Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ARNC | |
Entity Registrant Name | Arconic Inc. | |
Entity Central Index Key | 4,281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 483,242,370 |
Statement of Consolidated Opera
Statement of Consolidated Operations (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales (C & D) | $ 3,524 | $ 3,236 | $ 10,542 | $ 9,689 |
Cost of goods sold (exclusive of expenses below) | 2,881 | 2,591 | 8,552 | 7,598 |
Selling, general administrative, and other expenses | 134 | 152 | 464 | 569 |
Research and development expenses | 25 | 24 | 77 | 81 |
Provision for depreciation and amortization | 141 | 140 | 427 | 410 |
Restructuring and other charges (E) | (2) | 19 | 20 | 118 |
Operating income | 345 | 310 | 1,002 | 913 |
Interest expense (N) | 88 | 100 | 291 | 398 |
Other expense (income), net (F) | 8 | 38 | 69 | (410) |
Income before income taxes | 249 | 172 | 642 | 925 |
Provision for income taxes (H) | 88 | 53 | 218 | 272 |
Net income | 161 | 119 | 424 | 653 |
Amounts Attributable to Arconic Common Shareholders (I): | ||||
Net income | $ 160 | $ 101 | $ 422 | $ 600 |
Earnings per share - basic (in usd per share) | $ 0.33 | $ 0.23 | $ 0.87 | $ 1.36 |
Earnings per share - diluted (in usd per share) | 0.32 | 0.22 | 0.86 | 1.31 |
Dividends paid per share (in usd per share) | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
Average Shares Outstanding (I): | ||||
Average shares outstanding - basic (in shares) | 483 | 442 | 483 | 441 |
Average shares outstanding - diluted (in shares) | 502 | 462 | 503 | 501 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 161 | $ 119 | $ 424 | $ 653 |
Other comprehensive income, net of tax (J): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 37 | 31 | 209 | 110 |
Foreign currency translation adjustments | (16) | 85 | (95) | 251 |
Net change in unrealized gains on available-for-sale securities | 1 | 1 | (1) | (133) |
Net change in unrecognized losses/gains on cash flow hedges | (10) | 10 | (13) | 13 |
Total Other comprehensive income, net of tax | 12 | 127 | 100 | 241 |
Comprehensive income | 173 | 246 | 524 | 894 |
Arconic | ||||
Net income | 161 | 119 | 424 | 653 |
Other comprehensive income, net of tax (J): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 37 | 31 | 209 | 110 |
Foreign currency translation adjustments | (16) | 85 | (95) | 251 |
Net change in unrealized gains on available-for-sale securities | 1 | 1 | (1) | (133) |
Net change in unrecognized losses/gains on cash flow hedges | (10) | 10 | (13) | 13 |
Total Other comprehensive income, net of tax | 12 | 127 | 100 | 241 |
Comprehensive income | 173 | 246 | 524 | 894 |
Noncontrolling Interests | ||||
Net income | 0 | 0 | 0 | 0 |
Other comprehensive income, net of tax (J): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Net change in unrealized gains on available-for-sale securities | 0 | 0 | 0 | 0 |
Net change in unrecognized losses/gains on cash flow hedges | 0 | 0 | 0 | 0 |
Total Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Balance Sheet (una
Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,535 | $ 2,150 |
Receivables from customers, less allowances of $5 in 2018 and $8 in 2017 (K) | 1,147 | 1,035 |
Other receivables (K) | 511 | 339 |
Inventories (L) | 2,622 | 2,480 |
Prepaid expenses and other current assets | 317 | 374 |
Total current assets | 6,132 | 6,378 |
Properties, plants, and equipment, net (M) | 5,645 | 5,594 |
Goodwill (A & M) | 4,517 | 4,535 |
Deferred income taxes | 605 | 743 |
Intangibles, net | 954 | 987 |
Other noncurrent assets | 474 | 481 |
Total assets | 18,327 | 18,718 |
Current liabilities: | ||
Accounts payable, trade | 2,061 | 1,839 |
Accrued compensation and retirement costs | 359 | 399 |
Taxes, including income taxes | 84 | 75 |
Accrued interest payable | 97 | 124 |
Other current liabilities | 371 | 349 |
Short-term debt | 42 | 38 |
Total current liabilities | 3,014 | 2,824 |
Long-term debt, less amount due within one year (N & O) | 6,315 | 6,806 |
Accrued pension benefits (G) | 2,120 | 2,564 |
Accrued other postretirement benefits (G) | 773 | 841 |
Other noncurrent liabilities and deferred credits | 730 | 759 |
Total liabilities | 12,952 | 13,794 |
Contingencies and commitments (Q) | ||
Arconic shareholders’ equity: | ||
Preferred stock | 55 | 55 |
Common stock | 483 | 481 |
Additional capital | 8,310 | 8,266 |
Accumulated deficit | (943) | (1,248) |
Accumulated other comprehensive loss (J) | (2,544) | (2,644) |
Total Arconic shareholders’ equity | 5,361 | 4,910 |
Noncontrolling interests | 14 | 14 |
Total equity | 5,375 | 4,924 |
Total liabilities and equity | $ 18,327 | $ 18,718 |
Consolidated Balance Sheet (u_2
Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 5 | $ 8 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 424 | $ 653 |
Adjustments to reconcile net income to cash used for operations: | ||
Depreciation and amortization | 427 | 410 |
Deferred income taxes | 95 | 24 |
Restructuring and other charges | 20 | 118 |
Net loss (gain) from investing activities - asset sales (F) | 7 | (514) |
Net periodic pension benefit cost (G) | 100 | 163 |
Stock-based compensation | 43 | 59 |
Other | 61 | 112 |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
(Increase) in receivables (B) | (1,020) | (792) |
(Increase) in inventories | (184) | (168) |
(Increase) decrease in prepaid expenses and other current assets | (3) | 6 |
Increase (decrease) in accounts payable, trade | 257 | (94) |
(Decrease) in accrued expenses | (96) | (138) |
Increase in taxes, including income taxes | 63 | 144 |
Pension contributions | (288) | (257) |
(Increase) in noncurrent assets | (33) | (37) |
(Decrease) in noncurrent liabilities | (82) | (62) |
Cash used for operations | (209) | (373) |
Financing Activities | ||
Net change in short-term borrowings (original maturities of three months or less) | 3 | 15 |
Additions to debt (original maturities greater than three months) (N) | 450 | 664 |
Premiums paid on early redemption of debt (B & N) | (17) | (52) |
Payments on debt (original maturities greater than three months) (N) | (952) | (1,484) |
Proceeds from exercise of employee stock options | 15 | 48 |
Dividends paid to shareholders | (89) | (132) |
Distributions to noncontrolling interests | 0 | (14) |
Other | (19) | (15) |
Cash used for financing activities | (609) | (970) |
Investing Activities | ||
Capital expenditures | (497) | (360) |
Proceeds from the sale of assets and businesses (P) | 7 | (9) |
Sales of investments (F) | 9 | 890 |
Cash receipts from sold receivables (B & K) | 693 | 514 |
Other | (1) | 244 |
Cash provided from investing activities | 211 | 1,279 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4) | 6 |
Net change in cash, cash equivalents and restricted cash (B) | (611) | (58) |
Cash, cash equivalents and restricted cash at beginning of year (B) | 2,153 | 1,878 |
Cash, cash equivalents and restricted cash at end of period (B) | $ 1,542 | $ 1,820 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Equity (unaudited) - USD ($) $ in Millions | Total | Preferred Class A | Preferred Class B | Preferred stock | Mandatory convertible preferred stock | Common stock | Additional capital | Accumulated deficit | Accumulated deficitPreferred Class A | Accumulated deficitPreferred Class B | Accumulated other comprehensive loss | Noncontrolling Interests |
Balance at beginning of period at Dec. 31, 2016 | $ 5,141 | $ 55 | $ 3 | $ 438 | $ 8,214 | $ (1,027) | $ (2,568) | $ 26 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 653 | 653 | 0 | |||||||||
Other comprehensive income (J) | 241 | 241 | 0 | |||||||||
Cash dividends declared: | ||||||||||||
Preferred dividends declared, value | $ (2) | $ (51) | $ (2) | $ (51) | ||||||||
Common share, value | (107) | (107) | ||||||||||
Stock-based compensation | 59 | 59 | ||||||||||
Common stock issued: compensation plans | 25 | 4 | 21 | |||||||||
Distributions | (14) | (14) | ||||||||||
Other | 16 | 15 | 1 | |||||||||
Balance at end of period at Sep. 30, 2017 | 5,961 | 55 | 3 | 442 | 8,294 | (519) | (2,327) | 13 | ||||
Balance at beginning of period at Jun. 30, 2017 | 5,753 | 55 | 3 | 441 | 8,262 | (567) | (2,454) | 13 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 119 | 119 | 0 | |||||||||
Other comprehensive income (J) | 127 | 127 | 0 | |||||||||
Cash dividends declared: | ||||||||||||
Preferred dividends declared, value | (1) | $ (17) | (1) | $ (17) | ||||||||
Common share, value | (53) | (53) | ||||||||||
Stock-based compensation | 11 | 11 | ||||||||||
Common stock issued: compensation plans | 22 | 1 | 21 | |||||||||
Balance at end of period at Sep. 30, 2017 | 5,961 | 55 | 3 | 442 | 8,294 | (519) | (2,327) | 13 | ||||
Balance at beginning of period at Dec. 31, 2017 | 4,924 | 55 | 0 | 481 | 8,266 | (1,248) | (2,644) | 14 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 424 | 424 | 0 | |||||||||
Other comprehensive income (J) | 100 | 100 | 0 | |||||||||
Cash dividends declared: | ||||||||||||
Preferred dividends declared, value | (2) | (2) | ||||||||||
Common share, value | (117) | (117) | ||||||||||
Stock-based compensation | 43 | 43 | ||||||||||
Common stock issued: compensation plans | 3 | 2 | 1 | |||||||||
Balance at end of period at Sep. 30, 2018 | 5,375 | 55 | 0 | 483 | 8,310 | (943) | (2,544) | 14 | ||||
Balance at beginning of period at Jun. 30, 2018 | 5,218 | 55 | 0 | 483 | 8,295 | (1,073) | (2,556) | 14 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 161 | 161 | 0 | |||||||||
Other comprehensive income (J) | 12 | 12 | 0 | |||||||||
Cash dividends declared: | ||||||||||||
Preferred dividends declared, value | $ (1) | $ (1) | ||||||||||
Common share, value | (30) | (30) | ||||||||||
Stock-based compensation | 14 | 14 | ||||||||||
Common stock issued: compensation plans | 1 | 1 | ||||||||||
Balance at end of period at Sep. 30, 2018 | $ 5,375 | $ 55 | $ 0 | $ 483 | $ 8,310 | $ (943) | $ (2,544) | $ 14 |
Statement of Changes in Conso_2
Statement of Changes in Consolidated Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Common stock, dividends per share (in usd per share) | $ 0.06 | $ 0.12 | $ 0.24 | $ 0.24 |
Preferred Class A | ||||
Preferred, dividends per share (in usd per share) | $ 0.9375 | 1.875 | $ 2.8125 | 3.75 |
Preferred Class B | ||||
Preferred, dividends per share (in usd per share) | $ 6.71875 | $ 20.1563 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements of Arconic Inc. and its subsidiaries (“Arconic” or the “Company”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2017 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with Arconic’s Annual Report on Form 10-K for the year ended December 31, 2017 , which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation (see below and Note D). On January 1, 2018, Arconic adopted new guidance issued by the Financial Accounting Standards Board (FASB) related to the following: presentation of net periodic pension cost and net periodic postretirement benefit cost that required a reclassification of costs within the Statement of Consolidated Operations; presentation of certain cash receipts and cash payments within the Statement of Consolidated Cash Flows that required a reclassification of amounts between operating and either financing or investing activities; and the classification of restricted cash within the Statement of Consolidated Cash Flows. See Note B for further details. In January 2018, management changed the organizational structure of the businesses in its Engineered Products and Solutions (EP&S) segment, from four business units to three business units, with a focus on aligning its internal structure to core markets and customers and reducing cost. As a result of this change in the EP&S segment organizational structure, management assessed and concluded that each of the three business units represent reporting units for goodwill impairment evaluation purposes. Also, as a result of the reorganization, goodwill was reallocated to the three new reporting units and evaluated for impairment during the first quarter of 2018. The estimated fair value of each reporting unit substantially exceeded its carrying value; thus, there was no goodwill impairment. More than 92% of Arconic’s total goodwill at March 31, 2018 was allocated to the following three EP&S reporting units: Arconic Engines ( $2,095 ), Arconic Fastening Systems ( $1,623 ) and Arconic Engineered Structures ( $517 ). See Note M for further details of an interim goodwill impairment evaluation that was performed for the Arconic Engines reporting unit during the second quarter of 2018. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | Recently Adopted and Recently Issued Accounting Guidance Adopted In May 2014, the FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. These changes became effective for Arconic on January 1, 2018. Arconic adopted this new guidance using the modified retrospective transition approach applied to those contracts that were not completed as of January 1, 2018. There was no cumulative effect adjustment to the opening balance of retained earnings in the Consolidated Balance Sheet in the first quarter of 2018, as the adoption did not result in a change to our timing of revenue recognition, which continues to be at a point in time. See Note C for further details. In January 2016, the FASB issued changes to equity investments. These changes require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values using the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Also, the impairment assessment of equity investments without readily determinable fair values has been simplified by requiring a qualitative assessment to identify impairment. Also, the new guidance required changes in fair value of equity securities to be recognized immediately as a component of net income instead of being reported in accumulated other comprehensive loss until the gain (loss) is realized. These changes became effective for Arconic on January 1, 2018 and have been applied on a prospective basis. Arconic elected the measurement alternative for its equity investments that do not have readily determinable fair values. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In August 2016, the FASB issued changes to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance identifies eight specific cash flow items and the sections where they must be presented within the statement of cash flows. These changes became effective for Arconic on January 1, 2018 and have been be applied retrospectively. As a result of the adoption, Arconic reclassified cash received related to beneficial interest in previously transferred trade accounts receivable from operating activities to investing activities in the Statement of Consolidated Cash Flows. This new accounting standard does not reflect a change in our underlying business or activities. The reclassification of cash received related to beneficial interest in previously transferred trade accounts receivable was $514 for the nine months ended September 30, 2017 . In addition, Arconic reclassified $52 of cash paid for debt prepayments including extinguishment costs from operating activities to financing activities for the nine months ended September 30, 2017 . In November 2016, the FASB issued changes to the classification of cash and cash equivalents within the statement of cash flow. Restricted cash and cash equivalents will be included within the cash and cash equivalents line on the cash flow statement and a reconciliation must be prepared to the statement of financial position. Transfers between restricted cash and cash equivalents and cash and cash equivalents will no longer be presented as cash flow activities in the Statement of Consolidated Cash Flows and for material balances of restricted cash and cash equivalents, Arconic will disclose information regarding the nature of the restrictions. These changes became effective for Arconic on January 1, 2018 and have been applied retrospectively. Management has determined that the adoption of this guidance did not have a material impact on the Statement of Consolidated Cash Flows. Restricted cash was $7 , $4 and $5 at September 30, 2018 , December 31, 2017 and September 30, 2017 , respectively. In March 2017, the FASB issued changes to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires registrants to present the service cost component of net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. Also, only the service cost component will be eligible for asset capitalization. Registrants will present the other components of net periodic benefit cost separately from the service cost component; and, the line item or items used in the income statement to present the other components of net periodic benefit cost must be disclosed. These changes became effective for Arconic on January 1, 2018 and were adopted retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the Statement of Consolidated Operations, and prospectively for the asset capitalization of the service cost component of net periodic benefit cost. The Company recorded the service related net periodic benefit cost within Cost of goods sold, Selling, general administrative, and other expenses and Research and development expenses and recorded the non-service related net periodic benefit cost (except for the curtailment cost which was recorded in Restructuring and other charges ) separately from service cost in Other expense (income), net within the Statement of Consolidated Operations. The impact of the retrospective adoption of this guidance was an increase to consolidated Operating income of $39 and $116 , while there was no impact to consolidated Net income, for the third quarter or nine months ended September 30, 2017 , respectively. In May 2017, the FASB issued clarification to guidance on the modification accounting criteria for share-based payment awards. The new guidance requires registrants to apply modification accounting unless three specific criteria are met. The three criteria are 1) the fair value of the award is the same before and after the modification, 2) the vesting conditions are the same before and after the modification and 3) the classification as a debt or equity award is the same before and after the modification. These changes became effective for Arconic on January 1, 2018 and were applied prospectively to new awards modified after adoption. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In August 2018, the FASB issued guidance which requires cloud computing arrangement implementation costs to be accounted for in accordance with the software stage model, regardless of whether or not the cloud computing arrangement contains a license. Arconic adopted this guidance in the third quarter of 2018. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. Issued In February 2016, the FASB issued changes to the accounting and presentation of leases. These changes require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. Also, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. As originally released, the standards update required application at the beginning of the earliest comparative period presented at the time of adoption. However, in July 2018, the FASB provided entities the option to instead apply the provisions of the new leases guidance at the effective date, without adjusting the comparative periods presented. The Company expects to apply the provisions of the new leases guidance at the effective date, without adjusting the comparative periods presented. These changes become effective for Arconic on January 1, 2019. Arconic’s current operating lease portfolio is primarily comprised of land and buildings, plant equipment, vehicles, and computer equipment. A cross-functional implementation team is in the process of determining the scope of arrangements that will be subject to this standard as well as assessing the impact to the Company’s systems, processes and internal controls. Arconic has contracted with a third-party vendor to implement a software solution. Concurrently, Arconic is compiling lease data to be uploaded into the software solution to account for leases under the new standard. Management is evaluating the impact of these changes on the Consolidated Balance Sheet, which will require right of use assets and lease liabilities be recorded for operating leases; therefore, an estimate of the impact is not currently determinable. However, the adoption is not expected to have a material impact on the Statement of Consolidated Operations or Statement of Consolidated Cash Flows. In June 2016, the FASB added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for Arconic on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In August 2017, the FASB issued guidance that will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. These changes become effective for Arconic on January 1, 2019. For cash flow and net investment hedges existing at the date of adoption, Arconic will apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year in which the amendment is adopted. The amended presentation and disclosure guidance is required only prospectively. Arconic has engaged a third-party consultant to assist with a review of the Company’s risk management and hedging strategies, with any changes to be implemented in conjunction with the adoption of the new guidance. Management is currently evaluating the potential impact of this guidance on the Consolidated Financial Statements. In February 2018, the FASB issued guidance that allows an optional reclassification from Accumulated other comprehensive loss to Accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted on December 22, 2017. These changes become effective for Arconic on January 1, 2019. Management is currently evaluating the potential impact of this guidance on the Consolidated Financial Statements. In August 2018, the FASB issued guidance that impacts disclosures for defined benefit pension plans. These changes become effective for Arconic's annual report for the year ending December 31, 2020, with early adoption permitted. Management has determined that the adoption of this guidance will not have a material impact on the Consolidated Financial Statements. Also, in August 2018, the Securities and Exchange Commission (SEC) issued guidance to eliminate or modify certain disclosure requirements that have become redundant, overlapping, outdated or superseded in light of other SEC rules, GAAP or changes in the information environment. This guidance becomes effective on November 5, 2018 and will be applied to filings thereafter. Management has determined that the adoption of this guidance will not have a material impact on the Consolidated Financial Statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company's contracts with customers are comprised of acknowledged purchase orders incorporating the Company’s standard terms and conditions, or for larger customers, may also generally include terms under negotiated multi-year agreements. These contracts with customers typically consist of the manufacture of products which represent single performance obligations that are satisfied upon transfer of control of the product to the customer. The Company produces fastening systems; seamless rolled rings; investment castings, including airfoils and forged jet engine components; extruded, machined and formed aircraft parts; aluminum sheet and plate; integrated aluminum structural systems; architectural extrusions; and forged aluminum commercial vehicle wheels. Transfer of control is assessed based on alternative use of the products we produce and our enforceable right to payment for performance to date under the contract terms. Transfer of control and revenue recognition generally occur upon shipment or delivery of the product, which is when title, ownership and risk of loss pass to the customer and is based on the applicable shipping terms. The shipping terms vary across all businesses and depend on the product, the country of origin, and the type of transportation (truck, train, or vessel). An invoice for payment is issued at time of shipment. The Company’s objective is to have net 30 -day terms. Our business units set commercial terms on which Arconic sells products to its customers. These terms are influenced by industry custom, market conditions, product line (specialty versus commodity products), and other considerations. The following table disaggregates revenue by major end market served. Differences between segment totals and consolidated Arconic are in Corporate. In the nine months ended September 30, 2018 , Corporate included $38 of costs related to settlements of certain customer claims primarily related to product introductions. Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Third quarter ended September 30, 2018 Aerospace $ 1,244 $ 220 $ — $ 1,464 Transportation 110 625 237 972 Building and construction — 59 293 352 Industrial and Other 212 522 — 734 Total end-market revenue $ 1,566 $ 1,426 $ 530 $ 3,522 Third quarter ended September 30, 2017 Aerospace $ 1,130 $ 214 $ — $ 1,344 Transportation 98 490 214 802 Building and construction — 56 286 342 Industrial and Other 249 474 23 746 Total end-market revenue $ 1,477 $ 1,234 $ 523 $ 3,234 Nine months ended September 30, 2018 Aerospace $ 3,675 $ 645 $ — $ 4,320 Transportation 326 1,835 733 2,894 Building and construction — 167 875 1,042 Industrial and Other 702 1,596 21 2,319 Total end-market revenue $ 4,703 $ 4,243 $ 1,629 $ 10,575 Nine months ended September 30, 2017 Aerospace $ 3,426 $ 670 $ — $ 4,096 Transportation 288 1,458 587 2,333 Building and construction — 156 831 987 Industrial and Other 735 1,469 65 2,269 Total end-market revenue $ 4,449 $ 3,753 $ 1,483 $ 9,685 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Arconic is a global leader in lightweight metals engineering and manufacturing. Arconic’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, building and construction, industrial applications, defense, and packaging. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2018, the Company changed its primary measure of segment performance from Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) to Segment operating profit, which more closely aligns segment performance with Operating income as presented in the Statement of Consolidated Operations. Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Arconic’s definition of Segment operating profit is Operating income excluding Special items. Special items include Restructuring and other charges and Impairment of goodwill. Segment operating profit also includes certain items that, under the previous segment performance measure, were recorded in Corporate, such as the impact of LIFO inventory accounting, metal price lag, intersegment profit eliminations, and derivative activities. Segment operating profit may not be comparable to similarly titled measures of other companies. Prior period financial information has been recast to conform to current year presentation. Differences between segment totals and consolidated Arconic are in Corporate. The operating results of Arconic’s reportable segments were as follows: Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Third quarter ended September 30, 2018 Sales: Third-party sales $ 1,566 $ 1,426 $ 530 $ 3,522 Intersegment sales — 34 — 34 Total sales $ 1,566 $ 1,460 $ 530 $ 3,556 Profit and loss: Segment operating profit $ 238 $ 74 $ 77 $ 389 Restructuring and other charges 15 2 — 17 Provision for depreciation and amortization 71 50 12 133 Third quarter ended September 30, 2017 Sales: Third-party sales $ 1,477 $ 1,234 $ 523 $ 3,234 Intersegment sales — 36 — 36 Total sales $ 1,477 $ 1,270 $ 523 $ 3,270 Profit and loss: Segment operating profit $ 239 $ 64 $ 74 $ 377 Restructuring and other charges 10 2 2 14 Provision for depreciation and amortization 68 52 13 133 Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Nine months ended September 30, 2018 Sales: Third-party sales $ 4,703 $ 4,243 $ 1,629 $ 10,575 Intersegment sales — 122 — 122 Total sales $ 4,703 $ 4,365 $ 1,629 $ 10,697 Profit and loss: Segment operating profit $ 671 $ 309 $ 241 $ 1,221 Restructuring and other charges 25 2 — 27 Provision for depreciation and amortization 212 154 37 403 Nine months ended September 30, 2017 Sales: Third-party sales $ 4,449 $ 3,753 $ 1,483 $ 9,685 Intersegment sales — 107 — 107 Total sales $ 4,449 $ 3,860 $ 1,483 $ 9,792 Profit and loss: Segment operating profit $ 736 $ 333 $ 213 $ 1,282 Restructuring and other charges 24 76 11 111 Provision for depreciation and amortization 198 153 37 388 The following table reconciles Total segment operating profit to Consolidated income before income taxes : Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Total segment operating profit $ 389 $ 377 $ 1,221 $ 1,282 Unallocated amounts: Restructuring and other charges 2 (19 ) (20 ) (118 ) Corporate expense (46 ) (48 ) (199 ) (251 ) Consolidated operating income $ 345 $ 310 $ 1,002 $ 913 Interest expense (88 ) (100 ) (291 ) (398 ) Other (expense) income, net (8 ) (38 ) (69 ) 410 Consolidated income before income taxes $ 249 $ 172 $ 642 $ 925 The total assets of Arconic's reportable segment were as follows: September 30, 2018 December 31, 2017 Engineered Products and Solutions $ 10,522 $ 10,325 Global Rolled Products 4,112 3,955 Transportation and Construction Solutions 1,091 1,041 Total segment assets $ 15,725 $ 15,321 The following table reconciles Total segment assets to Consolidated assets : September 30, 2018 December 31, 2017 Total segment assets $ 15,725 $ 15,321 Unallocated amounts: Cash and cash equivalents 1,535 2,150 Deferred income taxes 605 743 Corporate fixed assets, net 307 310 Fair value of derivative contracts 28 91 Other 127 103 Consolidated assets $ 18,327 $ 18,718 |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges In the third quarter of 2018 , Restructuring and other charges was a net benefit of $2 ( $3 after-tax), which included a postretirement curtailment benefit of $28 ( $22 after-tax) (see Note G); a charge of $12 ( $9 after-tax) for contract termination costs and asset impairments associated with the shutdown of a facility in Acuna, Mexico; a charge of $8 ( $6 after-tax) for layoff costs, including the separation of approximately 85 employees ( 65 in the Engineered Products and Solutions segment and 20 in Corporate); a charge of $4 ( $3 after-tax) for a pension settlement; a charge of $3 ( $2 after-tax) for other miscellaneous items; and a benefit of $1 ( $1 after-tax) for the reversal of a number of small layoff reserves related to prior periods. In the nine months ended September 30, 2018 , Arconic recorded Restructuring and other charges of $20 ( $14 after-tax), which included a postretirement curtailment benefit of $28 ( $22 after-tax) (see Note G); a charge of $14 ( $11 after-tax) for pension curtailments; a charge of $16 ( $12 after-tax) for layoff costs, including the separation of approximately 125 employees ( 89 in the Engineered Products and Solutions segment and 36 in Corporate); a charge of $12 ( $9 after-tax) related to the shutdown of a facility in Acuna, Mexico as noted above; a charge of $7 ( $5 after-tax) for other miscellaneous items; a charge of $5 ( $4 after-tax) for exit costs primarily related to the New York office; a charge of $4 ( $3 after-tax) for a pension settlement; and a benefit of $10 ( $8 after-tax) for the reversal of a number of small layoff reserves related to prior periods. In the third quarter of 2017 , Arconic recorded Restructuring and other charges of $19 ( $13 after-tax), which included a charge of $11 ( $8 after-tax) for layoff costs related to cost reduction initiatives including the separation of 124 employees ( 111 in the Engineered Products and Solutions segment, 12 in Corporate and 1 in the Global Rolled Products segment) and a net charge of $8 ( $5 after-tax) for other miscellaneous items. In the nine months ended September 30, 2017 , Arconic recorded Restructuring and other charges of $118 ( $99 after-tax), which included a charge of $59 ( $40 after-tax) for layoff costs related to cost reduction initiatives including the separation of approximately 800 employees ( 350 in the Engineered Products and Solutions segment, 243 in the Global Rolled Products segment, 133 in the Transportation and Construction Solutions segment and 74 in Corporate); a charge of $60 ( $60 after-tax) related to the sale of the Fusina, Italy rolling mill; a net benefit of $6 ( $4 after-tax) for the reversal of forfeited executive stock compensation of $13 , partially offset by a charge of $7 for the related severance; a net charge of $7 ( $5 after-tax) for other miscellaneous items; and a benefit of $2 ( $2 after-tax) for the reversal of a number of small layoff reserves related to prior periods. As of September 30, 2018 , approximately 35 of the 125 employees associated with 2018 restructuring programs and approximately 570 of the 760 employees (previously 830 ) associated with 2017 restructuring programs (with planned departures in 2018 ) were separated; all of the separations associated with 2016 restructuring programs were essentially complete. The remaining separations for the 2018 restructuring programs are expected to be completed by mid-2019. All of the remaining separations for the 2017 restructuring programs are expected to be completed by the end of 2018 . For the third quarter and nine months ended September 30, 2018 , cash payments of $3 and $6 , respectively, were made against layoff reserves related to 2018 restructuring programs, cash payments of $4 and $27 , respectively, were made against layoff reserves related to 2017 restructuring programs, and cash payments of $0 and $4 , respectively, were made against the layoff reserves related to 2016 restructuring programs. Activity and reserve balances for restructuring and other charges were as follows: Layoff costs Other exit costs Total Reserve balances at December 31, 2016 $ 50 $ 9 $ 59 Cash payments (59 ) (6 ) (65 ) Restructuring charges 64 1 65 Other (1) 1 (2 ) (1 ) Reserve balances at December 31, 2017 56 2 58 Cash payments (37 ) (1 ) (38 ) Restructuring charges 8 13 21 Other (1) — — — Reserve balances at September 30, 2018 $ 27 $ 14 $ 41 (1) Other includes reversals of previously recorded restructuring charges and credits, and the effects of foreign currency translation. In 2018, Other for layoff costs included the following: a reclassification of a $28 credit in postretirement benefits, as the impact to the liability was reflected in Arconic’s separate liability for postretirement benefits; a reclassification of $18 in pension costs, as this liability was reflected in Arconic’s separate liability for pension benefits; and reversals of $10 for previously recorded layoff charges. In 2017, Other for layoff costs included a reclassification of a stock awards reversal of $13 and reversals of $11 for previously recorded layoff reserves. The remaining reserves are expected to be paid in cash during 2018 , with the exception of approximately $18 to $20 , which is expected to be paid over the next several years for lease termination costs and special termination benefit payments. |
Other Expense (Income), Net
Other Expense (Income), Net | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Expense (Income), Net | Other Expense (Income), Net Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Non-service related net periodic benefit cost $ 27 $ 39 $ 83 $ 116 Interest income (6 ) (5 ) (16 ) (13 ) Foreign currency losses (gains), net 6 (1 ) 20 (4 ) Net loss (gain) from asset sales 2 1 7 (514 ) Other, net (21 ) 4 (25 ) 5 $ 8 $ 38 $ 69 $ (410 ) For the third quarter and nine months ended September 30, 2018 , Non-service related net periodic benefit cost included lower net actuarial losses as a result of pension actions taken during 2018 (see Note G). For the third quarter and nine months ended September 30, 2018 , Other, net included a benefit from establishing a tax indemnification receivable of $29 reflecting Alcoa Corporation’s 49% share of a Spanish tax reserve (see Notes H and Q). For the nine months ended September 30, 2017 , Net loss (gain) from asset sales included a gain on the sale of a portion of Arconic’s investment in Alcoa Corporation common stock of $351 that resulted in cash proceeds of $888 which were recorded in Sale of investments within Investing Activities in the Statement of Consolidated Cash Flows and a $167 gain on the debt-for-equity exchange with two investment banks (the “Investment Banks”) of the remaining portion of Arconic’s retained interest in Alcoa Corporation common stock for a portion of the Company’s outstanding notes held by the Investment Banks (the “Debt-for-Equity Exchange”). |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The components of net periodic benefit cost were as follows: Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Pension benefits Service cost $ 9 $ 23 $ 37 $ 67 Interest cost 54 59 164 175 Expected return on plan assets (76 ) (83 ) (230 ) (248 ) Recognized net actuarial loss 42 55 126 165 Amortization of prior service cost (benefit) 1 1 3 4 Settlements 4 — 4 — Curtailments — — 14 — Net periodic benefit cost (1) $ 34 $ 55 $ 118 $ 163 Other postretirement benefits Service cost $ 2 $ 2 $ 6 $ 6 Interest cost 7 7 21 22 Recognized net actuarial loss 1 2 5 4 Amortization of prior service cost (benefit) (2 ) (2 ) (6 ) (6 ) Curtailments (28 ) — (28 ) — Net periodic benefit cost (1) $ (20 ) $ 9 $ (2 ) $ 26 (1) Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses , and Research and development expenses ; curtailments and settlements were included in Restructuring and other charges; and all other cost components were recorded in Other expense (income), net in the Statement of Consolidated Operations. In the first quarter of 2018, the Company announced that, effective April 1, 2018, benefit accruals for future service and compensation under all of the Company's qualified and non-qualified defined benefit pension plans for U.S. salaried and non-bargaining hourly employees ceased. As a result of this change, in the first quarter of 2018, the Company recorded a decrease to the Accrued pension benefits liability of $136 related to the reduction of future benefits, $141 offset in Accumulated other comprehensive loss, and curtailment charges of $5 in Restructuring and other charges. In conjunction with the separation of Alcoa Inc. on November 1, 2016, the Pension Benefit Guaranty Corporation approved management’s plan to separate the Alcoa Inc. pension plans between Arconic Inc. and Alcoa Corporation. The plan stipulates that Arconic will make cash contributions over a period of 30 months (from November 1, 2016) to its two largest pension plans. Payments are expected to be made in three increments of no less than $50 each ( $150 total) over this 30 -month period. The Company made payments of $50 in March 2018 and $50 in April 2017. In the third quarter of 2018, the 2018 U.S. pension plan valuations were completed and additional pension contributions of $16 that were made in the first quarter of 2018 were able to be used to partially satisfy the third $50 requirement. The remaining $34 payment is expected to be made in 2019. Through the third quarter of 2018, $116 of pension contributions have been made toward the $150 requirement. On April 13, 2018, the United Auto Workers ratified a new five -year labor agreement, covering approximately 1,300 U.S. employees of Arconic, which expires on March 31, 2023. A provision within the agreement includes a retirement benefit increase for future retirees that participate in a defined benefit pension plan, which impacts approximately 300 of those employees. In addition, effective January 1, 2019, benefit accruals for future service will cease. As result of these changes, a curtailment charge of $9 was recorded in Restructuring and other charges in the second quarter of 2018. In the third quarter of 2018, the Company announced that effective December 31, 2018, it will end all pre-Medicare medical, prescription drug and vision coverage for current and future salaried and non-bargained hourly employees and retirees of the Company and its subsidiaries. As a result of this change, in the third quarter of 2018, the Company recorded a decrease to the Accrued other postretirement benefits liability of $32 related to the reduction of future benefits, $4 offset in Accumulated other comprehensive loss, and a curtailment benefit of $28 in Restructuring and other charges. In the third quarter of 2018, settlement accounting applied to a U.S. pension plan due to the payment of lump sums, resulting in a charge of $4 that was recorded in Restructuring and other charges. In the fourth quarter of 2018, settlement accounting is expected to apply to certain U.S. pension plans due to the significant amount of lump sum payments made to participants. The settlement will result in a charge that is expected to be in the range of $70 to $85 that will be recorded in Restructuring and other charges. The actual charge will be based on the total lump sum payments for the year along with any updates to the plan assets and obligations based upon market conditions. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Arconic’s year-to-date tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date pre-tax ordinary income. The tax impact of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. In addition, the tax provision is adjusted for the interim period impact of non-benefited pre-tax losses. For the nine months ended September 30, 2018 , the estimated annual effective tax rate, before discrete items, applied to ordinary income was 26.5% . This rate was higher than the federal statutory rate of 21%, which was enacted by the Tax Cuts and Jobs Act (the “2017 Act”) on December 22, 2017, primarily due to the additional estimated U.S. tax on Global Intangible Low-Taxed Income (GILTI) pursuant to the 2017 Act, domestic taxable income in certain U.S. states no longer subject to valuation allowance, and foreign income taxed in higher rate jurisdictions, partially offset by the favorable impact related to the portion of an indemnification receivable recorded through pre-tax income (see Note Q) that is not subject to tax and a benefit for tax credits allowed. For the nine months ended September 30, 2017 , Arconic’s estimated annual effective tax rate, before discrete items, was 28.5% . This rate is lower than the federal statutory rate of 35% due to foreign income taxed in lower rate jurisdictions, a tax basis in excess of book basis in Alcoa Corporation common stock sold, and a nontaxable gain on the Debt-for-Equity Exchange. These beneficial items were partially offset by a loss on the sale of a rolling mill in Fusina, Italy for which no net tax benefit was recognized and valuation allowances recorded against U.S. foreign tax credits. For the third quarter ended September 30, 2018 and September 30, 2017 , the tax rate including discrete items was 35.3% and 30.8% , respectively. A discrete charge of $26 was recorded in the third quarter ended September 30, 2018 related to the establishment of a $59 tax reserve in Spain (see Note Q) and prior year adjustments of $13 related to various jurisdictions, partially offset by the reversal of a $38 foreign tax reserve that is effectively settled and an $8 reduction to the estimate of the provisional impact of the enactment of the 2017 Act discussed further below. A discrete charge of $2 was recorded in the third quarter ended September 30, 2017, primarily related to the tax effects of expired stock compensation, partially offset by a number of small items. The tax provisions for the third quarter and nine months ended September 30, 2018 and 2017 were comprised of the following: Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Pre-tax income at estimated annual effective income tax rate before discrete items $ 66 $ 49 $ 170 $ 264 Catch-up adjustment to revalue previous quarter pre-tax income at current estimated annual effective tax rate (2 ) 1 — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized (2 ) 1 (1 ) 5 Other discrete items 26 2 49 3 Provision for income taxes $ 88 $ 53 $ 218 $ 272 On December 22, 2017, the 2017 Act was signed into law, making significant changes to the Internal Revenue Code. Also on December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118"), Income Tax Accounting Implications of the Tax Cuts and Jobs Act, was issued by the SEC to address the application of U.S. GAAP for financial reporting. SAB 118 permits the use of provisional amounts based on reasonable estimates in the financial statements. SAB 118 also provides that the tax impact may be considered incomplete in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Act. Any adjustments to provisional or incomplete amounts should be included in income from continuing operations as an adjustment to tax expense or benefit in the reporting period that the amounts are determined within one year. The Company's analysis of U.S. tax reform legislation updated through September 30, 2018, resulted in a decrease of $8 and an increase of $13 in the third quarter and nine months ended September 30, 2018, respectively, to the 2017 year-end provisional charge of $272 . In the third quarter ended September 30, 2018, a benefit of $8 was recorded related to a $2 decrease in the estimate of the one-time transition tax and $6 for U.S. tax rate change impacts. In the nine months ended September 30, 2018, a net charge of $13 was recorded for an increase of $16 in the estimate of the one-time transition tax and a charge of $3 for alternative minimum tax (AMT) credits expected to be refunded upon filing the 2018 tax return that will result in no benefit under government sequestration, partly offset by beneficial U.S. tax rate change impacts of $6 . The Company's estimates of the impact of the 2017 Act remain provisional through September 30, 2018. The impact of the rate reduction will be finalized in the fourth quarter of 2018 upon the filing of the 2017 U.S. income tax return and the expected completion of the Internal Revenue Service’s 2017 audit. Arconic will continue to analyze the amount of foreign earnings and profits, the associated foreign tax credits, and additional guidance that may be issued during 2018 in order to further update the estimated deemed repatriation calculation as necessary under SAB 118. Arconic has not yet gathered, prepared and analyzed all the necessary information in sufficient detail to determine whether any excess foreign tax credits that may result from the deemed repatriation will be realizable. Provisional estimates of the impact of the 2017 Act on the realizability of certain deferred tax assets, including, but not limited to, foreign tax credits, AMT credits, and state tax loss carryforwards have been made based on information and computations that were available, prepared, and analyzed as of February 2, 2018. Through September 30, 2018, there were no changes to the estimates related to the realizability of deferred tax assets. Further analysis, or the issuance of additional guidance, could result in changes to the realizability of this and other deferred tax assets. As a result of the 2017 Act, the non-previously taxed post-1986 foreign earnings and profits (calculated based on U.S. tax principles) of certain U.S.-owned foreign corporations has been subject to U.S. tax under the one-time transition tax provisions. In the fourth quarter of 2017, Arconic had no plans to distribute such earnings in the foreseeable future and considered that conclusion to be incomplete under SAB 118. There is no change to this conclusion through September 30, 2018. The 2017 Act creates a new requirement that certain income earned by foreign subsidiaries, GILTI, must be included in the gross income of the U.S. shareholder. The 2017 Act also established the Base Erosion and Anti-Abuse Tax (BEAT). Arconic anticipates that it will be subject to GILTI and has included an estimate of GILTI in the calculation of the 2018 estimated annual effective tax rate. At this time, Arconic does not anticipate being subject to BEAT for 2018. In the first quarter ended March 31, 2018, Arconic made a final accounting policy election to treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current period expense when incurred. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Net income $ 161 $ 119 $ 424 $ 653 Less: Preferred stock dividends declared (1 ) (18 ) (2 ) (53 ) Net income available to Arconic common shareholders - basic 160 101 422 600 Add: Interest expense related to convertible notes 3 2 8 7 Add: Dividends related to mandatory convertible preferred stock — — — 50 Net income available to Arconic common shareholders - diluted $ 163 $ 103 $ 430 $ 657 Average shares outstanding - basic 483 442 483 441 Effect of dilutive securities: Stock options — 1 1 2 Stock and performance awards 5 5 5 5 Mandatory convertible preferred stock — — — 39 Convertible notes 14 14 14 14 Average shares outstanding - diluted 502 462 503 501 The following shares were excluded from the calculation of average shares outstanding – diluted as their effect was anti-dilutive (shares in millions). Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Mandatory convertible preferred stock — 39 — — Stock options (1) 6 3 6 3 (1) The average exercise price of options per share was $29.14 for the third quarter and nine months ended September 30, 2018 and $33.33 for the third quarter and nine months ended September 30, 2017. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended September 30, 2018 2017 2018 2017 Pension and other postretirement benefits (G) Balance at beginning of period $ (2,058 ) $ (1,931 ) $ — $ — Other comprehensive income: Unrecognized net actuarial loss and prior service cost/benefit 30 (7 ) — — Tax (expense) benefit (7 ) 1 — — Total Other comprehensive income (loss) before reclassifications, net of tax 23 (6 ) — — Amortization of net actuarial loss and prior service cost (1) 18 56 — — Tax expense (2) (4 ) (19 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 14 37 — — Total Other comprehensive income 37 31 — — Balance at end of period $ (2,021 ) $ (1,900 ) $ — $ — Foreign currency translation Balance at beginning of period $ (516 ) $ (523 ) $ — $ (2 ) Other comprehensive (loss) income (3) (16 ) 85 — — Balance at end of period $ (532 ) $ (438 ) $ — $ (2 ) Available-for-sale securities Balance at beginning of period $ (4 ) $ (2 ) $ — $ — Other comprehensive income (4) 1 1 — — Balance at end of period $ (3 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 22 $ 2 $ — $ — Other comprehensive (loss) income: Net change from periodic revaluations (7 ) 15 — — Tax benefit (expense) 1 (5 ) — — Total Other comprehensive (loss) income before reclassifications, net of tax (6 ) 10 — — Net amount reclassified to earnings (5 ) — — — Tax benefit (2) 1 — — — Total amount reclassified from Accumulated other comprehensive income, net of tax (5) (4 ) — — — Total Other comprehensive (loss) income (10 ) 10 — — Balance at end of period $ 12 $ 12 $ — $ — Total balance at end of period $ (2,544 ) $ (2,327 ) $ — $ (2 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note G). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other expense (income), net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. Arconic Noncontrolling Interests Nine months ended September 30, 2018 2017 2018 2017 Pension and other postretirement benefits (G) Balance at beginning of period $ (2,230 ) $ (2,010 ) $ — $ — Other comprehensive income: Unrecognized net actuarial loss and prior service cost/benefit 152 4 — — Tax expense (35 ) (3 ) — — Total Other comprehensive income before reclassifications, net of tax 117 1 — — Amortization of net actuarial loss and prior service cost (1) 118 167 — — Tax expense (2) (26 ) (58 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 92 109 — — Total Other comprehensive income 209 110 — — Balance at end of period $ (2,021 ) $ (1,900 ) $ — $ — Foreign currency translation Balance at beginning of period $ (437 ) $ (689 ) $ — $ (2 ) Other comprehensive (loss) income (3) (95 ) 251 — — Balance at end of period $ (532 ) $ (438 ) $ — $ (2 ) Available-for-sale securities Balance at beginning of period $ (2 ) $ 132 $ — $ — Other comprehensive loss (4) (1 ) (133 ) — — Balance at end of period $ (3 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 25 $ (1 ) $ — $ — Other comprehensive (loss) income: Net change from periodic revaluations (4 ) 20 — — Tax benefit (expense) 1 (7 ) — — Total Other comprehensive (loss) income before reclassifications, net of tax (3 ) 13 — — Net amount reclassified to earnings (12 ) — — — Tax benefit (2) 2 — — — Total amount reclassified from Accumulated other comprehensive income, net of tax (5) (10 ) — — — Total Other comprehensive (loss) income (13 ) 13 — — Balance at end of period $ 12 $ 12 $ — $ — Total balance at end of period $ (2,544 ) $ (2,327 ) $ — $ (2 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note G). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other expense (income), net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Receivables | Receivables Arconic has an arrangement with three financial institutions to sell certain customer receivables without recourse on a revolving basis. The sale of such receivables is completed using a bankruptcy remote special purpose entity, which is a consolidated subsidiary of Arconic. This arrangement provides for minimum funding of $200 up to a maximum of $400 for receivables sold. Arconic maintains a beneficial interest, or a right to collect cash, on the sold receivables that have not been funded (deferred purchase program). On March 30, 2012, Arconic initially sold $304 of customer receivables in exchange for $50 in cash and $254 of deferred purchase program under the arrangement. Arconic has received additional net cash funding of $300 ( $2,808 in draws and $2,508 in repayments) since the program’s inception, including net cash draws totaling $0 ( $450 in draws and $450 in repayments) for the nine months ended September 30, 2018 . As of September 30, 2018 and December 31, 2017 , the deferred purchase program receivable was $362 and $187 , respectively, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase program receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase program receivable. The gross amount of receivables sold and total cash collected under this program since its inception was $40,194 and $39,482 , respectively. Arconic services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded. Cash receipts from customer payments on sold receivables (which are cash receipts on the underlying trade receivables that have been previously sold in this program) as well as cash receipts and cash disbursements from draws and repayments under the program are presented as cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories September 30, 2018 December 31, 2017 Finished goods $ 667 $ 669 Work-in-process 1,467 1,349 Purchased raw materials 398 381 Operating supplies 90 81 Total inventories $ 2,622 $ 2,480 At September 30, 2018 and December 31, 2017 , the portion of inventories valued on a last-in, first-out (LIFO) basis was $1,339 and $1,208 , respectively. If valued on an average-cost basis, total inventories would have been $534 and $481 higher at September 30, 2018 and December 31, 2017 , respectively. In the second quarter of 2018, a charge of $23 was recorded in Cost of goods sold and Inventories to reflect a physical inventory adjustment at one plant in the EP&S segment. While a portion of this charge relates to prior years, the majority relates to 2018. The out-of-period amounts are not material to any interim or annual periods. |
Property, Plants, and Equipment
Property, Plants, and Equipment, Net | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants, and Equipment, Net | Properties, Plants, and Equipment, Net September 30, 2018 December 31, 2017 Land and land rights $ 138 $ 140 Structures 2,374 2,395 Machinery and equipment 9,244 8,830 11,756 11,365 Less: accumulated depreciation and amortization 6,778 6,392 4,978 4,973 Construction work-in-progress 667 621 $ 5,645 $ 5,594 During the second quarter of 2018, the Company updated its three-year strategic plan and determined that there was a decline in the forecasted financial performance for the disks operations, an asset group within the Arconic Engines business unit. As such, the Company evaluated the recoverability of the long-lived assets by comparing their carrying value of approximately $515 to the estimated undiscounted net cash flows of the disks operations, resulting in an estimated fair value in excess of their carrying value of approximately 13% ; thus, there was no impairment. If the disks operations do not achieve the revised forecasted financial performance or if there are changes in any significant assumptions, a material non-cash impairment of long-lived assets may occur in future periods. These significant assumptions include sales growth, cost of raw materials, ramp up of additional production capacity, and working capital. A 1% decrease in the forecasted net cash flows would reduce the undiscounted cash flows by approximately $6 . There were no indicators of impairment identified for the disks operations during the third quarter of 2018 and, as such, the Company did not evaluate the recoverability of its long-lived assets. The Company also performed an interim impairment evaluation of goodwill in the second quarter of 2018 for the Arconic Engines reporting unit as a result of the decline in the forecasted performance of the disks operations as noted above. The estimated fair value of the reporting unit was substantially in excess of the carrying value; thus, there was no impairment of goodwill. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt September 30, 2018 December 31, 2017 5.72% Notes, due 2019 $ — $ 500 1.63% Convertible Notes, due 2019 403 403 6.150% Notes, due 2020 1,000 1,000 5.40% Notes due 2021 1,250 1,250 5.87% Notes, due 2022 627 627 5.125% Notes, due 2024 1,250 1,250 5.90% Notes, due 2027 625 625 6.75% Bonds, due 2028 300 300 5.95% Notes, due 2037 625 625 Iowa Finance Authority Loan, due 2042 250 250 Other (1) (12 ) (23 ) Total debt 6,318 6,807 Less: amount due within one year 3 1 Total long-term debt $ 6,315 $ 6,806 (1) Includes various financing arrangements related to subsidiaries, unamortized debt discounts related to outstanding notes and bonds listed in the table above, an equity option related to the convertible notes due in 2019, and unamortized debt issuance costs. Public Debt – During the first quarter of 2018, the Company completed the early redemption of its remaining outstanding 5.72% Notes due in 2019, with aggregate principal amount of $500 , for $518 in cash including accrued and unpaid interest. As a result, the Company recorded a charge of $19 in Interest expense in the accompanying Statement of Consolidated Operations for the first quarter of 2018 primarily for the premium paid on the early redemption of these notes in excess of their carrying value. Credit Facilities. On July 25, 2014, Arconic entered into a Five -Year Revolving Credit Agreement with a syndicate of lenders and issuers named therein, which provides for a senior unsecured revolving credit facility (the “Credit Facility”). By an Extension Request and Amendment Letter dated as of June 5, 2015, the maturity date of the Credit Facility was extended to July 25, 2020. On September 16, 2016, Arconic entered into Amendment No. 1 to the Five-Year Revolving Credit Agreement to permit the Separation Transaction and to amend certain terms of the Credit Agreement, including the replacement of the existing financial covenant with a leverage ratio and reduction of total commitments available from $4,000 to $3,000 . On June 29, 2018, Arconic entered into Amendment No. 2 (“Amendment No. 2”) to amend and restate the Five-Year Revolving Credit Agreement. The Five-Year Revolving Credit Agreement, as so amended and restated, is herein referred to as the “Credit Agreement.” The Credit Agreement provides a $3,000 Credit Facility, the proceeds of which are to be used to provide working capital or for other general corporate purposes of Arconic. Subject to the terms and conditions of the Credit Agreement, Arconic may from time to time request increases in lender commitments under the Credit Facility, not to exceed $500 in aggregate principal amount, and may also request the issuance of letters of credit, subject to a letter of credit sublimit of $1,000 of the Credit Facility. Pursuant to the Credit Agreement, Arconic shall not permit the ratio of Consolidated Net Debt to Consolidated EBITDA (each as defined in the Credit Agreement) as of the end of each fiscal quarter for the period of the four fiscal quarters most recently ended, to be greater than 4.50 to 1.00, which maximum level will step down successively to 4.00 to 1.00 on December 31, 2018, and to 3.50 to 1.00 on December 31, 2019 and thereafter. The Credit Agreement includes additional covenants, including, among others, (a) limitations on Arconic’s ability to incur liens securing indebtedness for borrowed money, (b) limitations on Arconic’s ability to consummate a merger, consolidation or sale of all or substantially all of its assets, and (c) limitations on Arconic’s ability to change the nature of its business. As of September 30, 2018 , Arconic was in compliance with all such covenants. The Credit Facility matures on June 29, 2023, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Arconic may make two one -year extension requests during the term of the Credit Facility, subject to the lender consent requirements set forth in the Credit Agreement. Under the provisions of the Credit Agreement, Arconic will pay a fee of 0.25% per annum (based on Arconic’s current long-term debt ratings) of the total commitment to maintain the Credit Facility. The Credit Facility is unsecured and amounts payable under it will rank pari passu with all other unsecured, unsubordinated indebtedness of Arconic. Borrowings under the Credit Facility may be denominated in U.S. dollars or euros. Loans will bear interest at a base rate or a rate equal to LIBOR, plus, in each case, an applicable margin based on the credit ratings of Arconic’s outstanding senior unsecured long-term debt. The applicable margin on base rate loans and LIBOR loans will be 0.50% and 1.50% per annum, respectively, based on Arconic’s current long-term debt ratings. Loans may be prepaid without premium or penalty, subject to customary breakage costs. The obligation of Arconic to pay amounts outstanding under the Credit Facility may be accelerated upon the occurrence of an “Event of Default” as defined in the Credit Agreement. Such Events of Default include, among others, (a) non-payment of obligations; (b) breach of any representation or warranty in any material respect; (c) non-performance of covenants and obligations; (d) with respect to other indebtedness in a principal amount in excess of $100 million , a default thereunder that causes such indebtedness to become due prior to its stated maturity or a default in the payment at maturity of any principal of such indebtedness; (e) the bankruptcy or insolvency of Arconic; and (f) a change in control of Arconic. There were no amounts outstanding at September 30, 2018 or December 31, 2017 , and no amounts were borrowed during 2018 or 2017 , under the Credit Facility. In addition to the Credit Agreement above, Arconic has a number of other credit agreements that provide a combined borrowing capacity of $715 as of September 30, 2018 , of which $200 is due to expire in 2018 , $365 is due to expire in 2019 , and $150 due to expire in 2020 . The purpose of any borrowings under these credit arrangements is to provide for working capital requirements and for other general corporate purposes. The covenants contained in all these arrangements are the same as the Credit Agreement. During the nine months ended September 30, 2018 , Arconic borrowed and repaid $450 and $450 , respectively, under these other credit facilities. The weighted-average interest rate and weighted-average days outstanding during the third quarter and nine months ended September 30, 2018 were 3.5% and 35 days and 3.3% and 55 days, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of Cash and cash equivalents, Restricted cash, Derivatives, Noncurrent receivables and Short-term debt included in the Consolidated Balance Sheet approximate fair values. The Company holds exchange-traded fixed income securities which are considered available-for-sale securities which are carried at fair value which is based on quoted market prices. The following table summarizes Arconic’s financial liabilities that were not carried at fair value at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Carrying value Fair value Carrying value Fair value Long-term debt, less amount due within one year $ 6,315 $ 6,495 $ 6,806 $ 7,443 The fair value of Long-term debt, less amount due within one year was based on quoted market prices for public debt and on interest rates that are currently available to Arconic for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures In March 2017, Arconic completed the sale of its Fusina, Italy rolling mill to Slim Aluminium. While owned by Arconic, the operating results and assets and liabilities of the Fusina, Italy rolling mill were included in the Global Rolled Products segment. As part of the transaction, Arconic injected $10 of cash into the business and provided a third-party guarantee with a fair value of $5 related to Slim Aluminium’s environmental remediation. The Company recorded a loss on the sale of $60 , which was recorded in Restructuring and other charges (see Note E) on the Statement of Consolidated Operations in the first quarter of 2017. The rolling mill generated third-party sales of approximately $37 in the first quarter of 2017. At the time of the divestiture, the rolling mill had approximately 312 employees. On April 2, 2018, Arconic completed the sale of its Latin America extrusions business to a subsidiary of Hydro Extruded Solutions AS for $5 in cash, subject to post-closing adjustments that are not expected to be significant. The sales price approximates the carrying value of the net assets sold on the closing date, following the charge of $41 recognized in the fourth quarter of 2017 related to the non-cash impairment of the net book value of the business. The operating results and assets and liabilities of the business were included in the Transportation and Construction Solutions segment. This business generated sales of approximately $30 in the third quarter of 2017, and $25 and $86 in the nine months ended September 30, 2018 and 2017, respectively. On July 31, 2018, the Company announced that it had initiated a sale process of its Building and Construction Systems (BCS) business, as part of the Company’s ongoing strategy and portfolio review that commenced in January 2018. BCS is part of the Transportation and Construction Solutions segment and generated third-party sales of approximately $1,070 for the year ended December 31, 2017. The sale process is in its early stages. The Company’s decision regarding whether to sell the business will not be finalized until final binding offers are evaluated at a later stage in the sale process. Until the Company makes that final decision, the BCS business will remain classified as held and in-use in the Consolidated Financial Statements. On October 31, 2018, the Company sold its Texarkana, Texas rolling mill and cast house, which had a combined net book value of $63 , to Ta Chen International, Inc. for $302 in cash, subject to post-closing adjustments, plus additional contingent consideration of up to $50 . The contingent consideration relates to the achievement of various milestones within 36 months of the transaction closing date associated with operationalizing the rolling mill equipment. The Texarkana rolling mill facility had previously been idle since late 2009. In early 2016, the Company restarted the Texarkana cast house to meet demand for aluminum slab. As part of the agreement, the Company will continue to produce aluminum slab at the facility for a period of 18 months through a lease back of the cast house building and equipment, after which time, Ta Chen will perform toll processing of metal for the Company for a period of six months. The Company will supply Ta Chen with cold-rolled aluminum coil during this 24 -month period. The sale of the rolling mill and cast house will be accounted for separately. The gain on the sale of the rolling mill is estimated to be approximately $150 to $165 including the fair value of contingent consideration of $4 , which will be recorded in the fourth quarter of 2018. The Company will reevaluate its estimate of the amount of contingent consideration to which it will be entitled at the end of each reporting period and recognize any changes thereto in the Statement of Consolidated Operations. The Company will have continuing involvement related to the cast house, and, therefore will use the failed-sale-leaseback accounting model. Under such model, the Company is deemed to still own the cast house building and equipment sold to Ta Chen, and therefore the Company must continue to reflect these assets in its Consolidated Balance Sheet and depreciate them over the remaining useful life. Additionally, the Company will record the cash proceeds associated with the cast house as a noncurrent liability in its Consolidated Balance Sheet. The Company will defer a gain estimated at approximately $85 to $100 associated with the cast house assets. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Contingencies Environmental Matters Arconic participates in environmental assessments and cleanups at more than 100 locations. These include owned or operating facilities and adjoining properties, previously owned or operating facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)) sites. A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others. Arconic’s remediation reserve balance was $280 at September 30, 2018 and $294 at December 31, 2017 (of which $70 and $41 , respectively, was classified as a current liability), and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. Payments related to remediation expenses applied against the reserve were $7 and $15 in the third quarter and nine months ended September 30, 2018 , respectively. This amount includes expenditures currently mandated, as well as those not required by any regulatory authority or third party. Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 1% or less of cost of goods sold. The following discussion provides details regarding the current status of the most significant remediation reserves related to a current Arconic site. Massena West, NY— Arconic has an ongoing remediation project related to the Grasse River, which is adjacent to Arconic’s Massena plant site. Many years ago, it was determined that sediments and fish in the river contain varying levels of polychlorinated biphenyls (PCBs). The project, which was selected by the U.S. Environmental Protection Agency (EPA) in a Record of Decision issued in April 2013, is aimed at capping PCB contaminated sediments with concentration in excess of one part per million in the main channel of the river and dredging PCB contaminated sediments in the near-shore areas where total PCBs exceed one part per million. At September 30, 2018 and December 31, 2017 , the reserve balance associated with this matter was $208 and $215 , respectively. Arconic is in the planning and design phase of the project, which is expected to be completed in 2018. Following the submittal of the final design and EPA approval, the actual remediation fieldwork is expected to commence and take approximately four years . The majority of the project funding is expected to be incurred between 2018 and 2022 . Tax Pursuant to the Tax Matters Agreement entered into between Arconic and Alcoa Corporation in connection with the separation transaction with Alcoa Corporation, Arconic shares responsibility with Alcoa Corporation, and Alcoa Corporation has agreed to partially indemnify Arconic for 49% of the ultimate liability, with respect to the following matter. As previously reported, in July 2013, following a Spanish corporate income tax audit covering the 2006 through 2009 tax years, an assessment was received mainly disallowing certain interest deductions claimed by a Spanish consolidated tax group owned by the Company. In August 2013, the Company filed an appeal of this assessment in Spain’s Central Tax Administrative Court, which was denied in January 2015. Arconic filed another appeal in Spain’s National Court in March 2015 which was denied in July 2018. The National Court’s decision requires the assessment for the 2006 through 2009 tax years to be reissued to take into account the outcome of the 2003 to 2005 audit which was closed in 2017. The Company estimates the revised assessment to be $175 ( €152 ), including interest. The Company maintains its intent to petition the Supreme Court of Spain to review the National Court’s decision. If the petition is accepted, the Supreme Court will review the assessment on its merits and render a final decision. In the event the Company is unsuccessful in appealing the assessment to the Supreme Court of Spain, a portion of the assessment may be offset with existing net operating losses and tax credits available to the Spanish consolidated tax group, which would be shared between the Company and Alcoa Corporation as provided for in the Tax Matters Agreement. As a result of the National Court decision, an income tax reserve, including interest, of $59 ( €51 ) was established in the third quarter of 2018. Concurrent with the establishment of the reserve, an indemnification receivable of $29 ( €25 ), representing Alcoa Corporation’s 49% share of the liability, was also recorded in the third quarter of 2018 (see Note F). Additionally, while the tax years 2010 through 2013 are closed to audit, it is possible that the Company may receive assessments for tax years subsequent to 2013. Any potential assessment for an individual tax year is not expected to be material to the Company’s consolidated operations. Reynobond PE Howard v. Arconic Inc. et al. As previously reported, a purported class action complaint related to the Grenfell Tower fire was filed on August 11, 2017 in the United States District Court for the Western District of Pennsylvania against Arconic Inc. and Klaus Kleinfeld. A related purported class action complaint was filed in the United States District Court for the Western District of Pennsylvania on August 25, 2017, under the caption Sullivan v. Arconic Inc. et al. , against Arconic Inc., two former Arconic executives, several current and former Arconic directors, and banks that acted as underwriters for Arconic’s September 18, 2014 preferred stock offering (the “Preferred Offering”). The plaintiff in Sullivan had previously filed a purported class action against the same defendants on July 18, 2017 in the Southern District of New York and, on August 25, 2017, voluntarily dismissed that action without prejudice. On February 7, 2018, on motion from certain putative class members, the court consolidated Howard and Sullivan , closed Sullivan , and appointed lead plaintiffs in the consolidated case. On April 9, 2018, the lead plaintiffs in the consolidated purported class action filed a consolidated amended complaint. The consolidated amended complaint alleges that the registration statement for the Preferred Offering contained false and misleading statements and omitted to state material information, including by allegedly failing to disclose material uncertainties and trends resulting from sales of Reynobond PE for unsafe uses and by allegedly expressing a belief that appropriate risk management and compliance programs had been adopted while concealing the risks posed by Reynobond PE sales. The consolidated amended complaint also alleges that between November 4, 2013 and June 23, 2017 Arconic and Kleinfeld made false and misleading statements and failed to disclose material information about the Company’s commitment to safety, business and financial prospects, and the risks of the Reynobond PE product, including in Arconic’s Form 10-Ks for the fiscal years ended December 31, 2013, 2014, 2015 and 2016, its Form 10-Qs and quarterly financial press releases from the fourth quarter of 2013 through the first quarter of 2017, its 2013, 2014, 2015 and 2016 Annual Reports, and its 2016 Annual Highlights Report. The consolidated amended complaint seeks, among other things, unspecified compensatory damages and an award of attorney and expert fees and expenses. On June 8, 2018, all defendants moved to dismiss the consolidated amended complaint for failure to state a claim. Briefing on that motion is now closed and the parties await a ruling. Raul v. Albaugh, et al. As previously reported, on June 22, 2018, a derivative complaint was filed nominally on behalf of Arconic by a purported Arconic shareholder against all current members of Arconic’s Board of Directors, Klaus Kleinfeld and Ken Giacobbe, naming Arconic as a nominal defendant, in the United States District Court for the District of Delaware. The complaint raises similar allegations as the consolidated amended complaint in Howard , as well as allegations that the defendants improperly authorized the sale of Reynobond PE for unsafe uses, and asserts claims under Section 14(a) of the Securities Exchange Act of 1934 and Delaware state law. On July 13, 2018, the parties filed a stipulation agreeing to stay this case until the final resolution of the Howard case, the Grenfell Tower public inquiry in London, and the investigation by the London Metropolitan Police Service and on June 23, 2018, the Court approved the stay. While the Company believes that these cases are without merit and intends to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters. Given the preliminary nature of these matters and the uncertainty of litigation, the Company cannot reasonably estimate at this time the likelihood of an unfavorable outcome or the possible loss or range of losses in the event of an unfavorable outcome. The Board of Directors has also received letters, purportedly sent on behalf of shareholders, reciting allegations similar to those made in the federal court lawsuits and demanding that the Board authorize the Company to initiate litigation against members of management, the Board and others. The Board of Directors has appointed a Special Litigation Committee of the Board to review and make recommendations to the Board regarding the appropriate course of action with respect to these shareholder demand letters. The Special Litigation Committee and the Board are continuing to consider the appropriate responses to the shareholder demand letters in view of developments in proceedings concerning the Grenfell Tower fire. In addition, the Company has settled lawsuits with another shareholder that had been pending in state court in New York and federal court in Pennsylvania concerning the shareholder’s demand to inspect certain of the Company’s books and records related to the Grenfell Tower fire and Reynobond PE. Other In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Arconic, including those pertaining to environmental, product liability, safety and health, employment, tax matters and antitrust. While the amounts claimed in these other matters may be substantial, the ultimate liability cannot currently be determined because of the considerable uncertainties that exist. Therefore, it is possible that the Company’s liquidity or results of operations in a period could be materially affected by one or more of these other matters. However, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the results of operations, financial position or cash flows of the Company. Commitments Guarantees At September 30, 2018 , Arconic had outstanding bank guarantees related to tax matters, outstanding debt, workers’ compensation, environmental obligations, energy contracts, and customs duties, among others. The total amount committed under these guarantees, which expire at various dates between 2018 and 2026 , was $32 at September 30, 2018 . Pursuant to the Separation and Distribution Agreement between Arconic and Alcoa Corporation, Arconic was required to provide certain guarantees for Alcoa Corporation, which had a combined fair value of $7 and $8 at September 30, 2018 and December 31, 2017 , respectively, and were included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. Arconic was required to provide payment guarantees for Alcoa Corporation issued on behalf of a third party related to project financing for Alcoa Corporation’s aluminum complex in Saudi Arabia. During the third quarter of 2018, Arconic was released from this guarantee. Furthermore, Arconic was required to provide a guarantee up to an estimated present value amount of approximately $1,141 and $1,297 at September 30, 2018 and December 31, 2017 , respectively, related to a long-term supply agreement for energy for an Alcoa Corporation facility in the event of an Alcoa Corporation payment default. This guarantee expires in 2047. For this guarantee, subject to its provisions, Arconic is secondarily liable in the event of a payment default by Alcoa Corporation. Arconic currently views the risk of an Alcoa Corporation payment default on its obligations under the contract to be remote. Letters of Credit Arconic has outstanding letters of credit, primarily related to workers’ compensation, environmental obligations and leasing obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates, mostly in 2018 , was $129 at September 30, 2018 . Pursuant to the Separation and Distribution Agreement, Arconic was required to retain letters of credit of $53 that had previously been provided related to both Arconic and Alcoa Corporation workers’ compensation claims which occurred prior to November 1, 2016. Alcoa Corporation workers’ compensation claims and letter of credit fees paid by Arconic are being proportionally billed to and are being fully reimbursed by Alcoa Corporation. Surety Bonds Arconic has outstanding surety bonds, primarily related to tax matters, contract performance, workers’ compensation, environmental-related matters, and customs duties. The total amount committed under these surety bonds, which expire at various dates, primarily in 2018 , was $49 at September 30, 2018 . Pursuant to the Separation and Distribution Agreement, Arconic was required to provide surety bonds related to Alcoa Corporation workers’ compensation claims which occurred prior to November 1, 2016 and, as a result, Arconic has $25 in outstanding surety bonds relating to these liabilities. Alcoa Corporation workers’ compensation claims and surety bond fees paid by Arconic are being proportionately billed to and are being fully reimbursed by Alcoa Corporation. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Management evaluated all activity of Arconic and concluded that no subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the Notes to the Consolidated Financial Statements, except as noted below: See Note G for details of a subsequent event related to certain U.S. pension plan lump sum payments and see Note P for details of a subsequent event related to the divestiture of the Texarkana, Texas rolling mill. |
Recently Adopted and Recently_2
Recently Adopted and Recently Issued Accounting Guidance (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | Adopted In May 2014, the FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. These changes became effective for Arconic on January 1, 2018. Arconic adopted this new guidance using the modified retrospective transition approach applied to those contracts that were not completed as of January 1, 2018. There was no cumulative effect adjustment to the opening balance of retained earnings in the Consolidated Balance Sheet in the first quarter of 2018, as the adoption did not result in a change to our timing of revenue recognition, which continues to be at a point in time. See Note C for further details. In January 2016, the FASB issued changes to equity investments. These changes require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values using the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Also, the impairment assessment of equity investments without readily determinable fair values has been simplified by requiring a qualitative assessment to identify impairment. Also, the new guidance required changes in fair value of equity securities to be recognized immediately as a component of net income instead of being reported in accumulated other comprehensive loss until the gain (loss) is realized. These changes became effective for Arconic on January 1, 2018 and have been applied on a prospective basis. Arconic elected the measurement alternative for its equity investments that do not have readily determinable fair values. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In August 2016, the FASB issued changes to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance identifies eight specific cash flow items and the sections where they must be presented within the statement of cash flows. These changes became effective for Arconic on January 1, 2018 and have been be applied retrospectively. As a result of the adoption, Arconic reclassified cash received related to beneficial interest in previously transferred trade accounts receivable from operating activities to investing activities in the Statement of Consolidated Cash Flows. This new accounting standard does not reflect a change in our underlying business or activities. The reclassification of cash received related to beneficial interest in previously transferred trade accounts receivable was $514 for the nine months ended September 30, 2017 . In addition, Arconic reclassified $52 of cash paid for debt prepayments including extinguishment costs from operating activities to financing activities for the nine months ended September 30, 2017 . In November 2016, the FASB issued changes to the classification of cash and cash equivalents within the statement of cash flow. Restricted cash and cash equivalents will be included within the cash and cash equivalents line on the cash flow statement and a reconciliation must be prepared to the statement of financial position. Transfers between restricted cash and cash equivalents and cash and cash equivalents will no longer be presented as cash flow activities in the Statement of Consolidated Cash Flows and for material balances of restricted cash and cash equivalents, Arconic will disclose information regarding the nature of the restrictions. These changes became effective for Arconic on January 1, 2018 and have been applied retrospectively. Management has determined that the adoption of this guidance did not have a material impact on the Statement of Consolidated Cash Flows. Restricted cash was $7 , $4 and $5 at September 30, 2018 , December 31, 2017 and September 30, 2017 , respectively. In March 2017, the FASB issued changes to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires registrants to present the service cost component of net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. Also, only the service cost component will be eligible for asset capitalization. Registrants will present the other components of net periodic benefit cost separately from the service cost component; and, the line item or items used in the income statement to present the other components of net periodic benefit cost must be disclosed. These changes became effective for Arconic on January 1, 2018 and were adopted retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the Statement of Consolidated Operations, and prospectively for the asset capitalization of the service cost component of net periodic benefit cost. The Company recorded the service related net periodic benefit cost within Cost of goods sold, Selling, general administrative, and other expenses and Research and development expenses and recorded the non-service related net periodic benefit cost (except for the curtailment cost which was recorded in Restructuring and other charges ) separately from service cost in Other expense (income), net within the Statement of Consolidated Operations. The impact of the retrospective adoption of this guidance was an increase to consolidated Operating income of $39 and $116 , while there was no impact to consolidated Net income, for the third quarter or nine months ended September 30, 2017 , respectively. In May 2017, the FASB issued clarification to guidance on the modification accounting criteria for share-based payment awards. The new guidance requires registrants to apply modification accounting unless three specific criteria are met. The three criteria are 1) the fair value of the award is the same before and after the modification, 2) the vesting conditions are the same before and after the modification and 3) the classification as a debt or equity award is the same before and after the modification. These changes became effective for Arconic on January 1, 2018 and were applied prospectively to new awards modified after adoption. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In August 2018, the FASB issued guidance which requires cloud computing arrangement implementation costs to be accounted for in accordance with the software stage model, regardless of whether or not the cloud computing arrangement contains a license. Arconic adopted this guidance in the third quarter of 2018. The adoption of this guidance did not have a material impact on the Consolidated Financial Statements. Issued In February 2016, the FASB issued changes to the accounting and presentation of leases. These changes require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. Also, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. As originally released, the standards update required application at the beginning of the earliest comparative period presented at the time of adoption. However, in July 2018, the FASB provided entities the option to instead apply the provisions of the new leases guidance at the effective date, without adjusting the comparative periods presented. The Company expects to apply the provisions of the new leases guidance at the effective date, without adjusting the comparative periods presented. These changes become effective for Arconic on January 1, 2019. Arconic’s current operating lease portfolio is primarily comprised of land and buildings, plant equipment, vehicles, and computer equipment. A cross-functional implementation team is in the process of determining the scope of arrangements that will be subject to this standard as well as assessing the impact to the Company’s systems, processes and internal controls. Arconic has contracted with a third-party vendor to implement a software solution. Concurrently, Arconic is compiling lease data to be uploaded into the software solution to account for leases under the new standard. Management is evaluating the impact of these changes on the Consolidated Balance Sheet, which will require right of use assets and lease liabilities be recorded for operating leases; therefore, an estimate of the impact is not currently determinable. However, the adoption is not expected to have a material impact on the Statement of Consolidated Operations or Statement of Consolidated Cash Flows. In June 2016, the FASB added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for Arconic on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In August 2017, the FASB issued guidance that will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. These changes become effective for Arconic on January 1, 2019. For cash flow and net investment hedges existing at the date of adoption, Arconic will apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year in which the amendment is adopted. The amended presentation and disclosure guidance is required only prospectively. Arconic has engaged a third-party consultant to assist with a review of the Company’s risk management and hedging strategies, with any changes to be implemented in conjunction with the adoption of the new guidance. Management is currently evaluating the potential impact of this guidance on the Consolidated Financial Statements. In February 2018, the FASB issued guidance that allows an optional reclassification from Accumulated other comprehensive loss to Accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act enacted on December 22, 2017. These changes become effective for Arconic on January 1, 2019. Management is currently evaluating the potential impact of this guidance on the Consolidated Financial Statements. In August 2018, the FASB issued guidance that impacts disclosures for defined benefit pension plans. These changes become effective for Arconic's annual report for the year ending December 31, 2020, with early adoption permitted. Management has determined that the adoption of this guidance will not have a material impact on the Consolidated Financial Statements. Also, in August 2018, the Securities and Exchange Commission (SEC) issued guidance to eliminate or modify certain disclosure requirements that have become redundant, overlapping, outdated or superseded in light of other SEC rules, GAAP or changes in the information environment. This guidance becomes effective on November 5, 2018 and will be applied to filings thereafter. Management has determined that the adoption of this guidance will not have a material impact on the Consolidated Financial Statements. |
Revenue from Contracts with Customers | The Company's contracts with customers are comprised of acknowledged purchase orders incorporating the Company’s standard terms and conditions, or for larger customers, may also generally include terms under negotiated multi-year agreements. These contracts with customers typically consist of the manufacture of products which represent single performance obligations that are satisfied upon transfer of control of the product to the customer. The Company produces fastening systems; seamless rolled rings; investment castings, including airfoils and forged jet engine components; extruded, machined and formed aircraft parts; aluminum sheet and plate; integrated aluminum structural systems; architectural extrusions; and forged aluminum commercial vehicle wheels. Transfer of control is assessed based on alternative use of the products we produce and our enforceable right to payment for performance to date under the contract terms. Transfer of control and revenue recognition generally occur upon shipment or delivery of the product, which is when title, ownership and risk of loss pass to the customer and is based on the applicable shipping terms. The shipping terms vary across all businesses and depend on the product, the country of origin, and the type of transportation (truck, train, or vessel). An invoice for payment is issued at time of shipment. The Company’s objective is to have net 30 -day terms. Our business units set commercial terms on which Arconic sells products to its customers. These terms are influenced by industry custom, market conditions, product line (specialty versus commodity products), and other considerations. |
Segment Information | Arconic is a global leader in lightweight metals engineering and manufacturing. Arconic’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, building and construction, industrial applications, defense, and packaging. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2018, the Company changed its primary measure of segment performance from Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) to Segment operating profit, which more closely aligns segment performance with Operating income as presented in the Statement of Consolidated Operations. Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Arconic’s definition of Segment operating profit is Operating income excluding Special items. Special items include Restructuring and other charges and Impairment of goodwill. Segment operating profit also includes certain items that, under the previous segment performance measure, were recorded in Corporate, such as the impact of LIFO inventory accounting, metal price lag, intersegment profit eliminations, and derivative activities. Segment operating profit may not be comparable to similarly titled measures of other companies. Prior period financial information has been recast to conform to current year presentation. Differences between segment totals and consolidated Arconic are in Corporate. |
Earnings Per Share | Basic earnings per share (EPS) amounts are computed by dividing earnings, after the deduction of preferred stock dividends declared, by the average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. |
Receivables | Cash receipts from customer payments on sold receivables (which are cash receipts on the underlying trade receivables that have been previously sold in this program) as well as cash receipts and cash disbursements from draws and repayments under the program are presented as cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows. |
Fair Value | The fair value of Long-term debt, less amount due within one year was based on quoted market prices for public debt and on interest rates that are currently available to Arconic for issuance of debt with similar terms and maturities for non-public debt. The fair value amounts for all Long-term debt were classified in Level 2 of the fair value hierarchy. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Products and Services | The following table disaggregates revenue by major end market served. Differences between segment totals and consolidated Arconic are in Corporate. In the nine months ended September 30, 2018 , Corporate included $38 of costs related to settlements of certain customer claims primarily related to product introductions. Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Third quarter ended September 30, 2018 Aerospace $ 1,244 $ 220 $ — $ 1,464 Transportation 110 625 237 972 Building and construction — 59 293 352 Industrial and Other 212 522 — 734 Total end-market revenue $ 1,566 $ 1,426 $ 530 $ 3,522 Third quarter ended September 30, 2017 Aerospace $ 1,130 $ 214 $ — $ 1,344 Transportation 98 490 214 802 Building and construction — 56 286 342 Industrial and Other 249 474 23 746 Total end-market revenue $ 1,477 $ 1,234 $ 523 $ 3,234 Nine months ended September 30, 2018 Aerospace $ 3,675 $ 645 $ — $ 4,320 Transportation 326 1,835 733 2,894 Building and construction — 167 875 1,042 Industrial and Other 702 1,596 21 2,319 Total end-market revenue $ 4,703 $ 4,243 $ 1,629 $ 10,575 Nine months ended September 30, 2017 Aerospace $ 3,426 $ 670 $ — $ 4,096 Transportation 288 1,458 587 2,333 Building and construction — 156 831 987 Industrial and Other 735 1,469 65 2,269 Total end-market revenue $ 4,449 $ 3,753 $ 1,483 $ 9,685 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results of Arconic's Reportable Segments | The operating results of Arconic’s reportable segments were as follows: Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Third quarter ended September 30, 2018 Sales: Third-party sales $ 1,566 $ 1,426 $ 530 $ 3,522 Intersegment sales — 34 — 34 Total sales $ 1,566 $ 1,460 $ 530 $ 3,556 Profit and loss: Segment operating profit $ 238 $ 74 $ 77 $ 389 Restructuring and other charges 15 2 — 17 Provision for depreciation and amortization 71 50 12 133 Third quarter ended September 30, 2017 Sales: Third-party sales $ 1,477 $ 1,234 $ 523 $ 3,234 Intersegment sales — 36 — 36 Total sales $ 1,477 $ 1,270 $ 523 $ 3,270 Profit and loss: Segment operating profit $ 239 $ 64 $ 74 $ 377 Restructuring and other charges 10 2 2 14 Provision for depreciation and amortization 68 52 13 133 Engineered Products and Solutions Global Rolled Products Transportation and Construction Solutions Total Segment Nine months ended September 30, 2018 Sales: Third-party sales $ 4,703 $ 4,243 $ 1,629 $ 10,575 Intersegment sales — 122 — 122 Total sales $ 4,703 $ 4,365 $ 1,629 $ 10,697 Profit and loss: Segment operating profit $ 671 $ 309 $ 241 $ 1,221 Restructuring and other charges 25 2 — 27 Provision for depreciation and amortization 212 154 37 403 Nine months ended September 30, 2017 Sales: Third-party sales $ 4,449 $ 3,753 $ 1,483 $ 9,685 Intersegment sales — 107 — 107 Total sales $ 4,449 $ 3,860 $ 1,483 $ 9,792 Profit and loss: Segment operating profit $ 736 $ 333 $ 213 $ 1,282 Restructuring and other charges 24 76 11 111 Provision for depreciation and amortization 198 153 37 388 |
Schedule Of Segment Reporting Information To Consolidate Net Income Loss Attributable To Parent | The following table reconciles Total segment operating profit to Consolidated income before income taxes : Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Total segment operating profit $ 389 $ 377 $ 1,221 $ 1,282 Unallocated amounts: Restructuring and other charges 2 (19 ) (20 ) (118 ) Corporate expense (46 ) (48 ) (199 ) (251 ) Consolidated operating income $ 345 $ 310 $ 1,002 $ 913 Interest expense (88 ) (100 ) (291 ) (398 ) Other (expense) income, net (8 ) (38 ) (69 ) 410 Consolidated income before income taxes $ 249 $ 172 $ 642 $ 925 |
Reconciliation of Assets from Segment to Consolidated | The following table reconciles Total segment assets to Consolidated assets : September 30, 2018 December 31, 2017 Total segment assets $ 15,725 $ 15,321 Unallocated amounts: Cash and cash equivalents 1,535 2,150 Deferred income taxes 605 743 Corporate fixed assets, net 307 310 Fair value of derivative contracts 28 91 Other 127 103 Consolidated assets $ 18,327 $ 18,718 The total assets of Arconic's reportable segment were as follows: September 30, 2018 December 31, 2017 Engineered Products and Solutions $ 10,522 $ 10,325 Global Rolled Products 4,112 3,955 Transportation and Construction Solutions 1,091 1,041 Total segment assets $ 15,725 $ 15,321 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Activity and Reserve Balances for Restructuring Charges | Activity and reserve balances for restructuring and other charges were as follows: Layoff costs Other exit costs Total Reserve balances at December 31, 2016 $ 50 $ 9 $ 59 Cash payments (59 ) (6 ) (65 ) Restructuring charges 64 1 65 Other (1) 1 (2 ) (1 ) Reserve balances at December 31, 2017 56 2 58 Cash payments (37 ) (1 ) (38 ) Restructuring charges 8 13 21 Other (1) — — — Reserve balances at September 30, 2018 $ 27 $ 14 $ 41 (1) Other includes reversals of previously recorded restructuring charges and credits, and the effects of foreign currency translation. In 2018, Other for layoff costs included the following: a reclassification of a $28 credit in postretirement benefits, as the impact to the liability was reflected in Arconic’s separate liability for postretirement benefits; a reclassification of $18 in pension costs, as this liability was reflected in Arconic’s separate liability for pension benefits; and reversals of $10 for previously recorded layoff charges. In 2017, Other for layoff costs included a reclassification of a stock awards reversal of $13 and reversals of $11 for previously recorded layoff reserves. |
Other Expense (Income), Net (Ta
Other Expense (Income), Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Non-service related net periodic benefit cost $ 27 $ 39 $ 83 $ 116 Interest income (6 ) (5 ) (16 ) (13 ) Foreign currency losses (gains), net 6 (1 ) 20 (4 ) Net loss (gain) from asset sales 2 1 7 (514 ) Other, net (21 ) 4 (25 ) 5 $ 8 $ 38 $ 69 $ (410 ) |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows: Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Pension benefits Service cost $ 9 $ 23 $ 37 $ 67 Interest cost 54 59 164 175 Expected return on plan assets (76 ) (83 ) (230 ) (248 ) Recognized net actuarial loss 42 55 126 165 Amortization of prior service cost (benefit) 1 1 3 4 Settlements 4 — 4 — Curtailments — — 14 — Net periodic benefit cost (1) $ 34 $ 55 $ 118 $ 163 Other postretirement benefits Service cost $ 2 $ 2 $ 6 $ 6 Interest cost 7 7 21 22 Recognized net actuarial loss 1 2 5 4 Amortization of prior service cost (benefit) (2 ) (2 ) (6 ) (6 ) Curtailments (28 ) — (28 ) — Net periodic benefit cost (1) $ (20 ) $ 9 $ (2 ) $ 26 (1) Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses , and Research and development expenses ; curtailments and settlements were included in Restructuring and other charges; and all other cost components were recorded in Other expense (income), net in the Statement of Consolidated Operations. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provisions | The tax provisions for the third quarter and nine months ended September 30, 2018 and 2017 were comprised of the following: Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Pre-tax income at estimated annual effective income tax rate before discrete items $ 66 $ 49 $ 170 $ 264 Catch-up adjustment to revalue previous quarter pre-tax income at current estimated annual effective tax rate (2 ) 1 — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized (2 ) 1 (1 ) 5 Other discrete items 26 2 49 3 Provision for income taxes $ 88 $ 53 $ 218 $ 272 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Information Used to Compute Basic and Diluted EPS | The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Net income $ 161 $ 119 $ 424 $ 653 Less: Preferred stock dividends declared (1 ) (18 ) (2 ) (53 ) Net income available to Arconic common shareholders - basic 160 101 422 600 Add: Interest expense related to convertible notes 3 2 8 7 Add: Dividends related to mandatory convertible preferred stock — — — 50 Net income available to Arconic common shareholders - diluted $ 163 $ 103 $ 430 $ 657 Average shares outstanding - basic 483 442 483 441 Effect of dilutive securities: Stock options — 1 1 2 Stock and performance awards 5 5 5 5 Mandatory convertible preferred stock — — — 39 Convertible notes 14 14 14 14 Average shares outstanding - diluted 502 462 503 501 |
Schedule of Anti Dilutive Securities Excluded From Computation of Weighted Average Shares Outstanding | The following shares were excluded from the calculation of average shares outstanding – diluted as their effect was anti-dilutive (shares in millions). Third quarter ended Nine months ended September 30, September 30, 2018 2017 2018 2017 Mandatory convertible preferred stock — 39 — — Stock options (1) 6 3 6 3 (1) The average exercise price of options per share was $29.14 for the third quarter and nine months ended September 30, 2018 and $33.33 for the third quarter and nine months ended September 30, 2017. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive (Loss) by Component | The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended September 30, 2018 2017 2018 2017 Pension and other postretirement benefits (G) Balance at beginning of period $ (2,058 ) $ (1,931 ) $ — $ — Other comprehensive income: Unrecognized net actuarial loss and prior service cost/benefit 30 (7 ) — — Tax (expense) benefit (7 ) 1 — — Total Other comprehensive income (loss) before reclassifications, net of tax 23 (6 ) — — Amortization of net actuarial loss and prior service cost (1) 18 56 — — Tax expense (2) (4 ) (19 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 14 37 — — Total Other comprehensive income 37 31 — — Balance at end of period $ (2,021 ) $ (1,900 ) $ — $ — Foreign currency translation Balance at beginning of period $ (516 ) $ (523 ) $ — $ (2 ) Other comprehensive (loss) income (3) (16 ) 85 — — Balance at end of period $ (532 ) $ (438 ) $ — $ (2 ) Available-for-sale securities Balance at beginning of period $ (4 ) $ (2 ) $ — $ — Other comprehensive income (4) 1 1 — — Balance at end of period $ (3 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 22 $ 2 $ — $ — Other comprehensive (loss) income: Net change from periodic revaluations (7 ) 15 — — Tax benefit (expense) 1 (5 ) — — Total Other comprehensive (loss) income before reclassifications, net of tax (6 ) 10 — — Net amount reclassified to earnings (5 ) — — — Tax benefit (2) 1 — — — Total amount reclassified from Accumulated other comprehensive income, net of tax (5) (4 ) — — — Total Other comprehensive (loss) income (10 ) 10 — — Balance at end of period $ 12 $ 12 $ — $ — Total balance at end of period $ (2,544 ) $ (2,327 ) $ — $ (2 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note G). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other expense (income), net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. Arconic Noncontrolling Interests Nine months ended September 30, 2018 2017 2018 2017 Pension and other postretirement benefits (G) Balance at beginning of period $ (2,230 ) $ (2,010 ) $ — $ — Other comprehensive income: Unrecognized net actuarial loss and prior service cost/benefit 152 4 — — Tax expense (35 ) (3 ) — — Total Other comprehensive income before reclassifications, net of tax 117 1 — — Amortization of net actuarial loss and prior service cost (1) 118 167 — — Tax expense (2) (26 ) (58 ) — — Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 92 109 — — Total Other comprehensive income 209 110 — — Balance at end of period $ (2,021 ) $ (1,900 ) $ — $ — Foreign currency translation Balance at beginning of period $ (437 ) $ (689 ) $ — $ (2 ) Other comprehensive (loss) income (3) (95 ) 251 — — Balance at end of period $ (532 ) $ (438 ) $ — $ (2 ) Available-for-sale securities Balance at beginning of period $ (2 ) $ 132 $ — $ — Other comprehensive loss (4) (1 ) (133 ) — — Balance at end of period $ (3 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 25 $ (1 ) $ — $ — Other comprehensive (loss) income: Net change from periodic revaluations (4 ) 20 — — Tax benefit (expense) 1 (7 ) — — Total Other comprehensive (loss) income before reclassifications, net of tax (3 ) 13 — — Net amount reclassified to earnings (12 ) — — — Tax benefit (2) 2 — — — Total amount reclassified from Accumulated other comprehensive income, net of tax (5) (10 ) — — — Total Other comprehensive (loss) income (13 ) 13 — — Balance at end of period $ 12 $ 12 $ — $ — Total balance at end of period $ (2,544 ) $ (2,327 ) $ — $ (2 ) (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note G). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other expense (income), net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | September 30, 2018 December 31, 2017 Finished goods $ 667 $ 669 Work-in-process 1,467 1,349 Purchased raw materials 398 381 Operating supplies 90 81 Total inventories $ 2,622 $ 2,480 |
Property, Plants, and Equipme_2
Property, Plants, and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plants, and Equipment, Net | September 30, 2018 December 31, 2017 Land and land rights $ 138 $ 140 Structures 2,374 2,395 Machinery and equipment 9,244 8,830 11,756 11,365 Less: accumulated depreciation and amortization 6,778 6,392 4,978 4,973 Construction work-in-progress 667 621 $ 5,645 $ 5,594 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | September 30, 2018 December 31, 2017 5.72% Notes, due 2019 $ — $ 500 1.63% Convertible Notes, due 2019 403 403 6.150% Notes, due 2020 1,000 1,000 5.40% Notes due 2021 1,250 1,250 5.87% Notes, due 2022 627 627 5.125% Notes, due 2024 1,250 1,250 5.90% Notes, due 2027 625 625 6.75% Bonds, due 2028 300 300 5.95% Notes, due 2037 625 625 Iowa Finance Authority Loan, due 2042 250 250 Other (1) (12 ) (23 ) Total debt 6,318 6,807 Less: amount due within one year 3 1 Total long-term debt $ 6,315 $ 6,806 (1) Includes various financing arrangements related to subsidiaries, unamortized debt discounts related to outstanding notes and bonds listed in the table above, an equity option related to the convertible notes due in 2019, and unamortized debt issuance costs. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Instruments | The following table summarizes Arconic’s financial liabilities that were not carried at fair value at September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Carrying value Fair value Carrying value Fair value Long-term debt, less amount due within one year $ 6,315 $ 6,495 $ 6,806 $ 7,443 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($) | Sep. 30, 2018USD ($)reporting_unit | Dec. 31, 2017USD ($)reporting_unit | |
Basis Of Presentation [Line Items] | |||
Number of reporting units | reporting_unit | 3 | 4 | |
Goodwill, impairment loss | $ 0 | ||
Goodwill | $ 4,517,000,000 | $ 4,535,000,000 | |
Arconic Engines | |||
Basis Of Presentation [Line Items] | |||
Goodwill | $ 2,095,000,000 | ||
Arconic Fastening Systems | |||
Basis Of Presentation [Line Items] | |||
Goodwill | 1,623,000,000 | ||
Arconic Engineered Structures | |||
Basis Of Presentation [Line Items] | |||
Goodwill | $ 517,000,000 | ||
Minimum | |||
Basis Of Presentation [Line Items] | |||
Percentage of goodwill allocated to reporting units | 92.00% |
Recently Adopted and Recently_3
Recently Adopted and Recently Issued Accounting Guidance (Details) - USD ($) $ in Millions | Mar. 30, 2012 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||||
Restricted cash | $ 7 | $ 5 | $ 7 | $ 5 | $ 4 | |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Reclassification of cash received related to beneficial interest in previously transferred trade accounts receivables | $ 50 | 693 | 514 | |||
Reclassification of cash paid for debt prepayments including extinguishment costs from operating to financing activities | 17 | 52 | ||||
Adjustment to operating income based on adoption of new accounting guidance | $ 345 | 310 | $ 1,002 | 913 | ||
ASU 2016-15 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Reclassification of cash paid for debt prepayments including extinguishment costs from operating to financing activities | (52) | |||||
Adjustments for New Accounting Pronouncement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Adjustment to operating income based on adoption of new accounting guidance | $ 39 | $ 116 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue, shipping payment terms | 30 days |
Customer claims for new product introductions | $ 38 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Segment Revenue By Product (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 3,522 | $ 3,234 | $ 10,575 | $ 9,685 |
Aerospace | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 1,464 | 1,344 | 4,320 | 4,096 |
Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 972 | 802 | 2,894 | 2,333 |
Building and construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 352 | 342 | 1,042 | 987 |
Industrial and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 734 | 746 | 2,319 | 2,269 |
Engineered Products and Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 1,566 | 1,477 | 4,703 | 4,449 |
Engineered Products and Solutions | Aerospace | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 1,244 | 1,130 | 3,675 | 3,426 |
Engineered Products and Solutions | Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 110 | 98 | 326 | 288 |
Engineered Products and Solutions | Building and construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 0 | 0 | 0 | 0 |
Engineered Products and Solutions | Industrial and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 212 | 249 | 702 | 735 |
Global Rolled Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 1,426 | 1,234 | 4,243 | 3,753 |
Global Rolled Products | Aerospace | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 220 | 214 | 645 | 670 |
Global Rolled Products | Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 625 | 490 | 1,835 | 1,458 |
Global Rolled Products | Building and construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 59 | 56 | 167 | 156 |
Global Rolled Products | Industrial and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 522 | 474 | 1,596 | 1,469 |
Transportation and Construction Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 530 | 523 | 1,629 | 1,483 |
Transportation and Construction Solutions | Aerospace | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 0 | 0 | 0 | 0 |
Transportation and Construction Solutions | Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 237 | 214 | 733 | 587 |
Transportation and Construction Solutions | Building and construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 293 | 286 | 875 | 831 |
Transportation and Construction Solutions | Industrial and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 0 | $ 23 | $ 21 | $ 65 |
Segment Information - Schedule
Segment Information - Schedule of Operating Results of Arconic's Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 3,524 | $ 3,236 | $ 10,542 | $ 9,689 |
Segment operating profit | 389 | 377 | 1,221 | 1,282 |
Restructuring and other charges | 17 | 14 | 27 | 111 |
Provision for depreciation and amortization | 133 | 133 | 403 | 388 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 3,556 | 3,270 | 10,697 | 9,792 |
Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 34 | 36 | 122 | 107 |
Third-Party Sales | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 3,522 | 3,234 | 10,575 | 9,685 |
Engineered Products and Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | 238 | 239 | 671 | 736 |
Restructuring and other charges | 15 | 10 | 25 | 24 |
Provision for depreciation and amortization | 71 | 68 | 212 | 198 |
Engineered Products and Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,566 | 1,477 | 4,703 | 4,449 |
Engineered Products and Solutions | Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 0 | 0 | 0 | 0 |
Engineered Products and Solutions | Third-Party Sales | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,566 | 1,477 | 4,703 | 4,449 |
Global Rolled Products | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | 74 | 64 | 309 | 333 |
Restructuring and other charges | 2 | 2 | 2 | 76 |
Provision for depreciation and amortization | 50 | 52 | 154 | 153 |
Global Rolled Products | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,460 | 1,270 | 4,365 | 3,860 |
Global Rolled Products | Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 34 | 36 | 122 | 107 |
Global Rolled Products | Third-Party Sales | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,426 | 1,234 | 4,243 | 3,753 |
Transportation and Construction Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | 77 | 74 | 241 | 213 |
Restructuring and other charges | 0 | 2 | 0 | 11 |
Provision for depreciation and amortization | 12 | 13 | 37 | 37 |
Transportation and Construction Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 530 | 523 | 1,629 | 1,483 |
Transportation and Construction Solutions | Intersegment Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 0 | 0 | 0 | 0 |
Transportation and Construction Solutions | Third-Party Sales | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | $ 530 | $ 523 | $ 1,629 | $ 1,483 |
Segment Information - Schedul_2
Segment Information - Schedule of Combined Segment Adjusted EBITDA to Net Income Attributable to Arconic (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total segment operating profit | $ 389 | $ 377 | $ 1,221 | $ 1,282 |
Restructuring and other charges | 2 | (19) | (20) | (118) |
Operating income | 345 | 310 | 1,002 | 913 |
Interest expense | (88) | (100) | (291) | (398) |
Other (expense) income, net | (8) | (38) | (69) | 410 |
Income before income taxes | 249 | 172 | 642 | 925 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and other charges | 2 | (19) | (20) | (118) |
Corporate expense | (46) | (48) | (199) | (251) |
Operating income | 345 | 310 | 1,002 | 913 |
Interest expense | (88) | (100) | (291) | (398) |
Other (expense) income, net | (8) | (38) | (69) | 410 |
Income before income taxes | $ 249 | $ 172 | $ 642 | $ 925 |
Segment Information - Assets By
Segment Information - Assets By Reportable Segment (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total segment assets | $ 18,327 | $ 18,718 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment assets | 15,725 | 15,321 |
Engineered Products and Solutions | ||
Segment Reporting Information [Line Items] | ||
Total segment assets | 10,522 | 10,325 |
Global Rolled Products | ||
Segment Reporting Information [Line Items] | ||
Total segment assets | 4,112 | 3,955 |
Transportation and Construction Solutions | ||
Segment Reporting Information [Line Items] | ||
Total segment assets | $ 1,091 | $ 1,041 |
Segment Information - Schedul_3
Segment Information - Schedule of Segment Reporting Information to Consolidated Assets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total segment assets | $ 18,327 | $ 18,718 |
Cash and cash equivalents | 1,535 | 2,150 |
Corporate fixed assets, net | 5,645 | 5,594 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment assets | 15,725 | 15,321 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Cash and cash equivalents | 1,535 | 2,150 |
Deferred income taxes | 605 | 743 |
Corporate fixed assets, net | 307 | 310 |
Fair value of derivative contracts | 28 | 91 |
Other | $ 127 | $ 103 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($)employeeposition | Sep. 30, 2017USD ($)position | Sep. 30, 2018USD ($)employeeposition | Sep. 30, 2017USD ($)position | Dec. 31, 2017USD ($)employee | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ (2) | $ 19 | $ 20 | $ 118 | |
Restructuring and other charges after tax and noncontrolling interest | $ 3 | $ 13 | $ 14 | $ 99 | |
Number of employees associated with layoff costs | position | 85 | 124 | 125 | 800 | |
Reversal of forfeited executive stock compensation | $ 13 | ||||
Severance costs | $ 7 | ||||
Cash payments made against the layoff reserves | $ 38 | $ 65 | |||
Reversals of previously recorded layoff | 10 | $ 11 | |||
Minimum amount of cash payments expected to be paid beyond the end of the current annual period | 18 | ||||
Maximum amount of cash payments expected to be paid beyond the end of the current annual period | $ 20 | ||||
Engineered Products and Solutions | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | position | 65 | 111 | 89 | 350 | |
Global Rolled Products | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | position | 1 | 243 | |||
Transportation and Construction Solutions | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | position | 133 | ||||
Corporate | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | position | 20 | 12 | 36 | 74 | |
Acuna, Mexico | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 12 | $ 12 | |||
Restructuring and other charges after tax | 9 | 9 | |||
New York office | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 5 | ||||
Restructuring and other charges after tax | 4 | ||||
Fusina, Italy | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 60 | ||||
Restructuring and other charges after tax | 60 | ||||
Postretirement Curtailment Benefit | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 28 | 28 | |||
Restructuring and other charges after tax | 22 | 22 | |||
Restructuring Programs Layoffs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 8 | $ 11 | 16 | 59 | |
Restructuring and other charges after tax | 6 | 8 | 12 | 40 | |
Pension Settlement | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 4 | 4 | |||
Restructuring and other charges after tax | 3 | 3 | |||
Other Miscellaneous Items | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 3 | 8 | 7 | 7 | |
Restructuring and other charges after tax | 2 | $ 5 | 5 | 5 | |
Other Adjustments | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 1 | 10 | 2 | ||
Restructuring and other charges after tax and noncontrolling interest | $ 1 | 8 | 2 | ||
Pension Curtailment Charge | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 14 | ||||
Restructuring and other charges after tax | $ 11 | ||||
Reversal of Forfeited Executive Stock Compensation | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 6 | ||||
Restructuring and other charges after tax | $ 4 | ||||
Restructuring Programs Layoffs 2018 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | employee | 125 | ||||
Approximate number of employees already laid off | employee | 35 | 35 | |||
Cash payments made against the layoff reserves | $ 3 | $ 6 | |||
Restructuring Programs Layoffs 2017 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of employees associated with layoff costs | employee | 760 | 830 | |||
Approximate number of employees already laid off | employee | 570 | 570 | |||
Cash payments made against the layoff reserves | $ 4 | $ 27 | |||
Restructuring Programs Layoffs 2016 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Cash payments made against the layoff reserves | $ 0 | $ 4 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve beginning balance | $ 58 | $ 59 | $ 59 | ||
Cash payments | (38) | (65) | |||
Restructuring charges | 21 | 65 | |||
Other | 0 | (1) | |||
Restructuring reserve ending balance | $ 41 | 41 | 58 | ||
Restructuring and other charges | (2) | $ 19 | 20 | 118 | |
Layoff costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve beginning balance | 56 | 50 | 50 | ||
Cash payments | (37) | (59) | |||
Restructuring charges | 8 | 64 | |||
Other | 0 | 1 | |||
Restructuring reserve ending balance | 27 | 27 | 56 | ||
Other exit costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring reserve beginning balance | 2 | $ 9 | 9 | ||
Cash payments | (1) | (6) | |||
Restructuring charges | 13 | 1 | |||
Other | 0 | (2) | |||
Restructuring reserve ending balance | $ 14 | 14 | 2 | ||
Postretirement benefits | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring and other charges | 28 | ||||
Pension costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring and other charges | $ 18 | ||||
Stock awards reversal | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring and other charges | $ 13 |
Other Expense (Income), Net - S
Other Expense (Income), Net - Schedule (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Non-service related net periodic benefit cost | $ 27 | $ 39 | $ 83 | $ 116 |
Interest income | (6) | (5) | (16) | (13) |
Foreign currency losses (gains), net | 6 | (1) | 20 | (4) |
Net loss (gain) from asset sales | 2 | 1 | 7 | (514) |
Other, net | (21) | 4 | (25) | 5 |
Total | $ 8 | $ 38 | $ 69 | $ (410) |
Other Expense (Income), Net - N
Other Expense (Income), Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Provision for income taxes | $ (88) | $ (53) | $ (218) | $ (272) |
Sales of investments | 9 | 890 | ||
Gain from assets sales | (2) | (1) | (7) | 514 |
Alcoa Corporation | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of investments | 351 | |||
Sales of investments | $ 888 | |||
Gain from assets sales | $ 167 | |||
Alcoa Corporation | Spain | Other, net | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Provision for income taxes | $ 29 | $ 29 | ||
Alcoa Corporation | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Tax agreement, indemnification of ultimate liability, percent | 49.00% | 49.00% |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Curtailments | $ 9 | ||||
Pension benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 9 | $ 23 | $ 37 | $ 67 | |
Interest cost | 54 | 59 | 164 | 175 | |
Expected return on plan assets | (76) | (83) | (230) | (248) | |
Recognized net actuarial loss | 42 | 55 | 126 | 165 | |
Amortization of prior service cost (benefit) | 1 | 1 | 3 | 4 | |
Settlements | (4) | 0 | (4) | 0 | |
Curtailments | 0 | 0 | 14 | 0 | |
Net periodic benefit cost | 34 | 55 | 118 | 163 | |
Other postretirement benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 2 | 2 | 6 | 6 | |
Interest cost | 7 | 7 | 21 | 22 | |
Recognized net actuarial loss | 1 | 2 | 5 | 4 | |
Amortization of prior service cost (benefit) | (2) | (2) | (6) | (6) | |
Curtailments | (28) | 0 | (28) | 0 | |
Net periodic benefit cost | $ (20) | $ 9 | $ (2) | $ 26 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Narrative (Details) $ in Millions | Apr. 13, 2018employee | Nov. 01, 2016USD ($)Installments | Mar. 31, 2018USD ($) | Apr. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | $ 37 | $ 31 | $ 209 | $ 110 | ||||||||
Curtailment benefit (charges) | $ (9) | |||||||||||
Cash contribution term to pension plan | 30 months | |||||||||||
Number of installments | Installments | 3 | |||||||||||
Minimum required cash contribution to pension plan | $ 50 | |||||||||||
Aggregate cash cash contribution to pension plan | $ 150 | |||||||||||
Cash payments made for pension and other post-retirement benefits | $ 50 | $ 50 | $ 16 | 116 | ||||||||
Labor agreement, duration | 5 years | |||||||||||
Labor agreement, number of employees | employee | 1,300 | |||||||||||
Defined benefit plan, labor agreement, employees subject to retirement benefit increase | employee | 300 | |||||||||||
Scenario, Forecast | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Cash payments made for pension and other post-retirement benefits | $ 34 | |||||||||||
Pension benefits | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Curtailment benefit (charges) | 0 | 0 | (14) | 0 | ||||||||
Charge recorded | 9 | 23 | 37 | 67 | ||||||||
Other postretirement benefits | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Decrease in obligation, pension benefits | 32 | |||||||||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 4 | |||||||||||
Curtailment benefit (charges) | 28 | 0 | 28 | 0 | ||||||||
Charge recorded | 2 | $ 2 | $ 6 | $ 6 | ||||||||
UNITED STATES | Pension benefits | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Decrease in obligation, pension benefits | 136 | |||||||||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 141 | |||||||||||
Curtailment benefit (charges) | $ (5) | |||||||||||
Charge recorded | $ 4 | |||||||||||
UNITED STATES | Pension benefits | Scenario, Forecast | Minimum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Charge recorded | $ 70 | |||||||||||
UNITED STATES | Pension benefits | Scenario, Forecast | Maximum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Charge recorded | $ 85 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017 | Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | ||||||
Effective income tax rate reconciliation, percent | 26.50% | 28.50% | ||||
Effective income tax rate reconciliation, including discrete items, percent | 35.30% | 35.30% | 30.80% | |||
Discrete income tax expense | $ 26 | $ 2 | ||||
Prior year adjustments | 13 | |||||
Reversal of a foreign tax reserve that is effectively settled | 38 | |||||
Tax Cuts And Jobs Act of 2017, incomplete accounting, provisional income tax expense (benefit) | (8) | $ 13 | $ 272 | |||
Tax Cuts and Jobs Act of 2017, incomplete accounting, transition tax benefit | 2 | |||||
Tax Cuts and Jobs Act of 2017, incomplete accounting, change in tax rate benefit | 6 | |||||
Increase in estimate of one-time transition tax | 16 | |||||
Charges recorded for alternative minimum tax credits | (3) | |||||
U.S. tax rate change impacts | $ 6 | |||||
Spain | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Established tax reserve | $ 59 | € 51 |
Income Taxes - Summary of Tax P
Income Taxes - Summary of Tax Provisions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Pretax income at estimated annual effective income tax rate before discrete items | $ 66 | $ 49 | $ 170 | $ 264 |
Catch-up adjustment to revalue previous quarter pre-tax income at current estimated annual effective tax rate | (2) | 1 | 0 | 0 |
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized | (2) | 1 | (1) | 5 |
Other discrete items | 26 | 2 | 49 | 3 |
Provision for income taxes | $ 88 | $ 53 | $ 218 | $ 272 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 161 | $ 119 | $ 424 | $ 653 |
Less: Preferred stock dividends declared | (1) | (18) | (2) | (53) |
Net income available to Arconic common shareholders - basic | 160 | 101 | 422 | 600 |
Add: Interest expense related to convertible notes | 3 | 2 | 8 | 7 |
Add: Dividends related to mandatory convertible preferred stock | 0 | 0 | 0 | 50 |
Net income available to Arconic common shareholders - diluted | $ 163 | $ 103 | $ 430 | $ 657 |
Average shares outstanding - basic (in shares) | 483 | 442 | 483 | 441 |
Effect of dilutive securities: | ||||
Stock options (in shares) | 0 | 1 | 1 | 2 |
Stock and performance awards (in shares) | 5 | 5 | 5 | 5 |
Mandatory convertible preferred stock (in shares) | 0 | 0 | 0 | 39 |
Convertible notes (in shares) | 14 | 14 | 14 | 14 |
Weighted average shares outstanding - diluted (in shares) | 502 | 462 | 503 | 501 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Anti Dilutive Securities Excluded From Computation of Weighted Average Shares Outstanding (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Mandatory convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of anti-dilutive securities (in shares) | 0 | 39 | 0 | 0 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of anti-dilutive securities (in shares) | 6 | 3 | 6 | 3 |
Weighted average exercise price of options (in usd per share) | $ 29.14 | $ 33.33 | $ 29.14 | $ 33.33 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 5,218 | $ 5,753 | $ 4,924 | $ 5,141 |
Total Other comprehensive income, net of tax | 12 | 127 | 100 | 241 |
Balance at end of period | 5,375 | 5,961 | 5,375 | 5,961 |
Arconic | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (2,556) | (2,454) | (2,644) | (2,568) |
Total Other comprehensive income, net of tax | 12 | 127 | 100 | 241 |
Balance at end of period | (2,544) | (2,327) | (2,544) | (2,327) |
Pension and other postretirement benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (2,058) | (1,931) | (2,230) | (2,010) |
Other comprehensive income (loss), before reclassifications, before tax | 30 | (7) | 152 | 4 |
Tax (expense) benefit | (7) | 1 | (35) | (3) |
Total Other comprehensive income (loss) before reclassifications, net of tax | 23 | (6) | 117 | 1 |
Reclassification from accumulated other comprehensive income, before tax | 18 | 56 | 118 | 167 |
Tax (expense) benefit | (4) | (19) | (26) | (58) |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 14 | 37 | 92 | 109 |
Total Other comprehensive income, net of tax | 37 | 31 | 209 | 110 |
Balance at end of period | (2,021) | (1,900) | (2,021) | (1,900) |
Foreign currency translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (516) | (523) | (437) | (689) |
Total Other comprehensive income, net of tax | (16) | 85 | (95) | 251 |
Balance at end of period | (532) | (438) | (532) | (438) |
Available-for-sale securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (4) | (2) | (2) | 132 |
Total Other comprehensive income, net of tax | 1 | 1 | (1) | (133) |
Balance at end of period | (3) | (1) | (3) | (1) |
Cash flow hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 22 | 2 | 25 | (1) |
Other comprehensive income (loss), before reclassifications, before tax | (7) | 15 | (4) | 20 |
Tax (expense) benefit | 1 | (5) | 1 | (7) |
Total Other comprehensive income (loss) before reclassifications, net of tax | (6) | 10 | (3) | 13 |
Reclassification from accumulated other comprehensive income, before tax | (5) | 0 | (12) | 0 |
Tax (expense) benefit | 1 | 0 | 2 | 0 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | (4) | 0 | (10) | 0 |
Total Other comprehensive income, net of tax | (10) | 10 | (13) | 13 |
Balance at end of period | 12 | 12 | 12 | 12 |
Noncontrolling Interests | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at end of period | 0 | (2) | 0 | (2) |
Pension and other postretirement benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), before reclassifications, before tax | 0 | 0 | 0 | 0 |
Tax (expense) benefit | 0 | 0 | 0 | 0 |
Total Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 0 | 0 |
Reclassification from accumulated other comprehensive income, before tax | 0 | 0 | 0 | 0 |
Tax (expense) benefit | 0 | 0 | 0 | 0 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Total Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 0 | 0 |
Foreign currency translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | (2) | 0 | (2) |
Total Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 0 | (2) | 0 | (2) |
Available-for-sale securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | 0 | 0 |
Total Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 0 | 0 |
Cash flow hedges | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), before reclassifications, before tax | 0 | 0 | 0 | 0 |
Tax (expense) benefit | 0 | 0 | 0 | 0 |
Total Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 0 | 0 |
Reclassification from accumulated other comprehensive income, before tax | 0 | 0 | 0 | 0 |
Tax (expense) benefit | 0 | 0 | 0 | 0 |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 |
Total Other comprehensive income, net of tax | 0 | 0 | 0 | 0 |
Balance at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Receivables (Details)
Receivables (Details) | Mar. 30, 2012USD ($) | Sep. 30, 2018USD ($)agreement | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Schedule Of Financial Receivables [Line Items] | ||||
Number of arrangement with different financial institution to sell customer receivables | agreement | 3 | |||
Funding of customer receivables sold | $ 0 | |||
Sale of customer receivables | $ 304,000,000 | |||
Cash received for receivables | 50,000,000 | 693,000,000 | $ 514,000,000 | |
Deferred purchase program receivable | $ 254,000,000 | 362,000,000 | $ 187,000,000 | |
Net cash funding received during the period | 300,000,000 | |||
Amount of cash draws under arrangement during the period | 2,808,000,000 | |||
Amount of cash repayments under arrangement during the period | (2,508,000,000) | |||
Amount of cash draws under arrangement since inception | (450,000,000) | |||
Amount of cash repayments under arrangement since inception | 450,000,000 | |||
Cash outflow from deferred purchase receivable | 40,194,000,000 | |||
Cash collections of other receivables | (39,482,000,000) | |||
Minimum | ||||
Schedule Of Financial Receivables [Line Items] | ||||
Funding of customer receivables sold | 200,000,000 | |||
Maximum | ||||
Schedule Of Financial Receivables [Line Items] | ||||
Funding of customer receivables sold | $ 400,000,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory Components (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 667 | $ 669 |
Work-in-process | 1,467 | 1,349 |
Purchased raw materials | 398 | 381 |
Operating supplies | 90 | 81 |
Total inventories | $ 2,622 | $ 2,480 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Inventories valued on a LIFO basis | $ 1,339 | $ 1,208 | |
Total inventories valued on an average-cost basis | $ 534 | $ 481 | |
EP&S | |||
Segment Reporting Information [Line Items] | |||
Inventory adjustments | $ 23 |
Property, Plants, and Equipme_3
Property, Plants, and Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ 6,778 | $ 6,392 |
Properties, plants, and equipment, net | 5,645 | 5,594 |
Undiscounted cash flows, effect of one percentage point decrease on net cash flows | $ 6 | |
Disks Business | ||
Property, Plant and Equipment [Line Items] | ||
Estimated undiscounted cash flows in excess its carrying value, percent | 13.00% | |
Arconic Engines | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 515 | |
Land and land rights | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 138 | 140 |
Structures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,374 | 2,395 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 9,244 | 8,830 |
Depreciable property, plant and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,756 | 11,365 |
Properties, plants, and equipment, net | 4,978 | 4,973 |
Construction work-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 667 | $ 621 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 6,318 | $ 6,807 | |
Other | (12) | (23) | |
Less: amount due within one year | 3 | 1 | |
Long-term debt, excluding amount due within one year | 6,315 | 6,806 | |
5.72% Notes, due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | $ 500 | |
Long-term debt, interest rate | 5.72% | 5.72% | |
1.63% Convertible Notes, due 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 403 | $ 403 | |
Long-term debt, interest rate | 1.63% | ||
6.150% Notes, due 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,000 | 1,000 | |
Long-term debt, interest rate | 6.15% | ||
5.40% Notes due 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,250 | 1,250 | |
Long-term debt, interest rate | 5.40% | ||
5.87% Notes, due 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 627 | 627 | |
Long-term debt, interest rate | 5.87% | ||
5.125% Notes, due 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,250 | 1,250 | |
Long-term debt, interest rate | 5.125% | ||
5.90% Notes, due 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 625 | 625 | |
Long-term debt, interest rate | 5.90% | ||
6.75% Bonds, due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 300 | 300 | |
Long-term debt, interest rate | 6.75% | ||
5.95% Notes, due 2037 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 625 | 625 | |
Long-term debt, interest rate | 5.95% | ||
Iowa Finance Authority Loan, due 2042 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 250 | $ 250 |
Debt - Public Debt (Details)
Debt - Public Debt (Details) - 5.72% Notes, due 2019 - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term debt, interest rate | 5.72% | 5.72% |
Long-term debt | $ 500,000,000 | |
Redemption amount | 518,000,000 | |
Loss on prepayment of debt redemption | $ 19,000,000 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) | Jun. 29, 2018USD ($)extension | Jul. 25, 2014USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 05, 2015USD ($) |
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 715,000,000 | $ 715,000,000 | ||||
Parent Company | ||||||
Debt Instrument [Line Items] | ||||||
Borrowings from credit facility | 450,000,000 | |||||
Repayments of borrowings | $ (450,000,000) | |||||
Weighted average interest rate outstanding borrowings | 3.50% | 3.30% | ||||
Debt weighted average maturity term | 35 days | 55 days | ||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin on LIBOR loans | 1.50% | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin on LIBOR loans | 0.50% | |||||
Revolving Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility term | 5 years | |||||
Long-term line of credit | $ 0 | $ 0 | $ 0 | |||
Outstanding amount | 0 | 0 | $ 0 | |||
Revolving Credit Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Commitment fee percentage | 0.25% | |||||
Revolving Credit Agreement | Prior To Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | $ 4,000,000,000 | |||||
Revolving Credit Agreement | After Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | $ 3,000,000,000 | $ 3,000,000,000 | ||||
Maximum increase in borrowing capacity | $ 500,000,000 | |||||
Debt covenants net leverage ratio | 4.50% | |||||
Debt covenants net leverage ratio after year three | 4.00% | |||||
Debt covenants net leverage ratio after year four | 3.50% | |||||
Number of extensions | extension | 2 | |||||
Extended additional maturity period | 1 year | |||||
Minimum indebtedness for other principal amounts | $ 100,000,000 | |||||
Revolving Credit Agreement | After Amendment | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Long-term line of credit | $ 1,000,000,000 | |||||
Expected Maturity Date Year 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding amount | 200,000,000 | 200,000,000 | ||||
Expected Maturity Date Year 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding amount | 365,000,000 | 365,000,000 | ||||
Expected Maturity Date Year 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding amount | $ 150,000,000 | $ 150,000,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | $ 6,315 | $ 6,806 |
Fair Value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | $ 6,495 | $ 7,443 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Details) $ in Millions | Oct. 31, 2018USD ($) | Apr. 02, 2018USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($)employee | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Restructuring and other charges | $ (2) | $ 19 | $ 20 | $ 118 | ||||||
Latin America Extrusions (LAE) | Disposed of by Sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Disposal group, including discontinued operation, revenue | $ 30 | $ 25 | $ 86 | |||||||
Cash received on sale of operations | $ 5 | |||||||||
Latin America Extrusions (LAE) | Disposed of by Sale | Divested Businesses | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Restructuring and other charges | $ 41 | |||||||||
Texarkana, Texas Rolling Mill And Cast House | Subsequent Event | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Period of operationalizing rolling mill equipment of transaction closing date | 36 months | |||||||||
Minimum required terms of leases on cast house building and equipment | 18 months | |||||||||
Period of supply with aluminum | 24 months | |||||||||
Texarkana, Texas Rolling Mill And Cast House | Subsequent Event | Ta Chen International, Inc. | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Period of services performed, processing of metal | 6 years | |||||||||
Texarkana, Texas Rolling Mill And Cast House | Disposed of by Sale | Subsequent Event | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Cash received on sale of operations | $ 63 | |||||||||
Disposal group, consideration | 302 | |||||||||
Disposal group, consideration consideration | 50 | |||||||||
Texarkana, Texas rolling mill | Disposed of by Sale | Subsequent Event | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Contingent consideration on sale of assets | 4 | |||||||||
Texarkana, Texas rolling mill | Disposed of by Sale | Subsequent Event | Scenario, Forecast | Minimum | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Gain on disposal | 150 | |||||||||
Deferred gain on disposal | 85 | |||||||||
Texarkana, Texas rolling mill | Disposed of by Sale | Subsequent Event | Scenario, Forecast | Maximum | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Gain on disposal | 165 | |||||||||
Deferred gain on disposal | $ 100 | |||||||||
Slim Aluminium | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Cash expense related to sale of rolling mill | $ 10 | |||||||||
Third party guarantee with a fair value related to environmental remediation | $ 5 | |||||||||
Disposal group, including discontinued operation, revenue | $ 37 | |||||||||
Number of employees | employee | 312 | |||||||||
Slim Aluminium | Restructuring and Other Charges | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Loss on sale of rolling mill | $ 60 | |||||||||
Third-Party Sales | Building and Construction Systems | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Disposal group, including discontinued operation, revenue | $ 1,070 |
Contingencies and Commitments (
Contingencies and Commitments (Details) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) | Sep. 30, 2018USD ($)location | Sep. 30, 2018EUR (€) | Jul. 31, 2018USD ($) | Jul. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Nov. 01, 2016USD ($) | |
Loss Contingencies [Line Items] | ||||||||
Number of cleanup locations | location | 100 | |||||||
Remediation reserve balance | $ 280 | $ 280 | $ 294 | |||||
Remediation reserve balance, classified as a current liability | 70 | 70 | 41 | |||||
Payments related to remediation expenses applied against the reserve | 7 | $ 15 | ||||||
Actual remediation fieldwork period | 4 years | |||||||
Income tax examination assessment outstanding | $ 175 | € 152 | ||||||
Guarantees of third party related to project financing | 32 | $ 32 | ||||||
Long-term debt | 6,318 | 6,318 | 6,807 | |||||
Total amount committed under outstanding surety bonds | 49 | 49 | ||||||
Bank Loan Obligations | Letter of Credit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Long-term debt | 129 | 129 | ||||||
Separation Agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Total amount committed under outstanding surety bonds | 25 | 25 | ||||||
Other Noncurrent Liabilities and Deferred Credits | ||||||||
Loss Contingencies [Line Items] | ||||||||
Combined fair value of guarantees | 7 | 7 | 8 | |||||
Massena West, NY | ||||||||
Loss Contingencies [Line Items] | ||||||||
Remediation reserve balance | 208 | 208 | 215 | |||||
Spain | ||||||||
Loss Contingencies [Line Items] | ||||||||
Established tax reserve | 59 | € 51 | ||||||
Tax indemnification receivable | $ 29 | $ 29 | € 25 | |||||
Alcoa Corporation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Tax agreement, indemnification of ultimate liability, percent | 49.00% | 49.00% | 49.00% | |||||
Recurring Costs of Managing Hazardous Substances and Environmental Programs | Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of cost of goods sold | 1.00% | |||||||
Supply Agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Guarantees of third party related to project financing | $ 1,141 | $ 1,141 | $ 1,297 | |||||
Alcoa Corporation Workers Compensation Claims | ||||||||
Loss Contingencies [Line Items] | ||||||||
Letters of credit, total amount committed | $ 53 |