XML 39 R39.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2019
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, | 2019 |  | 2018 |  | 2017
United States | $ | 275 |  |  | $ | 518 |  |  | $ | 500 |
Foreign | 300 |  |  | 350 |  |  | (30 | )
| $ | 575 |  |  | $ | 868 |  |  | $ | 470 |
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, | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal(1) | $ | 4 |  |  | $ | 45 |  |  | $ | — |
Foreign | 108 |  |  | 138 |  |  | 98 |
State and local | 5 |  |  | 4 |  |  | (2 | )
| 117 |  |  | 187 |  |  | 96 |
Deferred: |  |  |  |  |
Federal | 65 |  |  | 146 |  |  | 489 |
Foreign | (53 | ) |  | (94 | ) |  | 37 |
State and local | (24 | ) |  | (13 | ) |  | (78 | )
| (12 | ) |  | 39 |  |  | 448 |
Total | $ | 105 |  |  | $ | 226 |  |  | $ | 544 |
(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, | 2019 |  | 2018 |  | 2017
U.S. federal statutory rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Foreign tax rate differential | 2.6 |  |  | 2.4 |  |  | (8.7 | )
U.S. and residual tax on foreign earnings | 6.0 |  |  | 1.6 |  |  | (0.1 | )
U.S. State and local taxes | 2.5 |  |  | 1.5 |  |  | 0.7 |
Federal benefit of state tax | 0.4 |  |  | (0.3 | ) |  | 3.7 |
Permanent differences related to asset disposals and items included in restructuring and other charges(1) | (22.9 | ) |  | (16.9 | ) |  | (167.4 | )
Non-deductible transaction costs | 1.6 |  |  | — |  |  | 0.3 |
Non-deductible officer compensation | 1.8 |  |  | 0.1 |  |  | — |
Statutory tax rate and law changes(2) | (0.2 | ) |  | 6.5 |  |  | 52.5 |
Tax holidays | (3.2 | ) |  | (1.6 | ) |  | (3.0 | )
Changes in valuation allowances(3) | (14.2 | ) |  | 0.9 |  |  | 137.9 |
Impairment of goodwill | — |  |  | — |  |  | 53.5 |
Changes in uncertain tax positions | 6.1 |  |  | 12.8 |  |  | 10.1 |
Prior year tax adjustments(4) | 15.2 |  |  | (2.6 | ) |  | (0.9 | )
Other | 1.6 |  |  | 0.6 |  |  | 2.1 |
Effective tax rate | 18.3 | % |  | 26.0 | % |  | 115.7 | %
(1) | In 2019, a net tax benefit was recognized related to a U.S. tax election which caused the deemed liquidation of a foreign subsidiary's assets into its U.S. tax parent. The benefit is partially offset by an increase in uncertain tax positions. Losses reported in Spain's 2017 tax return related to the Separation of Alcoa 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.
(3) | In 2019, the Company released a valuation allowance related to 2015 and 2016 foreign tax credits, subsequent to filing U.S. amended tax returns to deduct, rather than credit, foreign taxes.
(4) In 2019, the Company filed U.S. amended tax returns to deduct, rather than credit, 2015 and 2016 foreign taxes resulting in a tax cost associated with the write-off of the deferred tax asset for the credit, partially offset by a tax benefit for the deduction.
Schedule of Components of Net Deferred Tax Assets and Liabilities | The components of net deferred tax assets and liabilities were as follows:
| 2019 |  | 2018
December 31, | Deferred tax assets |  | Deferred tax liabilities |  | Deferred tax assets |  | Deferred tax liabilities
Depreciation | $ | 25 |  |  | $ | 729 |  |  | $ | 38 |  |  | $ | 694 |
Employee benefits | 887 |  |  | 16 |  |  | 836 |  |  | 27 |
Loss provisions | 92 |  |  | — |  |  | 94 |  |  | — |
Deferred income/expense | 96 |  |  | 943 |  |  | 22 |  |  | 1,102 |
Interest | 56 |  |  | — |  |  | — |  |  | — |
Tax loss carryforwards | 2,932 |  |  | — |  |  | 3,159 |  |  | — |
Tax credit carryforwards | 379 |  |  | — |  |  | 579 |  |  | — |
Other | 52 |  |  | 16 |  |  | 94 |  |  | 20 |
| $ | 4,519 |  |  | $ | 1,704 |  |  | $ | 4,822 |  |  | $ | 1,843 |
Valuation allowance | (2,256 | ) |  | — |  |  | (2,486 | ) |  | — |
| $ | 2,263 |  |  | $ | 1,704 |  |  | $ | 2,336 |  |  | $ | 1,843 |
Schedule of Expiration Periods of Deferred Tax Assets | The following table details the expiration periods of the deferred tax assets presented above:
December 31, 2019 | Expires within 10 years |  | Expires within 11-20 years |  | No expiration(1) |  | Other(2) |  | Total
Tax loss carryforwards | $ | 452 |  |  | $ | 235 |  |  | $ | 2,245 |  |  | $ | — |  |  | $ | 2,932 |
Tax credit carryforwards | 300 |  |  | 69 |  |  | 10 |  |  | — |  |  | 379 |
Other | — |  |  | — |  |  | 120 |  |  | 1,088 |  |  | 1,208 |
Valuation allowance | (711 | ) |  | (176 | ) |  | (1,306 | ) |  | (63 | ) |  | (2,256 | )
| $ | 41 |  |  | $ | 128 |  |  | $ | 1,069 |  |  | $ | 1,025 |  |  | $ | 2,263 |
(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, | 2019 |  | 2018 |  | 2017
Balance at beginning of year | $ | 2,486 |  |  | $ | 2,584 |  |  | $ | 1,940 |
Increase to allowance | 37 |  |  | 136 |  |  | 831 |
Release of allowance | (222 | ) |  | (154 | ) |  | (246 | )
Acquisitions and divestitures | (2 | ) |  | — |  |  | (1 | )
Tax apportionment, tax rate and tax law changes | (13 | ) |  | (14 | ) |  | (24 | )
Foreign currency translation | (30 | ) |  | (66 | ) |  | 84 |
Balance at end of year | $ | 2,256 |  |  | $ | 2,486 |  |  | $ | 2,584 |
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, | 2019 |  | 2018 |  | 2017
Balance at beginning of year | $ | 166 |  |  | $ | 73 |  |  | $ | 28 |
Additions for tax positions of the current year | 34 |  |  | — |  |  | 23 |
Additions for tax positions of prior years | 3 |  |  | 143 |  |  | 27 |
Reductions for tax positions of prior years | — |  |  | (42 | ) |  | — |
Settlements with tax authorities | — |  |  | — |  |  | — |
Expiration of the statute of limitations | (2 | ) |  | (6 | ) |  | (5 | )
Foreign currency translation | (4 | ) |  | (2 | ) |  | — |
Balance at end of year | $ | 197 |  |  | $ | 166 |  |  | $ | 73 |

X
- Definition Schedule of expiration periods of deferred tax assets. + References No definition available. + Details
Name: | arnc_ScheduleOfExpirationPeriodsOfDeferredTaxAssetsTableTextBlock
Namespace Prefix: | arnc_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)(1)(i)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=117331294&loc=d3e36027-109320 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=84230637&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32537-109319 + Details
Name: | us-gaap_SummaryOfValuationAllowanceTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration