71 |  |  | (156 | ) |  | 1 |  |  | (84 | )
Provision for depreciation and amortization | 282 |  |  | 212 |  |  | 50 |  |  | 544 |
2017 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 5,943 |  |  | $ | 5,000 |  |  | $ | 2,011 |  |  | $ | 12,954 |
Intersegment sales | — |  |  | 148 |  |  | — |  |  | 148 |
Total sales | $ | 5,943 |  |  | $ | 5,148 |  |  | $ | 2,011 |  |  | $ | 13,102 |
Profit and loss: |  |  |  |  |  |  |
Segment operating profit | $ | 964 |  |  | $ | 424 |  |  | $ | 290 |  |  | $ | 1,678 |
Restructuring and other charges | 30 |  |  | 72 |  |  | 52 |  |  | 154 |
Provision for depreciation and amortization | 268 |  |  | 205 |  |  | 50 |  |  | 523 |
2016 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 5,728 |  |  | $ | 4,865 |  |  | $ | 1,802 |  |  | $ | 12,395 |
Intersegment sales | — |  |  | 118 |  |  | — |  |  | 118 |
Total sales | $ | 5,728 |  |  | $ | 4,983 |  |  | $ | 1,802 |  |  | $ | 12,513 |
Profit and loss: |  |  |  |  |  |  |
Segment operating profit | $ | 955 |  |  | $ | 421 |  |  | $ | 246 |  |  | $ | 1,622 |
Restructuring and other charges | 78 |  |  | 40 |  |  | 14 |  |  | 132 |
Provision for depreciation and amortization | 255 |  |  | 201 |  |  | 48 |  |  | 504 |
2018 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Capital expenditures | $ | 349 |  |  | $ | 255 |  |  | $ | 111 |  |  | $ | 715 |
Goodwill | 4,179 |  |  | 245 |  |  | 76 |  |  | 4,500 |
Total assets | 10,346 |  |  | 3,934 |  |  | 1,089 |  |  | 15,369 |
2017 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Capital expenditures | $ | 308 |  |  | $ | 178 |  |  | $ | 57 |  |  | $ | 543 |
Goodwill | 4,205 |  |  | 252 |  |  | 78 |  |  | 4,535 |
Total assets | 10,325 |  |  | 3,955 |  |  | 1,041 |  |  | 15,321 |
The following tables reconcile certain segment information to consolidated totals:
For the year ended December 31, | 2018 |  | 2017 |  | 2016
Sales: |  |  |  |  |
Total segment sales | $ | 14,206 |  |  | $ | 13,102 |  |  | $ | 12,513 |
Elimination of intersegment sales | (160 | ) |  | (148 | ) |  | (118 | )
Corporate | (32 | ) |  | 6 |  |  | (1 | )
Consolidated sales | $ | 14,014 |  |  | $ | 12,960 |  |  | $ | 12,394 |
For the year ended December 31, | 2018 |  | 2017 |  | 2016
Total segment operating profit | $ | 1,581 |  |  | $ | 1,678 |  |  | $ | 1,622 |
Unallocated amounts: |  |  |  |  |
Impairment of goodwill | — |  |  | (719 | ) |  | — |
Restructuring and other charges | (9 | ) |  | (165 | ) |  | (155 | )
Corporate expense | (247 | ) |  | (314 | ) |  | (513 | )
Consolidated operating income | $ | 1,325 |  |  | $ | 480 |  |  | $ | 954 |
Interest expense | (378 | ) |  | (496 | ) |  | (499 | )
Other (expense) income, net | (79 | ) |  | 486 |  |  | (41 | )
Consolidated income before income taxes | $ | 868 |  |  | $ | 470 |  |  | $ | 414 |
December 31, | 2018 |  | 2017
Assets: |  |  |
Total segment assets | $ | 15,369 |  |  | $ | 15,321 |
Unallocated amounts: |  |  |
Cash and cash equivalents | 2,277 |  |  | 2,150 |
Deferred income taxes | 573 |  |  | 743 |
Corporate fixed assets, net | 305 |  |  | 310 |
Fair value of derivative contracts | 37 |  |  | 91 |
Other | 132 |  |  | 103 |
Consolidated assets | $ | 18,693 |  |  | $ | 18,718 |
Sales by major product grouping were as follows:
For the year ended December 31, | 2018 |  | 2017 |  | 2016
Sales: |  |  |  |  |
Innovative flat-rolled products | $ | 5,588 |  |  | $ | 4,992 |  |  | $ | 4,864 |
Engines | 2,940 |  |  | 2,708 |  |  | 2,560 |
Engineered structures | 1,839 |  |  | 1,743 |  |  | 1,683 |
Fastening systems | 1,531 |  |  | 1,484 |  |  | 1,463 |
Architectural aluminum systems | 1,140 |  |  | 1,065 |  |  | 1,010 |
Aluminum wheels | 969 |  |  | 805 |  |  | 689 |
Other | 7 |  |  | 163 |  |  | 125 |
| $ | 14,014 |  |  | $ | 12,960 |  |  | $ | 12,394 |
Geographic information for sales was as follows (based upon the country where the point of sale occurred):
For the year ended December 31, | 2018 |  | 2017 |  | 2016
Sales: |  |  |  |  |
United States | $ | 9,137 |  |  | $ | 8,167 |  |  | $ | 7,823 |
France | 936 |  |  | 965 |  |  | 930 |
Hungary | 823 |  |  | 739 |  |  | 619 |
United Kingdom | 737 |  |  | 721 |  |  | 711 |
China | 632 |  |  | 615 |  |  | 582 |
Russia | 553 |  |  | 500 |  |  | 433 |
Germany | 302 |  |  | 309 |  |  | 284 |
Canada | 285 |  |  | 261 |  |  | 262 |
Brazil | 214 |  |  | 285 |  |  | 250 |
Japan | 170 |  |  | 141 |  |  | 145 |
Other | 225 |  |  | 257 |  |  | 355 |
| $ | 14,014 |  |  | $ | 12,960 |  |  | $ | 12,394 |
Geographic information for long-lived assets was as follows (based upon the physical location of the assets):
December 31, | 2018 |  | 2017
Long-lived assets: |  |  |
United States | $ | 4,148 |  |  | $ | 4,005 |
China | 326 |  |  | 347 |
Hungary | 257 |  |  | 227 |
Russia | 253 |  |  | 276 |
United Kingdom | 253 |  |  | 259 |
France | 163 |  |  | 159 |
Germany | 84 |  |  | 88 |
Canada | 61 |  |  | 63 |
Brazil | 54 |  |  | 62 |
Other | 105 |  |  | 108 |
| $ | 5,704 |  |  | $ | 5,594 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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