v3.20.2

Segment and Related Information​ | 9 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
Segment and Related Information​ | Segment and Related Information​ Effective in the second quarter of 2020, management elected to change the profit or loss measure of the Company’s reportable segments from Segment operating profit to Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) for internal reporting and performance measurement purposes. This change was made to enhance the transparency and visibility of the underlying operating performance of each segment. Effective in the third quarter of 2020, management refined the Company’s Segment Adjusted EBITDA measure to remove the impact of metal price lag (see footnote 4 to the Segment Adjusted EBITDA reconciliation below). This change was made to further enhance the transparency and visibility of the underlying operating performance of each segment by removing the volatility associated with metal prices. Arconic Corporation calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus each of (i) Cost of goods sold, (ii) Selling, general administrative, and other expenses, and (iii) and Research and development expenses, plus Stock-based compensation expense and Metal price lag. Previously, the Company calculated Segment operating profit as Segment Adjusted EBITDA minus each of (i) the Provision for depreciation and amortization, (ii) Stock-based compensation expense, and (iii) Metal price lag. Arconic Corporation’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments. Also, effective July 1, 2020, the Company changed its inventory cost method to average cost for all U.S. inventories previously carried at LIFO cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented in the accompanying Consolidated Financial Statements. See Note K for additional information. Segment information for all prior periods presented was recast to reflect the new measure of segment profit or loss and the change in inventory cost method. The operating results of the Company’s reportable segments were as follows (differences between segment totals and consolidated amounts are in Corporate):
Third quarter ended September 30, | ​ | Rolled Products |  | Building and Construction Systems |  | Extrusions |  | Total
2020 | ​ | ​ |  | ​ |  | ​ |  | ​
Sales: | ​ | ​ |  | ​ |  | ​ |  | ​
Third-party sales-unrelated party | ​ | $ | 1,073 |  |  | $ | 241 |  |  | $ | 77 |  |  | $ | 1,391 |
Third-party sales-related party | ​ | 19 |  |  | — |  |  | 5 |  |  | 24 |
Intersegment sales | ​ | 3 |  |  | — |  |  | 1 |  |  | 4 |
Total sales | ​ | $ | 1,095 |  |  | $ | 241 |  |  | $ | 83 |  |  | $ | 1,419 |
Segment Adjusted EBITDA(1) | ​ | $ | 138 |  |  | $ | 40 |  |  | $ | (6) |  |  | $ | 172 |
Provision for depreciation and amortization | ​ | $ | 48 |  |  | $ | 5 |  |  | $ | 6 |  |  | $ | 59 |
2019 | ​ |  |  |  |  |  |  |
Sales: | ​ |  |  |  |  |  |  |
Third-party sales-unrelated party | ​ | $ | 1,366 |  |  | $ | 282 |  |  | $ | 116 |  |  | $ | 1,764 |
Third-party sales-related party | ​ | 31 |  |  | — |  |  | 10 |  |  | 41 |
Intersegment sales | ​ | 4 |  |  | — |  |  | 1 |  |  | 5 |
Total sales | ​ | $ | 1,401 |  |  | $ | 282 |  |  | $ | 127 |  |  | $ | 1,810 |
Segment Adjusted EBITDA(1),(2) | ​ | $ | 160 |  |  | $ | 39 |  |  | $ | (8) |  |  | $ | 191 |
Provision for depreciation and amortization | ​ | $ | 46 |  |  | $ | 4 |  |  | $ | 7 |  |  | $ | 57 |
Nine months ended September 30, | ​ | Rolled Products |  | Building and Construction Systems |  | Extrusions |  | Total
2020 | ​ | ​ |  | ​ |  | ​ |  | ​
Sales: | ​ | ​ |  | ​ |  | ​ |  | ​
Third-party sales-unrelated party | ​ | $ | 3,144 |  |  | $ | 727 |  |  | $ | 265 |  |  | $ | 4,136 |
Third-party sales-related party | ​ | 50 |  |  | — |  |  | 31 |  |  | 81 |
Intersegment sales | ​ | 14 |  |  | — |  |  | 1 |  |  | 15 |
Total sales | ​ | $ | 3,208 |  |  | $ | 727 |  |  | $ | 297 |  |  | $ | 4,232 |
Segment Adjusted EBITDA(1) | ​ | $ | 388 |  |  | $ | 107 |  |  | $ | (12) |  |  | $ | 483 |
Provision for depreciation and amortization | ​ | $ | 147 |  |  | $ | 14 |  |  | $ | 18 |  |  | $ | 179 |
2019 | ​ |  |  |  |  |  |  |
Sales: | ​ |  |  |  |  |  |  |
Third-party sales-unrelated party | ​ | $ | 4,193 |  |  | $ | 855 |  |  | $ | 379 |  |  | $ | 5,427 |
Third-party sales-related party | ​ | 101 |  |  | — |  |  | 41 |  |  | 142 |
Intersegment sales | ​ | 20 |  |  | — |  |  | 1 |  |  | 21 |
Total sales | ​ | $ | 4,314 |  |  | $ | 855 |  |  | $ | 421 |  |  | $ | 5,590 |
Segment Adjusted EBITDA(1),(2) | ​ | $ | 499 |  |  | $ | 96 |  |  | $ | (6) |  |  | $ | 589 |
Provision for depreciation and amortization | ​ | $ | 139 |  |  | $ | 14 |  |  | $ | 22 |  |  | $ | 175 |
The following table reconciles total Segment Adjusted EBITDA to consolidated net income (loss) attributable to Arconic Corporation:
|  | Third quarter ended September 30, |  | Nine months ended September 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Total Segment Adjusted EBITDA(1),(2) |  | $ | 172 |  |  | $ | 191 |  |  | $ | 483 |  |  | $ | 589 |
Unallocated amounts: |  |  |  |  |  |  |  |
Corporate expenses(1),(3) |  | (6) |  |  | (10) |  |  | (15) |  |  | (43) |
Stock-based compensation expense |  | (6) |  |  | (10) |  |  | (18) |  |  | (28) |
Metal price lag(4) |  | (16) |  |  | (10) |  |  | (30) |  |  | (33) |
Provision for depreciation and amortization |  | (63) |  |  | (63) |  |  | (191) |  |  | (190) |
Restructuring and other charges (E) |  | (3) |  |  | (64) |  |  | (61) |  |  | (104) |
Other(1),(5) |  | (14) |  |  | (12) |  |  | (42) |  |  | (54) |
Operating income(2) |  | 64 |  |  | 22 |  |  | 126 |  |  | 137 |
Interest expense |  | (22) |  |  | (29) |  |  | (97) |  |  | (86) |
Other (expenses) income, net(1) (F) |  | (27) |  |  | — |  |  | (69) |  |  | 4 |
Provision for income taxes(2) |  | (10) |  |  | (17) |  |  | (5) |  |  | (46) |
Net income attributable to noncontrolling interest |  | — |  |  | — |  |  | — |  |  | — |
Consolidated net income (loss) attributable to Arconic Corporation(2) |  | $ | 5 |  |  | $ | (24) |  |  | $ | (45) |  |  | $ | 9 |
________________ ​ (1)In preparation for the Separation, effective January 1, 2020, certain U.S. defined benefit pension and other postretirement plans previously sponsored by ParentCo were separated into standalone plans for both Arconic Corporation and Howmet Aerospace. Additionally, effective April 1, 2020, Arconic Corporation assumed a portion of the obligations associated with certain non-U.S. defined benefit pension plans that included participants related to both the Arconic Corporation Businesses and the Howmet Aerospace Businesses, as well as legacy defined benefit pension plans assigned to the Company as a result of the Separation. As a result, beginning in the first quarter of 2020 for these U.S. plans and in the second quarter of 2020 for these non-U.S. plans, Arconic Corporation applied defined benefit plan accounting resulting in benefit plan expense being recorded in operating income (service cost) and nonoperating income (nonservice cost). In all historical periods prior to these respective timeframes, Arconic Corporation was considered a participating employer in ParentCo’s defined benefit plans and, therefore, applied multiemployer plan accounting resulting in the Company’s share of benefit plan expense being recorded entirely in operating income. Also, Arconic Corporation is the plan sponsor of certain other non-U.S. defined benefit plans that contain participants related only to the Arconic Corporation Businesses and, therefore, the related benefit plan expense was recorded in accordance with defined benefit plan accounting in all periods presented. The following table presents the total benefit plan expense (excluding settlements and curtailments) recorded by Arconic Corporation based on the foregoing in each period presented:
|  | Third quarter ended September 30, |  | Nine months ended September 30,
|  | 2020 | ​ | 2019 |  | 2020 | ​ | 2019
Segment Adjusted EBITDA: |  |  |  |  |  |  |  |
Rolled Products |  | $ | (5) |  |  | $ | (16) |  |  | $ | (13) |  |  | $ | (47) |
Building and Construction Systems |  | — |  |  | (1) |  |  | (1) |  |  | (4) |
Extrusions |  | (2) |  |  | (4) |  |  | (5) |  |  | (13) |
Segment total |  | (7) |  |  | (21) |  |  | (19) |  |  | (64) |
Unallocated amounts: |  |  |  |  |  |  |  |
Corporate expenses |  | — |  |  | (3) |  |  | — |  |  | (11) |
Other |  | — |  |  | (3) |  |  | 1 |  |  | (7) |
Subtotal |  | — |  |  | (6) |  |  | 1 |  |  | (18) |
Other expenses, net |  | (20) |  |  | (1) |  |  | (59) |  |  | (2) |
Total |  | $ | (27) |  |  | $ | (28) |  |  | $ | (77) |  |  | $ | (84) |
(2)Effective July 1, 2020, the Company changed its inventory cost method to average cost for all U.S. inventories previously carried at LIFO cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented in the accompanying Consolidated Financial Statements. See Note K for additional information. (3)Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities, as well as research and development expenses of the corporate technical center. Amounts presented for all periods prior to second quarter 2020 represent an allocation of ParentCo’s corporate expenses (see Cost Allocations in Note A). (4)Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions. (5)Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on the Company’s Statement of Consolidated Operations that are not included in Segment Adjusted EBITDA.

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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://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
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