v3.22.4

Segment and Related Information​ | 12 Months Ended
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Dec. 31, 2022
Segment Reporting [Abstract] |
Segment and Related Information​ | Segment and Related Information Segment Information Arconic has three operating and reportable segments, which are organized by product on a global basis: Rolled Products, Building and Construction Systems, and Extrusions (see segment descriptions below). The Company determined the chief operating decision maker to be the CEO, who regularly reviews the financial information of these three segments to assess performance and allocate resources. 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 in 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. Segment assets are comprised of customer receivables; inventories; properties, plants, and equipment, net; and goodwill. The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note B). Transactions among segments are established based on negotiation among the parties. The following are detailed descriptions of Arconic’s reportable segments: Rolled Products. This segment produces aluminum sheet and plate for a variety of end markets. Sheet and plate are sold directly to customers and through distributors related to the aerospace, ground transportation, packaging, building and construction, and industrial products (mainly used in the production of machinery and equipment and consumer durables) end markets. A small portion of this segment also produced aseptic foil for the packaging end market prior to February 1, 2020 (see Note S). While the customer base for flat-rolled products is large, a significant amount of sales of sheet and plate is to a relatively small number of customers. Prices for these products are generally based on the price of metal plus a premium for adding value to the aluminum to produce a semi-finished product, resulting in a business model in which the underlying price of metal is contractually passed-through to customers. Building and Construction Systems. This segment manufactures products that are used primarily in the non-residential building and construction end market. These products include integrated aluminum architectural systems and architectural extrusions, which are sold directly to customers and through distributors. Extrusions. This segment produces a range of extruded and machined parts for the aerospace, ground transportation, and industrial products end markets. These products are sold directly to customers and through distributors. Prices for these products are generally based on the price of metal plus a premium for adding value to the aluminum to produce a semi-finished product, resulting in a business model in which the underlying price of metal is contractually passed-through to customers. The operating results and assets of Arconic’s reportable segments were as follows (differences between segment totals and Arconic’s consolidated totals for line items not reconciled are in Corporate):
| Rolled Products |  | Building and Construction Systems |  | Extrusions |  | Total
2022 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 7,313 |  |  | $ | 1,245 |  |  | $ | 409 |  |  | $ | 8,967 |
Intersegment sales | 44 |  |  | — |  |  | 2 |  |  | 46 |
Total sales | $ | 7,357 |  |  | $ | 1,245 |  |  | $ | 411 |  |  | $ | 9,013 |
Segment Adjusted EBITDA | $ | 581 |  |  | $ | 195 |  |  | $ | (47) |  |  | $ | 729 |
Provision for depreciation and amortization | $ | 190 |  |  | $ | 17 |  |  | $ | 18 |  |  | $ | 225 |
2021 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 6,187 |  |  | $ | 1,011 |  |  | $ | 306 |  |  | $ | 7,504 |
Intersegment sales | 33 |  |  | — |  |  | 1 |  |  | 34 |
Total sales | $ | 6,220 |  |  | $ | 1,011 |  |  | $ | 307 |  |  | $ | 7,538 |
Segment Adjusted EBITDA | $ | 655 |  |  | $ | 130 |  |  | $ | (28) |  |  | $ | 757 |
Provision for depreciation and amortization | $ | 197 |  |  | $ | 17 |  |  | $ | 23 |  |  | $ | 237 |
2020 |  |  |  |  |  |  |
Sales: |  |  |  |  |  |  |
Third-party sales | $ | 4,335 |  |  | $ | 963 |  |  | $ | 381 |  |  | $ | 5,679 |
Intersegment sales | 19 |  |  | — |  |  | 2 |  |  | 21 |
Total sales | $ | 4,354 |  |  | $ | 963 |  |  | $ | 383 |  |  | $ | 5,700 |
Segment Adjusted EBITDA | $ | 527 |  |  | $ | 137 |  |  | $ | (16) |  |  | $ | 648 |
Provision for depreciation and amortization | $ | 192 |  |  | $ | 18 |  |  | $ | 25 |  |  | $ | 235 |
2022 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Segment assets(1) | $ | 4,308 |  |  | $ | 474 |  |  | $ | 312 |  |  | $ | 5,094 |
Supplemental information: |  |  |  |  |  |  |
Capital expenditures | 194 |  |  | 18 |  |  | 16 |  |  | 228 |
Goodwill | 224 |  |  | 68 |  |  | — |  |  | 292 |
2021 |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |
Segment assets(2) | $ | 4,766 |  |  | $ | 416 |  |  | $ | 381 |  |  | $ | 5,563 |
Supplemental information: |  |  |  |  |  |  |
Capital expenditures | 147 |  |  | 11 |  |  | 14 |  |  | 172 |
Goodwill | 253 |  |  | 69 |  |  | — |  |  | 322 |
_____________________ (1)In the 2022 third quarter, the Extrusions segment recorded a $92 asset impairment charge comprised of $90 for Properties, plants, and equipment and $2 for intangible assets (included within Other noncurrent assets) (see Note E). Also, in November 2022, Arconic completed the sale of all of its operations in Russia (see Note S), which was previously reported in Rolled Products. (2)In the 2021 fourth quarter, the Rolled Products segment recorded a net adjustment of $10 (approximately $7 of which relates to prior quarters in 2021) related to write-downs of scrap inventory. The out-of-period amounts were not material to any interim or annual period. The following tables reconcile certain segment information to consolidated totals:
For the year ended December 31, |  | 2022 |  | 2021 |  | 2020
Sales: |  |  |  |  |  |
Total segment sales |  | $ | 9,013 |  |  | $ | 7,538 |  |  | $ | 5,700 |
Elimination of intersegment sales |  | (46) |  |  | (34) |  |  | (21) |
Other |  | (6) |  |  | — |  |  | (4) |
Consolidated sales |  | $ | 8,961 |  |  | $ | 7,504 |  |  | $ | 5,675 |
For the year ended December 31, |  | 2022 |  | 2021 |  | 2020
Total Segment Adjusted EBITDA |  | $ | 729 |  |  | $ | 757 |  |  | $ | 648 |
Unallocated amounts: |  |  |  |  |  |
Corporate expenses(1) |  | (29) |  |  | (33) |  |  | (24) |
Stock-based compensation expense (K) |  | (15) |  |  | (22) |  |  | (23) |
Metal price lag(2) |  | 17 |  |  | (16) |  |  | (27) |
Unrealized gains on mark-to-market hedging instruments and derivatives (U) |  | 6 |  |  | — |  |  | — |
Provision for depreciation and amortization |  | (237) |  |  | (253) |  |  | (251) |
Impairment of goodwill (B & O) |  | — |  |  | (65) |  |  | — |
Restructuring and other charges(3),(4) (E) |  | (456) |  |  | (624) |  |  | (188) |
Other(5) |  | (62) |  |  | (36) |  |  | (55) |
Operating (loss) income |  | (47) |  |  | (292) |  |  | 80 |
Interest expense (F) |  | (104) |  |  | (100) |  |  | (118) |
Other expenses, net (G) |  | (41) |  |  | (67) |  |  | (70) |
Benefit (Provision) for income taxes (I) |  | 11 |  |  | 62 |  |  | (1) |
Net income attributable to noncontrolling interest |  | (1) |  |  | — |  |  | — |
Consolidated net loss attributable to Arconic(1) |  | $ | (182) |  |  | $ | (397) |  |  | $ | (109) |
_____________________ (1)Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities. The amounts presented for all periods prior to second quarter 2020 include an allocation of ParentCo’s corporate expenses, including research and development expenses, for the portion of the period prior to the Separation Date (see Cost Allocations in Note A). (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 2022, Restructuring and other charges includes a loss of $306 related to the sale of the Company’s operations in Russia and a $92 asset impairment charge related to the Extrusions segment (see Note E). (4)In 2022, 2021, and 2020, Restructuring and other charges include a $47, $584, and $199, respectively, charge for the settlement of certain employee retirement benefits virtually all of which were within the United States and the United Kingdom (see Note H). (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. In 2022, Other includes costs related to environmental remediation charges of $27 (see Environmental Matters in Note T) and costs related to the new labor agreement of $19 (see Note H). These charges were recorded in Cost of goods sold on the accompanying Statement of Consolidated Operations.
December 31, |  | 2022 |  | 2021
Assets: |  |  |  |
Total segment assets |  | $ | 5,094 |  |  | $ | 5,563 |
Unallocated amounts: |  |  |  |
Cash and cash equivalents |  | 261 |  |  | 335 |
Prepaid expenses and other current assets |  | 124 |  |  | 54 |
Fair value of hedging instruments and derivatives |  | 21 |  |  | 1 |
Corporate fixed assets, net |  | 135 |  |  | 153 |
Operating lease right-of-use assets |  | 115 |  |  | 122 |
Deferred income taxes (I) |  | 188 |  |  | 229 |
Other noncurrent assets |  | 57 |  |  | 88 |
Other |  | 20 |  |  | 35 |
Consolidated assets |  | $ | 6,015 |  |  | $ | 6,580 |
Customer Information In 2021 and 2020 Arconic generated more than 10% of its consolidated sales from one customer, Ford Motor Company. These sales amounted to $761 and $647 in 2021, and 2020 respectively, and were included in the Rolled Products segment. Geographic Area Information Geographic information for sales was as follows (based upon the country where the point of sale occurred):
For the year ended December 31, |  | 2022 |  | 2021 |  | 2020
Sales: |  |  |  |  |  |
United States |  | $ | 5,972 |  |  | $ | 4,753 |  |  | $ | 3,697 |
Russia* |  | 828 |  |  | 793 |  |  | 535 |
China |  | 807 |  |  | 696 |  |  | 429 |
Hungary* |  | 608 |  |  | 625 |  |  | 462 |
France |  | 247 |  |  | 260 |  |  | 207 |
United Kingdom |  | 245 |  |  | 169 |  |  | 144 |
Other |  | 254 |  |  | 208 |  |  | 201 |
|  | $ | 8,961 |  |  | $ | 7,504 |  |  | $ | 5,675 |
_____________________ *In all periods presented, sales of a portion of aluminum products from Arconic’s plant in Russia were completed through the Company’s international selling company located in Hungary. Also, in November 2022, Arconic completed the sale of all of its operations in Russia (see Note S). Geographic information for long-lived assets was as follows (based upon the physical location of the assets):
December 31, |  | 2022 |  | 2021
Long-lived assets: |  |  |  |
United States |  | $ | 1,943 |  |  | $ | 1,998 |
China |  | 208 |  |  | 242 |
Russia* |  | — |  |  | 200 |
Hungary |  | 99 |  |  | 98 |
United Kingdom |  | 78 |  |  | 79 |
France |  | 18 |  |  | 15 |
Other |  | 15 |  |  | 19 |
|  | $ | 2,361 |  |  | $ | 2,651 |
_____________________ *In November 2022, Arconic completed the sale of all of its operations in Russia (see Note S).

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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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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