Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-3610 | |
Entity Registrant Name | HOWMET AEROSPACE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 25-0317820 | |
Entity Address, Address Line One | 201 Isabella Street, Suite 200 | |
Entity Address, City or Town | Pittsburgh | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 15212-5872 | |
City Area Code | 412 | |
Local Phone Number | 553-1940 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 427,217,982 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000004281 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | HWM | |
Security Exchange Name | NYSE | |
Preferred stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | $3.75 Cumulative Preferred Stock, par value $100.00 per share | |
Trading Symbol | HWM PR | |
Security Exchange Name | NYSEAMER |
Statement of Consolidated Opera
Statement of Consolidated Operations (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Sales | $ 1,283 | $ 1,134 | $ 3,687 | $ 4,021 |
Cost of goods sold (exclusive of expenses below) | 928 | 900 | 2,658 | 3,006 |
Selling, general administrative, and other expenses | 70 | 66 | 190 | 219 |
Research and development expenses | 4 | 5 | 13 | 13 |
Provision for depreciation and amortization | 68 | 68 | 203 | 212 |
Restructuring and other charges | 8 | 22 | 22 | 166 |
Operating income | 205 | 73 | 601 | 405 |
Loss on debt redemption | 118 | 0 | 141 | 64 |
Interest expense, net | 63 | 77 | 201 | 241 |
Other expense, net | 1 | 8 | 13 | 0 |
Income (loss) before income taxes | 23 | (12) | 246 | 100 |
(Benefit) provision for income taxes | (4) | (48) | 65 | (5) |
Income from continuing operations after income taxes | 27 | 36 | 181 | 105 |
Income from discontinued operations after income taxes | 0 | 0 | 0 | 50 |
Net income | 27 | 36 | 181 | 155 |
Amounts Attributable to Howmet Aerospace Common Shareholders: | ||||
Net income | 26 | 35 | 179 | 153 |
Net income | $ 26 | $ 35 | $ 179 | $ 153 |
Earnings per share - basic | ||||
Continuing operations (in usd per share) | $ 0.06 | $ 0.08 | $ 0.42 | $ 0.24 |
Discontinued operations (in usd per share) | 0 | 0 | 0 | 0.11 |
Earnings per share - diluted | ||||
Continuing operations (in usd per share) | 0.06 | 0.08 | 0.41 | 0.23 |
Discontinued operations (in usd per share) | $ 0 | $ 0 | $ 0 | $ 0.11 |
Average Shares Outstanding: | ||||
Average shares outstanding - basic (in shares) | 429 | 436 | 431 | 436 |
Average shares outstanding - diluted (in shares) | 434 | 439 | 437 | 440 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 27 | $ 36 | $ 181 | $ 155 |
Other comprehensive income (loss), net of tax: | ||||
Change in unrecognized net actuarial loss and prior service cost related to pension and other postretirement benefits | 13 | 8 | 90 | 54 |
Foreign currency translation adjustments | (36) | 48 | (62) | (25) |
Net change in unrecognized (losses) gains on cash flow hedges | (4) | 5 | 4 | 1 |
Total other comprehensive (loss) income, net of tax | (27) | 61 | 32 | 30 |
Comprehensive income | $ 0 | $ 97 | $ 213 | $ 185 |
Consolidated Balance Sheet (una
Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 724 | $ 1,610 |
Receivables from customers, less allowances of $- in 2021 and $1 in 2020 | 408 | 328 |
Other receivables | 57 | 29 |
Inventories | 1,420 | 1,488 |
Prepaid expenses and other current assets | 211 | 217 |
Total current assets | 2,820 | 3,672 |
Properties, plants, and equipment, net | 2,483 | 2,592 |
Goodwill | 4,077 | 4,102 |
Deferred income taxes | 202 | 272 |
Intangibles, net | 554 | 571 |
Other noncurrent assets | 221 | 234 |
Total assets | 10,357 | 11,443 |
Current liabilities: | ||
Accounts payable, trade | 646 | 599 |
Accrued compensation and retirement costs | 202 | 205 |
Taxes, including income taxes | 77 | 102 |
Accrued interest payable | 68 | 89 |
Other current liabilities | 201 | 289 |
Short-term debt | 14 | 376 |
Total current liabilities | 1,208 | 1,660 |
Long-term debt, less amount due within one year | 4,272 | 4,699 |
Accrued pension benefits | 847 | 985 |
Accrued other postretirement benefits | 154 | 198 |
Other noncurrent liabilities and deferred credits | 297 | 324 |
Total liabilities | 6,778 | 7,866 |
Contingencies and commitments | ||
Howmet Aerospace shareholders’ equity: | ||
Preferred stock | 55 | 55 |
Common stock | 428 | 433 |
Additional capital | 4,473 | 4,668 |
Retained earnings | 534 | 364 |
Accumulated other comprehensive loss | (1,911) | (1,943) |
Total equity | 3,579 | 3,577 |
Total liabilities and equity | $ 10,357 | $ 11,443 |
Consolidated Balance Sheet (u_2
Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 0 | $ 1 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net income | $ 181 | $ 155 |
Adjustments to reconcile net income to cash provided from (used for) operations: | ||
Depreciation and amortization | 203 | 271 |
Deferred income taxes | 24 | 25 |
Restructuring and other charges | 22 | 148 |
Net loss from investing activities—asset sales | 7 | 6 |
Net periodic pension cost | 13 | 42 |
Stock-based compensation | 28 | 35 |
Loss on debt redemption | 141 | 64 |
Other | 28 | (1) |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
Increase in receivables | (382) | (117) |
Decrease (increase) in inventories | 49 | (42) |
Decrease in prepaid expenses and other current assets | 6 | 1 |
Increase (decrease) in accounts payable, trade | 63 | (439) |
Decrease in accrued expenses | (121) | (177) |
(Decrease) increase in taxes, including income taxes | (15) | 41 |
Pension contributions | (68) | (110) |
Increase in noncurrent assets | (1) | (5) |
Decrease in noncurrent liabilities | (32) | (39) |
Cash provided from (used for) operations | 146 | (142) |
Financing Activities | ||
Net change in short-term borrowings (original maturities of three months or less) | 0 | (8) |
Additions to debt (original maturities greater than three months) | 700 | 2,400 |
Payments on debt (original maturities greater than three months) | (1,491) | (2,041) |
Debt issuance costs | (11) | (61) |
Premiums paid on early redemption of debt | (133) | (59) |
Proceeds from exercise of employee stock options | 17 | 30 |
Dividends paid to shareholders | (11) | (10) |
Repurchase of common stock | (225) | (51) |
Net cash transferred to Arconic Corporation at separation | 0 | (500) |
Other | (20) | (39) |
Cash used for financing activities | (1,174) | (339) |
Investing Activities | ||
Capital expenditures | (138) | (220) |
Proceeds from the sale of assets and businesses | 8 | 114 |
Sale of debt securities | 5 | 0 |
Cash receipts from sold receivables | 267 | 258 |
Other | 2 | 0 |
Cash provided from investing activities | 144 | 152 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1) | (6) |
Net change in cash, cash equivalents and restricted cash | (885) | (335) |
Cash, cash equivalents and restricted cash at beginning of period | 1,611 | 1,703 |
Cash, cash equivalents and restricted cash at end of period | $ 726 | $ 1,368 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Equity (unaudited) - USD ($) $ in Millions | Total | Class A | Preferred stock | Common stock | Additional capital | Retained earnings | Retained earningsClass A | Accumulated other comprehensive loss | Noncontrolling interests |
Beginning balance at Dec. 31, 2019 | $ 4,605 | $ 55 | $ 433 | $ 7,319 | $ 113 | $ (3,329) | $ 14 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 155 | 155 | |||||||
Other comprehensive income | 30 | 30 | |||||||
Cash dividends declared: | |||||||||
Preferred dividends declared, value | $ (2) | $ (2) | |||||||
Common share, value | (8) | (8) | |||||||
Repurchase and retirement of common stock | (51) | (2) | (49) | ||||||
Stock-based compensation | 35 | 35 | |||||||
Common stock issued: compensation plans | (8) | 3 | (11) | ||||||
Distributions to Arconic Corporation | (1,255) | (2,611) | 1,370 | (14) | |||||
Ending balance at Sep. 30, 2020 | 3,501 | 55 | 434 | 4,683 | 258 | (1,929) | 0 | ||
Beginning balance at Jun. 30, 2020 | 3,449 | 55 | 436 | 4,703 | 223 | (1,968) | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 36 | 36 | |||||||
Other comprehensive income | 61 | 61 | |||||||
Cash dividends declared: | |||||||||
Preferred dividends declared, value | (1) | (1) | |||||||
Repurchase and retirement of common stock | (51) | (2) | (49) | ||||||
Stock-based compensation | 12 | 12 | |||||||
Common stock issued: compensation plans | (5) | (5) | |||||||
Distributions to Arconic Corporation | 0 | 22 | (22) | ||||||
Ending balance at Sep. 30, 2020 | 3,501 | 55 | 434 | 4,683 | 258 | (1,929) | $ 0 | ||
Beginning balance at Dec. 31, 2020 | 3,577 | 55 | 433 | 4,668 | 364 | (1,943) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 181 | 181 | |||||||
Other comprehensive income | 32 | 32 | |||||||
Cash dividends declared: | |||||||||
Preferred dividends declared, value | (2) | (2) | |||||||
Common share, value | (9) | (9) | |||||||
Repurchase and retirement of common stock | (225) | (7) | (218) | ||||||
Stock-based compensation | 28 | 28 | |||||||
Common stock issued: compensation plans | (3) | 2 | (5) | ||||||
Ending balance at Sep. 30, 2021 | 3,579 | 55 | 428 | 4,473 | 534 | (1,911) | |||
Beginning balance at Jun. 30, 2021 | 3,598 | 55 | 429 | 4,481 | 517 | (1,884) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 27 | 27 | |||||||
Other comprehensive income | (27) | (27) | |||||||
Cash dividends declared: | |||||||||
Preferred dividends declared, value | $ (1) | $ (1) | |||||||
Common share, value | (9) | (9) | |||||||
Repurchase and retirement of common stock | (25) | (1) | (24) | ||||||
Stock-based compensation | 14 | 14 | |||||||
Common stock issued: compensation plans | 2 | 2 | |||||||
Ending balance at Sep. 30, 2021 | $ 3,579 | $ 55 | $ 428 | $ 4,473 | $ 534 | $ (1,911) |
Statement of Changes in Conso_2
Statement of Changes in Consolidated Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Common stock, dividends per share (in usd per share) | $ 0.02 | $ 0.02 | $ 0.02 | |
Class A | ||||
Preferred, dividends per share (in usd per share) | $ 0.9375 | $ 0.9375 | $ 2.8125 | $ 2.8125 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements of Howmet Aerospace Inc. (formerly known as Arconic Inc.) and subsidiaries (“Howmet” 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 2020 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation. The separation of Arconic Inc. into two standalone, publicly-traded companies, Howmet Aerospace Inc. and Arconic Corporation, (the “Arconic Inc. Separation Transaction”) occurred on April 1, 2020. The financial results of Arconic Corporation for all periods prior to the Arconic Inc. Separation Transaction have been retrospectively reflected in the Statement of Consolidated Operations as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. The cash flows, comprehensive income, and equity related to Arconic Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows, Statement of Consolidated Comprehensive Income, and Statement of Changes in Consolidated Equity, respectively, for all periods prior to the Arconic Inc. Separation Transaction. See Note B for additional information related to the Arconic Inc. Separation Transaction and discontinued operations. For the nine months ended September 30, 2021 and 2020, the Company derived approximately 60% and 70%, respectively, of its revenue from products sold to the aerospace end-market. As a result of the global COVID-19 pandemic and its impact on the aerospace industry to-date, the possibility exists that there could be a sustained impact to our operations and financial results. Since the start of the pandemic, certain original equipment manufacturer (“OEM”) customers have reduced production or suspended manufacturing operations in North America and Europe on a temporary basis. While the pandemic resulted in the temporary closure of a small number of the Company's manufacturing facilities during 2020, all of our manufacturing facilities are currently operating. Since the duration of the pandemic is uncertain, management has taken a series of actions to address the financial impact, including fixed and variable cost reductions, such as headcount reductions in certain segments, and reducing the level of capital expenditures to preserve cash and maintain liquidity. The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to the impact of COVID-19. The impact of COVID-19 is rapidly changing and of unknown duration and macroeconomic impact and, as a result, these considerations remain highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions that may be impacted by COVID-19. |
Arconic Inc. Separation Transac
Arconic Inc. Separation Transaction and Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Arconic Inc. Separation Transaction and Discontinued Operations | Arconic Inc. Separation Transaction and Discontinued Operations On April 1, 2020, the Company completed the separation of its business into two independent, publicly-traded companies, which was effected by the distribution (the “Distribution”) by the Company of all of the outstanding common stock of Arconic Corporation to the Company’s stockholders. Following the Arconic Inc. Separation Transaction, Arconic Corporation held the Global Rolled Products businesses (global rolled products, aluminum extrusions, and building and construction systems) previously held by the Company. The Company retained the Engineered Products and Forgings businesses (Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels). In connection with the Arconic Inc. Separation Transaction , the Company entered into several agreements with Arconic Corporation , including the following: a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, certain Patent, Know-How, Trade Secret License and Trademark License Agreements, and Raw Material Supply Agreements. On February 7, 2020, Arconic Corporation completed an offering of $600 aggregate principal amount of 6.125% senior secured second-lien notes due 2028. On March 25, 2020, Arconic Corporation entered into a credit agreement which provided for a $600 aggregate principal amount seven-year senior secured first-lien loan B facility and a revolving credit facility which is guaranteed by certain of Arconic Corporation's wholly-owned domestic subsidiaries and secured on a first-priority basis by liens on substantially all assets of Arconic Corporation and subsidiary guarantors. Arconic Corporation used the proceeds to make payment to the Company to fund the transfer of certain assets to Arconic Corporation relating to the Arconic Inc. Separation Transaction and for general corporate purposes. The Company incurred debt issuance costs of $45 associated with these issuances for the first quarter of 2020. On February 1, 2020, the Company completed the sale of its rolling mill in Itapissuma, Brazil for $50 in cash which resulted in a loss of $59, of which $53 was recognized in Restructuring and other charges within discontinued operations in the second half of 2019 and $6 in the first quarter of 2020. On March 1, 2020, Arconic Corporation sold its hard alloy extrusions plant in South Korea for $62 in cash, which resulted in a $27 gain that was recognized in Restructuring and other charges within discontinued operations in the first quarter of 2020. Discontinued Operations The results of operations of Arconic Corporation are presented as discontinued operations in the Statement of Consolidated Operations as summarized below: Nine months ended September 30, 2020 Sales $ 1,575 Cost of goods sold 1,293 Selling, general administrative, research and development and other expenses 106 Provision for depreciation and amortization 58 Restructuring and other charges (18) Operating income from discontinued operations 136 Interest expense, net 7 Other expense, net 41 Income from discontinued operations 88 Provision for income taxes 38 Income from discontinued operations after income taxes $ 50 The following table presents purchases of properties, plants, and equipment, proceeds from the sale of businesses, and the provision for depreciation and amortization of discontinued operations related to Arconic Corporation: Nine months ended September 30, 2020 Capital expenditures $ 72 Proceeds from the sales of businesses $ 112 Provision for depreciation and amortization $ 58 There was no discontinued operations activity related to Arconic Corporation for the third quarter ended September 30, 2020. The cash flows and equity related to Arconic Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows or Statement of Comprehensive Income for all periods presented prior to the Arconic Inc. Separation Transaction. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | Recently Adopted and Recently Issued Accounting Guidance Adopted On January 1, 2021, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The adoption of this new guidance did not have a material impact on the Consolidated Financial Statements. Issued In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, and industrial and other end markets. Segment performance under Howmet’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Howmet’s definition of Segment operating profit is Operating income excluding Special items. Special items include Restructuring and other charges. Segment operating profit may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate. Howmet’s operations consist of four worldwide reportable segments as follows: Engine Products Engine Products produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines and industrial gas turbines. Engine Products produces rotating parts as well as structural parts. Fastening Systems Fastening Systems produces aerospace fastening systems, as well as commercial transportation, industrial and other fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. The business’s products are also critical components of commercial transportation vehicles, automobiles, construction and industrial equipment and renewable energy sector. Engineered Structures Engineered Structures produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, extrusions forming and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components and assemblies for aerospace and defense applications. Forged Wheels Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation markets. Goodwill The Company had $4,077 of Goodwill at September 30, 2021 and reviews it annually for impairment in the fourth quarter, or more frequently, if indicators exist or if a decision is made to sell or realign a business. On January 1, 2020, management transferred the Savannah business from the Engine Products segment to the Engineered Structures segment, based on synergies with forgings technologies and manufacturing capabilities. As a result of the reorganization, goodwill of $17 was reallocated from Engine Products to Engineered Structures, and these reporting units were evaluated for impairment during the first quarter of 2020. The estimated fair value of each of these reporting units substantially exceeded their carrying value; thus, there was no goodwill impairment at the date the business was transferred. During the first quarter of 2020, Howmet's market capitalization declined significantly compared to the fourth quarter of 2019. Over the same period, the equity value of our peer group companies, and the overall U.S. stock market also declined significantly amid market volatility. In addition, as a result of the COVID-19 pandemic and measures designed to contain the spread, global sales to customers in the aerospace and commercial transportation industries impacted by COVID-19 have been and are expected to be negatively impacted compared to 2019 as a result of disruption in demand. As a result of these macroeconomic factors, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of any of our reporting units is less than its carrying value. As a result of this assessment, the Company performed a quantitative impairment test in the first quarter of 2020 for the Engineered Structures reporting unit and concluded that though the margin between the fair value of the reporting unit and carrying value had declined from approximately 60% to The operating results of the Company’s reportable segments were as follows. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Third quarter ended September 30, 2021 Sales: Third-party sales $ 599 $ 254 $ 199 $ 231 $ 1,283 Inter-segment sales 1 — 1 — 2 Total sales $ 600 $ 254 $ 200 $ 231 $ 1,285 Profit and loss: Segment operating profit $ 120 $ 47 $ 14 $ 62 $ 243 Restructuring and other charges 5 3 — — 8 Provision for depreciation and amortization 31 12 12 10 65 Capital expenditures 21 8 3 15 47 Third quarter ended September 30, 2020 Sales: Third-party sales $ 485 $ 271 $ 206 $ 172 $ 1,134 Inter-segment sales 1 — 1 — 2 Total sales $ 486 $ 271 $ 207 $ 172 $ 1,136 Profit and loss: Segment operating profit $ 39 $ 33 $ 10 $ 35 $ 117 Restructuring and other charges 9 — 9 — 18 Provision for depreciation and amortization 31 12 13 10 66 Capital expenditures 15 9 3 6 33 Engine Products Fastening Systems Engineered Structures Forged Wheels Total Nine months ended September 30, 2021 Sales: Third-party sales $ 1,677 $ 788 $ 535 $ 687 $ 3,687 Inter-segment sales 3 — 4 — 7 Total sales $ 1,680 $ 788 $ 539 $ 687 $ 3,694 Profit and loss: Segment operating profit $ 321 $ 142 $ 35 $ 193 $ 691 Restructuring and other charges 15 8 1 — 24 Provision for depreciation and amortization 92 37 37 29 195 Capital expenditures 48 22 13 37 120 Nine months ended September 30, 2020 Sales: Third-party sales $ 1,851 $ 982 $ 710 $ 476 $ 4,019 Inter-segment sales 4 — 6 — 10 Total sales $ 1,855 $ 982 $ 716 $ 476 $ 4,029 Profit and loss: Segment operating profit $ 309 $ 199 $ 57 $ 91 $ 656 Restructuring and other charges 44 26 21 3 94 Provision for depreciation and amortization 92 36 40 29 197 Capital expenditures 48 24 11 17 100 The following table reconciles Total segment operating profit to Income (loss) from continuing operations before income taxes: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Total segment operating profit $ 243 $ 117 $ 691 $ 656 Unallocated amounts: Restructuring and other charges (8) (22) (22) (166) Corporate expense (30) (22) (68) (85) Operating income $ 205 $ 73 $ 601 $ 405 Loss on debt redemption (118) — (141) (64) Interest expense, net (63) (77) (201) (241) Other expense, net (1) (8) (13) — Income (loss) from continuing operations before income taxes $ 23 $ (12) $ 246 $ 100 The following table reconciles total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the Statement of Consolidated Cash Flows. Differences between the total segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period. Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Total segment capital expenditures $ 47 $ 33 $ 120 $ 100 Corporate and discontinued operations — 3 18 120 Capital expenditures $ 47 $ 36 $ 138 $ 220 The following table disaggregates segment revenue by major end market served. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Third quarter ended September 30, 2021 Aerospace - Commercial $ 299 $ 126 $ 118 $ — $ 543 Aerospace - Defense 130 37 65 — 232 Commercial Transportation — 59 — 231 290 Industrial and Other 170 32 16 — 218 Total end-market revenue $ 599 $ 254 $ 199 $ 231 $ 1,283 Third quarter ended September 30, 2020 Aerospace - Commercial $ 199 $ 169 $ 104 $ — $ 472 Aerospace - Defense 142 37 82 — 261 Commercial Transportation — 38 — 172 210 Industrial and Other 144 27 20 — 191 Total end-market revenue $ 485 $ 271 $ 206 $ 172 $ 1,134 Nine months ended September 30, 2021 Aerospace - Commercial $ 786 $ 403 $ 277 $ — $ 1,466 Aerospace - Defense 402 120 206 — 728 Commercial Transportation — 154 — 687 841 Industrial and Other 489 111 52 — 652 Total end-market revenue $ 1,677 $ 788 $ 535 $ 687 $ 3,687 Nine months ended September 30, 2020 Aerospace - Commercial $ 1,018 $ 650 $ 432 $ — $ 2,100 Aerospace - Defense 394 120 216 — 730 Commercial Transportation — 118 — 476 594 Industrial and Other 439 94 62 — 595 Total end-market revenue $ 1,851 $ 982 $ 710 $ 476 $ 4,019 The Company derive d 60% and 70% of its revenue from the aerospace end-market for the nine months ended September 30, 2021 and 2020, respectively. General Electric Company represented approximately 13% and 11% of the Company’s third-party sales for the nine months ended September 30, 2021 and 2020 , respectively, primarily from Engine Products. |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Restructuring and Other Charges Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Layoff costs $ — $ 17 $ 2 $ 93 Net reversals of previously recorded layoff reserves — — (1) (10) Pension, Other post-retirement benefits and Deferred Compensation - net settlements ( G ) 3 3 9 67 Non-cash asset impairments 4 — 8 — Net loss related to divestitures of assets and businesses ( Q ) — — 4 9 Other 1 2 — 7 Restructuring and other charges $ 8 $ 22 $ 22 $ 166 In the third quarter and nine months ended September 30, 2021, the Company recorded Restructuring and other charges of $8 and $22, respectively, which were primarily due to charges for pension plan settlements and exit related costs. In the third quarter of 2020, the Company recorded Restructuring and other charges of $22, which included a $17 charge for layoff costs, an $8 charge for pension plan settlements, and a $2 charge for accelerated depreciation. These charges were partially offset by a $3 benefit from the termination of a deferred compensation plan and a $2 curtailment benefit related to a post-retirement plan. In the nine months ended September 30, 2020, the Company recorded Restructuring and other charges of $166, which included a $93 charge for layoff costs, a $72 charge for pension plan settlements, a $6 post-closing adjustment related to the sale of the Company’s U.K. forgings business (which was formerly part of the Engine Products segment), a $5 charge for impairment of assets associated with an agreement to sell an aerospace components business in the U.K (within the Engineered Structures segment), a $2 charge for accelerated depreciation, and a $5 charge for various other exit costs. These charges were partially offset by a benefit of $10 related to the reversal of a number of prior period programs, a $3 benefit from the termination of a deferred compensation plan, a $2 curtailment benefit related to a post-retirement plan, and a gain of $2 on the sale of assets. Layoff costs Other exit costs Total Reserve balances at December 31, 2020 $ 54 $ — $ 54 Cash payments (37) — (37) Restructuring charges 10 12 22 Other (1) (11) (12) (23) Reserve balances at September 30, 2021 $ 16 $ — $ 16 (1) In the nine months ended September 30, 2021, layoff costs included a $9 charge for pension plan settlements and a $2 charge for other layoffs costs; while other exit costs were primarily related to an $11 charge for other exit costs including accelerated depreciation. The remaining layoff cost reserves are expected to be paid in cash by mid-year 2022. |
Other Expense, Net
Other Expense, Net | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Expense, Net | Other Expense, Net Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Non-service related net periodic benefit cost $ 2 $ 8 $ 8 $ 19 Interest income (1) (1) (2) (5) Foreign currency (gains) losses, net (2) (5) 1 (12) Net loss from asset sales 3 2 7 6 Deferred compensation (1) 4 5 1 Other, net — — (6) (9) Other expense, net $ 1 $ 8 $ 13 $ — |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The components of net periodic cost (benefit) were as follows: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pension benefits Service cost $ 1 $ 1 $ 3 $ 10 Interest cost 12 17 36 81 Expected return on plan assets (23) (21) (69) (115) Recognized net actuarial loss 14 12 43 66 Settlements 3 8 9 72 Net periodic cost (1) 7 17 22 114 Discontinued operations — — — 20 Net amount recognized in continuing operations in Statement of Consolidated Operations $ 7 $ 17 $ 22 $ 94 Other postretirement benefits Service cost $ — $ 1 $ 1 $ 3 Interest cost 1 2 4 9 Recognized net actuarial loss 1 — 1 2 Amortization of prior service benefit (3) (2) (7) (5) Curtailments — (2) — (2) Net periodic (benefit) cost (1) (1) (1) (1) 7 Discontinued operations — — — 6 Net amount recognized in continuing operations in Statement of Consolidated Operations $ (1) $ (1) $ (1) $ 1 (1) Service cost for continuing operations was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; settlements and curtailments were included in Restructuring and other charges; and all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations. The amounts included in net periodic cost (benefit) include costs related to both continuing and discontinued operations for the nine months ended September 30, 2020 . Pension benefits In the third quarter of 2021, the Company applied settlement accounting to certain U.S. and Canadian pension plans due to lump sum payments made to participants, which resulted in settlement charges of $3 and $9 in the third quarter and nine months ended September 30, 2021, respectively, that were recorded in Restructuring and other charges. In October 2021, the Company undertook additional actions to reduce gross pension obligations by approximately $125 by purchasing group annuity contracts with a third-party carrier to pay and administer future annuity payments. These actions are expected to result in a settlement charge of approximately $30 and will be recorded in Restructuring and other charges in the fourth quarter ending December 31, 2021 in the Statement of Consolidated Operations. The funded status of the plans have not been significantly impacted. On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA 2021”) was signed into law in the United States. ARPA 2021, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. Considering the impact of ARPA 2021, management expects Howmet’s estimated pension contributions and other postretirement benefit payments in 2021 to be approximately $120. In the second quarter ended June 30, 2020 and nine months ended September 30, 2020, the Company undertook a number of actions to reduce pension obligations in the U.K. by offering lump sum payments to certain plan participants and entering into group annuity contracts with a third-party carrier to pay and administer future annuity payments. The Company applied settlement accounting to these U.K. pension plans which resulted in settlement charges of $62 that were recorded in Restructuring and other charges in the Statement of Consolidated Operations in the second quarter ended June 30, 2020 and nine months ended September 30, 2020. In the third quarter and nine months ended September 30, 2020, the Company also applied settlement accounting to certain Canadian, U.K., and U.S. pension plans due to lump sum payments to participants which resulted in settlement charges of $8 and $10, respectively, that were recorded in Restructuring and other charges. Other postretirement benefits In the first quarter of 2021, the Company announced a plan administration change of certain of its Medicare-eligible prescription drug benefits to an Employer Group Waiver Plan with a wrap-around secondary plan effective July 1, 2021. The administration change is expected to reduce costs to the Company through the usage of Medicare Part D and drug manufacturer subsidies. Due to this amendment, along with the associated plan remeasurements, the Company recorded a decrease to its Accrued other postretirement benefits liability of $39, which was offset in Accumulated other comprehensive loss in the Consolidated Balance Sheet. In the third quarter of 2020, the Company applied curtailment accounting due to a workforce reduction resulting in a decrease in expense of $2 which is recorded in Restructuring and other charges in the Statement of Consolidated Operations. In the second quarter of 2020, the Company communicated to plan participants that for its U.S. salaried and non-bargained hourly retirees of the Company and its subsidiaries, it would eliminate certain health care subsidies effective December 31, 2021 and that for certain bargained retirees of the Company, it would eliminate certain health care subsidies effective December 31, 2021 and the life insurance benefit effective August 1, 2020. As a result of these changes, in the second quarter of 2020, the Company recorded a decrease to the Accrued other postretirement benefits liability of $6, which was offset in Accumulated other comprehensive loss. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’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 impacts 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. The estimated annual effective tax rate, before discrete items, applied to ordinary income was 29.7% in both the third quarter and nine months ended September 30, 2021, and 34.5% in both the third quarter and nine months ended September 30, 2020. The 2021 rate was higher than the U.S. federal statutory rate of 21% primarily due to additional estimated U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) and other foreign earnings, incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, and nondeductible expenses. The 2020 rate was higher than the U.S. federal statutory rate of 21% primarily due to U.S. tax on foreign earnings, incremental state tax and foreign taxes on earnings also subject to U.S. federal income tax, and nondeductible expenses. For the third quarter of 2021 and 2020, the tax rate including discrete items was 17.4% (benefit on income) and 400.0% (benefit on a relatively small loss), respectively. For the third quarter of 2021, the Company recorded a discrete tax benefit of $12 related to a net $13 benefit from prior year amended returns and audit settlements, and a net $1 charge for other items. For the third quarter of 2020, the Company recorded a discrete tax benefit of $41 related to a $36 benefit for a U.S. tax law change associated with the issuance of final regulations that provide for an exclusion of certain high-taxed foreign earnings from the calculation of GILTI, a net $6 benefit for prior year items, and a net $1 charge for other items. For the nine months ended September 30, 2021 and 2020, the tax rate including discrete items was 26.4% (provision on income) and 5.0% (benefit on income), respectively. For the nine months ended September 30, 2021, the Company recorded a discrete tax benefit of $9 related to a net $13 benefit related to prior year amended returns and audit settlements, a $2 charge for a U.K. tax rate change, and a net $2 charge for other items. For the nine months ended September 30, 2020, the Company recorded a discrete tax benefit of $39 related to a $36 benefit for a U.S. tax law change associated with the issuance of final regulations that provide for an exclusion of certain high-taxed foreign earnings from the calculation of GILTI, a $6 charge for the remeasurement of deferred tax balances in various jurisdictions as a result of the Arconic Inc. Separation Transaction, a $5 benefit for stock compensation, a net $2 benefit for prior year items, and a net $2 benefit for other items. The tax (benefit) provision for the third quarter and nine months ended September 30, 2021 and 2020 were comprised of the following: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pre-tax income (loss) at estimated annual effective income tax rate before discrete items $ 7 $ (4) $ 73 $ 34 Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income 1 (2) — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized — (1) 1 — Other discrete items (12) (41) (9) (39) (Benefit) provision for income taxes $ (4) $ (48) $ 65 $ (5) |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
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 Howmet common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Net income from continuing operations attributable to common shareholders $ 27 $ 36 $ 181 $ 105 Income from discontinued operations — — — 50 Net income attributable to common shareholders 27 36 181 155 Less: preferred stock dividends declared 1 1 2 2 Net income available to Howmet Aerospace common shareholders - basic and diluted $ 26 $ 35 $ 179 $ 153 Average shares outstanding - basic 429 436 431 436 Effect of dilutive securities: Stock options 1 — 1 — Stock and performance awards 4 3 5 4 Average shares outstanding - diluted 434 439 437 440 Common stock outstanding at September 30, 2021 and 2020 was approximately 428 million and 434 million, respectively. On August 18, 2021, the Company announced that its Board of Directors authorized a share repurchase program of up to $1,500 of the Company's outstanding common stock. The Board had previously authorized, in May 2019, a share repurchase program of up to $500, of which approximately $77 Board authorization remained available as of July 31, 2021. In the quarter ended September 30, 2021, the Company repurchased approximately 770 thousand shares of its common stock at an average price of $32.50 per share (excluding commissions cost) for approximately $25 in cash. All of the shares repurchased have been retired. After giving effect to the share repurchases made through September 30, 2021, approximately $1,552 Board authorization remains available. Under the Company’s share repurchase programs (the “Share Repurchase Programs”), the Company may repurchase shares by means of trading plans established from time to time in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, block trades, private transactions, open market repurchases and/or accelerated share repurchase agreements or other derivative transactions. There is no stated expiration for the Share Repurchase Programs. Under its Share Repurchase Programs, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations, including limits under the Company’s Five-Year Revolving Credit Agreement (see Note O ). The Company is not obligated to repurchase any specific number of shares or to do so at any particular time, and the Share Repurchase Programs may be suspended, modified or terminated at any time without prior notice. The 5 million decrease in average shares outstanding (basic) for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was primarily due to the 7 million shares repurchased during 2021. As average shares outstanding are used in the calculation for both basic and diluted EPS, the full impact of share repurchases was not realized in EPS in the third quarter and nine months ended September 30, 2021 as share repurchases occurred at varying points during the second and third quarter of 2021. 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, 2021 2020 2021 2020 Stock options (1) — 3 — 3 (1) The weighted average exercise price per share of options excluded from diluted EPS was $33.61 and $26.03 as of September 30, 2021 and 2020, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table details the activity of the three components that comprise Accumulated other comprehensive loss: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pension and other postretirement benefits ( G ) Balance at beginning of period $ (903) $ (866) $ (980) $ (2,732) Other comprehensive income: Unrecognized net actuarial gain (loss) and prior service cost/benefit 1 (7) 68 (66) Tax benefit (expense) — 3 (15) 11 Total Other comprehensive income (loss) before reclassifications, net of tax 1 (4) 53 (55) Amortization of net actuarial loss and prior service cost (1) 15 16 46 133 Tax expense (2) (3) (4) (9) (24) Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) 12 12 37 109 Total Other comprehensive income 13 8 90 54 Transfer to Arconic Corporation — (22) — 1,798 Balance at end of period $ (890) $ (880) $ (890) $ (880) Foreign currency translation Balance at beginning of period $ (992) $ (1,097) $ (966) $ (596) Foreign currency translation (36) 48 (62) (39) Net amount reclassified from Accumulated other comprehensive loss (4) — — — 14 Other comprehensive (loss) income (36) 48 (62) (25) Transfer to Arconic Corporation — — — (428) Balance at end of period $ (1,028) $ (1,049) $ (1,028) $ (1,049) Cash flow hedges Balance at beginning of period $ 11 $ (5) $ 3 $ (1) Other comprehensive income (loss): Net change from periodic revaluations 1 2 20 (6) Tax benefit (expense) — 2 (4) 2 Total Other comprehensive income (loss) before reclassifications, net of tax 1 4 16 (4) Net amount reclassified to earnings (7) 2 (15) 6 Tax benefit (expense) (2) 2 (1) 3 (1) Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (3) (5) 1 (12) 5 Total Other comprehensive (loss) income (4) 5 4 1 Balance at end of period $ 7 $ — $ 7 $ — Accumulated other comprehensive loss $ (1,911) $ (1,929) $ (1,911) $ (1,929) (1) These amounts were recorded in Other expense, net on the Statement of Consolidation Operations (see Note F ). (2) These amounts were included in (Benefit) provision for income taxes on the Statement of Consolidated Operations. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. (4) Foreign currency translation charges were included in Restructuring and other charges on the Statement of Consolidated Operations due to the sale of foreign entities. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Receivables | Receivables Sale of Receivables Programs The Company has historically maintained two accounts receivables securitization arrangements. The first was an arrangement with financial institutions to sell certain customer receivables without recourse on a revolving basis (the “Receivables Sale Program”) and was terminated on August 30, 2021. This arrangement historically provided up to a maximum funding of $300 for receivables sold. The Company maintained a beneficial interest, or a right to collect cash, on the sold receivables that have not been funded (deferred purchase program receivable). In connection with the termination, t he Company repurchased the remaining $211 unpaid receivables, paying $160 in cash and reducing the $51 deferred purchase program receivable to zero (in a non-cash transaction). The Company had net cash repayments totaling $44 ($41 in draws and $85 in repayments) and $153 ($189 in draws and $342 in repayments) for the nine months ended September 30, 2021 and September 30, 2020, respectively. As of September 30, 2021, there was no deferred purchase program receivable included in Other receivables on the accompanying Consolidated Balance Sheet. As of December 31, 2020, the deferred purchase program receivable was $12, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase program receivable was reduced as collections of the underlying receivables occurred. Cash receipts from customer payments on sold receivables (which were cash receipts on the underlying trade receivables that had been previously sold) as well as cash receipts and cash disbursements from draws and repayments under the program were presented as cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows through the termination of the arrangement in 2021. As a result of the termination of the Receivables Sale Program on August 30, 2021, there will be no additional changes related to cash receipts from sold receivables within investing activities in the Statement of Consolidated Cash Flows in the fourth quarter of 2021. The second arrangement is one in which the Company, through a wholly-owned special purpose entity (“SPE”), has a receivables purchase agreement (the “Receivables Purchase Agreement”) such that the SPE may sell certain receivables to financial institutions until the earlier of August 30, 2024 or a termination event. The Receivables Purchase Agreement also contains customary representations and warranties, as well as affirmative and negative covenants. Pursuant to the Receivables Purchase Agreement, the Company does not maintain effective control over the transferred receivables, and therefore accounts for these transfers as sales of receivables. Cash received from collections of sold receivables is used by the SPE to fund additional purchases of receivables on a revolving basis. This arrangement historically provided up to a maximum funding of $125 for receivables sold. On August 30, 2021, the Company entered into an amendment to add the subsidiaries that were previously part of the terminated Receivables Sale Program, and, as a result, the maximum funding limit was increased by $200 to $325. The SPE sold the $211 of receivables, which were repurchased as a result of the termination of the Receivables Sale Program, in exchange for cash. The SPE sold $398 and $553 of its receivables without recourse and received cash funding under this program during the third quarter and nine months ended September 30, 2021, respectively, resulting in derecognition of the receivables from the Company’s Consolidated Balance Sheet. As of September 30, 2021 and December 31, 2020, $250 and $46 remained outstanding from the customer, respectively. As collateral against the sold receivables, the SPE maintains a certain level of unsold receivables, which was $90 and $33 at September 30, 2021 and December 31, 2020, respectively. Costs associated with the sales of receivables are reflected in the Company’s Consolidated Statements of Operations for the periods in which the sales occur. Cash receipts from sold receivables under the Receivables Purchase Agreement, excluding the receipts associated with the August 30, 2021 termination of the Receivables Sale Program, are presented within operating activities in the Statement of Consolidated Cash Flows. The Company had accounts receivable securitization arrangements totaling $325 and $425 at September 30, 2021 and December 31, 2020, respectively, of which $250 was drawn as of September 30, 2021 and December 31, 2020. The net cash funding from the sale of accounts receivable was neither a use of cash nor a source of cash for any quarter of 2021. Other Customer Receivable Sales In the third quarter and nine months ended September 30, 2021, the Company sold $103 and $267, respectively, of certain customers’ receivables in exchange for cash (of which $102 r emained outstanding from the customers at September 30, 2021), the proceeds from which are presented in changes in receivables within operating activities in the Statement of Consolidated Cash Flows. In the third quarter and nine months ended September 30, 2020, the Company sold $42 and $131, respectively, of |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories September 30, 2021 December 31, 2020 Finished goods $ 479 $ 528 Work-in-process 640 629 Purchased raw materials 264 292 Operating supplies 37 39 Total inventories $ 1,420 $ 1,488 |
Properties, Plants, and Equipme
Properties, Plants, and Equipment, net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants, and Equipment, net | Properties, Plants, and Equipment, net September 30, 2021 December 31, 2020 Land and land rights $ 92 $ 98 Structures 1,024 1,033 Machinery and equipment 3,940 3,879 5,056 5,010 Less: accumulated depreciation and amortization 2,736 2,626 2,320 2,384 Construction work-in-progress 163 208 Properties, plants, and equipment, net $ 2,483 $ 2,592 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases Operating lease cost, which includes short-term leases and variable lease payments and approximates cash paid, was $15 and $17 in the third quarter of 2021 and 2020, respectively. Operating lease cost, which includes short-term leases and variable lease payments and approximates cash paid, was $48 and $53 in the nine months ended September 30, 2021 and 2020, respectively. Operating lease right-of-use assets and lease liabilities in the Consolidated Balance Sheet were as follows: September 30, 2021 December 31, 2020 Right-of-use assets classified in Other noncurrent assets $ 116 $ 131 Current portion of lease liabilities classified in Other current liabilities $ 34 $ 38 Long-term portion of lease liabilities classified in Other noncurrent liabilities 88 100 Total lease liabilities $ 122 $ 138 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt September 30, 2021 December 31, 2020 5.400% Notes, due 2021 (1) $ — $ 361 5.870% Notes, due 2022 (2) — 476 5.125% Notes, due 2024 1,197 1,250 6.875% Notes, due 2025 600 1,200 5.900% Notes, due 2027 625 625 6.750% Bonds, due 2028 300 300 3.000% Notes, due 2029 700 — 5.950% Notes, due 2037 625 625 4.750% Iowa Finance Authority Loan, due 2042 250 250 Other (3) (11) (12) 4,286 5,075 Less: amount due within one year 14 376 Total long-term debt $ 4,272 $ 4,699 (1) Redeemed on January 15, 2021. (2) Redeemed on May 3, 2021. (3) Includes various financing arrangements related to subsidiaries, unamortized debt discounts and unamortized debt issuance costs related to outstanding notes and bonds listed in the table above. Public Debt On April 6, 2020, the Company completed the early redemption of all $1,000 of its 6.150% Notes due 2020 (the “6.150% Notes”) and the early partial redemption of $300 of its 5.400% Notes due 2021 (the “ 5.400% Notes"). Holders of the 6.150% Notes were paid an aggregate of $1,020 and holders of the 5.400% Notes were paid an aggregate of $315, plus accrued and unpaid interest up to, but not including, the redemption date. The Company incurred early termination premium and accrued interest of $35 and $17, respectively, which were recorded in Loss on debt redemption and Interest expense, net, respectively, during the second quarter ended June 30, 2020 in the Statement of Consolidated Operations. On April 24, 2020, the Company completed an offering of $1,200 aggregate principal amount of 6.875% Notes due 2025 (the “6.875% Notes”), the proceeds of which have been used to fund the cash tender offers noted above and to pay related transaction fees, including applicable premiums and expenses, with the remaining amount to be used for general corporate purposes. The Company incurred deferred financing costs of $14 associated with the issuance in the second quarter of 2020. On May 21, 2020, the Company completed a cash tender offer and repurchased $589 and $151 of principa l amount of the 5.400% Notes and its 5.870% Notes due 2022 (the “5.870% Notes”), respectively. The amount of early tender premium and accrued interest associated with the notes accepted for early settlement were $24 and $4, respectively, which were recorded in Loss on debt redemption and Interest expense, net, respectively, during the second quarter ended June 30, 2020 in the Statement of Consolidated Operations. On January 15, 2021, the Company completed the early redemption of all the remaining $361 of its 5.400% Notes at par and paid $5 in accrued interest. On May 3, 2021, the Company completed the early redemption of all the remaining $476 aggregate principal amount of its 5.870% Notes and paid an aggregate of $503, including $5 of accrued interest. The Company also incurred an early termination premium and other costs of $23, which was recorded in Loss on debt redemption in the second quarter of 2021 . On September 1, 2021, the Company completed an offering of $700 aggregate principal amount of 3.000% Notes due 2029, the proceeds of which have been used to fund the cash tender offer noted below and to pay related transaction fees, including applicable premiums and expenses. On September 2, 2021, the Company completed a cash tender offer and repurchased approximately $600 aggregate principal amount of its 6.875% Notes. The amount of tender premium and accrued interest associated with the notes accepted for settlement were $105 and $14, respectively, which were recorded in Loss on debt redemption and Interest expense, net, respectively, during the third quarter ended September 30, 2021 in the Statement of Consolidated Operations. In the third quarter of 2021, the Company repurchased in the open market approximately $53 aggregate principal amount of its 5.125% Notes due 2024 (the “5.125% Notes”) and paid approximately $59, including an early termination premium and accrued interest of approximately $5 and $1, respectively, which were recorded in Loss on debt redemption and Interest expense, net, respectively. In October 2021, the Company repurchased an additional $47 aggregate principal amount of its 5.125% Notes in the open market and paid approximately $52, including an early termination premium of approximately $5, which will be recorded in Loss on debt redemption in the fourth quarter ending December 31, 2021 in the Statement of Consolidated Operations. On an annual basis, the current year debt activity will decrease Interest expense, net by approximately $70. Credit Facility On September 28, 2021, the Company amended and restated its Five-Year Revolving Credit Agreement (the “Credit Agreement”). The Credit Agreement provides a $1,000 senior unsecured revolving credit facility that matures on September 28, 2026, unless extended or earlier terminated in accordance with the provisions of the Credit Agreement. Capitalized terms used in this “Credit Facility” section but not otherwise defined shall have the meanings given to such terms in the Credit Agreement. Under the Credit Agreement, the Company’s ratio of Consolidated Net Debt to Consolidated EBITDA as of the end of each fiscal quarter for the period of the four fiscal quarters of the Company most recently ended, is required to be no greater than 3.50 to 1.00; provided, however, that during the Covenant Relief Period through December 31, 2022 (unless the Company elects to terminate the Covenant Relief Period earlier in accordance with the Credit Agreement), the Company’s Consolidated Net Debt to Consolidated EBITDA ratio cannot exceed the levels set forth below: No greater than (i) for the quarter ending September 30, 2021 5.00 to 1.00 (ii) for the quarter ending December 31, 2021 4.75 to 1.00 (iii) for the quarter ending March 31, 2022 4.50 to 1.00 (iv) for the quarter ending June 30, 2022 4.50 to 1.00 (v) for the quarter ending September 30, 2022 4.25 to 1.00 (vi) for the quarter ending December 31, 2022 3.75 to 1.00 During the Covenant Relief Period, common stock dividends and share repurchases (see Note I ) are permitted only if no loans under the Credit Agreement are outstanding at the time and are limited to an aggregate amount not to exceed $450 during the year ending December 31, 2021, with an incremental amount of $500 available during the year ending December 31, 2022 provided that any amount that remains unused as of December 31, 2021 may be carried forward and used during the year ending December 31, 2022. There were no amounts outstanding at September 30, 2021 or December 31, 2020, and no amounts were borrowed during 2021 or 2020 under the Credit Agreement. At September 30, 2021, the Company was in compliance with all covenants under the Credit Agreement. Availability under the Credit Agreement could be reduced in future periods if the Company fails to maintain the required ratios referenced above. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
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 their fair value. The Company holds exchange-traded fixed income securities which are considered available-for-sale securities that are carried at fair value which is based on quoted market prices which are classified in Level 1 of the fair value hierarchy and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheet. 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 Howmet 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. September 30, 2021 December 31, 2020 Carrying Fair Carrying Fair Long-term debt, less amount due within one year $ 4,272 $ 4,872 $ 4,699 $ 5,426 Restricted cash, which is included in Prepaid expenses and other current assets in the Consolidated Balance Sheet, was $2 and $1 at September 30, 2021 and December 31, 2020, respectively. |
Divestitures
Divestitures | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures 2021 Divestiture On June 1, 2021, the Company completed the sale of a small manufacturing plant in France within the Fastening Systems segment for $10 (of which $8 of cash was received in the second quarter of 2021). An agreement to sell was reached on March 15, 2021, which resulted in a charge of $4 related to the non-cash impairment of the net book value of the business, primarily goodwill, in the first quarter of 2021 which was recorded in Restructuring and other charges in the Statement of Consolidated Operations. 2020 Divestiture On January 31, 2020, the Company reached an agreement to sell a small manufacturing plant in the U.K. within the Engineered Structures segment for $12 in cash, and therefore was classified as held for sale. As a result of entering into the agreement, a charge of $12 was recognized related to a non-cash impairment of the net book value of the business, primarily properties, plants, and equipment in the first quarter of 2020, which was recorded in Restructuring and other charges in the Statement of Consolidated Operations. As the sale did not close, the Company changed the classification from held for sale to held for use in the second quarter of 2020 and recorded these assets at their lower of carrying value (assuming no initial reclassification for held for sale was made) or fair value. The result was a reversal of $7 related to a non-cash impairment in the second quarter of 2020. These charges were recorded in Restructuring and other charges in the Statement of Consolidated Operations. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Contingencies The following information supplements and, as applicable, updates the discussion of the contingencies and commitments in Note V to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “Form 10-K”), and should be read in conjunction with the complete descriptions provided in the Form 10-K. Environmental Matters Howmet participates in environmental assessments and cleanups at more than 30 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. The Company’s remediation reserve balance was $12 and $10 at September 30, 2021 and December 31, 2020, respectively, recorded in Other noncurrent liabilities and deferred credits in the Consolidated Balance Sheet (of which $6 and $5, respectively, were classified as a current liability), and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. The increase in September 2021 is associated with site monitoring costs for previously owned property in Vernon, California, which will determine if any additional remediation is required. Payments related to remediation expenses applied against the reserve were less than $1 in the third quarter ended September 30, 2021 and included 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 less than 1% of Cost of goods sold. Reynobond PE The Company is indemnified for all potential liabilities associated with the fire at the Grenfell Tower in London, U.K., which occurred on June 14, 2017, by Arconic Corporation pursuant to the Separation and Distribution Agreement dated March 31, 2020, including, with respect to the following legal proceedings, updated as applicable from the Form 10-K: Howard v. Arconic Inc. et al. (securities law related claims). As described in the Form 10-K, lead plaintiffs in this case, which alleges violations of the federal securities law, filed an amended complaint in July 2019 (the “Second Amended Complaint”). On June 23, 2021, the Court ruled that certain claims related to a particular registration statement, other SEC filings, product brochures and websites can proceed. All other claims against the defendants were permanently dismissed, with prejudice. On August 12, 2021, defendants filed an answer to the Second Amended Complaint. In addition, on August 11, 2021, the Company filed a motion for certification of an interlocutory appeal and associated stay, to which Plaintiffs filed an opposition on August 17, 2021 and the Company filed a reply brief on August 24, 2021. This motion remains pending before the court. With respect to the United Kingdom litigation (various claims on behalf of survivors and estates of decedents) and the Behrens et al. v. Arconic Inc. et al. (various claims on behalf of survivors and estates of decedents) and Raul v. Albaugh, et al . (derivative related claim) proceedings, there are no updates. Lehman Brothers International (Europe) (“LBIE”) Proceeding. On June 26, 2020, LBIE filed formal proceedings against two Firth Rixson entities (“Firth”) in the High Court of Justice, Business and Property Courts of England and Wales. The proceedings relate to interest rate swap transactions that Firth entered into with LBIE in 2007 to 2008. In 2008, LBIE commenced insolvency proceedings, an event of default under the agreements, rendering LBIE unable to meet its obligations under the swaps and suspending Firth’s payment obligations. In the court proceedings, LBIE seeks a declaration that Firth has a contractual obligation to pay the amounts owing to LBIE under the agreements upon its emergence from insolvency proceedings which is expected to occur by 2023, which LBIE claims to be approximately $64, plus applicable interest. Firth will continue to maintain its position that multiple events of default under the agreements related to LBIE’s insolvency proceeding cannot be cured or continue indefinitely, which the Company believes are meritorious defenses. A virtual hearing in this matter occurred on January 13 and 14, 2021 in London, England, and a ruling has yet to be issued to date. Given the importance of the case for LBIE and Firth, it is expected that irrespective of the outcome of the most recent hearing, the case will be appealed and any requirement for the parties to pay amounts under the agreements will be stayed. An appeal of the case could continue past the end of 2022 into 2023. The Company intends to vigorously defend against these claims. Other In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, product liability, safety and health, employment, tax and antitrust matters. 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, 2021, Howmet 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 2021 and 2040, was $16 at September 30, 2021. Pursuant to the Separation and Distribution Agreement, dated as of October 31, 2016, between Howmet and Alcoa Corporation, Howmet was required to provide certain guarantees for Alcoa Corporation, which had a fair value of $6 and $12 at September 30, 2021 and December 31, 2020, respectively, and were included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. The Company was required to provide a guarantee up to an estimated present value amount of approximately $1,406 and $1,398 at September 30, 2021 and December 31, 2020, respectively. For this guarantee, subject to its provisions, the Company is secondarily liable in the event of a payment default by Alcoa Corporation. The Company currently views the risk of an Alcoa Corporation payment default on its obligations under the contract to be remote. Letters of Credit The Company has outstanding letters of credit, primarily related to workers’ compensation, environmental obligations, accounts receivable securitization and leasing obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates in 2021 and 2022, was $116 at September 30, 2021. Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to retain letters of credit of $53 that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims which occurred prior to the respective separation transactions of April 1, 2020 and November 1, 2016. Arconic Corporation and Alcoa Corporation workers’ compensation and letters of credit fees paid by the Company are being proportionally billed to and are being reimbursed by Arconic Corporation and Alcoa Corporation, respectively. Also, the Company was required to provide letters of credit for certain Arconic Corporation environmental obligations and, as a result, the Company has $17 of outstanding letters of credit relating to liabilities (which are included in the $116 in the above paragraph). Less than $1 of these outstanding letters of credit are pending cancellation and will be deemed cancelled once returned by the beneficiary. Arconic Corporation has issued surety bonds to cover these environmental obligations. Arconic Corporation is being billed for these letter of credit fees paid by the Company and will reimburse the Company for any payments made under these letters of credit. Surety Bonds The Company 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 annual surety bonds, which expire and automatically renew at various dates, primarily in 2021 and 2022, was $46 at September 30, 2021. Pursuant to the Separation and Distribution Agreements between the Company and Arconic Corporation and between the Company and Alcoa Corporation, the Company is required to provide surety bonds of $25 (which are included in the $46 in the above paragraph) that had previously been provided related to the Company, Arconic Corporation, and Alcoa Corporation workers’ compensation claims which occurred prior to the respective separation transactions of April 1, 2020 and November 1, 2016. Arconic Corporation and Alcoa Corporation workers’ compensation claims paid and surety bond fees paid by the Company are being proportionately billed to and are being reimbursed by Arconic Corporation and Alcoa Corporation. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Management evaluated all activity of Howmet 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 related to actions taken by the Company to reduce pension obligations. See Note O for the open market debt repurchases made subsequent to the third quarter of 2021. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Consolidated Financial Statements of Howmet Aerospace Inc. (formerly known as Arconic Inc.) and subsidiaries (“Howmet” 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 2020 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which includes all disclosures required by GAAP. Certain amounts in previously issued financial statements were reclassified to conform to the current period presentation. The separation of Arconic Inc. into two standalone, publicly-traded companies, Howmet Aerospace Inc. and Arconic Corporation, (the “Arconic Inc. Separation Transaction”) occurred on April 1, 2020. The financial results of Arconic Corporation for all periods prior to the Arconic Inc. Separation Transaction have been retrospectively reflected in the Statement of Consolidated Operations as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. The cash flows, comprehensive income, and equity related to Arconic Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows, Statement of Consolidated Comprehensive Income, and Statement of Changes in Consolidated Equity, respectively, for all periods prior to the Arconic Inc. Separation Transaction. See Note B for additional information related to the Arconic Inc. Separation Transaction and discontinued operations. For the nine months ended September 30, 2021 and 2020, the Company derived approximately 60% and 70%, respectively, of its revenue from products sold to the aerospace end-market. As a result of the global COVID-19 pandemic and its impact on the aerospace industry to-date, the possibility exists that there could be a sustained impact to our operations and financial results. Since the start of the pandemic, certain original equipment manufacturer (“OEM”) customers have reduced production or suspended manufacturing operations in North America and Europe on a temporary basis. While the pandemic resulted in the temporary closure of a small number of the Company's manufacturing facilities during 2020, all of our manufacturing facilities are currently operating. Since the duration of the pandemic is uncertain, management has taken a series of actions to address the financial impact, including fixed and variable cost reductions, such as headcount reductions in certain segments, and reducing the level of capital expenditures to preserve cash and maintain liquidity. The preparation of the Consolidated Financial Statements of the Company in conformity with GAAP requires management to make certain judgments, estimates, and assumptions. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience, including considerations relating to the impact of COVID-19. The impact of COVID-19 is rapidly changing and of unknown duration and macroeconomic impact and, as a result, these considerations remain highly uncertain. Management has made its best estimates using all relevant information available at the time, but it is possible that our estimates will differ from our actual results and affect the Consolidated Financial Statements in future periods and potentially require adverse adjustments to the recoverability of goodwill, intangible and long-lived assets, the realizability of deferred tax assets and other judgments and estimations and assumptions that may be impacted by COVID-19. |
Recently Adopted and Recently Issued Accounting Guidance | Recently Adopted and Recently Issued Accounting Guidance Adopted On January 1, 2021, the Company adopted changes issued by the Financial Accounting Standards Board (“FASB”) that were intended to simplify various aspects of accounting for income taxes by eliminating certain exceptions contained in existing guidance and amending other guidance to simplify several other income tax accounting matters. The adoption of this new guidance did not have a material impact on the Consolidated Financial Statements. Issued In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. |
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. |
Arconic Inc. Separation Trans_2
Arconic Inc. Separation Transaction and Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The results of operations of Arconic Corporation are presented as discontinued operations in the Statement of Consolidated Operations as summarized below: Nine months ended September 30, 2020 Sales $ 1,575 Cost of goods sold 1,293 Selling, general administrative, research and development and other expenses 106 Provision for depreciation and amortization 58 Restructuring and other charges (18) Operating income from discontinued operations 136 Interest expense, net 7 Other expense, net 41 Income from discontinued operations 88 Provision for income taxes 38 Income from discontinued operations after income taxes $ 50 The following table presents purchases of properties, plants, and equipment, proceeds from the sale of businesses, and the provision for depreciation and amortization of discontinued operations related to Arconic Corporation: Nine months ended September 30, 2020 Capital expenditures $ 72 Proceeds from the sales of businesses $ 112 Provision for depreciation and amortization $ 58 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results of Arconic's Reportable Segments | The operating results of the Company’s reportable segments were as follows. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Third quarter ended September 30, 2021 Sales: Third-party sales $ 599 $ 254 $ 199 $ 231 $ 1,283 Inter-segment sales 1 — 1 — 2 Total sales $ 600 $ 254 $ 200 $ 231 $ 1,285 Profit and loss: Segment operating profit $ 120 $ 47 $ 14 $ 62 $ 243 Restructuring and other charges 5 3 — — 8 Provision for depreciation and amortization 31 12 12 10 65 Capital expenditures 21 8 3 15 47 Third quarter ended September 30, 2020 Sales: Third-party sales $ 485 $ 271 $ 206 $ 172 $ 1,134 Inter-segment sales 1 — 1 — 2 Total sales $ 486 $ 271 $ 207 $ 172 $ 1,136 Profit and loss: Segment operating profit $ 39 $ 33 $ 10 $ 35 $ 117 Restructuring and other charges 9 — 9 — 18 Provision for depreciation and amortization 31 12 13 10 66 Capital expenditures 15 9 3 6 33 Engine Products Fastening Systems Engineered Structures Forged Wheels Total Nine months ended September 30, 2021 Sales: Third-party sales $ 1,677 $ 788 $ 535 $ 687 $ 3,687 Inter-segment sales 3 — 4 — 7 Total sales $ 1,680 $ 788 $ 539 $ 687 $ 3,694 Profit and loss: Segment operating profit $ 321 $ 142 $ 35 $ 193 $ 691 Restructuring and other charges 15 8 1 — 24 Provision for depreciation and amortization 92 37 37 29 195 Capital expenditures 48 22 13 37 120 Nine months ended September 30, 2020 Sales: Third-party sales $ 1,851 $ 982 $ 710 $ 476 $ 4,019 Inter-segment sales 4 — 6 — 10 Total sales $ 1,855 $ 982 $ 716 $ 476 $ 4,029 Profit and loss: Segment operating profit $ 309 $ 199 $ 57 $ 91 $ 656 Restructuring and other charges 44 26 21 3 94 Provision for depreciation and amortization 92 36 40 29 197 Capital expenditures 48 24 11 17 100 |
Schedule of Segment Reporting Information to Consolidated Income Before income Taxes | The following table reconciles Total segment operating profit to Income (loss) from continuing operations before income taxes: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Total segment operating profit $ 243 $ 117 $ 691 $ 656 Unallocated amounts: Restructuring and other charges (8) (22) (22) (166) Corporate expense (30) (22) (68) (85) Operating income $ 205 $ 73 $ 601 $ 405 Loss on debt redemption (118) — (141) (64) Interest expense, net (63) (77) (201) (241) Other expense, net (1) (8) (13) — Income (loss) from continuing operations before income taxes $ 23 $ (12) $ 246 $ 100 |
Reconciliation of Capital Expenditures from Segments to Consolidated | The following table reconciles total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the Statement of Consolidated Cash Flows. Differences between the total segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period. Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Total segment capital expenditures $ 47 $ 33 $ 120 $ 100 Corporate and discontinued operations — 3 18 120 Capital expenditures $ 47 $ 36 $ 138 $ 220 |
Disaggregation of Revenue by Major End Market Served | The following table disaggregates segment revenue by major end market served. Differences between the total segment and consolidated totals are in Corporate. Engine Products Fastening Systems Engineered Structures Forged Wheels Total Third quarter ended September 30, 2021 Aerospace - Commercial $ 299 $ 126 $ 118 $ — $ 543 Aerospace - Defense 130 37 65 — 232 Commercial Transportation — 59 — 231 290 Industrial and Other 170 32 16 — 218 Total end-market revenue $ 599 $ 254 $ 199 $ 231 $ 1,283 Third quarter ended September 30, 2020 Aerospace - Commercial $ 199 $ 169 $ 104 $ — $ 472 Aerospace - Defense 142 37 82 — 261 Commercial Transportation — 38 — 172 210 Industrial and Other 144 27 20 — 191 Total end-market revenue $ 485 $ 271 $ 206 $ 172 $ 1,134 Nine months ended September 30, 2021 Aerospace - Commercial $ 786 $ 403 $ 277 $ — $ 1,466 Aerospace - Defense 402 120 206 — 728 Commercial Transportation — 154 — 687 841 Industrial and Other 489 111 52 — 652 Total end-market revenue $ 1,677 $ 788 $ 535 $ 687 $ 3,687 Nine months ended September 30, 2020 Aerospace - Commercial $ 1,018 $ 650 $ 432 $ — $ 2,100 Aerospace - Defense 394 120 216 — 730 Commercial Transportation — 118 — 476 594 Industrial and Other 439 94 62 — 595 Total end-market revenue $ 1,851 $ 982 $ 710 $ 476 $ 4,019 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Layoff costs $ — $ 17 $ 2 $ 93 Net reversals of previously recorded layoff reserves — — (1) (10) Pension, Other post-retirement benefits and Deferred Compensation - net settlements ( G ) 3 3 9 67 Non-cash asset impairments 4 — 8 — Net loss related to divestitures of assets and businesses ( Q ) — — 4 9 Other 1 2 — 7 Restructuring and other charges $ 8 $ 22 $ 22 $ 166 |
Activity and Reserve Balances for Restructuring Charges | Layoff costs Other exit costs Total Reserve balances at December 31, 2020 $ 54 $ — $ 54 Cash payments (37) — (37) Restructuring charges 10 12 22 Other (1) (11) (12) (23) Reserve balances at September 30, 2021 $ 16 $ — $ 16 (1) In the nine months ended September 30, 2021, layoff costs included a $9 charge for pension plan settlements and a $2 charge for other layoffs costs; while other exit costs were primarily related to an $11 charge for other exit costs including accelerated depreciation. |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expense, Net | Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Non-service related net periodic benefit cost $ 2 $ 8 $ 8 $ 19 Interest income (1) (1) (2) (5) Foreign currency (gains) losses, net (2) (5) 1 (12) Net loss from asset sales 3 2 7 6 Deferred compensation (1) 4 5 1 Other, net — — (6) (9) Other expense, net $ 1 $ 8 $ 13 $ — |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic cost (benefit) were as follows: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pension benefits Service cost $ 1 $ 1 $ 3 $ 10 Interest cost 12 17 36 81 Expected return on plan assets (23) (21) (69) (115) Recognized net actuarial loss 14 12 43 66 Settlements 3 8 9 72 Net periodic cost (1) 7 17 22 114 Discontinued operations — — — 20 Net amount recognized in continuing operations in Statement of Consolidated Operations $ 7 $ 17 $ 22 $ 94 Other postretirement benefits Service cost $ — $ 1 $ 1 $ 3 Interest cost 1 2 4 9 Recognized net actuarial loss 1 — 1 2 Amortization of prior service benefit (3) (2) (7) (5) Curtailments — (2) — (2) Net periodic (benefit) cost (1) (1) (1) (1) 7 Discontinued operations — — — 6 Net amount recognized in continuing operations in Statement of Consolidated Operations $ (1) $ (1) $ (1) $ 1 (1) Service cost for continuing operations was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; settlements and curtailments were included in Restructuring and other charges; and all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations. The amounts included in net periodic cost (benefit) include costs related to both continuing and discontinued operations for the nine months ended September 30, 2020 . |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provisions | The tax (benefit) provision for the third quarter and nine months ended September 30, 2021 and 2020 were comprised of the following: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pre-tax income (loss) at estimated annual effective income tax rate before discrete items $ 7 $ (4) $ 73 $ 34 Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income 1 (2) — — Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized — (1) 1 — Other discrete items (12) (41) (9) (39) (Benefit) provision for income taxes $ (4) $ (48) $ 65 $ (5) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 Howmet common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Net income from continuing operations attributable to common shareholders $ 27 $ 36 $ 181 $ 105 Income from discontinued operations — — — 50 Net income attributable to common shareholders 27 36 181 155 Less: preferred stock dividends declared 1 1 2 2 Net income available to Howmet Aerospace common shareholders - basic and diluted $ 26 $ 35 $ 179 $ 153 Average shares outstanding - basic 429 436 431 436 Effect of dilutive securities: Stock options 1 — 1 — Stock and performance awards 4 3 5 4 Average shares outstanding - diluted 434 439 437 440 |
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, 2021 2020 2021 2020 Stock options (1) — 3 — 3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive (Loss) by Component | The following table details the activity of the three components that comprise Accumulated other comprehensive loss: Third quarter ended Nine months ended September 30, September 30, 2021 2020 2021 2020 Pension and other postretirement benefits ( G ) Balance at beginning of period $ (903) $ (866) $ (980) $ (2,732) Other comprehensive income: Unrecognized net actuarial gain (loss) and prior service cost/benefit 1 (7) 68 (66) Tax benefit (expense) — 3 (15) 11 Total Other comprehensive income (loss) before reclassifications, net of tax 1 (4) 53 (55) Amortization of net actuarial loss and prior service cost (1) 15 16 46 133 Tax expense (2) (3) (4) (9) (24) Total amount reclassified from Accumulated other comprehensive loss, net of tax (3) 12 12 37 109 Total Other comprehensive income 13 8 90 54 Transfer to Arconic Corporation — (22) — 1,798 Balance at end of period $ (890) $ (880) $ (890) $ (880) Foreign currency translation Balance at beginning of period $ (992) $ (1,097) $ (966) $ (596) Foreign currency translation (36) 48 (62) (39) Net amount reclassified from Accumulated other comprehensive loss (4) — — — 14 Other comprehensive (loss) income (36) 48 (62) (25) Transfer to Arconic Corporation — — — (428) Balance at end of period $ (1,028) $ (1,049) $ (1,028) $ (1,049) Cash flow hedges Balance at beginning of period $ 11 $ (5) $ 3 $ (1) Other comprehensive income (loss): Net change from periodic revaluations 1 2 20 (6) Tax benefit (expense) — 2 (4) 2 Total Other comprehensive income (loss) before reclassifications, net of tax 1 4 16 (4) Net amount reclassified to earnings (7) 2 (15) 6 Tax benefit (expense) (2) 2 (1) 3 (1) Total amount reclassified from Accumulated other comprehensive (loss) income, net of tax (3) (5) 1 (12) 5 Total Other comprehensive (loss) income (4) 5 4 1 Balance at end of period $ 7 $ — $ 7 $ — Accumulated other comprehensive loss $ (1,911) $ (1,929) $ (1,911) $ (1,929) (1) These amounts were recorded in Other expense, net on the Statement of Consolidation Operations (see Note F ). (2) These amounts were included in (Benefit) provision for income taxes on the Statement of Consolidated Operations. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. (4) Foreign currency translation charges were included in Restructuring and other charges on the Statement of Consolidated Operations due to the sale of foreign entities. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | September 30, 2021 December 31, 2020 Finished goods $ 479 $ 528 Work-in-process 640 629 Purchased raw materials 264 292 Operating supplies 37 39 Total inventories $ 1,420 $ 1,488 |
Properties, Plants, and Equip_2
Properties, Plants, and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plants, and Equipment, Net | September 30, 2021 December 31, 2020 Land and land rights $ 92 $ 98 Structures 1,024 1,033 Machinery and equipment 3,940 3,879 5,056 5,010 Less: accumulated depreciation and amortization 2,736 2,626 2,320 2,384 Construction work-in-progress 163 208 Properties, plants, and equipment, net $ 2,483 $ 2,592 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Operating lease right-of-use assets and lease liabilities in the Consolidated Balance Sheet were as follows: September 30, 2021 December 31, 2020 Right-of-use assets classified in Other noncurrent assets $ 116 $ 131 Current portion of lease liabilities classified in Other current liabilities $ 34 $ 38 Long-term portion of lease liabilities classified in Other noncurrent liabilities 88 100 Total lease liabilities $ 122 $ 138 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | September 30, 2021 December 31, 2020 5.400% Notes, due 2021 (1) $ — $ 361 5.870% Notes, due 2022 (2) — 476 5.125% Notes, due 2024 1,197 1,250 6.875% Notes, due 2025 600 1,200 5.900% Notes, due 2027 625 625 6.750% Bonds, due 2028 300 300 3.000% Notes, due 2029 700 — 5.950% Notes, due 2037 625 625 4.750% Iowa Finance Authority Loan, due 2042 250 250 Other (3) (11) (12) 4,286 5,075 Less: amount due within one year 14 376 Total long-term debt $ 4,272 $ 4,699 (1) Redeemed on January 15, 2021. (2) Redeemed on May 3, 2021. (3) Includes various financing arrangements related to subsidiaries, unamortized debt discounts and unamortized debt issuance costs related to outstanding notes and bonds listed in the table above. |
Schedule Of Debt Covenant Information | the Company’s Consolidated Net Debt to Consolidated EBITDA ratio cannot exceed the levels set forth below: No greater than (i) for the quarter ending September 30, 2021 5.00 to 1.00 (ii) for the quarter ending December 31, 2021 4.75 to 1.00 (iii) for the quarter ending March 31, 2022 4.50 to 1.00 (iv) for the quarter ending June 30, 2022 4.50 to 1.00 (v) for the quarter ending September 30, 2022 4.25 to 1.00 (vi) for the quarter ending December 31, 2022 3.75 to 1.00 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values 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 their fair value. The Company holds exchange-traded fixed income securities which are considered available-for-sale securities that are carried at fair value which is based on quoted market prices which are classified in Level 1 of the fair value hierarchy and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheet. 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 Howmet 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. September 30, 2021 December 31, 2020 Carrying Fair Carrying Fair Long-term debt, less amount due within one year $ 4,272 $ 4,872 $ 4,699 $ 5,426 |
Basis of Presentation (Details)
Basis of Presentation (Details) - company | Apr. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Concentration Risk [Line Items] | |||
Number of independent, publicly-traded companies resulting from proposed separation transaction | 2 | ||
Aerospace | Revenue Benchmark | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 60.00% | 70.00% |
Arconic Inc. Separation Trans_3
Arconic Inc. Separation Transaction and Discontinued Operations - Narrative (Details) | Apr. 01, 2020company | Mar. 25, 2020USD ($) | Feb. 01, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 01, 2020USD ($) | Feb. 07, 2020USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of independent, publicly-traded companies resulting from proposed separation transaction | company | 2 | |||||||||
Debt issuance costs incurred | $ 11,000,000 | $ 61,000,000 | ||||||||
Aluminum Rolling Mill | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Consideration | $ 50,000,000 | |||||||||
Gain (loss) on sale of business | $ (59,000,000) | $ 6,000,000 | $ 53,000,000 | |||||||
Hard Alloy Extrusions Plant In South Korea | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Consideration | $ 62,000,000 | |||||||||
Gain (loss) on sale of business | 27,000,000 | |||||||||
Arconic Corporation | Discontinued Operations, Disposed of by Means Other than Sale | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Discontinued operations activity | $ 0 | $ 50,000,000 | ||||||||
Lien Notes | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Debt issuance costs incurred | $ 45,000,000 | |||||||||
Senior Notes | Second Lien Notes Due 2028 | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Aggregate principal amount | $ 600,000,000 | |||||||||
Long-term debt, interest rate | 6.125% | |||||||||
Line of Credit | Senior Secured First Lien Term B Loan Facility Due 2027 | Secured Debt | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Aggregate principal amount | $ 600,000,000 | |||||||||
Credit agreement term | 7 years |
Arconic Inc. Separation Trans_4
Arconic Inc. Separation Transaction and Discontinued Operations - Summary of Results of Discontinued Operations (Details) - Arconic Corporation - Discontinued Operations, Disposed of by Means Other than Sale - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Sales | $ 1,575 | |
Cost of goods sold | 1,293 | |
Selling, general administrative, research and development and other expenses | 106 | |
Provision for depreciation and amortization | 58 | |
Restructuring and other charges | (18) | |
Operating income from discontinued operations | 136 | |
Interest expense, net | 7 | |
Other expense, net | 41 | |
Income from discontinued operations | 88 | |
Provision for income taxes | 38 | |
Income from discontinued operations after income taxes | $ 0 | $ 50 |
Arconic Inc. Separation Trans_5
Arconic Inc. Separation Transaction and Discontinued Operations - Summary of Property, Plant and Equipment Purchases of the Discontinued Operations (Details) - Arconic Corporation - Discontinued Operations, Disposed of by Means Other than Sale $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Capital expenditures | $ 72 |
Proceeds from the sales of businesses | 112 |
Provision for depreciation and amortization | $ 58 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | Jan. 01, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020 | Dec. 31, 2020USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||||||
Number of reportable segments | segment | 4 | |||||
Goodwill | $ 4,077 | $ 4,102 | ||||
Goodwill, impairment loss | $ 0 | |||||
Revenue Benchmark | Customer Concentration Risk | Aerospace | ||||||
Segment Reporting Information [Line Items] | ||||||
Concentration risk, percentage | 60.00% | 70.00% | ||||
Revenue Benchmark | Customer Concentration Risk | Aerospace | General Electric Company | Engine Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Concentration risk, percentage | 13.00% | 11.00% | ||||
Engineered Structures | ||||||
Segment Reporting Information [Line Items] | ||||||
Goodwill reallocated, increase (decrease) | 17 | |||||
Percentage of fair value in excess of carrying amount | 15.00% | 60.00% | ||||
Engine Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Goodwill reallocated, increase (decrease) | $ (17) |
Segment Information - Schedule
Segment Information - Schedule of Operating Results of Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,283 | $ 1,134 | $ 3,687 | $ 4,021 |
Segment operating profit | 205 | 73 | 601 | 405 |
Restructuring and other charges | 8 | 22 | 22 | 166 |
Provision for depreciation and amortization | 68 | 68 | 203 | 212 |
Capital expenditures | 47 | 36 | 138 | 220 |
Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,283 | 1,134 | 3,687 | 4,019 |
Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 2 | 2 | 7 | 10 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1,285 | 1,136 | 3,694 | 4,029 |
Segment operating profit | 243 | 117 | 691 | 656 |
Restructuring and other charges | 8 | 18 | 24 | 94 |
Provision for depreciation and amortization | 65 | 66 | 195 | 197 |
Capital expenditures | 47 | 33 | 120 | 100 |
Engine Products | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 599 | 485 | 1,677 | 1,851 |
Engine Products | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1 | 1 | 3 | 4 |
Engine Products | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 600 | 486 | 1,680 | 1,855 |
Segment operating profit | 120 | 39 | 321 | 309 |
Restructuring and other charges | 5 | 9 | 15 | 44 |
Provision for depreciation and amortization | 31 | 31 | 92 | 92 |
Capital expenditures | 21 | 15 | 48 | 48 |
Fastening Systems | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 254 | 271 | 788 | 982 |
Fastening Systems | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Fastening Systems | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 254 | 271 | 788 | 982 |
Segment operating profit | 47 | 33 | 142 | 199 |
Restructuring and other charges | 3 | 0 | 8 | 26 |
Provision for depreciation and amortization | 12 | 12 | 37 | 36 |
Capital expenditures | 8 | 9 | 22 | 24 |
Engineered Structures | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 199 | 206 | 535 | 710 |
Engineered Structures | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 1 | 1 | 4 | 6 |
Engineered Structures | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 200 | 207 | 539 | 716 |
Segment operating profit | 14 | 10 | 35 | 57 |
Restructuring and other charges | 0 | 9 | 1 | 21 |
Provision for depreciation and amortization | 12 | 13 | 37 | 40 |
Capital expenditures | 3 | 3 | 13 | 11 |
Forged Wheels | Third-party sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 231 | 172 | 687 | 476 |
Forged Wheels | Intersegment sales | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Forged Wheels | Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 231 | 172 | 687 | 476 |
Segment operating profit | 62 | 35 | 193 | 91 |
Restructuring and other charges | 0 | 0 | 0 | 3 |
Provision for depreciation and amortization | 10 | 10 | 29 | 29 |
Capital expenditures | $ 15 | $ 6 | $ 37 | $ 17 |
Segment Information - Schedul_2
Segment Information - Schedule of Segment Operating Profit to Consolidated Income before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Segment operating profit | $ 205 | $ 73 | $ 601 | $ 405 |
Loss on debt redemption | (118) | 0 | (141) | (64) |
Interest expense, net | (63) | (77) | (201) | (241) |
Other expense, net | (1) | (8) | (13) | 0 |
Income (loss) from continuing operations before income taxes | 23 | (12) | 246 | 100 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | 243 | 117 | 691 | 656 |
Restructuring and other charges | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | (8) | (22) | (22) | (166) |
Corporate expense | ||||
Segment Reporting Information [Line Items] | ||||
Segment operating profit | $ (30) | $ (22) | $ (68) | $ (85) |
Segment Information - Reconcili
Segment Information - Reconciliation of Capital Expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 47 | $ 36 | $ 138 | $ 220 |
Total segment capital expenditures | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | 47 | 33 | 120 | 100 |
Corporate and discontinued operations | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 0 | $ 3 | $ 18 | $ 120 |
Segment Information - Disaggreg
Segment Information - Disaggregation of Revenue by Major End Market Served (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue, Major Customer [Line Items] | ||||
Sales | $ 1,283 | $ 1,134 | $ 3,687 | $ 4,021 |
Third-party sales | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 1,283 | 1,134 | 3,687 | 4,019 |
Third-party sales | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 599 | 485 | 1,677 | 1,851 |
Third-party sales | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 254 | 271 | 788 | 982 |
Third-party sales | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 199 | 206 | 535 | 710 |
Third-party sales | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 231 | 172 | 687 | 476 |
Third-party sales | Aerospace - Commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 543 | 472 | 1,466 | 2,100 |
Third-party sales | Aerospace - Commercial | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 299 | 199 | 786 | 1,018 |
Third-party sales | Aerospace - Commercial | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 126 | 169 | 403 | 650 |
Third-party sales | Aerospace - Commercial | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 118 | 104 | 277 | 432 |
Third-party sales | Aerospace - Commercial | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Aerospace - Defense | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 232 | 261 | 728 | 730 |
Third-party sales | Aerospace - Defense | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 130 | 142 | 402 | 394 |
Third-party sales | Aerospace - Defense | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 37 | 37 | 120 | 120 |
Third-party sales | Aerospace - Defense | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 65 | 82 | 206 | 216 |
Third-party sales | Aerospace - Defense | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 290 | 210 | 841 | 594 |
Third-party sales | Commercial Transportation | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 59 | 38 | 154 | 118 |
Third-party sales | Commercial Transportation | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 0 | 0 | 0 | 0 |
Third-party sales | Commercial Transportation | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 231 | 172 | 687 | 476 |
Third-party sales | Industrial and Other | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 218 | 191 | 652 | 595 |
Third-party sales | Industrial and Other | Engine Products | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 170 | 144 | 489 | 439 |
Third-party sales | Industrial and Other | Fastening Systems | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 32 | 27 | 111 | 94 |
Third-party sales | Industrial and Other | Engineered Structures | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | 16 | 20 | 52 | 62 |
Third-party sales | Industrial and Other | Forged Wheels | ||||
Revenue, Major Customer [Line Items] | ||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Summary (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | ||||
Layoff costs | $ 0 | $ 17 | $ 2 | $ 93 |
Net reversals of previously recorded layoff reserves | 0 | 0 | (1) | (10) |
Pension, Other post-retirement benefits and Deferred Compensation - net settlements | 3 | 3 | 9 | 67 |
Non-cash asset impairments | 4 | 0 | 8 | 0 |
Net loss related to divestitures of assets and businesses | 0 | 0 | 4 | 9 |
Other | 1 | 2 | 0 | 7 |
Restructuring and other charges | $ 8 | $ 22 | $ 22 | $ 166 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 8 | $ 22 | $ 22 | $ 166 |
Settlements | 3 | 3 | 9 | 67 |
Accelerated depreciation | 2 | 2 | ||
Benefit from termination of deferred benefit plan | 3 | 3 | ||
Layoff costs | 0 | 17 | 2 | 93 |
Impairment of assets to be disposed of | 5 | |||
Gain on sale of assets | 2 | |||
Pension benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 3 | 8 | 9 | 10 |
Settlements | 3 | 8 | 9 | 72 |
Other postretirement benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Curtailments | $ 0 | 2 | 0 | 2 |
Layoff costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 17 | $ 10 | ||
Facility closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 5 | |||
Facility closing | U.K. Forging Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 6 | |||
Reversal of prior period programs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 10 |
Restructuring and Other Charg_5
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | $ 54 | |||
Cash payments | (37) | |||
Restructuring charges | $ 8 | $ 22 | 22 | $ 166 |
Other | (23) | |||
Restructuring reserve ending balance | 16 | 16 | ||
Settlements | 3 | 3 | 9 | 67 |
Restructuring and other charges | 8 | 22 | 22 | 166 |
Pension benefits | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 3 | 8 | 9 | 10 |
Settlements | 3 | 8 | 9 | 72 |
Restructuring and other charges | 3 | 8 | 9 | $ 10 |
Layoff costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | 54 | |||
Cash payments | (37) | |||
Restructuring charges | 17 | 10 | ||
Other | (11) | |||
Restructuring reserve ending balance | 16 | 16 | ||
Restructuring and other charges | $ 17 | 10 | ||
Other exit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring reserve beginning balance | 0 | |||
Cash payments | 0 | |||
Restructuring charges | 12 | |||
Other | (12) | |||
Restructuring reserve ending balance | $ 0 | 0 | ||
Restructuring and other charges | 12 | |||
Other layoff costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 2 | |||
Restructuring and other charges | 2 | |||
Other exit costs, other | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | 11 | |||
Restructuring and other charges | $ 11 |
Other Expense, Net (Details)
Other Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | ||||
Non-service related net periodic benefit cost | $ 2 | $ 8 | $ 8 | $ 19 |
Interest income | (1) | (1) | (2) | (5) |
Foreign currency (gains) losses, net | (2) | (5) | 1 | (12) |
Net loss from asset sales | 3 | 2 | 7 | 6 |
Deferred compensation | (1) | 4 | 5 | 1 |
Other, net | 0 | 0 | (6) | (9) |
Other expense, net | $ 1 | $ 8 | $ 13 | $ 0 |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlements | $ 3 | $ 3 | $ 9 | $ 67 |
Pension benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 3 | 10 |
Interest cost | 12 | 17 | 36 | 81 |
Expected return on plan assets | (23) | (21) | (69) | (115) |
Recognized net actuarial loss | 14 | 12 | 43 | 66 |
Settlements | 3 | 8 | 9 | 72 |
Net periodic (benefit) cost | 7 | 17 | 22 | 114 |
Discontinued operations | 0 | 0 | 0 | 20 |
Net amount recognized in continuing operations in Statement of Consolidated Operations | 7 | 17 | 22 | 94 |
Other postretirement benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 1 | 1 | 3 |
Interest cost | 1 | 2 | 4 | 9 |
Recognized net actuarial loss | 1 | 0 | 1 | 2 |
Amortization of prior service benefit | (3) | (2) | (7) | (5) |
Curtailments | 0 | (2) | 0 | (2) |
Net periodic (benefit) cost | (1) | (1) | (1) | 7 |
Discontinued operations | 0 | 0 | 0 | 6 |
Net amount recognized in continuing operations in Statement of Consolidated Operations | $ (1) | $ (1) | $ (1) | $ 1 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Narrative (Details) - USD ($) $ in Millions | Mar. 11, 2021 | Oct. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restructuring and other charges | $ 8 | $ 22 | $ 22 | $ 166 | ||||
Settlement charges | (3) | (3) | (9) | (67) | ||||
Pension benefits | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restructuring and other charges | 3 | 8 | 9 | 10 | ||||
Increase (decrease) in minimum required pension funding | $ 120 | |||||||
Settlement charges | (3) | (8) | (9) | (72) | ||||
Pension benefits | UK | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Settlement charges | $ 62 | 62 | ||||||
Pension benefits | Subsequent Event | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restructuring and other charges | $ 30 | |||||||
Increase (decrease) in obligation, pension benefits | $ 125 | |||||||
Other postretirement benefits | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increase (decrease) in obligation, pension benefits | $ 39 | |||||||
Curtailments | $ 0 | $ 2 | $ 0 | $ 2 | ||||
Other postretirement benefits | US | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increase (decrease) in obligation, pension benefits | $ 6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation (percent) | 29.70% | 34.50% | 29.70% | 34.50% |
Effective income tax rate reconciliation, including discrete items (percent) | 17.40% | 400.00% | 26.40% | 5.00% |
Discrete income tax charge (benefit) | $ 12 | $ 41 | $ 9 | $ 39 |
Charge (benefit) from tax rate change | 13 | 36 | 2 | 36 |
Other items charge (benefit) | $ 1 | 1 | 2 | (2) |
Income tax charge related to remeasurement as a result of the Separation Transaction | $ 13 | 6 | ||
Income tax charge (benefit) related to prior year items | $ 6 | 5 | ||
Tax charge (benefit) for stock compensation | $ 2 |
Income Taxes - Summary of Tax P
Income Taxes - Summary of Tax Provisions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Pre-tax income (loss) at estimated annual effective income tax rate before discrete items | $ 7 | $ (4) | $ 73 | $ 34 |
Impact of change in estimated annual effective tax rate on previous quarter’s pre-tax income | 1 | (2) | 0 | 0 |
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized | 0 | (1) | 1 | 0 |
Other discrete items | (12) | (41) | (9) | (39) |
(Benefit) provision for income taxes | $ (4) | $ (48) | $ 65 | $ (5) |
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, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations attributable to common shareholders | $ 27 | $ 36 | $ 181 | $ 105 |
Income from discontinued operations | 0 | 0 | 0 | 50 |
Net income | 27 | 36 | 181 | 155 |
Less: preferred stock dividends declared | 1 | 1 | 2 | 2 |
Net income available to Howmet Aerospace common shareholders - basic | 26 | 35 | 179 | 153 |
Net income available to Howmet Aerospace common shareholders - diluted | $ 26 | $ 35 | $ 179 | $ 153 |
Average shares outstanding - basic (in shares) | 429 | 436 | 431 | 436 |
Effect of dilutive securities: | ||||
Stock options (in shares) | 1 | 0 | 1 | 0 |
Stock and performance awards (in shares) | 4 | 3 | 5 | 4 |
Average shares outstanding - diluted (in shares) | 434 | 439 | 437 | 440 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Sep. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 18, 2021 | Jul. 31, 2021 | May 20, 2019 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Common stock outstanding (in shares) | 428,000 | 428,000 | 434,000 | ||||
Authorized repurchase amount | $ 1,500 | $ 500 | |||||
Remaining authorized repurchase amount | $ 1,552 | $ 1,552 | $ 77 | ||||
Share repurchases (in shares) | 770 | ||||||
Treasury stock acquired, average price per share (in usd per share) | $ 32.50 | ||||||
Repurchase of common stock | $ 25 | $ 225 | $ 51 | ||||
Decrease in average shares outstanding (in shares) | 5,000 | ||||||
Incremental common shares attributable to dilutive effect of accelerated share repurchase agreements (in shares) | 7,000 | ||||||
Revolving Credit Agreement | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Credit agreement term | 5 years |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Anti Dilutive Securities Excluded From Computation of Weighted Average Shares Outstanding (Details) - Stock options - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of anti-dilutive securities (in shares) | 0 | 3 | 0 | 3 |
Weighted average exercise price of options (in usd per share) | $ 33.61 | $ 26.03 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 3,577 | |||
Other comprehensive income: | ||||
Total other comprehensive (loss) income, net of tax | $ (27) | $ 61 | 32 | $ 30 |
Ending balance | 3,579 | 3,579 | ||
Accumulated other comprehensive loss | ||||
Other comprehensive income: | ||||
Total other comprehensive (loss) income, net of tax | (27) | 61 | 32 | 30 |
Ending balance | (1,911) | (1,929) | (1,911) | (1,929) |
Pension and other postretirement benefits | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (903) | (866) | (980) | (2,732) |
Other comprehensive income: | ||||
Unrecognized net actuarial gain (loss) and prior service cost/benefit | 1 | (7) | 68 | (66) |
Tax benefit (expense) | 0 | 3 | (15) | 11 |
Total Other comprehensive income (loss) before reclassifications, net of tax | 1 | (4) | 53 | (55) |
Net amount reclassified to earnings | 15 | 16 | 46 | 133 |
Tax benefit (expense) | (3) | (4) | (9) | (24) |
Amount reclassified from Accumulated other comprehensive loss, net of tax | 12 | 12 | 37 | 109 |
Total other comprehensive (loss) income, net of tax | 13 | 8 | 90 | 54 |
Transfer to Arconic Corporation | 0 | (22) | 0 | 1,798 |
Ending balance | (890) | (880) | (890) | (880) |
Foreign currency translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (992) | (1,097) | (966) | (596) |
Other comprehensive income: | ||||
Total Other comprehensive income (loss) before reclassifications, net of tax | (36) | 48 | (62) | (39) |
Amount reclassified from Accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 14 |
Total other comprehensive (loss) income, net of tax | (36) | 48 | (62) | (25) |
Transfer to Arconic Corporation | 0 | 0 | 0 | (428) |
Ending balance | (1,028) | (1,049) | (1,028) | (1,049) |
Cash flow hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 11 | (5) | 3 | (1) |
Other comprehensive income: | ||||
Unrecognized net actuarial gain (loss) and prior service cost/benefit | 1 | 2 | 20 | (6) |
Tax benefit (expense) | 0 | 2 | (4) | 2 |
Total Other comprehensive income (loss) before reclassifications, net of tax | 1 | 4 | 16 | (4) |
Net amount reclassified to earnings | (7) | 2 | (15) | 6 |
Tax benefit (expense) | 2 | (1) | 3 | (1) |
Amount reclassified from Accumulated other comprehensive loss, net of tax | (5) | 1 | (12) | 5 |
Total other comprehensive (loss) income, net of tax | (4) | 5 | 4 | 1 |
Ending balance | $ 7 | $ 0 | $ 7 | $ 0 |
Receivables (Details)
Receivables (Details) $ in Millions | Aug. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)agreement | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Schedule Of Financial Receivables [Line Items] | ||||||
Accounts receivable securitization arrangements | agreement | 2 | |||||
Accounts receivable securitization | $ 325 | $ 325 | $ 425 | |||
Accounts receivable securitization amount drawn | 250 | 250 | 250 | |||
Receivables Sale Program | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Repurchases of receivables | $ 211 | |||||
Cash payment for repurchase of receivables | 160 | |||||
Decrease from termination of deferred purchase program receivable | 51 | |||||
Deferred purchase program receivable | 0 | 0 | 0 | 12 | ||
Net cash funding received during the period | 44 | $ 153 | ||||
Amount of cash draws under arrangement during the period | 41 | 189 | ||||
Amount of cash repayments under arrangement during the period | 85 | 342 | ||||
Receivables Purchase Agreement | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Funding of customer receivables sold | 325 | |||||
Repurchases of receivables | 211 | |||||
Increase in funding of customer receivables sold | $ 200 | |||||
Accounts receivables sold | 398 | 553 | ||||
Accounts receivable remaining outstanding | 250 | 250 | 46 | |||
Financing receivables, held as collateral | 90 | 90 | $ 33 | |||
Customer One | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Accounts receivables sold | 103 | 267 | ||||
Accounts receivable remaining outstanding | $ 102 | 102 | ||||
Customer Two | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Accounts receivables sold | $ 42 | $ 131 | ||||
Maximum | Receivables Sale Program | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Funding of customer receivables sold | 300 | |||||
Maximum | Receivables Purchase Agreement | ||||||
Schedule Of Financial Receivables [Line Items] | ||||||
Funding of customer receivables sold | $ 125 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory Components (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 479 | $ 528 |
Work-in-process | 640 | 629 |
Purchased raw materials | 264 | 292 |
Operating supplies | 37 | 39 |
Total inventories | $ 1,420 | $ 1,488 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Inventories valued on a LIFO basis | $ 500 | $ 458 |
Total inventories valued on an average-cost basis | $ 173 | $ 131 |
Properties, Plants, and Equip_3
Properties, Plants, and Equipment, net (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 5,056 | $ 5,010 | |
Less: accumulated depreciation and amortization | 2,736 | 2,626 | |
Properties, plants and equipment excluding construction work in progress | 2,320 | 2,384 | |
Construction work-in-progress | 163 | 208 | |
Properties, plants, and equipment, net | 2,483 | 2,592 | |
Capital expenditures incurred but not yet paid | 42 | $ 29 | |
Land and land rights | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 92 | 98 | |
Structures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,024 | 1,033 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 3,940 | $ 3,879 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 15 | $ 17 | $ 48 | $ 53 |
Leases - Operating Lease Assets
Leases - Operating Lease Assets and Liabilities in the Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Right-of-use assets classified in Other noncurrent assets | $ 116 | $ 131 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Current portion of lease liabilities classified in Other current liabilities | $ 34 | $ 38 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other noncurrent liabilities and deferred credits | Other noncurrent liabilities and deferred credits |
Long-term portion of lease liabilities classified in Other noncurrent liabilities | $ 88 | $ 100 |
Total lease liabilities | $ 122 | $ 138 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 01, 2021 | Dec. 31, 2020 | May 21, 2020 | Apr. 24, 2020 | Apr. 06, 2020 |
Debt Instrument [Line Items] | ||||||
Other | $ (11) | $ (12) | ||||
Long-term debt | 4,286 | 5,075 | ||||
Less: amount due within one year | 14 | 376 | ||||
Total long-term debt | 4,272 | $ 4,699 | ||||
5.400% Notes, due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 5.40% | 5.40% | ||||
Amount outstanding | 0 | $ 361 | ||||
5.870% Notes, due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 5.87% | 5.87% | ||||
Amount outstanding | $ 0 | $ 476 | ||||
5.125% Notes, due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 5.125% | |||||
Amount outstanding | $ 1,197 | 1,250 | ||||
6.875% Notes, due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 6.875% | 6.875% | ||||
Amount outstanding | $ 600 | 1,200 | ||||
5.900% Notes, due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 5.90% | |||||
Amount outstanding | $ 625 | 625 | ||||
6.750% Bonds, due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 6.75% | |||||
Amount outstanding | $ 300 | 300 | ||||
3.000% Notes, due 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 3.00% | 3.00% | ||||
Amount outstanding | $ 700 | 0 | ||||
5.950% Notes, due 2037 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 5.95% | |||||
Amount outstanding | $ 625 | 625 | ||||
4.750% Iowa Finance Authority Loan, due 2042 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, interest rate | 4.75% | |||||
Amount outstanding | $ 250 | $ 250 |
Debt - Public Debt (Details)
Debt - Public Debt (Details) - USD ($) $ in Millions | Sep. 02, 2021 | Sep. 01, 2021 | May 03, 2021 | Jan. 15, 2021 | May 21, 2020 | Apr. 24, 2020 | Apr. 06, 2020 | Oct. 28, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||||||||||
Payment for early redemption of debt | $ 133 | $ 59 | ||||||||||||
Early termination premium | $ 35 | |||||||||||||
Interest expense | 17 | |||||||||||||
6.150% Notes, due 2020 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 1,000 | |||||||||||||
Long-term debt, interest rate | 6.15% | |||||||||||||
Payment for early redemption of debt | $ 1,020 | |||||||||||||
5.400% Notes, due 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 476 | $ 361 | $ 589 | $ 300 | ||||||||||
Long-term debt, interest rate | 5.40% | 5.40% | ||||||||||||
Payment for early redemption of debt | $ 315 | |||||||||||||
Interest expense | 24 | |||||||||||||
Accrued interest paid | $ 5 | |||||||||||||
6.875% Notes, due 2025 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 600 | $ 1,200 | ||||||||||||
Long-term debt, interest rate | 6.875% | 6.875% | 6.875% | |||||||||||
Early termination premium | 105 | |||||||||||||
Interest expense | $ 14 | |||||||||||||
Deferred financing costs | 14 | |||||||||||||
5.870% Notes, due 2022 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 151 | |||||||||||||
Long-term debt, interest rate | 5.87% | 5.87% | ||||||||||||
Payment for early redemption of debt | 503 | |||||||||||||
Early termination premium | $ 23 | |||||||||||||
Interest expense | $ 4 | |||||||||||||
Accrued interest paid | 5 | |||||||||||||
3.000% Notes, due 2029 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 700 | |||||||||||||
Long-term debt, interest rate | 3.00% | 3.00% | 3.00% | |||||||||||
5.125% Notes, due 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 53 | |||||||||||||
Long-term debt, interest rate | 5.125% | 5.125% | ||||||||||||
Payment for early redemption of debt | $ 59 | |||||||||||||
Early termination premium | 5 | |||||||||||||
Accrued interest paid | $ 1 | |||||||||||||
Increase (decrease) interest expense, net | $ (70) | |||||||||||||
5.125% Notes, due 2024 | Subsequent Event | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Early redemption of debt | $ 47 | |||||||||||||
Payment for early redemption of debt | 52 | |||||||||||||
Early termination premium | $ 5 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - Revolving Credit Agreement $ in Millions | Sep. 28, 2021USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||
Credit agreement term | 5 years | ||
Long-term line of credit | $ 1,000 | ||
Debt covenants, net debt to consolidated EBITDA ratio | 3.50 | ||
Amount outstanding | $ 0 | $ 0 | |
Amount borrowed | 0 | $ 0 | |
Year Ending December 2021 | |||
Debt Instrument [Line Items] | |||
Debt covenants, net debt to consolidated EBITDA ratio | 4.75 | ||
Maximum common stock dividends and share repurchases | 450 | ||
Year Ending December 2022 | |||
Debt Instrument [Line Items] | |||
Debt covenants, net debt to consolidated EBITDA ratio | 3.75 | ||
Maximum common stock dividends and share repurchases | $ 500 |
Debt - Schedule of Net Debt To
Debt - Schedule of Net Debt To Consolidated EBITDA Ratio (Details) - Revolving Credit Agreement | Sep. 28, 2021 |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 3.50 |
Quarter ending September 30, 2021 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 5 |
Quarter ending December 31, 2021 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.75 |
Quarter ending March 31, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.50 |
Quarter ending June 30, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.50 |
Quarter ending September 30, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 4.25 |
Quarter ending December 31, 2022 | |
Debt Conversion [Line Items] | |
Debt covenants, net debt to consolidated EBITDA ratio | 3.75 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative [Line Items] | ||
Restricted cash | $ 2 | $ 1 |
Carrying value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | 4,272 | 4,699 |
Fair value | ||
Derivative [Line Items] | ||
Long-term debt, less amount due within one year | $ 4,872 | $ 5,426 |
Divestitures (Details)
Divestitures (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 01, 2021 | Jan. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Asset impairment charges | $ 4 | $ 0 | $ 8 | $ 0 | ||||||
Fastening Systems | Small Manufacturing Facility in France | Disposed of by Sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Consideration | $ 10 | |||||||||
Proceeds from the sales of businesses | $ 8 | |||||||||
Asset impairment charges | $ 4 | |||||||||
Engineered Structures | Small manufacturing facility in the United Kingdom | Disposed of by Sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Consideration | $ 12 | |||||||||
Asset impairment charges | $ (7) | $ 12 |
Contingencies and Commitments (
Contingencies and Commitments (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($)location | Dec. 31, 2020USD ($) | Jun. 26, 2020USD ($)entity | |
Loss Contingencies [Line Items] | ||||
Number of cleanup locations | location | 30 | |||
Remediation reserve balance | $ 12 | $ 12 | $ 10 | |
Remediation reserve balance, classified as a current liability | 6 | 6 | 5 | |
Payments related to remediation expenses applied against the reserve | 1 | |||
Guarantees of third party related to project financing | 16 | 16 | ||
Combined fair value of guarantees | 6 | 6 | 12 | |
Total amount committed under outstanding surety bonds | 46 | 46 | ||
Surety bonds, amount outstanding | 25 | 25 | ||
Bank Loan Obligations | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount | 116 | 116 | ||
Other Noncurrent Liabilities and Deferred Credits | Separation Agreement | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | 1,406 | 1,406 | $ 1,398 | |
Lehman Brothers International (Europe) (“LBIE”) Claims | ||||
Loss Contingencies [Line Items] | ||||
Number of entities | entity | 2 | |||
Estimate of claim | $ 64 | |||
Alcoa Corporation Workers Compensation Claims | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount outstanding | 53 | 53 | ||
Arconic Corporation Environmental Obligations | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount outstanding | 17 | 17 | ||
Arconic Corporation Environmental Obligations | Letters Of Credit, Pending Cancellation | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount outstanding | $ 1 | $ 1 | ||
Maximum | Recurring Costs of Managing Hazardous Substances and Environmental Programs | ||||
Loss Contingencies [Line Items] | ||||
Percentage of cost of goods sold (percent) | 1.00% |