v3.22.4
Segment and Related Information​
 12 Months Ended
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		ExtrusionsTotal
2022
Sales:
Third-party sales$7,313 $1,245 $409 $8,967 
Intersegment sales44 — 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 sales33 — 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 sales19 — 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 expenditures194 18 16 228 
Goodwill224 68 — 292 
2021
Assets:
Segment assets(2)
$4,766 $416 $381 $5,563 
Supplemental information:
Capital expenditures147 11 14 172 
Goodwill253 69 — 322 
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(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 31,202220212020
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 31,202220212020
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 31,20222021
Assets:
Total segment assets$5,094 $5,563 
Unallocated amounts:
Cash and cash equivalents261 335 
Prepaid expenses and other current assets124 54 
Fair value of hedging instruments and derivatives21 1 
Corporate fixed assets, net135 153 
Operating lease right-of-use assets115 122 
Deferred income taxes (I)
188 229 
Other noncurrent assets57 88 
Other20 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 31,202220212020
Sales:
United States$5,972 $4,753 $3,697 
Russia*828 793 535 
China807 696 429 
Hungary*608 625 462 
France247 260 207 
United Kingdom245 169 144 
Other254 208 201 
$8,961 $7,504 $5,675 
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*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 31,20222021
Long-lived assets:
United States$1,943 $1,998 
China208 242 
Russia*— 200 
Hungary99 98 
United Kingdom78 79 
France18 15 
Other15 19 
$2,361 $2,651 
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*In November 2022, Arconic completed the sale of all of its operations in Russia (see Note S).