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Segment and Geographic Area Information | 12 Months Ended
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Dec. 31, 2019
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 operations consist of two worldwide reportable segments: EP&F and GRP. 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 may not be comparable to similarly titled measures of other companies. Differences between segment totals and consolidated Arconic are in Corporate. In the third quarter of 2019, the Company realigned its operations by eliminating its TCS segment and transferring the Forged Wheels business to its EP&F segment and BCS to its GRP segment, consistent with how the Chief Executive Officer is assessing operating performance and allocating capital in conjunction with the planned Separation of Arconic (see Note U). The Latin America extrusions business, which was formerly part of the Company's TCS segment until its sale in April of 2018 (see Note S), was moved to Corporate. In the first quarter of 2019, management transferred its aluminum extrusions operations from its Engineered Structures business unit within the EP&F segment to the GRP segment, based on synergies with the GRP segment including similar customer base, technologies, and manufacturing capabilities. 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. Engineered Products and Forgings. 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 (aluminum, titanium, steel, and nickel superalloys) and seamless rolled rings (mostly nickel superalloys); investment castings (nickel superalloys, titanium, and aluminum), including airfoils; forged jet engine components (e.g., jet engine disks); extruded, machined and forged aircraft parts (titanium and aluminum); and forged aluminum commercial vehicle wheels, all of which are sold directly to customers and through distributors. Approximately 70% of the third-party sales in this segment are from the aerospace end market. A small part of this segment also produces various forged and machined metal products (titanium and aluminum) for various end markets. Seasonal decreases in sales are experienced for certain products in the third quarter of the year due to the European summer slowdown. Global Rolled Products. This segment produces aluminum sheet and plate, aluminum extruded and machined parts, integrated aluminum structural systems, and architectural extrusions used in the automotive, aerospace, building and construction, industrial, packaging, and commercial transportation end markets. Products are sold directly to customers and through distributors. While the customer base for flat-rolled products is large, a significant amount of sales of sheet and plate are to a relatively small number of customers. The operating results and assets of Arconic’s reportable segments were as follows:
| Engineered Products and Forgings |  | Global Rolled Products |  | Total
2019 |  |  |  |  |
Sales: |  |  |  |  |
Third-party sales | $ | 7,105 |  |  | $ | 7,082 |  |  | $ | 14,187 |
Intersegment sales | — |  |  | 183 |  |  | 183 |
Total segment sales | $ | 7,105 |  |  | $ | 7,265 |  |  | $ | 14,370 |
Profit and loss: |  |  |  |  |
Segment operating profit | $ | 1,390 |  |  | $ | 625 |  |  | $ | 2,015 |
Restructuring and other charges | 509 |  |  | 81 |  |  | 590 |
Provision for depreciation and amortization | 269 |  |  | 233 |  |  | 502 |
2018 |  |  |  |  |
Sales: |  |  |  |  |
Third-party sales | $ | 6,798 |  |  | $ | 7,223 |  |  | $ | 14,021 |
Intersegment sales | — |  |  | 205 |  |  | 205 |
Total segment sales | $ | 6,798 |  |  | $ | 7,428 |  |  | $ | 14,226 |
Profit and loss: |  |  |  |  |
Segment operating profit | $ | 1,105 |  |  | $ | 481 |  |  | $ | 1,586 |
Restructuring and other charges | 70 |  |  | (157 | ) |  | (87 | )
Provision for depreciation and amortization | 289 |  |  | 253 |  |  | 542 |
2017 |  |  |  |  |
Sales: |  |  |  |  |
Third-party sales | $ | 6,300 |  |  | $ | 6,540 |  |  | $ | 12,840 |
Intersegment sales | — |  |  | 183 |  |  | 183 |
Total segment sales | $ | 6,300 |  |  | $ | 6,723 |  |  | $ | 13,023 |
Profit and loss: |  |  |  |  |
Segment operating profit | $ | 1,119 |  |  | $ | 570 |  |  | $ | 1,689 |
Restructuring and other charges | 30 |  |  | 83 |  |  | 113 |
Provision for depreciation and amortization | 275 |  |  | 243 |  |  | 518 |
2019 |  |  |  |  |
Assets: |  |  |  |  |
Capital expenditures | $ | 344 |  |  | $ | 189 |  |  | $ | 533 |
Goodwill | 4,067 |  |  | 426 |  |  | 4,493 |
Total assets(1) | 10,034 |  |  | 4,907 |  |  | 14,941 |
2018 |  |  |  |  |
Assets: |  |  |  |  |
Capital expenditures | $ | 407 |  |  | $ | 308 |  |  | $ | 715 |
Goodwill | 4,186 |  |  | 314 |  |  | 4,500 |
Total assets | 10,494 |  |  | 4,845 |  |  | 15,339 |
(1) Segment assets at December 31, 2019 included operating lease right-of-use assets (see Notes A and O). Segment assets for the EP&F segment at December 31, 2019 were impacted by a long-lived asset impairment charge of $428 recorded in the second quarter of 2019 (see Note M). The following tables reconcile certain segment information to consolidated totals:
For the year ended December 31, | 2019 |  | 2018 |  | 2017
Sales: |  |  |  |  |
Total segment sales | $ | 14,370 |  |  | $ | 14,226 |  |  | $ | 13,023 |
Elimination of intersegment sales | (183 | ) |  | (205 | ) |  | (183 | )
Corporate | 5 |  |  | (7 | ) |  | 120 |
Consolidated sales | $ | 14,192 |  |  | $ | 14,014 |  |  | $ | 12,960 |
For the year ended December 31, | 2019 |  | 2018 |  | 2017
Total segment operating profit | $ | 2,015 |  |  | $ | 1,586 |  |  | $ | 1,689 |
Unallocated amounts: |  |  |  |  |
Impairment of goodwill | — |  |  | — |  |  | (719 | )
Restructuring and other charges | (620 | ) |  | (9 | ) |  | (165 | )
Corporate expense | (360 | ) |  | (252 | ) |  | (325 | )
Consolidated operating income | $ | 1,035 |  |  | $ | 1,325 |  |  | $ | 480 |
Interest expense | (338 | ) |  | (378 | ) |  | (496 | )
Other (expense) income, net | (122 | ) |  | (79 | ) |  | 486 |
Consolidated income before income taxes | $ | 575 |  |  | $ | 868 |  |  | $ | 470 |
December 31, | 2019 |  | 2018
Assets: |  |  |
Total segment assets | $ | 14,941 |  |  | $ | 15,339 |
Unallocated amounts: |  |  |
Cash and cash equivalents | 1,648 |  |  | 2,277 |
Deferred income taxes | 608 |  |  | 573 |
Corporate fixed assets, net | 326 |  |  | 334 |
Fair value of derivative contracts | 6 |  |  | 37 |
Other | 49 |  |  | 133 |
Consolidated assets | $ | 17,578 |  |  | $ | 18,693 |
Sales by major product grouping were as follows:
For the year ended December 31, | 2019 |  | 2018 |  | 2017
Sales: |  |  |  |  |
Innovative flat-rolled products | $ | 5,471 |  |  | $ | 5,604 |  |  | $ | 5,000 |
Engine products | 3,452 |  |  | 3,220 |  |  | 2,965 |
Fastening systems | 1,561 |  |  | 1,531 |  |  | 1,484 |
Engineered structures | 1,123 |  |  | 1,081 |  |  | 1,023 |
Architectural aluminum systems | 1,118 |  |  | 1,135 |  |  | 1,069 |
Forged wheels | 969 |  |  | 966 |  |  | 828 |
Aluminum extrusions | 493 |  |  | 484 |  |  | 471 |
Other | 5 |  |  | (7 | ) |  | 120 |
| $ | 14,192 |  |  | $ | 14,014 |  |  | $ | 12,960 |
Geographic information for sales was as follows (based upon the country where the point of sale occurred):
For the year ended December 31, | 2019 |  | 2018 |  | 2017
Sales: |  |  |  |  |
United States | $ | 9,548 |  |  | $ | 9,137 |  |  | $ | 8,167 |
France | 864 |  |  | 936 |  |  | 965 |
United Kingdom | 732 |  |  | 737 |  |  | 721 |
Hungary | 719 |  |  | 823 |  |  | 739 |
China | 630 |  |  | 632 |  |  | 615 |
Russia | 511 |  |  | 553 |  |  | 500 |
Germany | 322 |  |  | 302 |  |  | 309 |
Canada | 313 |  |  | 285 |  |  | 261 |
Japan | 190 |  |  | 170 |  |  | 141 |
Brazil | 159 |  |  | 214 |  |  | 285 |
Other | 204 |  |  | 225 |  |  | 257 |
| $ | 14,192 |  |  | $ | 14,014 |  |  | $ | 12,960 |
Geographic information for long-lived assets was as follows (based upon the physical location of the assets):
December 31, | 2019 |  | 2018
Long-lived assets: |  |  |
United States | $ | 4,193 |  |  | $ | 4,148 |
China | 338 |  |  | 326 |
Hungary | 302 |  |  | 257 |
Russia | 233 |  |  | 253 |
United Kingdom | 189 |  |  | 253 |
France | 185 |  |  | 163 |
Germany | 86 |  |  | 84 |
Canada | 57 |  |  | 61 |
Mexico | 57 |  |  | 45 |
Brazil | 5 |  |  | 54 |
Other | 69 |  |  | 60 |
| $ | 5,714 |  |  | $ | 5,704 |
The following table disaggregates revenue by major end market served. Differences between segment totals and consolidated Arconic are in Corporate. In 2018, Corporate included $38 of costs related to settlements of certain customer claims primarily related to product introductions.
For the year ended December 31, | Engineered Products and Forgings |  | Global Rolled Products |  | Total Segment
2019 |  |  |  |  |
Aerospace | $ | 5,075 |  |  | $ | 1,251 |  |  | $ | 6,326 |
Transportation | 1,289 |  |  | 2,418 |  |  | 3,707 |
Building and construction | — |  |  | 1,300 |  |  | 1,300 |
Industrial and Other | 741 |  |  | 2,113 |  |  | 2,854 |
Total end-market revenue | $ | 7,105 |  |  | $ | 7,082 |  |  | $ | 14,187 |
2018 |  |  |  |  |
Aerospace | $ | 4,722 |  |  | $ | 1,116 |  |  | $ | 5,838 |
Transportation | 1,302 |  |  | 2,550 |  |  | 3,852 |
Building and construction | — |  |  | 1,357 |  |  | 1,357 |
Industrial and Other | 774 |  |  | 2,200 |  |  | 2,974 |
Total end-market revenue | $ | 6,798 |  |  | $ | 7,223 |  |  | $ | 14,021 |
2017 |  |  |  |  |
Aerospace | $ | 4,347 |  |  | $ | 1,109 |  |  | $ | 5,456 |
Transportation | 1,098 |  |  | 2,072 |  |  | 3,170 |
Building and construction | — |  |  | 1,269 |  |  | 1,269 |
Industrial and Other | 855 |  |  | 2,090 |  |  | 2,945 |
Total end-market revenue | $ | 6,300 |  |  | $ | 6,540 |  |  | $ | 12,840 |

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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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