v3.22.1
Segment and Related Information​
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment and Related Information​ Segment and Related Information
Arconic’s profit or loss measure for its reportable segments is Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization). The Company 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) Research and development expenses, plus each of (i) Stock-based compensation expense, (ii) Metal price lag, and (iii) Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below). Arconic’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments.
Effective in the first quarter of 2022, management modified the Company’s definition of Segment Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as Arconic is considering entering into additional hedging instruments in future reporting periods if favorable conditions exist to mitigate cost inflation. Certain of these instruments may not qualify for hedge accounting resulting in unrealized gains and losses being recorded directly to Sales or Cost of goods sold, as appropriate (i.e., mark-to-market). Additionally, this change was also applied to derivatives that do not qualify for hedge accounting for consistency purposes. The Company does not have a regular practice of entering into contracts that are treated as derivatives for accounting purposes. Ultimately, this change was made to maintain the transparency and visibility of the underlying operating performance of Arconic’s reportable segments. Prior to this change, the Company had a limited number of hedging instruments and derivatives that did not qualify for hedge accounting, the unrealized impact of which was not material to Arconic’s Segment Adjusted EBITDA performance measure. Accordingly, prior period information presented was not recast to reflect this change.
The operating results of Arconic’s reportable segments were as follows (differences between segment totals and the Company’s consolidated totals for line items not reconciled are in Corporate):
First quarter ended March 31,Rolled
Products		Building and
Construction
Systems		ExtrusionsTotal
2022
Sales:
Third-party sales$1,804 $291 $97 $2,192 
Intersegment sales12 — 1 13 
Total sales$1,816 $291 $98 $2,205 
Segment Adjusted EBITDA
$176 $44 $(5)$215 
Provision for depreciation and amortization$48 $4 $4 $56 
2021
Sales:
Third-party sales$1,364 $236 $75 $1,675 
Intersegment sales7 — — 7 
Total sales$1,371 $236 $75 $1,682 
Segment Adjusted EBITDA
$165 $28 $(4)$189 
Provision for depreciation and amortization$48 $4 $6 $58 
The following table reconciles total Segment Adjusted EBITDA to consolidated net income attributable to Arconic Corporation:
First quarter ended March 31,20222021
Total Segment Adjusted EBITDA
$215 $189 
Unallocated amounts:
Corporate expenses(1)
(9)(9)
Stock-based compensation expense(5)(2)
Metal price lag(2)
(36)5 
Unrealized gains on mark-to-market hedging instruments and derivatives (P)
2 — 
Provision for depreciation and amortization(60)(63)
Restructuring and other charges (E)
(5)(1)
Other(3)
(6)(6)
Operating income
96 113 
Interest expense(25)(23)
Other expenses, net (F)
(17)(22)
Provision for income taxes (H)
(12)(16)
Net income attributable to noncontrolling interest— — 
Consolidated net income attributable to Arconic Corporation
$42 $52 
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(1)Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities.
(2)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.
(3)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.