XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.20.2

Segment Information | 9 Months Ended
--- | ---
Sep. 30, 2020
Segment Reporting [Abstract] |
Segment Information | Segment Information Following the Arconic Inc. Separation Transaction, Howmet’s operations consist of four worldwide reportable segments as follows: Engine Products Engine Products produces investment castings and seamless rolled rings primarily for aircraft engines and industrial gas turbines. Engine Products produces rotating parts as well as structural parts. Fastening Systems Fastening Systems produces aerospace fastening systems, as well as commercial transportation fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. The business’s products are also critical components of automobiles, commercial transportation vehicles, and construction and industrial equipment. Engineered Structures Engineered Structures produces titanium and aluminum ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, extrusions forming and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components and assemblies for aerospace and defense applications. Forged Wheels Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation markets. Goodwill The Company had $4,072 of Goodwill at September 30, 2020, and the Company reviews it for impairment annually in the fourth quarter or more frequently if indicators exist or if a decision is made to sell or realign a business. On January 1, 2020, management transferred the Savannah business from the Engine Products segment to the Engineered Structures segment, based on synergies with forgings technologies and manufacturing capabilities. As a result of the reorganization, goodwill of $17 was reallocated from Engine Products to Engineered Structures, and these reporting units were evaluated for impairment during the first quarter of 2020. The estimated fair value of each of these reporting units substantially exceeded their carrying value; thus, there was no goodwill impairment at the date the business was transferred. During the first quarter of 2020, Howmet's market capitalization declined significantly compared to the fourth quarter of 2019. Over the same period, the equity value of our peer group companies, and the overall U.S. stock market also declined significantly amid market volatility. In addition, as a result of the COVID-19 pandemic and measures designed to contain the spread, sales globally to customers in the aerospace and commercial transportation industries that are impacted by COVID-19 have been and are expected to be negatively impacted as a result of disruption in demand. As a result of these macroeconomic factors, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of any of our reporting units is less than its carrying value. As a result of this assessment, the Company performed a quantitative impairment test in the first quarter for the Engineered Structures reporting unit and concluded that though the margin between the fair value of the reporting unit and carrying value had declined from approximately 60% to approximately 15%, it was not impaired. Consistent with prior practice, a discounted cash flow model was used to estimate the current fair value of the reporting unit. The significant assumptions and estimates utilized to determine fair value were developed utilizing current market and forecast information reflecting the disruption in demand that has and is expected to negatively impact the Company’s sales globally in the aerospace industry. In the second and third quarters of 2020, there were no indicators of impairment identified for the Engineered Structures reporting unit as the margin between fair value of the reporting unit and carrying value exceeded 20%. If our actual results or external market factors decline significantly from management’s estimates, future goodwill impairment charges may be necessary and could be material. The operating results of the Company’s reportable segments were as follows. Differences between total segment and consolidated totals are in Corporate.
| Engine Products |  | Fastening Systems |  | Engineered Structures |  | Forged Wheels |  | Total Segment
Third quarter ended September 30, 2020 |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |
Third-party sales | $ | 485 |  |  | $ | 271 |  |  | $ | 206 |  |  | $ | 172 |  |  | $ | 1,134 |
Inter-segment sales | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 2 |
Total sales | $ | 486 |  |  | $ | 271 |  |  | $ | 207 |  |  | $ | 172 |  |  | $ | 1,136 |
Profit and loss: |  |  |  |  |  |  |  |  |
Segment operating profit | $ | 39 |  |  | $ | 33 |  |  | $ | 10 |  |  | $ | 35 |  |  | $ | 117 |
Restructuring and other charges | 9 |  |  | — |  |  | 9 |  |  | — |  |  | 18 |
Provision for depreciation and amortization | 31 |  |  | 12 |  |  | 13 |  |  | 10 |  |  | 66 |
Capital expenditures | 15 |  |  | 9 |  |  | 3 |  |  | 6 |  |  | 33 |
Third quarter ended September 30, 2019 |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |
Third-party sales | $ | 844 |  |  | $ | 391 |  |  | $ | 318 |  |  | $ | 241 |  |  | $ | 1,794 |
Inter-segment sales | 1 |  |  | — |  |  | 4 |  |  | — |  |  | 5 |
Total sales | $ | 845 |  |  | $ | 391 |  |  | $ | 322 |  |  | $ | 241 |  |  | $ | 1,799 |
Profit and loss: |  |  |  |  |  |  |  |  |
Segment operating profit | $ | 161 |  |  | $ | 102 |  |  | $ | 40 |  |  | $ | 60 |  |  | $ | 363 |
Restructuring and other charges | 43 |  |  | — |  |  | 1 |  |  | — |  |  | 44 |
Provision for depreciation and amortization | 31 |  |  | 12 |  |  | 15 |  |  | 8 |  |  | 66 |
Capital expenditures | 39 |  |  | 7 |  |  | 4 |  |  | 11 |  |  | 61 |
| Engine Products |  | Fastening Systems |  | Engineered Structures |  | Forged Wheels |  | Total Segment
Nine months ended September 30, 2020 |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |
Third-party sales | $ | 1,851 |  |  | $ | 982 |  |  | $ | 710 |  |  | $ | 476 |  |  | $ | 4,019 |
Inter-segment sales | 4 |  |  | — |  |  | 6 |  |  | — |  |  | 10 |
Total sales | $ | 1,855 |  |  | $ | 982 |  |  | $ | 716 |  |  | $ | 476 |  |  | $ | 4,029 |
Profit and loss: |  |  |  |  |  |  |  |  |
Segment operating profit | $ | 309 |  |  | $ | 199 |  |  | $ | 57 |  |  | $ | 91 |  |  | $ | 656 |
Restructuring and other charges | 44 |  |  | 26 |  |  | 21 |  |  | 3 |  |  | 94 |
Provision for depreciation and amortization | 92 |  |  | 36 |  |  | 40 |  |  | 29 |  |  | 197 |
Capital expenditures | 48 |  |  | 24 |  |  | 11 |  |  | 17 |  |  | 100 |
Nine months ended September 30, 2019 |  |  |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |  |  |
Third-party sales | $ | 2,492 |  |  | $ | 1,185 |  |  | $ | 943 |  |  | $ | 752 |  |  | $ | 5,372 |
Inter-segment sales | 9 |  |  | — |  |  | 10 |  |  | — |  |  | 19 |
Total sales | $ | 2,501 |  |  | $ | 1,185 |  |  | $ | 953 |  |  | $ | 752 |  |  | $ | 5,391 |
Profit and loss: |  |  |  |  |  |  |  |  |
Segment operating profit | $ | 465 |  |  | $ | 297 |  |  | $ | 81 |  |  | $ | 193 |  |  | $ | 1,036 |
Restructuring and other charges | 296 |  |  | 6 |  |  | 198 |  |  | 5 |  |  | 505 |
Provision for depreciation and amortization | 100 |  |  | 36 |  |  | 46 |  |  | 24 |  |  | 206 |
Capital expenditures | 165 |  |  | 24 |  |  | 22 |  |  | 56 |  |  | 267 |
The following table reconciles Total segment operating profit to Income (loss) from continuing operations before income taxes:
| Third quarter ended |  | Nine months ended
| September 30, |  | September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Total segment operating profit | $ | 117 |  |  | $ | 363 |  |  | $ | 656 |  |  | $ | 1,036 |
Unallocated amounts: |  |  |  |  |  |  |
Restructuring and other charges | (22) |  |  | (56) |  |  | (166) |  |  | (572) |
Corporate expense | (22) |  |  | (51) |  |  | (85) |  |  | (170) |
Consolidated operating income | $ | 73 |  |  | $ | 256 |  |  | $ | 405 |  |  | $ | 294 |
Interest expense, net | (77) |  |  | (85) |  |  | (305) |  |  | (256) |
Other expense, net | (8) |  |  | (8) |  |  | — |  |  | (26) |
Income (loss) from continuing operations before income taxes | $ | (12) |  |  | $ | 163 |  |  | $ | 100 |  |  | $ | 12 |
The following table reconciles Total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the statement of cash flows. Differences between segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period.
| Third quarter ended |  | Nine months ended
| September 30, |  | September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Total segment capital expenditures | $ | 33 |  |  | $ | 61 |  |  | $ | 100 |  |  | $ | 267 |
Corporate and discontinued operations | 3 |  |  | 66 |  |  | 120 |  |  | 265 |
Capital expenditures | $ | 36 |  |  | $ | 127 |  |  | $ | 220 |  |  | $ | 532 |
The following table disaggregates segment revenue by major end market served. Differences between total segment and consolidated totals are in Corporate.
| Engine Products |  | Fastening Systems |  | Engineered Structures |  | Forged Wheels |  | Total Segment
Third quarter ended September 30, 2020 |  |  |  |  |  |  |  |  |
Aerospace - Commercial | $ | 199 |  |  | $ | 169 |  |  | $ | 104 |  |  | $ | — |  |  | $ | 472 |
Aerospace - Defense | 142 |  |  | 37 |  |  | 82 |  |  | — |  |  | 261 |
Commercial Transportation | — |  |  | 38 |  |  | — |  |  | 172 |  |  | 210 |
Industrial and Other | 144 |  |  | 27 |  |  | 20 |  |  | — |  |  | 191 |
Total end-market revenue | $ | 485 |  |  | $ | 271 |  |  | $ | 206 |  |  | $ | 172 |  |  | $ | 1,134 |
Third quarter ended September 30, 2019 |  |  |  |  |  |  |  |  |
Aerospace - Commercial | $ | 571 |  |  | $ | 267 |  |  | $ | 226 |  |  | $ | — |  |  | $ | 1,064 |
Aerospace - Defense | 120 |  |  | 41 |  |  | 65 |  |  | — |  |  | 226 |
Commercial Transportation | 5 |  |  | 59 |  |  | — |  |  | 241 |  |  | 305 |
Industrial and Other | 148 |  |  | 24 |  |  | 27 |  |  | — |  |  | 199 |
Total end-market revenue | $ | 844 |  |  | $ | 391 |  |  | $ | 318 |  |  | $ | 241 |  |  | $ | 1,794 |
Nine months ended September 30, 2020 |  |  |  |  |  |  |  |  |
Aerospace - Commercial | $ | 1,018 |  |  | $ | 650 |  |  | $ | 432 |  |  | $ | — |  |  | $ | 2,100 |
Aerospace - Defense | 394 |  |  | 120 |  |  | 216 |  |  | — |  |  | 730 |
Commercial Transportation | — |  |  | 118 |  |  | — |  |  | 476 |  |  | 594 |
Industrial and Other | 439 |  |  | 94 |  |  | 62 |  |  | — |  |  | 595 |
Total end-market revenue | $ | 1,851 |  |  | $ | 982 |  |  | $ | 710 |  |  | $ | 476 |  |  | $ | 4,019 |
Nine months ended September 30, 2019 |  |  |  |  |  |  |  |  |
Aerospace - Commercial | $ | 1,689 |  |  | $ | 803 |  |  | $ | 672 |  |  | $ | — |  |  | $ | 3,164 |
Aerospace - Defense | 350 |  |  | 115 |  |  | 194 |  |  | — |  |  | 659 |
Commercial Transportation | 17 |  |  | 179 |  |  | — |  |  | 754 |  |  | 950 |
Industrial and Other | 436 |  |  | 88 |  |  | 77 |  |  | (2) |  |  | 599 |
Total end-market revenue | $ | 2,492 |  |  | $ | 1,185 |  |  | $ | 943 |  |  | $ | 752 |  |  | $ | 5,372 |
In the nine months ended September 30 , 2020, the Company derived 70% of its revenue from aerospace end markets of which 11% related to General Electric Company.

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

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration