v3.22.2.2
Segment and Related Information​
 9 Months Ended
Sep. 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):
Third quarter ended September 30,Rolled
Products		Building and
Construction
Systems		ExtrusionsTotal
2022
Sales:
Third-party sales$1,861 $321 $98 $2,280 
Intersegment sales10 — — 10 
Total sales$1,871 $321 $98 $2,290 
Segment Adjusted EBITDA
$111 $49 $(13)$147 
Provision for depreciation and amortization$48 $4 $5 $57 
2021
Sales:
Third-party sales$1,559 $257 $74 $1,890 
Intersegment sales9 — 1 10 
Total sales$1,568 $257 $75 $1,900 
Segment Adjusted EBITDA
$155 $34 $(7)$182 
Provision for depreciation and amortization$48 $4 $6 $58 
Nine months ended September 30,Rolled
Products		Building and
Construction
Systems		ExtrusionsTotal
2022
Sales:
Third-party sales$5,778 $941 $300 $7,019 
Intersegment sales33 — 1 34 
Total sales$5,811 $941 $301 $7,053 
Segment Adjusted EBITDA$461 $146 $(30)$577 
Provision for depreciation and amortization$145 $13 $15 $173 
2021
Sales:
Third-party sales$4,397 $750 $219 $5,366 
Intersegment sales26 — 1 27 
Total sales$4,423 $750 $220 $5,393 
Segment Adjusted EBITDA$493 $97 $(19)$571 
Provision for depreciation and amortization$145 $13 $17 $175 
The following table reconciles total Segment Adjusted EBITDA to consolidated net (loss) income attributable to Arconic Corporation:
Third quarter ended September 30,Nine months ended September 30,
2022202120222021
Total Segment Adjusted EBITDA
$147 $182 $577 $571 
Unallocated amounts:
Corporate expenses(1)
(4)(7)(23)(26)
Stock-based compensation expense(6)(8)(19)(15)
Metal price lag(2)
15 (21)9 (27)
Unrealized (losses) gains on mark-to-market hedging instruments and derivatives (Q)
(7)— 16 — 
Provision for depreciation and amortization(59)(61)(181)(186)
Restructuring and other charges(3) (E)
(112)(14)(119)(612)
Other(4)
(10)(3)(56)(19)
Operating (loss) income
(36)68 204 (314)
Interest expense(27)(26)(78)(74)
Other expenses, net (F)
(27)(15)(9)(52)
Benefit (Provision) for income taxes (H)
25 (11)(25)81 
Net income attributable to noncontrolling interest— — (1)— 
Consolidated net (loss) income attributable to Arconic Corporation
$(65)$16 $91 $(359)
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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)In the 2022 third quarter and nine-month period, Restructuring and other charges includes a $92 asset impairment charge related to the Extrusions segment (see Note E).
(4)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 third quarter and nine-month period, the respective amounts include costs related to environmental remediation charges of $9 and $18, respectively (see Environmental Matters in Note P). Additionally in the 2022 nine-month period, Other includes costs related to the new union labor agreement of $19 (see Note G). These charges were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.