v3.22.2
Segment and Related Information​
 6 Months Ended
Jun. 30, 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):
Second quarter ended June 30,Rolled
Products		Building and
Construction
Systems		ExtrusionsTotal
2022
Sales:
Third-party sales$2,113 $329 $105 $2,547 
Intersegment sales11 — — 11 
Total sales$2,124 $329 $105 $2,558 
Segment Adjusted EBITDA
$174 $53 $(12)$215 
Provision for depreciation and amortization$49 $5 $6 $60 
2021
Sales:
Third-party sales$1,474 $257 $70 $1,801 
Intersegment sales10 — — 10 
Total sales$1,484 $257 $70 $1,811 
Segment Adjusted EBITDA
$173 $35 $(8)$200 
Provision for depreciation and amortization$49 $5 $5 $59 
Management is conducting a business review of Extrusions aimed at identifying alternatives to improve the financial performance of this segment in future periods. Such alternatives could include a restructuring of the operations that may result in asset impairment charges. As of June 30, 2022, the aggregate carrying value of Extrusions’ properties, plants, and equipment, intangible assets, and operating lease right-of-use assets was approximately $230.
Six months ended June 30,Rolled
Products		Building and
Construction
Systems		ExtrusionsTotal
2022
Sales:
Third-party sales$3,917 $620 $202 $4,739 
Intersegment sales23 — 1 24 
Total sales$3,940 $620 $203 $4,763 
Segment Adjusted EBITDA$350 $97 $(17)$430 
Provision for depreciation and amortization$97 $9 $10 $116 
2021
Sales:
Third-party sales$2,838 $493 $145 $3,476 
Intersegment sales17 — — 17 
Total sales$2,855 $493 $145 $3,493 
Segment Adjusted EBITDA$338 $63 $(12)$389 
Provision for depreciation and amortization$97 $9 $11 $117 
The following table reconciles total Segment Adjusted EBITDA to consolidated net income (loss) attributable to Arconic Corporation:
Second quarter ended June 30,Six months ended June 30,
2022202120222021
Total Segment Adjusted EBITDA
$215 $200 $430 $389 
Unallocated amounts:
Corporate expenses(1)
(10)(10)(19)(19)
Stock-based compensation expense(8)(5)(13)(7)
Metal price lag(2)
30 (11)(6)(6)
Unrealized gains on mark-to-market hedging instruments and derivatives (Q)
21 — 23 — 
Provision for depreciation and amortization(62)(62)(122)(125)
Restructuring and other charges (E)
(2)(597)(7)(598)
Other(3)
(40)(10)(46)(16)
Operating income (loss)
144 (495)240 (382)
Interest expense(26)(25)(51)(48)
Other income (expenses), net (F)
35 (15)18 (37)
(Provision) Benefit for income taxes (H)
(38)108 (50)92 
Net income attributable to noncontrolling interest(1)— (1)— 
Consolidated net income (loss) attributable to Arconic Corporation
$114 $(427)$156 $(375)
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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. In the 2022 second
quarter and six-month period, the respective amounts include costs related to a new union labor agreement of $19 (see Note G) and environmental remediation charges of $9 (see Environmental Matters in Note P), both of which were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.