Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 20, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ARNC | |
Entity Registrant Name | Arconic Inc. | |
Entity Central Index Key | 4,281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 481,324,177 |
Statement of Consolidated Opera
Statement of Consolidated Operations (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales (I) | $ 3,236 | $ 3,138 | $ 9,689 | $ 9,427 |
Cost of goods sold (exclusive of expenses below) | 2,626 | 2,503 | 7,701 | 7,436 |
Selling, general administrative, and other expenses | 155 | 229 | 580 | 673 |
Research and development expenses | 25 | 30 | 83 | 93 |
Provision for depreciation and amortization | 140 | 136 | 410 | 402 |
Restructuring and other charges (D & E) | 19 | 3 | 118 | 33 |
Operating income | 271 | 237 | 797 | 790 |
Interest expense (L) | 100 | 126 | 398 | 371 |
Other income, net (G) | (1) | (11) | (526) | (40) |
Income from continuing operations before income taxes | 172 | 122 | 925 | 459 |
Provision for income taxes | 53 | 56 | 272 | 230 |
Income from continuing operations after income taxes | 119 | 66 | 653 | 229 |
Income from discontinued operations after income taxes (G) | 120 | 146 | ||
Net income | 119 | 186 | 653 | 375 |
Less: Income from discontinued operations attributable to noncontrolling interests (G) | 20 | 58 | ||
Net income attributable to Arconic | 119 | 166 | 653 | 317 |
Amounts Attributable to Arconic Common Shareholders (J): | ||||
Net income | $ 101 | $ 148 | $ 600 | $ 265 |
Earnings per share - basic | ||||
Continuing operations | $ 0.23 | $ 0.11 | $ 1.36 | $ 0.40 |
Discontinued operations | 0.23 | 0.20 | ||
Net income per share - basic | 0.23 | 0.34 | 1.36 | 0.60 |
Earnings per share - diluted | ||||
Continuing operations | 0.22 | 0.11 | 1.31 | 0.40 |
Discontinued operations | 0.22 | 0.20 | ||
Net income per share - diluted | 0.22 | 0.33 | 1.31 | 0.60 |
Dividends paid per share | $ 0.06 | $ 0.09 | $ 0.18 | $ 0.27 |
Weighted Average Shares Outstanding (J): | ||||
Average shares outstanding - basic | 442 | 438 | 441 | 438 |
Average shares outstanding - diluted | 462 | 453 | 501 | 443 |
Statement of Consolidated Compr
Statement of Consolidated Comprehensive Income (Loss) (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 119 | $ 186 | $ 653 | $ 375 |
Other comprehensive income (loss), net of tax (C): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 31 | (463) | 110 | (363) |
Foreign currency translation adjustments | 85 | 202 | 251 | 689 |
Net change in unrealized gains/losses on available-for-sale securities | 1 | (133) | 4 | |
Net change in unrecognized gains/losses on cash flow hedges | 10 | (348) | 13 | (567) |
Total Other comprehensive income (loss), net of tax | 127 | (609) | 241 | (237) |
Comprehensive income (loss) | 246 | (423) | 894 | 138 |
Arconic [Member] | ||||
Net income | 119 | 166 | 653 | 317 |
Other comprehensive income (loss), net of tax (C): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | 31 | (462) | 110 | (365) |
Foreign currency translation adjustments | 85 | 157 | 251 | 505 |
Net change in unrealized gains/losses on available-for-sale securities | 1 | (133) | 4 | |
Net change in unrecognized gains/losses on cash flow hedges | 10 | (338) | 13 | (571) |
Total Other comprehensive income (loss), net of tax | 127 | (643) | 241 | (427) |
Comprehensive income (loss) | $ 246 | (477) | $ 894 | (110) |
Noncontrolling Interests [Member] | ||||
Net income | 20 | 58 | ||
Other comprehensive income (loss), net of tax (C): | ||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits | (1) | 2 | ||
Foreign currency translation adjustments | 45 | 184 | ||
Net change in unrecognized gains/losses on cash flow hedges | (10) | 4 | ||
Total Other comprehensive income (loss), net of tax | 34 | 190 | ||
Comprehensive income (loss) | $ 54 | $ 248 |
Consolidated Balance Sheet (una
Consolidated Balance Sheet (unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 1,815 | $ 1,863 |
Receivables from customers, less allowances of $7 in 2017 and $13 in 2016 (K) | 1,150 | 974 |
Other receivables (G & K) | 373 | 477 |
Inventories (F) | 2,453 | 2,253 |
Prepaid expenses and other current assets | 357 | 325 |
Total current assets | 6,148 | 5,892 |
Properties, plants, and equipment | 11,791 | 11,572 |
Less: accumulated depreciation and amortization | 6,265 | 6,073 |
Properties, plants, and equipment, net | 5,526 | 5,499 |
Goodwill | 5,246 | 5,148 |
Deferred income taxes | 1,024 | 1,234 |
Investment in common stock of Alcoa Corporation (G & N) | 0 | 1,020 |
Other noncurrent assets | 1,293 | 1,245 |
Total Assets | 19,237 | 20,038 |
Current liabilities: | ||
Short-term borrowings | 54 | 36 |
Accounts payable, trade | 1,656 | 1,744 |
Accrued compensation and retirement costs | 379 | 398 |
Taxes, including income taxes | 74 | 85 |
Accrued interest payable | 101 | 153 |
Other current liabilities | 412 | 329 |
Long-term debt due within one year | 1 | 4 |
Total current liabilities | 2,677 | 2,749 |
Long-term debt, less amount due within one year (L & N) | 6,802 | 8,044 |
Accrued pension benefits | 2,110 | 2,345 |
Accrued other postretirement benefits | 811 | 889 |
Other noncurrent liabilities and deferred credits | 876 | 870 |
Total liabilities | 13,276 | 14,897 |
Contingencies and commitments (H) | ||
Arconic shareholders' equity: | ||
Preferred stock | 55 | 55 |
Mandatory convertible preferred stock | 3 | 3 |
Common stock | 442 | 438 |
Additional capital | 8,294 | 8,214 |
Accumulated deficit | (519) | (1,027) |
Accumulated other comprehensive loss (C) | (2,327) | (2,568) |
Total Arconic shareholders' equity | 5,948 | 5,115 |
Noncontrolling interests | 13 | 26 |
Total equity | 5,961 | 5,141 |
Total Liabilities and Equity | $ 19,237 | $ 20,038 |
Consolidated Balance Sheet (un5
Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Receivables from customers, allowance | $ 7 | $ 13 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash from Operations | ||
Net income | $ 653 | $ 375 |
Adjustments to reconcile net income to cash from operations: | ||
Depreciation, depletion and amortization | 410 | 938 |
Deferred income taxes | 24 | (67) |
Equity income, net of dividends | 32 | |
Restructuring and other charges | 118 | 134 |
Net gain from investing activities - asset sales (G) | (514) | (152) |
Net periodic pension benefit cost (M) | 163 | 246 |
Stock-based compensation | 59 | 73 |
Other | 60 | 67 |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||
(Increase) in receivables | (278) | (226) |
(Increase) decrease in inventories | (168) | 7 |
Decrease (increase) in prepaid expenses and other current assets | 6 | (10) |
(Decrease) in accounts payable, trade | (94) | (196) |
(Decrease) in accrued expenses | (138) | (417) |
Increase in taxes, including income taxes | 144 | 63 |
Pension contributions | (257) | (227) |
(Increase) in noncurrent assets | (37) | (284) |
(Decrease) in noncurrent liabilities | (62) | (148) |
Cash provided from operations | 89 | 208 |
Financing Activities | ||
Net change in short-term borrowings (original maturities of three months or less) | 15 | (6) |
Additions to debt (original maturities greater than three months) | 664 | 1,313 |
Payments on debt (original maturities greater than three months) (L) | (1,484) | (1,324) |
Proceeds from exercise of employee stock options | 48 | 3 |
Dividends paid to shareholders | (132) | (171) |
Distributions to noncontrolling interests | (14) | (176) |
Other | (15) | 11 |
Cash used for financing activities | (918) | (350) |
Investing Activities | ||
Capital expenditures | (360) | (814) |
Proceeds from the sale of assets and businesses (E) | (9) | 683 |
Additions to investments | (2) | (23) |
Sales of investments (G) | 890 | 280 |
Net change in restricted cash | 11 | (72) |
Other (G) | 246 | 25 |
Cash provided from investing activities | 776 | 79 |
Effect of exchange rate changes on cash and cash equivalents | 5 | 7 |
Net change in cash and cash equivalents | (48) | (56) |
Cash and cash equivalents at beginning of year | 1,863 | 1,919 |
Cash and cash equivalents at end of period | $ 1,815 | $ 1,863 |
Statement of Changes in Consoli
Statement of Changes in Consolidated Equity (unaudited) - USD ($) $ in Millions | Total | Preferred Class A [Member] | Preferred Class B [Member] | Preferred Stock [Member] | Mandatory Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Retained Earnings (Accumulated Deficit) [Member]Preferred Class A [Member] | Retained Earnings (Accumulated Deficit) [Member]Preferred Class B [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] |
Balance at Dec. 31, 2015 | $ 14,131 | $ 55 | $ 3 | $ 1,391 | $ 10,019 | $ 8,834 | $ (2,825) | $ (5,431) | $ 2,085 | ||||
Net income | 375 | 317 | 58 | ||||||||||
Other comprehensive (loss) income (C) | (237) | (427) | 190 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | $ (2) | $ (50) | $ (2) | $ (50) | |||||||||
Common share, value | (159) | (159) | |||||||||||
Stock-based compensation | 73 | 73 | |||||||||||
Common stock issued: compensation plans | (23) | (209) | 186 | ||||||||||
Retirement of Treasury stock | (76) | (2,563) | 2,639 | ||||||||||
Reverse stock split | (877) | 877 | |||||||||||
Distributions | (176) | (176) | |||||||||||
Other | 13 | 13 | |||||||||||
Balance at Sep. 30, 2016 | 13,945 | 55 | 3 | 438 | 8,197 | 8,940 | (5,858) | 2,170 | |||||
Balance at Jun. 30, 2016 | 14,529 | 55 | 3 | 1,391 | 9,877 | 8,871 | (2,647) | (5,215) | 2,194 | ||||
Net income | 186 | 166 | 20 | ||||||||||
Other comprehensive (loss) income (C) | (609) | (643) | 34 | ||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | (1) | (16) | (1) | (16) | |||||||||
Common share, value | (80) | (80) | |||||||||||
Stock-based compensation | 18 | 18 | |||||||||||
Common stock issued: compensation plans | (4) | (12) | 8 | ||||||||||
Retirement of Treasury stock | (76) | (2,563) | $ 2,639 | ||||||||||
Reverse stock split | (877) | 877 | |||||||||||
Distributions | (92) | (92) | |||||||||||
Other | 14 | 14 | |||||||||||
Balance at Sep. 30, 2016 | 13,945 | 55 | 3 | 438 | 8,197 | 8,940 | (5,858) | 2,170 | |||||
Balance at Dec. 31, 2016 | 5,141 | 55 | 3 | 438 | 8,214 | (1,027) | (2,568) | 26 | |||||
Net income | 653 | 653 | |||||||||||
Other comprehensive (loss) income (C) | 241 | 241 | |||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | (2) | (51) | (2) | (51) | |||||||||
Common share, value | (107) | (107) | |||||||||||
Stock-based compensation | 59 | 59 | |||||||||||
Common stock issued: compensation plans | 25 | 4 | 21 | ||||||||||
Distributions | (14) | (14) | |||||||||||
Other | 16 | 15 | 1 | ||||||||||
Balance at Sep. 30, 2017 | 5,961 | 55 | 3 | 442 | 8,294 | (519) | (2,327) | 13 | |||||
Balance at Jun. 30, 2017 | 5,753 | 55 | 3 | 441 | 8,262 | (567) | (2,454) | 13 | |||||
Net income | 119 | 119 | |||||||||||
Other comprehensive (loss) income (C) | 127 | 127 | |||||||||||
Cash dividends declared: | |||||||||||||
Preferred share, value | $ (1) | $ (17) | $ (1) | $ (17) | |||||||||
Common share, value | (53) | (53) | |||||||||||
Stock-based compensation | 11 | 11 | |||||||||||
Common stock issued: compensation plans | 22 | 1 | 21 | ||||||||||
Balance at Sep. 30, 2017 | $ 5,961 | $ 55 | $ 3 | $ 442 | $ 8,294 | $ (519) | $ (2,327) | $ 13 |
Statement of Changes in Consol8
Statement of Changes in Consolidated Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Common stock, dividends per share | $ 0.12 | $ 0.18 | $ 0.24 | $ 0.36 |
Preferred Class A [Member] | ||||
Preferred, dividends per share | 1.875 | 1.875 | 3.75 | 3.75 |
Preferred Class B [Member] | ||||
Preferred, dividends per share | $ 6.71875 | $ 6.71875 | $ 20.1563 | $ 20.1563 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | A. Basis of Presentation The interim Consolidated Financial Statements of Arconic Inc. and its subsidiaries (“Arconic” or the “Company”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2016 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Form 10-Q report should be read in conjunction with Arconic’s Annual Report on Form 10-K for the year ended December 31, 2016, 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 Alcoa Inc. into two standalone, publicly-traded companies, Arconic Inc. (the new name for Alcoa Inc.) and Alcoa Corporation, became effective on November 1, 2016 (the “Separation Transaction”). The financial results of Alcoa Corporation for all periods prior to the 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 the third quarter and nine months ended September 30, 2016. The cash flows, equity and comprehensive income related to Alcoa Corporation have not been segregated and are included in the accompanying Statement of Consolidated Cash Flows, Statement of Changes in Consolidated Equity and Statement of Consolidated Comprehensive Income, respectively, for the third quarter and nine months ended September 30, 2016. Pursuant to the authorization provided at a special meeting of Arconic common shareholders held on October 5, 2016, shareholders approved a 1-for-3 reverse stock split of Arconic’s outstanding and authorized shares of common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every three shares of issued and outstanding common stock were combined into one issued and outstanding share of common stock, without any change in the par value per share. The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 1.3 billion shares to approximately 0.4 billion shares. The Company’s common stock began trading on a reverse stock split-adjusted basis on the New York Stock Exchange on October 6, 2016. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted and Recently Issued Accounting Guidance | B. Recently Adopted and Recently Issued Accounting Guidance Adopted In March 2016, the Financial Accounting Standards Board (“FASB”) issued changes to employee share-based payment accounting. Previously, an entity determined for each share-based payment award whether the difference between the deduction for tax purposes and the compensation cost recognized for financial reporting purposes resulted in either an excess tax benefit or a tax deficiency. Excess tax benefits were recognized in additional paid-in capital; tax deficiencies were recognized either as an offset to accumulated excess tax benefits, if any, or in the income statement. Excess tax benefits were not recognized until the deduction reduced taxes payable. The changes require all excess tax benefits and tax deficiencies related to share-based payment awards to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. In addition, the presentation of excess tax benefits related to share-based payment awards in the statement of cash flows changed. Previously, excess tax benefits were separated from other income tax cash flows and classified as a financing activity. The changes require excess tax benefits to be classified along with other income tax cash flows as an operating activity. Also, the changes require cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity. Further, for a share-based award to qualify for equity classification it previously could not be partially settled in cash in-excess of the employer’s minimum statutory withholding requirements. The changes permit equity classification of share-based awards for withholdings up to the maximum statutory tax rates in applicable jurisdictions. These changes became effective for Arconic on January 1, 2017. The prospective transition method was utilized for excess tax benefits in the Statement of Consolidated Cash Flows. Management concluded that the adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In March 2016, the FASB issued changes eliminating the requirement for an investor to adjust an equity method investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held as a result of an increase in the level of ownership interest or degree of influence. In addition, an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting must recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. These changes became effective for Arconic on January 1, 2017. Management determined that the adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In March 2016, the FASB issued changes to derivative instruments designated as hedging instruments. These changes clarify that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These changes became effective for Arconic on January 1, 2017. Management determined that the adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In October 2016, the FASB issued changes to the accounting for Intra-Entity transactions, other than inventory. Previously, no immediate tax impact was recognized in the consolidated financial statements as a result of intra-entity transfers of assets. The previous standard precluded an entity from reflecting a tax benefit or expense from an intra-entity transfer between entities that file separate tax returns, whether or not such entities were in different tax jurisdictions, until the asset was sold to a third party or otherwise recovered. The previous standard also prohibited recognition by the buyer of a deferred tax asset for the temporary difference arising from the excess of the buyer’s tax basis over the cost to the seller. The changes require the current and deferred income tax consequences of the intra-entity transfer to be recorded when the transaction occurs. The exception to defer the tax consequences of inventory transactions is maintained. These changes became effective for Arconic on January 1, 2017. Management determined that the adoption of this guidance did not have a material impact on the Consolidated Financial Statements. In January 2017, the FASB issued changes to the subsequent measurement of goodwill by eliminating step 2 from the goodwill impairment test, which previously required measurement of any goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. An entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value without exceeding the total amount of goodwill allocated to that reporting unit. Arconic has elected to early adopt this guidance as of January 1, 2017, and will apply it on a prospective basis. Management does not anticipate that the adoption of these changes will have a material impact on the Consolidated Financial Statements. In January 2017, the FASB issued changes which narrow the definition of a business and require an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, which would not constitute the acquisition of a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. Arconic has elected to early adopt this guidance as of January 1, 2017, and will apply it on a prospective basis. Management does not anticipate that the adoption of these changes will have a material impact on the Consolidated Financial Statements. Issued In May 2014, the FASB issued changes to the recognition of revenue from contracts with customers. These changes created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue and, therefore, supersede virtually all existing revenue recognition requirements and guidance. This framework is expected to result in less complex guidance in application while providing a consistent and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. In August 2015, the FASB deferred the effective date of the new guidance by one year, making these changes effective for Arconic on January 1, 2018. Arconic will adopt the new guidance using the modified retrospective transition approach, reflecting the cumulative effect of initially applying the new standard to revenue recognition in the first quarter of 2018. The Company formed a project assessment and adoption team and is currently reviewing contract terms and assessing the impact of adopting the new guidance on the Consolidated Financial Statements. While the Company generally recognizes revenue at a point in time upon delivery and transfer of title and risk of loss for most arrangements, based on the contract assessments to date, it believes that revenue under certain of those contracts, primarily within the Engineered Products and Solutions segment, may be recognized over time due to the customized nature of certain of its products that have no alternative use combined with an enforceable right of payment from the customer in the event of termination of the contract. The Company is assessing the modification of certain contract terms that may impact point-in-time versus over-time revenue recognition. It is not anticipated that these modifications would result in significant changes to revenue, business practices or controls. The Company is continuing to assess the impact that over-time revenue recognition will have on its Consolidated Financial Statements; therefore an estimate of the impact of adopting this standard is not currently determinable. In addition, the Company is in the process of identifying appropriate changes to its business processes and controls, as well as preparing for revisions to accounting policies and expanded disclosures related to revenue recognition in the notes to the Consolidated Financial Statements. In January 2016, the FASB issued changes to equity investments. These changes require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Also, the impairment assessment of equity investments without readily determinable fair values has been simplified by requiring a qualitative assessment to identify impairment. Also, the new guidance will require changes in fair value of equity securities to be recognized immediately as a component of net income instead of being reported in accumulated other comprehensive loss until the gain (loss) is realized . In February 2016, the FASB issued changes to the accounting and presentation of leases. These changes require lessees to recognize a right of use asset and lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right of use asset and lease liability. Additionally, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. These changes become effective for Arconic on January 1, 2019. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements, which will require right of use assets and lease liabilities be recorded in the consolidated balance sheet for operating leases. An estimate of the impact of this standard is not currently determinable. In June 2016, the FASB added a new impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective for Arconic on January 1, 2020. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In August 2016, the FASB issued changes to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance identifies eight specific cash flow items and the sections where they must be presented within the statement of cash flows. These changes become effective for Arconic on January 1, 2018. Management does not expect these changes to have a material impact on the Consolidated Financial Statements. In November 2016, the FASB issued changes to the classification of cash and cash equivalents within the cash flow statement. Restricted cash and restricted cash equivalents will be included within the cash and cash equivalents line on the cash flow statement and a reconciliation must be prepared to the statement of financial position. Transfers between restricted cash and restricted cash equivalents and cash and cash equivalents will no longer be presented as cash flow activities in the statement of cash flows and material balances of restricted cash and restricted cash equivalents must disclose information regarding the nature of the restrictions. These changes become effective for Arconic on January 1, 2018. Management determined that the adoption of these changes will not have a material impact on the Consolidated Financial Statements. In March 2017, the FASB issued changes to shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. These changes become effective for Arconic on January 1, 2019 and early adoption is permitted. Management determined that the adoption of these changes will not have a material impact on the Consolidated Financial Statements. In March 2017, the FASB issued changes to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires registrants to present the service cost component of net periodic benefit cost in the same income statement line item or items as other employee compensation costs arising from services rendered during the period. Also, only the service cost component will be eligible for asset capitalization. Registrants will present the other components of net periodic benefit cost separately from the service cost component; and, the line item or items used in the income statement to present the other components of net periodic benefit cost must be disclosed. These changes become effective for Arconic on January 1, 2018, including interim periods within those fiscal years. The new standard must be adopted retrospectively for the presentation of the service cost component and the other components of net periodic benefit cost in the income statement, and prospectively for the asset capitalization of the service cost component of net periodic benefit cost. The Company currently records non-service related net periodic pension cost and net periodic postretirement benefit cost within Cost of goods sold, Selling, general, administrative and other expenses and Research and development expenses and upon the adoption of this standard will be recorded separately from service cost in the Other income, net line item in the Statement of Consolidated Operations. The impact of the retrospective adoption of this standard update will be an increase to consolidated operating income of approximately $150 while there will be no impact to consolidated net income for the year ended December 31, 2017. Management is currently evaluating the potential impact of prospectively adopting the asset capitalization of only the service cost component on the Consolidated Financial Statements. In May 2017, the FASB issued clarification to guidance on the modification accounting criteria for share-based payment awards. The new guidance requires registrants to apply modification accounting unless three specific criteria are met. The three criteria are 1) the fair value of the award is the same before and after the modification, 2) the vesting conditions are the same before and after the modification and 3) the classification as a debt or equity award is the same before and after the modification. These changes become effective for Arconic on January 1, 2018 and are to be applied prospectively to new awards granted after adoption. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. In August 2017, the FASB issued guidance that will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. These changes become effective for Arconic on January 1, 2019. For cash flow and net investment hedges existing at the date of adoption, Arconic will apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year in which the amendment is adopted. The amended presentation and disclosure guidance is required only prospectively. Management is currently evaluating the potential impact of these changes on the Consolidated Financial Statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | C. Accumulated Other Comprehensive Loss The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended Third quarter ended September 30, September 30, 2017 2016 2017 2016 Pension and other postretirement benefits (M) Balance at beginning of period $ (1,931 ) $ (3,514 ) $ — $ (53 ) Other comprehensive income (loss): Unrecognized net actuarial loss and prior service cost (7 ) (819 ) — (1 ) Tax benefit 1 286 — — Total Other comprehensive loss before reclassifications, net of tax (6 ) (533 ) — (1 ) Amortization of net actuarial loss and prior service cost (1) 56 109 — 1 Tax expense (2) (19 ) (38 ) — (1 ) Total amount reclassified from Accumulated other comprehensive income, net of tax (5) 37 71 — — Total Other comprehensive income (loss) 31 (462 ) — (1 ) Balance at end of period $ (1,900 ) $ (3,976 ) $ — $ (54 ) Foreign currency translation Balance at beginning of period $ (523 ) $ (2,064 ) $ (2 ) $ (641 ) Other comprehensive income (3) 85 157 — 45 Balance at end of period $ (438 ) $ (1,907 ) $ (2 ) $ (596 ) Available-for-sale securities Balance at beginning of period $ (2 ) $ (1 ) $ — $ — Other comprehensive income (4) 1 — — — Balance at end of period $ (1 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 2 $ 364 $ — $ 11 Other comprehensive income (loss): Net change from periodic revaluations 15 (430 ) — 20 Tax (expense) benefit (5 ) 126 — (6 ) Total Other comprehensive income (loss) before reclassifications, net of tax 10 (304 ) — 14 Net amount reclassified to earnings — (46 ) — (34 ) Tax benefit (2) — 12 — 10 Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) — (34 ) — (24 ) Total Other comprehensive income (loss) 10 (338 ) — (10 ) Balance at end of period $ 12 $ 26 $ — $ 1 (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other income, net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 2 through 4. Arconic Noncontrolling Interests Nine months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 Pension and other postretirement benefits (M) Balance at beginning of period $ (2,010 ) $ (3,611 ) $ — $ (56 ) Other comprehensive income (loss): Unrecognized net actuarial loss and prior service cost 4 (883 ) — — Tax (expense) benefit (3 ) 312 — — Total Other comprehensive income (loss) before reclassifications, net of tax 1 (571 ) — — Amortization of net actuarial loss and prior service cost (1) 167 317 — 3 Tax expense (2) (58 ) (111 ) — (1 ) Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 109 206 — 2 Total Other comprehensive income (loss) 110 (365 ) — 2 Balance at end of period $ (1,900 ) $ (3,976 ) $ — $ (54 ) Foreign currency translation Balance at beginning of period $ (689 ) $ (2,412 ) $ (2 ) $ (780 ) Other comprehensive income (3) 251 505 — 184 Balance at end of period $ (438 ) $ (1,907 ) $ (2 ) $ (596 ) Available-for-sale securities Balance at beginning of period $ 132 $ (5 ) $ — $ — Other comprehensive (loss) income (4) (133 ) 4 — — Balance at end of period $ (1 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ (1 ) $ 597 $ — $ (3 ) Other comprehensive income (loss): Net change from periodic revaluations 20 (772 ) — 35 Tax (expense) benefit (7 ) 229 — (10 ) Total Other comprehensive income (loss) before reclassifications, net of tax 13 (543 ) — 25 Net amount reclassified to earnings — (41 ) — (29 ) Tax benefit 2) — 13 — 8 Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) — (28 ) — (21 ) Total Other comprehensive income (loss) 13 (571 ) — 4 Balance at end of period $ 12 $ 26 $ — $ 1 (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other income, net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 2 through 4. |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | D. Restructuring and Other Charges In the third quarter of 2017, Arconic recorded Restructuring and other charges of $19 ($13 after-tax), which included $11 ($8 after-tax) for layoff costs related to cost reduction initiatives including the separation of 124 employees (111 in the Engineered Products and Solutions segment, 12 in Corporate and 1 in the Global Rolled Products segment); and a net charge of $8 ($5 after-tax) for other miscellaneous items. In the first nine months of 2017, Arconic recorded Restructuring and other charges of $118 ($99 after-tax), which included $59 ($40 after-tax) for layoff costs related to cost reduction initiatives including the separation of approximately 800 employees (350 in the Engineered Products and Solutions segment, 243 in the Global Rolled Products segment, 133 in the Transportation and Construction Solutions segment and 74 in Corporate); a charge of $60 ($60 after-tax) related to the sale of the Fusina, Italy rolling mill; a net benefit of $6 ($4 after-tax), for the reversal of forfeited executive stock compensation of $13, partially offset by a charge of $7 for the related severance; a net charge of $7 ($5 after-tax) for other miscellaneous items; and a favorable benefit of $2 ($2 after-tax) for the reversal of a number of small layoff reserves related to prior periods. In the third quarter of 2016, Arconic recorded Restructuring and other charges of $3 ($2 after-tax), which included $4 ($2 after-tax) for layoff costs related to cost reduction initiatives and the separation of Alcoa Inc. (see Note G), including the separation of approximately 70 employees (60 in the Engineered Products and Solutions segment and 10 in Corporate); a net charge of $7 ($5 after-tax) for other miscellaneous items; and a favorable benefit of $8 ($5 after-tax) for the reversal of a number of small layoff reserves related to prior periods. In the first nine months of 2016, Arconic recorded Restructuring and other charges of $33 ($22 after-tax), which included $34 ($21 after-tax) for layoff costs related to cost reduction initiatives and the separation of Alcoa Inc. (see Note G), including the separation of approximately 1,140 employees (860 in the Engineered Products and Solutions segment, 30 in the Global Rolled Products segment, 240 in the Transportation and Construction Solutions segment, and 10 in Corporate); a net charge of $14 ($9 after-tax) for other miscellaneous items; and a net favorable benefit of $15 ($8 after-tax) for the reversal of a number of small layoff reserves related to prior periods. Arconic does not include Restructuring and other charges in the results of its reportable segments. The pretax impact of such charges to segment results would have been as follows: Third quarter ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Engineered Products and Solutions $ 10 $ (1 ) $ 24 $ 16 Global Rolled Products 2 (1 ) 76 1 Transportation and Construction Solutions 2 (2 ) 11 6 Segment Total 14 (4 ) 111 23 Corporate 5 7 7 10 Total Restructuring and other charges $ 19 $ 3 $ 118 $ 33 As of September 30, 2017, approximately 155 of the 800 employees associated with 2017 restructuring programs, approximately 1,200 of the 1,750 employees (previously 1,800) associated with 2016 restructuring programs (with planned departures in 2017), and approximately 1,120 of the 1,220 employees (previously 1,240) associated with the 2015 restructuring programs were separated. The total number of employees associated with both the 2016 and 2015 restructuring programs was updated to reflect employees who, initially identified for separation, accepted other positions within Arconic, as well as natural attrition. Most of the remaining separations for the 2017 restructuring programs are expected to be completed in 2017 and 2018. All of the remaining separations for the 2016 and 2015 restructuring programs are expected to be completed by the end of 2017. In the 2017 third quarter and nine-month period, cash payments of $11 and $13, respectively, were made against layoff reserves related to 2017 restructuring programs, cash payments of $3 and $23, respectively, were made against layoff reserves related to 2016 restructuring programs, and cash payments of $1 and $5, respectively, were made against the layoff reserves related to 2015 restructuring programs. Activity and reserve balances for restructuring charges were as follows: Layoff Other exit Total Reserve balances at December 31, 2015 $ 84 $ 9 $ 93 2016: Cash payments (73 ) (13 ) (86 ) Restructuring charges 70 27 97 Other* (31 ) (14 ) (45 ) Reserve balances at December 31, 2016 50 9 59 2017: Cash payments (41 ) (5 ) (46 ) Restructuring charges 54 — 54 Other* 10 (1 ) 9 Reserve balances at September 30, 2017 $ 73 $ 3 $ 76 * Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In 2017, Other for layoff costs includes the reclassification of a stock awards reversal of $13. In 2016, Other for other exit costs also included reclassifications of $8 in asset retirement, $2 in environmental obligations and $4 in legal obligations as these liabilities were included in Arconic’s separate reserves for asset retirement obligations, environmental remediation and legal costs. The remaining reserves are expected to be paid in cash during the remainder of 2017, except for approximately $15 to $20, which is expected to be paid within the next year for layoffs. As part of its ongoing restructuring in Brazil, the Company anticipates recognizing a restructuring-related charge of approximately $30 - $50 in the fourth quarter of 2017 related to its extrusions business which is part of the Transportation and Construction Solutions segment. The charge relates to the noncash impairment of the net book value of the business. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | E. Acquisitions and Divestitures In April 2016, Arconic completed the sale of the Remmele Medical business to LISI MEDICAL for $102 in cash ($99 net of transaction costs). This business, which was part of the RTI International Metals acquisition, manufactures precision-machined metal products for customers in the minimally invasive surgical device and implantable device markets. While owned by Arconic, the operating results and assets and liabilities of this business were included in the Engineered Products and Solutions segment. Remmele Medical generated third-party sales of $23 from January 1, 2016 through the divestiture date, and, at the time of the divestiture, had approximately 330 employees. This transaction is no longer subject to post-closing adjustments. In March 2017, Arconic completed the sale of its Fusina, Italy rolling mill to Slim Aluminium. While owned by Arconic, the operating results and assets and liabilities of the Fusina, Italy rolling mill were included in the Global Rolled Products segment. As part of the transaction, Arconic injected $10 of cash into the business and provided a third-party guarantee with a fair value of $5 related to Slim Aluminium’s environmental remediation. The Company recorded a loss on the sale of $60, which was recorded in Restructuring and other charges (see Note D) on the Statement of Consolidated Operations for the nine months ended September 30, 2017. The rolling mill generated third-party sales of approximately $54 and $128 for the nine-month periods ended September 30, 2017 and 2016, respectively. At the time of the divestiture, the rolling mill had approximately 312 employees. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | F. Inventories September 30, December 31, Finished goods $ 651 $ 625 Work-in-process 1,332 1,144 Purchased raw materials 386 408 Operating supplies 84 76 Total inventories $ 2,453 $ 2,253 At September 30, 2017 and December 31, 2016, the portion of inventories valued on a last-in, first-out (LIFO) basis was $1,148 and $947, respectively. If valued on an average-cost basis, total inventories would have been $449 and $371 higher at September 30, 2017 and December 31, 2016, respectively. |
Separation Transaction and Disc
Separation Transaction and Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Separation Transaction and Discontinued Operations | G. Separation Transaction and Discontinued Operations On November 1, 2016, Arconic completed the Separation Transaction. Alcoa Inc., which was re-named Arconic Inc., continued to own the Engineered Products and Solutions, the Global Rolled Products (except for the Warrick, IN rolling operations and the equity interest in the rolling mill at the joint venture in Saudi Arabia), and the Transportation and Construction Solutions segments. Alcoa Corporation included the Alumina and Primary Metals segments and the Warrick, IN rolling operations and equity interest in the rolling mill at the joint venture in Saudi Arabia, both of which were formerly part of Arconic’s Global Rolled Products segment. The results of operations of Alcoa Corporation for the third quarter and nine months ended September 30, 2016 are presented as discontinued operations in the accompanying Statement of Consolidated Operations. Arconic completed the Separation Transaction by distribution on November 1, 2016 of 80.1% of the outstanding common stock of Alcoa Corporation to the Company’s shareholders of record as of the close of business on October 20, 2016. Arconic retained 19.9% of the Alcoa Corporation common stock (36,311,767 shares). In February 2017, the Company sold 23,353,000 shares of Alcoa Corporation common stock at $38.03 per share, which resulted in cash proceeds of $888 which were recorded in Sale of investments within Investing Activities in the accompanying Statement of Consolidated Cash Flows and a gain of $351, which was recorded in Other income, net in the accompanying Statement of Consolidated Operations. In April and May 2017, the Company acquired a portion of its outstanding notes held by two investment banks (the “Investment Banks”) in exchange for cash and the Company’s remaining 12,958,767 Alcoa Corporation shares (valued at $35.91 per share) (the “Debt-for-Equity Exchange”) (See Note L). A gain of $167 on the Debt-for-Equity Exchange was recorded in Other income, net in the accompanying Statement of Consolidated Operations. The share exchange had no impact on the accompanying Statement of Consolidated Cash Flows. The Company had recorded the retained interest as a cost method investment in Investment in common stock of Alcoa Corporation in the accompanying Consolidated Balance Sheet. The fair value of Arconic’s retained interest in Alcoa Corporation was $0 and $1,020 at September 30, 2017 and December 31, 2016, respectively. The fair value was based on the closing stock price of Alcoa Corporation as of September 30, 2017, and December 31, 2016 multiplied by the number of shares of Alcoa Corporation common stock owned by the Company at those respective dates. As of May 4, 2017, the Company no longer maintained a retained interest in Alcoa Corporation common stock. In connection with the Separation Transaction, on October 31, 2016, Arconic and Alcoa Corporation entered into a Toll Processing and Services Agreement (the “Toll Processing Agreement”) pursuant to which Arconic provides can body stock from its Tennessee operations to Alcoa Corporation’s Warrick, Indiana rolling mill. Aluminum for the can body stock is supplied by Alcoa Corporation. The Toll Processing Agreement expires on December 31, 2018, unless sooner terminated by the parties. Tolling revenues for the third quarter and nine months ended September 30, 2017, and accounts receivable at September 30, 2017, were not material to the consolidated results of operations and financial position, respectively. As part of the Separation Transaction, Arconic had recorded a receivable in the accompanying Consolidated Balance Sheet as of December 31, 2016 for the net after-tax proceeds from Alcoa Corporation’s sale of the Yadkin Hydroelectric Project. The transaction closed in the first quarter of 2017 and the Company received proceeds of $238 in the first quarter of 2017 and the remaining $5 in the second quarter of 2017. The $243 proceeds were included in Other within Investing Activities in the Statement of Consolidated Cash Flows. The results of operations of Alcoa Corporation are presented as discontinued operations in the accompanying Statement of Consolidated Operations as summarized below: Third quarter ended September 30, Nine months ended September 30, Sales $ 2,075 $ 6,028 Cost of goods sold (exclusive of expenses below) 1,714 5,038 Selling, general administrative, and other expenses 46 148 Research and development expenses 8 26 Provision for depreciation, depletion and amortization 180 532 Restructuring and other charges 15 101 Interest expense 7 18 Other income, net (106 ) (80 ) Income from discontinued operations before income taxes 211 245 Provision for income taxes 91 99 Income from discontinued operations after income taxes 120 146 Less: Net income from discontinued operations attributable to noncontrolling interests 20 58 Net income from discontinued operations $ 100 $ 88 The cash flows related to Alcoa Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows for all periods presented. The following table presents depreciation, depletion and amortization, restructuring and other charges, and purchases of property, plant and equipment of the discontinued operations related to Alcoa Corporation: Nine months ended 2016 Depreciation, depletion and amortization $ 532 Restructuring and other charges $ 101 Capital expenditures $ 258 |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | H. Contingencies and Commitments Contingencies Environmental Matters Arconic participates in environmental assessments and cleanups at more than 100 locations. These include owned or operating facilities and adjoining properties, previously owned or operating facilities and adjoining properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)) sites. A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the extent of remedial actions and related costs. The liability can change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, and technological changes, among others. Arconic’s remediation reserve balance was $292 at September 30, 2017 and $308 at December 31, 2016 (of which $39 and $48, respectively, was classified as a current liability), and reflects the most probable costs to remediate identified environmental conditions for which costs can be reasonably estimated. Payments related to remediation expenses applied against the reserve were $10 and $17 in the third quarter and nine months ended September 30, 2017, respectively. This amount includes expenditures currently mandated, as well as those not required by any regulatory authority or third party. Included in annual operating expenses are the recurring costs of managing hazardous substances and environmental programs. These costs are estimated to be approximately 1% or less of cost of goods sold. The following discussion provides details regarding the current status of the most significant reserve related to a current Arconic site. Massena West, NY— Tax Pursuant to the Tax Matters Agreement entered into between Arconic and Alcoa Corporation in connection with the Separation Transaction, Arconic shares responsibility with Alcoa Corporation, and Alcoa Corporation has agreed to partially indemnify Arconic, with respect to the following matter. As previously reported, in September 2010, following a corporate income tax audit covering the 2003 through 2005 tax years, an assessment was received as a result of Spain’s tax authorities disallowing certain interest deductions claimed by a Spanish consolidated tax group owned by the Company. An appeal of this assessment in Spain’s Central Tax Administrative Court by the Company was denied in October 2013. In December 2013, the Company filed an appeal of the assessment in Spain’s National Court. On January 16, 2017, Spain’s National Court issued a decision in favor of the Company. The Spanish Tax Administration did not file an appeal within the applicable period. Based on this decision and recent confirming correspondence from the Spanish Tax Administration, the matter is now closed. The Company will not be responsible for any assessment related to the 2003 through 2005 tax years. In addition, following a corporate income tax audit of the same Spanish consolidated tax group for the 2006 through 2009 tax years, Spain’s tax authorities issued an assessment in July 2013 similarly disallowing certain interest deductions. In August 2013, Arconic filed an appeal of this second assessment in Spain’s Central Tax Administrative Court, which was denied in January 2015. Arconic filed another appeal of this second assessment in Spain’s National Court in March 2015. Spain’s National Court has not yet rendered a decision related to the assessment received in July 2013. The assessment for the 2006 through 2009 tax years is $152 (€129), including interest. Finally, the Spanish consolidated tax group had been under audit (beginning in September 2015) for the 2010 through 2013 tax years. In August 2017, the Company reached a settlement of this audit. The settlement amount is not material to the Company’s Consolidated Financial Statements. While the 2010 through 2013 tax years are closed to audit, it is possible that the Company may receive similar assessments from Spain’s tax authorities for years subsequent to 2013. The Company believes it has meritorious arguments to support its tax position for all years and intends to vigorously litigate assessments through Spain’s court system. However, in the event the Company is unsuccessful, a portion of the assessments may be offset with existing net operating losses available to the Spanish consolidated tax group, which would be shared between Arconic and Alcoa Corporation as provided for in the Tax Matters Agreement related to the Separation Transaction. At this time, the Company is unable to reasonably predict an outcome for this matter. Reynobond PE As previously reported, on June 13, 2017, the Grenfell Tower in London, UK caught fire resulting in fatalities, injuries and damage. A French subsidiary of Arconic, Arconic Architectural Products SAS (AAP SAS), supplied a product, Reynobond PE, to its customer, a cladding system fabricator, which used the product as one component of the overall cladding system on Grenfell Tower. The fabricator supplied its portion of the cladding system to the façade installer, who then completed and installed the system under the direction of the general contractor. Neither Arconic nor AAP SAS was involved in the design or installation of the system used at the Grenfell Tower, nor did it have a role in any other aspect of the building’s refurbishment or original design. Regulatory investigations into the overall Grenfell Tower matter are being conducted, including a criminal investigation by the London Metro Police, a Public Inquiry by the British government and a consumer protection inquiry by a French public authority. AAP SAS has filed an application seeking core participant status in the Public Inquiry. In August and September 2017, two purported class action complaints were filed against Arconic and certain officers, directors and/or other parties, alleging that, in light of the Grenfell Tower fire, certain Company filings with the Securities and Exchange Commission contained false and misleading disclosures and omissions in violation of the federal securities laws. While the Company believes that these cases are without merit and intends to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters. Given the preliminary nature of these matters and the uncertainty of litigation, the Company cannot reasonably estimate at this time the likelihood of an unfavorable outcome or the possible loss or range of losses in the event of an unfavorable outcome. The Board of Directors has also received letters, purportedly sent on behalf of shareholders, reciting allegations similar to those made in the federal court lawsuits and demanding that the Board authorize the Company to initiate litigation against members of management, the Board and others. The Board of Directors is reviewing these shareholder demand letters and considering the appropriate course of action. In addition, lawsuits are pending in state court in New York and federal court in Pennsylvania, initiated, respectively, by another purported shareholder and by the Company, concerning the shareholder’s claimed right, which the Company contests, to inspect the Company’s books and records related to the Grenfell Tower fire and Reynobond PE. Other In addition to the matters discussed above, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against Arconic, including those pertaining to environmental, product liability, safety and health, employment, and tax 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, 2017, Arconic had outstanding bank guarantees related to tax matters, outstanding debt, workers’ compensation, environmental obligations, energy contracts, and customs duties, among others. The total amount committed under these guarantees, which expire at various dates between 2017 and 2026, was $25 at September 30, 2017. Pursuant to the Separation and Distribution Agreement between Arconic and Alcoa Corporation, Arconic was required to provide maximum potential future payment guarantees for Alcoa Corporation issued on behalf of a third party of $270 and $354 at September 30, 2017 and December 31, 2016. These guarantees expire at various times between 2017 and 2024, and relate to project financing for Alcoa Corporation’s aluminum complex in Saudi Arabia. Furthermore, Arconic was required to provide guarantees up to an estimated present value amount of approximately $1,660 related to two long-term supply agreements for energy for Alcoa Corporation facilities. In accordance with the Separation and Distribution Agreement, Arconic is only liable for these guaranteed amounts in the event of an Alcoa Corporation payment default. In December 2016, Arconic entered into a one-year claims purchase agreement with a bank covering claims up to $245 related to the Saudi Arabian aluminum complex and two long-term energy supply agreements. Most of the premium related to this claims purchase agreement is being paid by Alcoa Corporation. At September 30, 2017 and December 31, 2016, the combined fair value of the three required guarantees was $35 in both periods and was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. See Note O for further information on the guarantee related to one of the long-term supply agreements for energy for an Alcoa Corporation facility. Arconic was also required to provide guarantees of $50 related to two Alcoa Corporation energy supply contracts. These guarantees expired in March 2017. Additionally, Arconic was required to provide guarantees of $53 related to certain Alcoa Corporation environmental liabilities. Notification of a change in guarantor to Alcoa Corporation was made to the appropriate environmental agencies and as such, Arconic no longer provides these guarantees. Letters of Credit Arconic has outstanding letters of credit, primarily related to workers’ compensation and environmental obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates, primarily in 2017, was $127 at September 30, 2017. Pursuant to the Separation and Distribution Agreement, Arconic was required to retain letters of credit of $61 that had previously been provided related to both Arconic and Alcoa Corporation workers’ compensation claims which occurred prior to November 1, 2016. Alcoa Corporation’s workers’ compensation claims and letter of credit fees paid by Arconic are being billed to and are being fully reimbursed by Alcoa Corporation. Additionally, Arconic was required to provide letters of credit totaling $103 for certain Alcoa Corporation equipment leases and energy contracts. The entire $103 of outstanding letters of credit were cancelled in 2017 when Alcoa Corporation issued its own letters of credit to cover these obligations. Surety Bonds Arconic has outstanding surety bonds, primarily related to tax matters, contract performance, workers’ compensation, environmental-related matters, and customs duties. The total amount committed under these surety bonds, which expire at various dates, primarily in 2017, was $128 at September 30, 2017. Pursuant to the Separation and Distribution Agreement, Arconic was required to provide surety bonds related to Alcoa Corporation workers’ compensation claims which occurred prior to November 1, 2016 and, as a result, Arconic has $25 in outstanding surety bonds relating to these liabilities. Alcoa Corporation workers’ compensation claims and surety bond fees paid by Arconic are being billed to and are being fully reimbursed by Alcoa Corporation. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | I. Segment Information Arconic is a producer of multi-material products including sheet, plate, precision castings, forgings, rolled rings, extrusions, wheels and fasteners. Arconic’s products are used worldwide in transportation (including aerospace, automotive, truck, trailer, rail, and shipping), packaging, building and construction, oil and gas, defense, and industrial applications. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2017, the Company changed its primary measure of segment performance from After-tax operating income (ATOI) to Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”). Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Adjusted EBITDA. Arconic’s definition of Adjusted EBITDA is net margin plus an add-back for depreciation and amortization and special items. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Items required to reconcile Combined segment adjusted EBITDA to Net income attributable to Arconic include: the Provision for depreciation and amortization; Restructuring and other charges; the impact of LIFO inventory accounting; metal price lag (the timing difference created when the average price of metal sold differs from the average cost of the metal when purchased by the respective segment — generally, when the price of metal increases, metal price lag is favorable, and when the price of metal decreases, metal price lag is unfavorable); corporate expense (general administrative and selling expenses of operating the corporate headquarters and other global administrative facilities and corporate research and development expenses); other items, including intersegment profit eliminations; Other income, net; Interest expense; Income tax expense; and the results of discontinued operations. Prior period information has been recast to conform to current year presentation. The operating results of Arconic’s reportable segments were as follows: Engineered Transportation Products and Global Rolled and Construction Combined Solutions Products Solutions Segment Third quarter ended September 30, 2017 Sales: Third-party sales $ 1,476 $ 1,234 $ 517 $ 3,227 Intersegment sales — 36 — 36 Total sales $ 1,476 $ 1,270 $ 517 $ 3,263 Profit and loss: Depreciation and amortization 68 52 13 133 Adjusted EBITDA 312 140 83 535 Third quarter ended September 30, 2016 Sales: Third-party sales $ 1,406 $ 1,285 $ 450 $ 3,141 Intersegment sales — 30 — 30 Total sales $ 1,406 $ 1,315 $ 450 $ 3,171 Profit and loss: Depreciation and amortization 63 52 12 127 Adjusted EBITDA 296 143 76 515 Engineered Transportation Products and Global Rolled and Construction Combined Solutions Products Solutions Segment Nine months ended September 30, 2017 Sales: Third-party sales $ 4,445 $ 3,751 $ 1,467 $ 9,663 Intersegment sales — 107 — 107 Total sales $ 4,445 $ 3,858 $ 1,467 $ 9,770 Profit and loss: Depreciation and amortization 198 153 37 388 Adjusted EBITDA 928 475 237 1,640 Nine months ended September 30, 2016 Sales: Third-party sales $ 4,320 $ 3,785 $ 1,346 $ 9,451 Intersegment sales — 88 — 88 Total sales $ 4,320 $ 3,873 $ 1,346 $ 9,539 Profit and loss: Depreciation and amortization 190 152 35 377 Adjusted EBITDA 930 461 216 1,607 The following table reconciles Combined segment adjusted EBITDA to Net income attributable to Arconic: Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Combined segment adjusted EBITDA $ 535 $ 515 $ 1,640 $ 1,607 Unallocated amounts: Depreciation and amortization (140 ) (136 ) (410 ) (402 ) Restructuring and other charges (19 ) (3 ) (118 ) (33 ) Impact of LIFO (48 ) (1 ) (78 ) (26 ) Metal price lag 2 4 43 10 Corporate expense (42 ) (113 ) (224 ) (304 ) Other (17 ) (29 ) (56 ) (62 ) Operating income $ 271 $ 237 $ 797 $ 790 Other income, net 1 11 526 40 Interest expense (100 ) (126 ) (398 ) (371 ) Income from continuing operations before income taxes $ 172 $ 122 $ 925 $ 459 Provision for income taxes (53 ) (56 ) (272 ) (230 ) Discontinued operations — 100 — 88 Net income attributable to Arconic $ 119 $ 166 $ 653 $ 317 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | J. 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 number of shares and per share amounts for all periods presented below have been updated to reflect the Reverse Stock Split (see Note A). The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Income from continuing operations after income taxes $ 119 $ 66 $ 653 $ 229 Less: Preferred stock dividends declared (18 ) (18 ) (53 ) (52 ) Income from continuing operations available to Arconic common shareholders 101 48 600 177 Income from discontinued operations after income taxes and noncontrolling interests — 100 — 88 Net income available to Arconic common shareholders - basic 101 148 600 265 Add: Interest expense related to convertible notes 2 2 7 — Add: Dividends related to mandatory convertible preferred stock — — 50 — Net income available to Arconic common shareholders - diluted $ 103 $ 150 $ 657 $ 265 Weighted average shares outstanding - basic 442 438 441 438 Effect of dilutive securities: Stock options 1 1 2 1 Stock and performance awards 5 5 5 4 Mandatory convertible preferred stock — — 39 — Convertible notes 14 9 14 — Weighted average shares outstanding - diluted 462 453 501 443 The following shares were excluded from the calculation of Weighted average shares outstanding – diluted as their effect was anti-dilutive. (shares in millions) Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Mandatory convertible preferred stock 39 26 — 26 Convertible notes — — — 9 Also, options to purchase 3 million shares of common stock at a weighted average exercise price of $33.33 and options to purchase 8 million shares of common stock at a weighted average exercise price of $38.16 were outstanding as of September 30, 2017 and 2016, respectively, but were not included in the computation of diluted EPS because their effect was anti-dilutive as the exercise price of the options was greater than the average market price of Arconic’s common stock. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Receivables | K. Receivables Arconic has an arrangement with three financial institutions to sell certain customer receivables without recourse on a revolving basis. The sale of such receivables is completed using a bankruptcy remote special purpose entity, which is a consolidated subsidiary of Arconic. This arrangement provides for minimum funding of $200 up to a maximum of $400 for receivables sold. On March 30, 2012, Arconic initially sold $304 of customer receivables in exchange for $50 cash and $254 of deferred purchase program under the arrangement. Arconic has received additional net cash funding of $300 ($2,208 in draws and $1,908 in repayments) since the program’s inception, including net cash draws totaling $0 ($450 in draws and $450 in repayments) in the nine months ended September 30, 2017. As of September 30, 2017, and December 31, 2016, the deferred purchase program receivable was $238 and $83, respectively, which was included in Other receivables on the accompanying Consolidated Balance Sheet. The deferred purchase program receivable is reduced as collections of the underlying receivables occur; however, as this is a revolving program, the sale of new receivables will result in an increase in the deferred purchase program receivable. The net change in the deferred purchase program receivable was reflected in the (Increase) in receivables line item on the accompanying Statement of Consolidated Cash Flows. This activity is reflected as an operating cash flow because the related customer receivables are the result of an operating activity with an insignificant, short-term interest rate risk. The gross amount of receivables sold and total cash collected under this program since its inception was $34,004 and $33,416, respectively. Arconic services the customer receivables for the financial institutions at market rates; therefore, no servicing asset or liability was recorded. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | L. Debt September 30, December 31, 6.50% Bonds, due 2018 $ — $ 250 6.75% Notes, due 2018 — 750 5.72% Notes, due 2019 500 750 1.63% Convertible Notes, due 2019* 403 403 6.150% Notes, due 2020 1,000 1,000 5.40% Notes due 2021 1,250 1,250 5.87% Notes, due 2022 627 627 5.125% Notes, due 2024 1,250 1,250 5.90% Notes, due 2027 625 625 6.75% Bonds, due 2028 300 300 5.95% Notes, due 2037 625 625 Iowa Finance Authority Loan, due 2042 250 250 Other** (27 ) (32 ) Total debt 6,803 8,048 Less: amount due within one year 1 4 Total long-term debt $ 6,802 $ 8,044 * Amount was assumed in conjunction with the July 2015 acquisition of RTI International Metals, Inc. ** Includes various financing arrangements related to subsidiaries, unamortized debt discounts related to outstanding notes and bonds listed in the table above, an equity option related to the convertible notes due in 2019, adjustments to the carrying value of long-term debt related to an interest rate swap contract accounted for as a fair value hedge, and unamortized debt issuance costs. Public Debt The Investment Banks purchased notes totaling $805 aggregate principal amount, including $150 aggregate principal amount of 6.50% Bonds, $405 aggregate principal amount of 6.75% Notes, and $250 aggregate principal amount of $5.72% Notes. During the second quarter of 2017, the Company agreed to acquire the notes from the Investment Banks for $409 in cash plus its remaining investment in Alcoa Corporation common stock (12,958,767 shares valued at $35.91 per share) for total consideration of $874 including accrued and unpaid interest. The Company recorded a charge of $58 ($27 in cash) primarily for the premium for the early redemption of the notes, a benefit of $8 for the proceeds of a related interest rate swap agreement, and a charge of $2 for legal fees associated with the transaction in Interest expense, and recorded a gain of $167 in Other income, net in the accompanying Statement of Consolidated Operations for the nine months ended September 30, 2017 for the Debt-for-Equity Exchange. On June 19, 2017, the Company completed the early redemption of its remaining outstanding 6.50% Bonds, with aggregate principal amount of $100, and its remaining outstanding 6.75% Notes, with aggregate principal amount of $345, for $479 in cash including accrued and unpaid interest. As a result of the early redemption of the 6.50% Bonds and 6.75% Notes, the Company recorded a charge of $24 in Interest expense in the accompanying Statement of Consolidated Operations for the nine months ended September 30, 2017 for the premium paid for the early redemption of these notes in excess of their carrying value. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | M. Pension and Other Postretirement Benefits The components of net periodic benefit cost were as follows: Third quarter ended Nine months ended Pension benefits 2017 2016 2017 2016 Service cost $ 22 $ 43 $ 67 $ 124 Interest cost 59 114 175 358 Expected return on plan assets (82 ) (187 ) (248 ) (558 ) Recognized net actuarial loss 55 104 165 308 Amortization of prior service cost (benefits) 1 4 4 12 Settlements — 13 — 15 Special termination benefits — — — 1 Net periodic benefit cost* $ 55 $ 91 $ 163 $ 260 Discontinued operations — 41 — 114 Net amount recognized in Statement of Consolidated Operations $ 55 $ 50 $ 163 $ 146 Other postretirement benefits Service cost $ 2 $ 3 $ 6 $ 10 Interest cost 7 16 22 53 Recognized net actuarial loss 2 8 4 19 Amortization of prior service cost (benefits) (2 ) (6 ) (6 ) (19 ) Special termination benefits — — — — Net periodic benefit cost* $ 9 $ 21 $ 26 $ 63 Discontinued operations — 12 — 37 Net amount recognized in Statement of Consolidated Operations $ 9 $ 9 $ 26 $ 26 * Components of Net periodic benefit cost were included within Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses as well as Restructuring and other charges in the Statement of Consolidated Operations. In conjunction with the Separation Transaction, the Pension Benefit Guaranty Corporation approved management’s plan to separate the Alcoa Inc. pension plans between Arconic Inc. and Alcoa Corporation. The plan stipulates that Arconic will make cash contributions over a period of 30 months to its two largest pension plans. Payments are expected to be made in three increments of no less than $50 each ($150 total) over this 30-month period. The first payment of $50 was made on April 18, 2017. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | N. Financial Instruments Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (i) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (ii) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 - Inputs that are both significant to the fair value measurement and unobservable. The carrying values and fair values of Arconic’s financial instruments were as follows: September 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Cash and cash equivalents $ 1,815 1,815 $ 1,863 $ 1,863 Restricted cash 5 5 15 15 Derivatives - current asset 41 41 14 14 Noncurrent receivables 18 18 21 21 Derivatives - noncurrent asset 24 24 10 10 Available-for-sale securities 106 106 102 102 Investment in common stock of Alcoa Corporation — — 1,020 1,020 Short-term borrowings 54 54 36 36 Derivatives - current liability 31 31 5 5 Long-term debt due within one year 1 1 4 4 Derivatives - noncurrent liability 11 11 3 3 Contingent payment related to an acquisition 81 81 78 78 Long-term debt, less amount due within one year 6,802 7,440 8,044 8,519 The following methods were used to estimate the fair values of financial instruments: Cash and cash equivalents, Restricted cash, and Short-term borrowings. Derivatives. Noncurrent receivables. Available-for-sale securities. Investment in common stock of Alcoa Corporation. Contingent payment related to an acquisition. Long-term debt due within one year and Long-term debt, less amount due within one year. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | O. Subsequent Events On October 2, 2017, all outstanding 24,975,978 depositary shares (each depositary share representing a 1/10th interest in a share of the mandatory convertible preferred stock) were converted at a rate of 1.56996 into 39,211,286 common shares; 24,022 depositary shares were previously tendered for early conversion into 31,428 shares of Arconic common stock. No gain or loss was recognized associated with this equity transaction. On October 13, 2017, Alcoa Corporation announced that it had terminated an electricity contract with Luminant Generation Company LLC, effective as of October 1, 2017, that was tied to its Rockdale Operations in Texas. Pursuant to the Separation and Distribution Agreement between Arconic and Alcoa Corporation, Arconic was required to provide a guarantee up to an estimated present value amount of approximately $485 related to this electricity contract for Alcoa Corporation’s facility in the event of an Alcoa Corporation payment default. As a result of the termination of the electricity contract by Alcoa Corporation, Arconic expects to record noncash non-operating income in the fourth quarter of 2017 of approximately $25 ($16 after-tax) associated with the reversal of the fair value of the guarantee which was included in Other noncurrent liabilities and deferred credits on the accompanying Consolidated Balance Sheet. |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive (Loss) by Component | The following table details the activity of the four components that comprise Accumulated other comprehensive loss for both Arconic’s shareholders and noncontrolling interests: Arconic Noncontrolling Interests Third quarter ended Third quarter ended September 30, September 30, 2017 2016 2017 2016 Pension and other postretirement benefits (M) Balance at beginning of period $ (1,931 ) $ (3,514 ) $ — $ (53 ) Other comprehensive income (loss): Unrecognized net actuarial loss and prior service cost (7 ) (819 ) — (1 ) Tax benefit 1 286 — — Total Other comprehensive loss before reclassifications, net of tax (6 ) (533 ) — (1 ) Amortization of net actuarial loss and prior service cost (1) 56 109 — 1 Tax expense (2) (19 ) (38 ) — (1 ) Total amount reclassified from Accumulated other comprehensive income, net of tax (5) 37 71 — — Total Other comprehensive income (loss) 31 (462 ) — (1 ) Balance at end of period $ (1,900 ) $ (3,976 ) $ — $ (54 ) Foreign currency translation Balance at beginning of period $ (523 ) $ (2,064 ) $ (2 ) $ (641 ) Other comprehensive income (3) 85 157 — 45 Balance at end of period $ (438 ) $ (1,907 ) $ (2 ) $ (596 ) Available-for-sale securities Balance at beginning of period $ (2 ) $ (1 ) $ — $ — Other comprehensive income (4) 1 — — — Balance at end of period $ (1 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ 2 $ 364 $ — $ 11 Other comprehensive income (loss): Net change from periodic revaluations 15 (430 ) — 20 Tax (expense) benefit (5 ) 126 — (6 ) Total Other comprehensive income (loss) before reclassifications, net of tax 10 (304 ) — 14 Net amount reclassified to earnings — (46 ) — (34 ) Tax benefit (2) — 12 — 10 Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) — (34 ) — (24 ) Total Other comprehensive income (loss) 10 (338 ) — (10 ) Balance at end of period $ 12 $ 26 $ — $ 1 (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other income, net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 2 through 4. Arconic Noncontrolling Interests Nine months ended Nine months ended September 30, September 30, 2017 2016 2017 2016 Pension and other postretirement benefits (M) Balance at beginning of period $ (2,010 ) $ (3,611 ) $ — $ (56 ) Other comprehensive income (loss): Unrecognized net actuarial loss and prior service cost 4 (883 ) — — Tax (expense) benefit (3 ) 312 — — Total Other comprehensive income (loss) before reclassifications, net of tax 1 (571 ) — — Amortization of net actuarial loss and prior service cost (1) 167 317 — 3 Tax expense (2) (58 ) (111 ) — (1 ) Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) 109 206 — 2 Total Other comprehensive income (loss) 110 (365 ) — 2 Balance at end of period $ (1,900 ) $ (3,976 ) $ — $ (54 ) Foreign currency translation Balance at beginning of period $ (689 ) $ (2,412 ) $ (2 ) $ (780 ) Other comprehensive income (3) 251 505 — 184 Balance at end of period $ (438 ) $ (1,907 ) $ (2 ) $ (596 ) Available-for-sale securities Balance at beginning of period $ 132 $ (5 ) $ — $ — Other comprehensive (loss) income (4) (133 ) 4 — — Balance at end of period $ (1 ) $ (1 ) $ — $ — Cash flow hedges Balance at beginning of period $ (1 ) $ 597 $ — $ (3 ) Other comprehensive income (loss): Net change from periodic revaluations 20 (772 ) — 35 Tax (expense) benefit (7 ) 229 — (10 ) Total Other comprehensive income (loss) before reclassifications, net of tax 13 (543 ) — 25 Net amount reclassified to earnings — (41 ) — (29 ) Tax benefit 2) — 13 — 8 Total amount reclassified from Accumulated other comprehensive loss, net of tax (5) — (28 ) — (21 ) Total Other comprehensive income (loss) 13 (571 ) — 4 Balance at end of period $ 12 $ 26 $ — $ 1 (1) These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note M). (2) These amounts were included in Provision for income taxes on the accompanying Statement of Consolidated Operations. (3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings. (4) Realized gains and losses were included in Other income, net on the accompanying Statement of Consolidated Operations. (5) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. These amounts were reflected on the accompanying Statement of Consolidated Operations in the line items indicated in footnotes 2 through 4. |
Restructuring and Other Charg25
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Charges by Reportable Segments, Pretax | The pretax impact of such charges to segment results would have been as follows: Third quarter ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Engineered Products and Solutions $ 10 $ (1 ) $ 24 $ 16 Global Rolled Products 2 (1 ) 76 1 Transportation and Construction Solutions 2 (2 ) 11 6 Segment Total 14 (4 ) 111 23 Corporate 5 7 7 10 Total Restructuring and other charges $ 19 $ 3 $ 118 $ 33 |
Activity and Reserve Balances for Restructuring Charges | Activity and reserve balances for restructuring charges were as follows: Layoff Other exit Total Reserve balances at December 31, 2015 $ 84 $ 9 $ 93 2016: Cash payments (73 ) (13 ) (86 ) Restructuring charges 70 27 97 Other* (31 ) (14 ) (45 ) Reserve balances at December 31, 2016 50 9 59 2017: Cash payments (41 ) (5 ) (46 ) Restructuring charges 54 — 54 Other* 10 (1 ) 9 Reserve balances at September 30, 2017 $ 73 $ 3 $ 76 * Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation. In 2017, Other for layoff costs includes the reclassification of a stock awards reversal of $13. In 2016, Other for other exit costs also included reclassifications of $8 in asset retirement, $2 in environmental obligations and $4 in legal obligations as these liabilities were included in Arconic’s separate reserves for asset retirement obligations, environmental remediation and legal costs. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory Components | September 30, December 31, Finished goods $ 651 $ 625 Work-in-process 1,332 1,144 Purchased raw materials 386 408 Operating supplies 84 76 Total inventories $ 2,453 $ 2,253 |
Separation Transaction and Di27
Separation Transaction and Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Alcoa Corporation [Member] | |
Summary of Discontinued Operations in Financial Statements | The results of operations of Alcoa Corporation are presented as discontinued operations in the accompanying Statement of Consolidated Operations as summarized below: Third quarter ended September 30, Nine months ended September 30, Sales $ 2,075 $ 6,028 Cost of goods sold (exclusive of expenses below) 1,714 5,038 Selling, general administrative, and other expenses 46 148 Research and development expenses 8 26 Provision for depreciation, depletion and amortization 180 532 Restructuring and other charges 15 101 Interest expense 7 18 Other income, net (106 ) (80 ) Income from discontinued operations before income taxes 211 245 Provision for income taxes 91 99 Income from discontinued operations after income taxes 120 146 Less: Net income from discontinued operations attributable to noncontrolling interests 20 58 Net income from discontinued operations $ 100 $ 88 The cash flows related to Alcoa Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows for all periods presented. The following table presents depreciation, depletion and amortization, restructuring and other charges, and purchases of property, plant and equipment of the discontinued operations related to Alcoa Corporation: Nine months ended 2016 Depreciation, depletion and amortization $ 532 Restructuring and other charges $ 101 Capital expenditures $ 258 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Operating Results of Arconic's Reportable Segments | The operating results of Arconic’s reportable segments were as follows: Engineered Transportation Products and Global Rolled and Construction Combined Solutions Products Solutions Segment Third quarter ended September 30, 2017 Sales: Third-party sales $ 1,476 $ 1,234 $ 517 $ 3,227 Intersegment sales — 36 — 36 Total sales $ 1,476 $ 1,270 $ 517 $ 3,263 Profit and loss: Depreciation and amortization 68 52 13 133 Adjusted EBITDA 312 140 83 535 Third quarter ended September 30, 2016 Sales: Third-party sales $ 1,406 $ 1,285 $ 450 $ 3,141 Intersegment sales — 30 — 30 Total sales $ 1,406 $ 1,315 $ 450 $ 3,171 Profit and loss: Depreciation and amortization 63 52 12 127 Adjusted EBITDA 296 143 76 515 Engineered Transportation Products and Global Rolled and Construction Combined Solutions Products Solutions Segment Nine months ended September 30, 2017 Sales: Third-party sales $ 4,445 $ 3,751 $ 1,467 $ 9,663 Intersegment sales — 107 — 107 Total sales $ 4,445 $ 3,858 $ 1,467 $ 9,770 Profit and loss: Depreciation and amortization 198 153 37 388 Adjusted EBITDA 928 475 237 1,640 Nine months ended September 30, 2016 Sales: Third-party sales $ 4,320 $ 3,785 $ 1,346 $ 9,451 Intersegment sales — 88 — 88 Total sales $ 4,320 $ 3,873 $ 1,346 $ 9,539 Profit and loss: Depreciation and amortization 190 152 35 377 Adjusted EBITDA 930 461 216 1,607 |
Schedule of Combined Segment Adjusted EBITDA to Net Income Attributable to Arconic | The following table reconciles Combined segment adjusted EBITDA to Net income attributable to Arconic: Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Combined segment adjusted EBITDA $ 535 $ 515 $ 1,640 $ 1,607 Unallocated amounts: Depreciation and amortization (140 ) (136 ) (410 ) (402 ) Restructuring and other charges (19 ) (3 ) (118 ) (33 ) Impact of LIFO (48 ) (1 ) (78 ) (26 ) Metal price lag 2 4 43 10 Corporate expense (42 ) (113 ) (224 ) (304 ) Other (17 ) (29 ) (56 ) (62 ) Operating income $ 271 $ 237 $ 797 $ 790 Other income, net 1 11 526 40 Interest expense (100 ) (126 ) (398 ) (371 ) Income from continuing operations before income taxes $ 172 $ 122 $ 925 $ 459 Provision for income taxes (53 ) (56 ) (272 ) (230 ) Discontinued operations — 100 — 88 Net income attributable to Arconic $ 119 $ 166 $ 653 $ 317 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Information Used to Compute Basic and Diluted EPS | The information used to compute basic and diluted EPS attributable to Arconic common shareholders was as follows (shares in millions): Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Income from continuing operations after income taxes $ 119 $ 66 $ 653 $ 229 Less: Preferred stock dividends declared (18 ) (18 ) (53 ) (52 ) Income from continuing operations available to Arconic common shareholders 101 48 600 177 Income from discontinued operations after income taxes and noncontrolling interests — 100 — 88 Net income available to Arconic common shareholders - basic 101 148 600 265 Add: Interest expense related to convertible notes 2 2 7 — Add: Dividends related to mandatory convertible preferred stock — — 50 — Net income available to Arconic common shareholders - diluted $ 103 $ 150 $ 657 $ 265 Weighted average shares outstanding - basic 442 438 441 438 Effect of dilutive securities: Stock options 1 1 2 1 Stock and performance awards 5 5 5 4 Mandatory convertible preferred stock — — 39 — Convertible notes 14 9 14 — Weighted average shares outstanding - diluted 462 453 501 443 |
Schedule of Anti Dilutive Securities Excluded From Computation of Weighted Average Shares Outstanding | The following shares were excluded from the calculation of Weighted average shares outstanding – diluted as their effect was anti-dilutive. (shares in millions) Third quarter ended Nine months ended September 30, 2017 2016 2017 2016 Mandatory convertible preferred stock 39 26 — 26 Convertible notes — — — 9 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | September 30, December 31, 6.50% Bonds, due 2018 $ — $ 250 6.75% Notes, due 2018 — 750 5.72% Notes, due 2019 500 750 1.63% Convertible Notes, due 2019* 403 403 6.150% Notes, due 2020 1,000 1,000 5.40% Notes due 2021 1,250 1,250 5.87% Notes, due 2022 627 627 5.125% Notes, due 2024 1,250 1,250 5.90% Notes, due 2027 625 625 6.75% Bonds, due 2028 300 300 5.95% Notes, due 2037 625 625 Iowa Finance Authority Loan, due 2042 250 250 Other** (27 ) (32 ) Total debt 6,803 8,048 Less: amount due within one year 1 4 Total long-term debt $ 6,802 $ 8,044 * Amount was assumed in conjunction with the July 2015 acquisition of RTI International Metals, Inc. ** Includes various financing arrangements related to subsidiaries, unamortized debt discounts related to outstanding notes and bonds listed in the table above, an equity option related to the convertible notes due in 2019, adjustments to the carrying value of long-term debt related to an interest rate swap contract accounted for as a fair value hedge, and unamortized debt issuance costs. |
Pension and Other Postretirem31
Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows: Third quarter ended Nine months ended Pension benefits 2017 2016 2017 2016 Service cost $ 22 $ 43 $ 67 $ 124 Interest cost 59 114 175 358 Expected return on plan assets (82 ) (187 ) (248 ) (558 ) Recognized net actuarial loss 55 104 165 308 Amortization of prior service cost (benefits) 1 4 4 12 Settlements — 13 — 15 Special termination benefits — — — 1 Net periodic benefit cost* $ 55 $ 91 $ 163 $ 260 Discontinued operations — 41 — 114 Net amount recognized in Statement of Consolidated Operations $ 55 $ 50 $ 163 $ 146 Other postretirement benefits Service cost $ 2 $ 3 $ 6 $ 10 Interest cost 7 16 22 53 Recognized net actuarial loss 2 8 4 19 Amortization of prior service cost (benefits) (2 ) (6 ) (6 ) (19 ) Special termination benefits — — — — Net periodic benefit cost* $ 9 $ 21 $ 26 $ 63 Discontinued operations — 12 — 37 Net amount recognized in Statement of Consolidated Operations $ 9 $ 9 $ 26 $ 26 * Components of Net periodic benefit cost were included within Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses as well as Restructuring and other charges in the Statement of Consolidated Operations. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Instruments | The carrying values and fair values of Arconic’s financial instruments were as follows: September 30, 2017 December 31, 2016 Carrying Fair Carrying Fair Cash and cash equivalents $ 1,815 1,815 $ 1,863 $ 1,863 Restricted cash 5 5 15 15 Derivatives - current asset 41 41 14 14 Noncurrent receivables 18 18 21 21 Derivatives - noncurrent asset 24 24 10 10 Available-for-sale securities 106 106 102 102 Investment in common stock of Alcoa Corporation — — 1,020 1,020 Short-term borrowings 54 54 36 36 Derivatives - current liability 31 31 5 5 Long-term debt due within one year 1 1 4 4 Derivatives - noncurrent liability 11 11 3 3 Contingent payment related to an acquisition 81 81 78 78 Long-term debt, less amount due within one year 6,802 7,440 8,044 8,519 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - Common Stock [Member] shares in Billions | Oct. 05, 2016shares | Oct. 04, 2016shares |
Basis Of Presentation [Line Items] | ||
Reverse stock split ratio | 0.33 | |
Common stock share outstanding | 0.4 | 1.3 |
Recently Adopted and Recently34
Recently Adopted and Recently Issued Accounting Guidance - Additional Information (Detail) $ in Billions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Accounting Changes and Error Corrections [Abstract] | |
Increase in operating income | $ 150 |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive (Loss) Income by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension and other postretirement benefits | ||||
Total Other comprehensive income (loss) | $ 31 | $ (463) | $ 110 | $ (363) |
Foreign currency translation | ||||
Other comprehensive income | 85 | 202 | 251 | 689 |
Available-for-sale securities | ||||
Other comprehensive (loss) income | 1 | (133) | 4 | |
Cash flow hedges | ||||
Total Other comprehensive income (loss) | 10 | (348) | 13 | (567) |
Arconic [Member] | ||||
Pension and other postretirement benefits | ||||
Balance at beginning of period | (1,931) | (3,514) | (2,010) | (3,611) |
Unrecognized net actuarial loss and prior service cost | (7) | (819) | 4 | (883) |
Tax (expense) benefit | 1 | 286 | (3) | 312 |
Total Other comprehensive income (loss) before reclassifications, net of tax | (6) | (533) | 1 | (571) |
Amortization of net actuarial loss and prior service cost | 56 | 109 | 167 | 317 |
Tax (expense) benefit | (19) | (38) | (58) | (111) |
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 37 | 71 | 109 | 206 |
Total Other comprehensive income (loss) | 31 | (462) | 110 | (365) |
Balance at end of period | (1,900) | (3,976) | (1,900) | (3,976) |
Foreign currency translation | ||||
Balance at beginning of period | (523) | (2,064) | (689) | (2,412) |
Other comprehensive income | 85 | 157 | 251 | 505 |
Balance at end of period | (438) | (1,907) | (438) | (1,907) |
Available-for-sale securities | ||||
Balance at beginning of period | (2) | (1) | 132 | (5) |
Other comprehensive (loss) income | 1 | (133) | 4 | |
Balance at end of period | (1) | (1) | (1) | (1) |
Cash flow hedges | ||||
Balance at beginning of period | 2 | 364 | (1) | 597 |
Net change from periodic revaluations | 15 | (430) | 20 | (772) |
Tax (expense) benefit | (5) | 126 | (7) | 229 |
Total Other comprehensive income (loss) before reclassifications, net of tax | 10 | (304) | 13 | (543) |
Net amount reclassified to earnings | (46) | (41) | ||
Tax benefit | 12 | 13 | ||
Total amount reclassified from Accumulated other comprehensive loss, net of tax | (34) | (28) | ||
Total Other comprehensive income (loss) | 10 | (338) | 13 | (571) |
Balance at end of period | 12 | 26 | 12 | 26 |
Noncontrolling Interests [Member] | ||||
Pension and other postretirement benefits | ||||
Balance at beginning of period | (53) | (56) | ||
Unrecognized net actuarial loss and prior service cost | (1) | |||
Total Other comprehensive income (loss) before reclassifications, net of tax | (1) | |||
Amortization of net actuarial loss and prior service cost | 1 | 3 | ||
Tax (expense) benefit | (1) | (1) | ||
Total amount reclassified from Accumulated other comprehensive loss, net of tax | 2 | |||
Total Other comprehensive income (loss) | (1) | 2 | ||
Balance at end of period | (54) | (54) | ||
Foreign currency translation | ||||
Balance at beginning of period | (2) | (641) | (2) | (780) |
Other comprehensive income | 45 | 184 | ||
Balance at end of period | $ (2) | (596) | $ (2) | (596) |
Cash flow hedges | ||||
Balance at beginning of period | 11 | (3) | ||
Net change from periodic revaluations | 20 | 35 | ||
Tax (expense) benefit | (6) | (10) | ||
Total Other comprehensive income (loss) before reclassifications, net of tax | 14 | 25 | ||
Net amount reclassified to earnings | (34) | (29) | ||
Tax benefit | 10 | 8 | ||
Total amount reclassified from Accumulated other comprehensive loss, net of tax | (24) | (21) | ||
Total Other comprehensive income (loss) | (10) | 4 | ||
Balance at end of period | $ 1 | $ 1 |
Restructuring and Other Charg36
Restructuring and Other Charges - Additional Information (Detail) | Sep. 30, 2017Employees | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($)EmployeesPositions | Sep. 30, 2016USD ($)Positions | Sep. 30, 2017USD ($)EmployeesPositions | Sep. 30, 2016USD ($)Positions | Dec. 31, 2016USD ($)Employees |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 19,000,000 | $ 3,000,000 | $ 118,000,000 | $ 33,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | $ 13,000,000 | $ 2,000,000 | $ 99,000,000 | $ 22,000,000 | |||
Number of employees associated with layoff costs | Positions | 124 | 70 | 800 | 1,140 | |||
Reversal of forfeited executive stock compensation | $ 13,000,000 | ||||||
Severance charges | 7,000,000 | ||||||
Cash payments made against the layoff reserves | 46,000,000 | $ 86,000,000 | |||||
Minimum amount of cash payments expected to be paid beyond the end of the current annual period | 15,000,000 | ||||||
Maximum amount of cash payments expected to be paid beyond the end of the current annual period | 20,000,000 | ||||||
Corporate [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 5,000,000 | $ 7,000,000 | $ 7,000,000 | $ 10,000,000 | |||
Number of employees associated with layoff costs | Positions | 12 | 10 | 74 | 10 | |||
Engineered Products and Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Positions | 111 | 60 | 350 | 860 | |||
Global Rolled Products [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Positions | 1 | 243 | 30 | ||||
Transportation and Construction Solutions [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Positions | 133 | 240 | |||||
Brazil [Member] | Transportation and Construction Solutions [Member] | Extrusions Business [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 0 | $ 0 | $ 0 | ||||
Brazil [Member] | Transportation and Construction Solutions [Member] | Scenario, Forecast [Member] | Extrusions Business [Member] | Minimum [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 30,000,000 | ||||||
Brazil [Member] | Transportation and Construction Solutions [Member] | Scenario, Forecast [Member] | Extrusions Business [Member] | Maximum [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 50,000,000 | ||||||
Fusina Italy [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 60,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | 60,000,000 | ||||||
Restructuring Programs Layoffs 2015 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | $ 11,000,000 | $ 4,000,000 | 59,000,000 | 34,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | $ 8,000,000 | 2,000,000 | $ 40,000,000 | 21,000,000 | |||
Number of employees associated with layoff costs | Employees | 1,220 | 1,240 | |||||
Approximate number of employees already laid off | Employees | 1,120 | 1,120 | 1,120 | ||||
Cash payments made against the layoff reserves | $ 1,000,000 | $ 5,000,000 | |||||
Other Miscellaneous Items [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 8,000,000 | 7,000,000 | 7,000,000 | 14,000,000 | |||
Restructuring and other charges after tax and noncontrolling interest | $ 5,000,000 | 5,000,000 | 5,000,000 | 9,000,000 | |||
Other Adjustments [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 8,000,000 | 2,000,000 | 15,000,000 | ||||
Restructuring and other charges after tax and noncontrolling interest | $ 5,000,000 | $ 2,000,000 | $ 8,000,000 | ||||
Restructuring Programs Layoffs 2017 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 800 | ||||||
Approximate number of employees already laid off | Employees | 155 | 155 | 155 | ||||
Cash payments made against the layoff reserves | $ 13,000,000 | $ 11,000,000 | |||||
Restructuring Programs Layoffs 2016 [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employees associated with layoff costs | Employees | 1,750 | 1,800 | |||||
Approximate number of employees already laid off | Employees | 1,200 | 1,200 | 1,200 | ||||
Cash payments made against the layoff reserves | $ 3,000,000 | $ 23,000,000 | |||||
Reversal of Forfeited Executive Stock Compensation [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and other charges | 6,000,000 | ||||||
Restructuring and other charges after tax and noncontrolling interest | $ 4,000,000 |
Restructuring and Other Charg37
Restructuring and Other Charges - Schedule of Restructuring and Other Charges by Reportable Segments, Pretax (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 19 | $ 3 | $ 118 | $ 33 |
Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 14 | (4) | 111 | 23 |
Corporate [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 5 | 7 | 7 | 10 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 10 | (1) | 24 | 16 |
Global Rolled Products [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | 2 | (1) | 76 | 1 |
Transportation and Construction Solutions [Member] | Operating Segments [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other charges | $ 2 | $ (2) | $ 11 | $ 6 |
Restructuring and Other Charg38
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | $ 59 | $ 93 |
Cash payments | (46) | (86) |
Restructuring charges | 54 | 97 |
Other | 9 | (45) |
Restructuring reserve ending balance | 76 | 59 |
Layoff Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 50 | 84 |
Cash payments | (41) | (73) |
Restructuring charges | 54 | 70 |
Other | 10 | (31) |
Restructuring reserve ending balance | 73 | 50 |
Other Exit Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve beginning balance | 9 | 9 |
Cash payments | (5) | (13) |
Restructuring charges | 27 | |
Other | (1) | (14) |
Restructuring reserve ending balance | $ 3 | $ 9 |
Restructuring and Other Charg39
Restructuring and Other Charges - Activity and Reserve Balances for Restructuring Charges (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 19 | $ 3 | $ 118 | $ 33 | |
Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Asset retirement obligations | $ 8 | ||||
Environmental Remediation [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | 2 | ||||
Legal Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 4 | ||||
Stock awards reversal [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other charges | $ 13 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Apr. 30, 2016USD ($)Employees | Sep. 30, 2017USD ($)Employees | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Business Acquisition [Line Items] | ||||||||
Third-party sale generated in last annual period prior to divestiture | $ 3,236 | $ 3,138 | $ 9,689 | $ 9,427 | ||||
Restructuring and other charges | $ 19 | $ 3 | 118 | 33 | ||||
LISI MEDICAL [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash received on sale of operations | $ 102 | |||||||
Sale of Remmele Medical business, net of transaction costs | $ 99 | |||||||
Slim Aluminium [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Third-party sale generated in last annual period prior to divestiture | $ 54 | 128 | ||||||
Number of employees | Employees | 312 | |||||||
Cash expense related to sale of rolling mill | $ 10 | |||||||
Third party guarantee with a fair value related to environmental remediation | $ 5 | |||||||
Slim Aluminium [Member] | Restructuring and Other Charges [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Loss on sale of rolling mill | $ 60 | |||||||
RTI [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Third-party sale generated in last annual period prior to divestiture | $ 23 | |||||||
Number of employees | Employees | 330 | |||||||
Extrusions Business [Member] | Brazil [Member] | Transportation and Construction Solutions [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Restructuring and other charges | $ 0 | $ 0 | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory Components (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 651 | $ 625 |
Work-in-process | 1,332 | 1,144 |
Purchased raw materials | 386 | 408 |
Operating supplies | 84 | 76 |
Total inventories | $ 2,453 | $ 2,253 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Inventories valued on a LIFO basis | $ 1,148 | $ 947 |
Total inventories valued on an average-cost basis | $ 449 | $ 371 |
Separation Transaction and Di43
Separation Transaction and Discontinued Operations - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Nov. 01, 2016 | May 31, 2017 | Apr. 30, 2017 | Feb. 28, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Common stock sold | 23,353,000 | 12,958,767 | ||||||
Common stock sold per share | $ 38.03 | $ 35.91 | ||||||
Cash proceeds sale of common stock | $ 888 | |||||||
Pre-tax gain on sale of common stock | $ 351 | $ 167 | ||||||
Investment in common stock of Alcoa Corporation | 0 | $ 1,020 | ||||||
Investment Banks [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Common stock sold | 12,958,767 | 12,958,767 | ||||||
Common stock sold per share | $ 35.91 | $ 35.91 | ||||||
Pre-tax gain on sale of common stock | $ 167 | $ 167 | ||||||
Yadkin [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from sale of assets | $ 5 | $ 238 | $ 243 | |||||
Alcoa Corporation [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Common stock outstanding percentage | 80.10% | |||||||
Number of common stock retained | 36,311,767 | |||||||
Percentage of common stock retained | 19.90% |
Separation Transaction and Di44
Separation Transaction and Discontinued Operations - Summary of Discontinued Operations in Statement of Consolidated Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from discontinued operations after income taxes | $ 120 | $ 146 |
Less: Net income from discontinued operations attributable to noncontrolling interests | 20 | 58 |
Net income from discontinued operations | 100 | 88 |
Alcoa Corporation [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sales | 2,075 | 6,028 |
Cost of goods sold (exclusive of expenses below) | 1,714 | 5,038 |
Selling, general administrative, and other expenses | 46 | 148 |
Research and development expenses | 8 | 26 |
Provision for depreciation, depletion and amortization | 180 | 532 |
Restructuring and other charges | 15 | 101 |
Interest expense | 7 | 18 |
Other income, net | (106) | (80) |
Income from discontinued operations before income taxes | 211 | 245 |
Provision for income taxes | 91 | 99 |
Income from discontinued operations after income taxes | 120 | 146 |
Less: Net income from discontinued operations attributable to noncontrolling interests | 20 | 58 |
Net income from discontinued operations | $ 100 | $ 88 |
Separation Transaction and Di45
Separation Transaction and Discontinued Operations - Summary of Discontinued Operations in Statement of Consolidated Cash Flows (Detail) - Alcoa Corporation [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Depreciation, depletion and amortization | $ 532 |
Restructuring and other charges | 101 |
Capital expenditures | $ 258 |
Contingencies and Commitments -
Contingencies and Commitments - Additional Information - 1 (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Number of cleanup locations | More than 100 | ||
Remediation reserve balance | $ 292 | $ 292 | $ 308 |
Remediation reserve balance, classified as a current liability | 39 | 39 | 48 |
Payments related to remediation expenses applied against the reserve | 10 | $ 17 | |
Actual remediation fieldwork period | 4 years | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Majority of the project funding period | 2,022 | ||
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Majority of the project funding period | 2,018 | ||
Massena West, NY [Member] | |||
Loss Contingencies [Line Items] | |||
Remediation reserve balance | $ 221 | $ 221 | $ 228 |
Recurring Costs of Managing Hazardous Substances and Environmental Programs [Member] | Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Percentage of cost of goods sold | 1.00% |
Contingencies and Commitments47
Contingencies and Commitments - Additional Information - 2 (Detail) € in Millions, $ in Millions | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2017EUR (€) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | ||||
Assessment for 2006 through 2009 tax years | $ 152 | € 129 | ||
Guarantees of third party related to project financing | 25 | |||
Letters of credit, total amount committed | $ 127 | |||
Letters of credit, expiration date | 2,017 | |||
Total amount committed under outstanding surety bonds | $ 128 | |||
Surety bonds, expiration date | 2,017 | |||
Other Noncurrent Liabilities and Deferred Credits [Member] | ||||
Loss Contingencies [Line Items] | ||||
Combined fair value of guarantees | $ 35 | $ 35 | ||
Separation Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | 270 | 354 | ||
Total amount committed under outstanding surety bonds | 25 | |||
Supply Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | 1,660 | |||
Purchase Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | $ 245 | |||
Alcoa Corporation Energy Supply Contracts Guarantee [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | $ 50 | |||
Alcoa Corporation Environmental Liabilities Guarantee [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees of third party related to project financing | 53 | |||
Alcoa Corporation Workers Compensation Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount committed | 61 | |||
Alcoa Corporation Equipment Leases And Energy Contracts [Member] | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit, total amount committed | $ 103 | |||
Minimum [Member] | Separation Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees, expiration date | 2,017 | |||
Minimum [Member] | Outstanding bank guarantees [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees, expiration date | 2,017 | |||
Maximum [Member] | Separation Agreement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees, expiration date | 2,024 | |||
Maximum [Member] | Outstanding bank guarantees [Member] | ||||
Loss Contingencies [Line Items] | ||||
Guarantees, expiration date | 2,026 |
Segment Information - Schedule
Segment Information - Schedule of Operating Results of Arconic's Reportable Segments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total sales | $ 3,236 | $ 3,138 | $ 9,689 | $ 9,427 |
Depreciation and amortization | 133 | 127 | 388 | 377 |
Adjusted EBITDA | 535 | 515 | 1,640 | 1,607 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 3,263 | 3,171 | 9,770 | 9,539 |
Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 36 | 30 | 107 | 88 |
Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 3,227 | 3,141 | 9,663 | 9,451 |
Engineered Products and Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 68 | 63 | 198 | 190 |
Adjusted EBITDA | 312 | 296 | 928 | 930 |
Engineered Products and Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,476 | 1,406 | 4,445 | 4,320 |
Engineered Products and Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 1,476 | 1,406 | 4,445 | 4,320 |
Global Rolled Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 52 | 52 | 153 | 152 |
Adjusted EBITDA | 140 | 143 | 475 | 461 |
Global Rolled Products [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 1,270 | 1,315 | 3,858 | 3,873 |
Global Rolled Products [Member] | Intersegment Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Intersegment sales | 36 | 30 | 107 | 88 |
Global Rolled Products [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | 1,234 | 1,285 | 3,751 | 3,785 |
Transportation and Construction Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 13 | 12 | 37 | 35 |
Adjusted EBITDA | 83 | 76 | 237 | 216 |
Transportation and Construction Solutions [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total sales | 517 | 450 | 1,467 | 1,346 |
Transportation and Construction Solutions [Member] | Third-Party Sales [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Third-party sales | $ 517 | $ 450 | $ 1,467 | $ 1,346 |
Segment Information - Schedul49
Segment Information - Schedule of Combined Segment Adjusted EBITDA to Net Income Attributable to Arconic (Detail) - USD ($) $ in Millions | Jun. 19, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Segment Reporting Information [Line Items] | |||||
Combined segment adjusted EBITDA | $ 535 | $ 515 | $ 1,640 | $ 1,607 | |
Depreciation and amortization | (140) | (136) | (410) | (402) | |
Restructuring and other charges | (19) | (3) | (118) | (33) | |
Operating income | 271 | 237 | 797 | 790 | |
Other income, net | 1 | 11 | 526 | 40 | |
Interest expense | $ (24) | (100) | (126) | (398) | (371) |
Income from continuing operations before income taxes | 172 | 122 | 925 | 459 | |
Provision for income taxes | (53) | (56) | (272) | (230) | |
Discontinued operations | 100 | 88 | |||
Net income attributable to Arconic | 119 | 166 | 653 | 317 | |
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | (140) | (136) | (410) | (402) | |
Restructuring and other charges | (19) | (3) | (118) | (33) | |
Impact of LIFO | (48) | (1) | (78) | (26) | |
Metal price lag | 2 | 4 | 43 | 10 | |
Corporate expense | (42) | (113) | (224) | (304) | |
Other | (17) | (29) | (56) | (62) | |
Operating income | 271 | 237 | 797 | 790 | |
Other income, net | 1 | 11 | 526 | 40 | |
Interest expense | (100) | (126) | (398) | (371) | |
Income from continuing operations before income taxes | 172 | 122 | 925 | 459 | |
Provision for income taxes | $ (53) | (56) | $ (272) | (230) | |
Discontinued operations | $ 100 | $ 88 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Information Used to Compute Basic and Diluted EPS (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations after income taxes | $ 119 | $ 66 | $ 653 | $ 229 |
Less: Preferred stock dividends declared | (18) | (18) | (53) | (52) |
Income from continuing operations available to Arconic common shareholders | 101 | 48 | 600 | 177 |
Income from discontinued operations after income taxes and noncontrolling interests | 100 | 88 | ||
Net income available to Arconic common shareholders - basic | 101 | 148 | 600 | 265 |
Add: Interest expense related to convertible notes | 2 | 2 | 7 | |
Add: Dividends related to mandatory convertible preferred stock | 50 | |||
Net income available to Arconic common shareholders - diluted | $ 103 | $ 150 | $ 657 | $ 265 |
Weighted average shares outstanding - basic | 442 | 438 | 441 | 438 |
Stock options | 1 | 1 | 2 | 1 |
Stock and performance awards | 5 | 5 | 5 | 4 |
Mandatory convertible preferred stock | 39 | |||
Convertible notes | 14 | 9 | 14 | |
Weighted average shares outstanding - diluted | 462 | 453 | 501 | 443 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Anti Dilutive Securities Excluded From Computation of Weighted Average Shares Outstanding (Detail) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2016 | |
Mandatory Convertible Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of anti-dilutive securities | 39 | 26 | 26 |
Convertible Notes [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of anti-dilutive securities | 9 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - $ / shares shares in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Equity Unit Purchase Agreements [Member] | ||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 3 | 8 |
Stock Options [Member] | ||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average exercise price of options | $ 33.33 | $ 38.16 |
Receivables - Additional Inform
Receivables - Additional Information (Detail) | Mar. 30, 2012USD ($) | Sep. 30, 2017USD ($)Agreement | Dec. 31, 2016USD ($) |
Schedule Of Financial Receivables [Line Items] | |||
Number of arrangement with different financial institution to sell customer receivables | Agreement | 3 | ||
Sale of customer receivables | $ 304,000,000 | ||
Cash received for receivables | 50,000,000 | ||
Deferred purchase program receivable | $ 254,000,000 | $ 238,000,000 | $ 83,000,000 |
Net cash funding received since inception | 300,000,000 | ||
Amount of cash draws under arrangement since inception | 2,208,000,000 | ||
Amount of cash repayments under arrangement since inception | 1,908,000,000 | ||
Net cash funding received during the period | 0 | ||
Amount of cash draws under arrangement during the period | 450,000,000 | ||
Amount of cash repayments under arrangement during the period | 450,000,000 | ||
Accounts receivables | 34,004,000,000 | ||
Cash collections of other receivables | 33,416,000,000 | ||
Minimum [Member] | |||
Schedule Of Financial Receivables [Line Items] | |||
Funding of customer receivables sold | 200,000,000 | ||
Maximum [Member] | |||
Schedule Of Financial Receivables [Line Items] | |||
Funding of customer receivables sold | $ 400,000,000 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 6,803 | $ 8,048 |
Less: amount due within one year | 1 | 4 |
Long-term debt, excluding amount due within one year | 6,802 | 8,044 |
Long-term debt | 6,803 | 8,048 |
6.50% Bonds, Due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 250 | |
Long-term debt | 250 | |
6.75% Notes, Due 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 750 | |
Long-term debt | 750 | |
5.72% Notes, Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 500 | 750 |
Long-term debt | 500 | 750 |
1.63% Convertible Notes, Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 403 | 403 |
Long-term debt | 403 | 403 |
6.150% Notes, Due 2020 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,000 | 1,000 |
Long-term debt | 1,000 | 1,000 |
5.40% Notes, Due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,250 | 1,250 |
Long-term debt | 1,250 | 1,250 |
5.87% Notes, Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 627 | 627 |
Long-term debt | 627 | 627 |
5.125% Notes, Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,250 | 1,250 |
Long-term debt | 1,250 | 1,250 |
5.90% Notes, Due 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 625 | 625 |
Long-term debt | 625 | 625 |
6.75% Bonds, Due 2028 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 300 | 300 |
Long-term debt | 300 | 300 |
5.95% Notes Due 2037 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 625 | 625 |
Long-term debt | 625 | 625 |
Iowa Finance Authority Loan, Due 2042 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 250 | 250 |
Long-term debt | 250 | 250 |
Other [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 27 | 32 |
Long-term debt | $ 27 | $ 32 |
Debt - Schedule of Long-Term 55
Debt - Schedule of Long-Term Debt (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2017 | |
6.50% Bonds, Due 2018 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 6.50% |
Debt instrument, maturity date | 2,018 |
6.75% Notes, Due 2018 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 6.75% |
Debt instrument, maturity date | 2,018 |
5.72% Notes, Due 2019 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.72% |
Debt instrument, maturity date | 2,019 |
1.63% Convertible Notes, Due 2019 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 1.63% |
Debt instrument, maturity date | 2,019 |
6.150% Notes, Due 2020 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 6.15% |
Debt instrument, maturity date | 2,020 |
5.40% Notes, Due 2021 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.40% |
Debt instrument, maturity date | 2,021 |
5.87% Notes, Due 2022 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.87% |
Debt instrument, maturity date | 2,022 |
5.125% Notes, Due 2024 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.125% |
Debt instrument, maturity date | 2,024 |
5.90% Notes, Due 2027 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.90% |
Debt instrument, maturity date | 2,027 |
6.75% Bonds, Due 2028 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 6.75% |
Debt instrument, maturity date | 2,028 |
5.95% Notes Due 2037 [Member] | |
Debt Instrument [Line Items] | |
Long-term debt, interest rate | 5.95% |
Debt instrument, maturity date | 2,037 |
Iowa Finance Authority Loan, Due 2042 [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, maturity date | 2,042 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jun. 19, 2017 | May 31, 2017 | Apr. 30, 2017 | Feb. 28, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Debt Instrument [Line Items] | |||||||||
Repayment of debt | $ 409 | ||||||||
Common stock sold | 23,353,000 | 12,958,767 | |||||||
Common stock sold per share | $ 38.03 | $ 35.91 | |||||||
Pre-tax gain on sale of common stock | $ 351 | $ 167 | |||||||
Consideration amount including accrued and unpaid interest | $ 874 | ||||||||
Interest expense | 58 | ||||||||
Interest paid | 27 | ||||||||
Legal fees | 2 | ||||||||
Interest expense for premium paid for early redemption of notes in excess of carrying value | $ 24 | $ 100 | $ 126 | $ 398 | $ 371 | ||||
6.50% Bonds, Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 6.50% | 6.50% | |||||||
Debt instrument, maturity date | 2,018 | ||||||||
6.50% Senior Notes Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 100 | ||||||||
6.75% Notes, Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 6.75% | 6.75% | |||||||
Debt instrument, maturity date | 2,018 | ||||||||
6.75% Senior Notes Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 345 | ||||||||
Redemption amount | $ 479 | ||||||||
5.72% Notes, Due 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 5.72% | 5.72% | |||||||
Debt instrument, maturity date | 2,019 | ||||||||
Investment Banks [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 805 | $ 805 | |||||||
Common stock sold | 12,958,767 | 12,958,767 | |||||||
Common stock sold per share | $ 35.91 | $ 35.91 | |||||||
Pre-tax gain on sale of common stock | $ 167 | $ 167 | |||||||
Investment Banks [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 1,000 | ||||||||
Investment Banks [Member] | 6.50% Bonds, Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 6.50% | 6.50% | 6.50% | ||||||
Debt instrument, maturity date | 2,018 | ||||||||
Long-term debt | $ 150 | $ 150 | |||||||
Investment Banks [Member] | 6.75% Notes, Due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 6.75% | 6.75% | 6.75% | ||||||
Debt instrument, maturity date | 2,018 | ||||||||
Long-term debt | $ 405 | $ 405 | |||||||
Investment Banks [Member] | 5.72% Notes, Due 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, interest rate | 5.72% | 5.72% | 5.72% | ||||||
Debt instrument, maturity date | 2,019 | ||||||||
Long-term debt | $ 250 | $ 250 | |||||||
Interest Rate Swap [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from interest rate swap agreement | $ 8 |
Pension and Other Postretirem57
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic benefit cost | $ 163 | $ 246 | ||
Net periodic benefit costs continuing and discontinued | ||||
Net periodic benefit cost | 163 | 246 | ||
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 22 | $ 43 | 67 | 124 |
Interest cost | 59 | 114 | 175 | 358 |
Expected return on plan assets | (82) | (187) | (248) | (558) |
Recognized net actuarial loss | 55 | 104 | 165 | 308 |
Amortization of prior service cost (benefits) | 1 | 4 | 4 | 12 |
Settlements | 13 | 15 | ||
Special termination benefits | 1 | |||
Net periodic benefit cost | 55 | 91 | 163 | 260 |
Net periodic benefit costs continuing and discontinued | ||||
Discontinued operations | 41 | 114 | ||
Net amount recognized in Statement of Consolidated Operations | 55 | 50 | 163 | 146 |
Net periodic benefit cost | 55 | 91 | 163 | 260 |
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 2 | 3 | 6 | 10 |
Interest cost | 7 | 16 | 22 | 53 |
Recognized net actuarial loss | 2 | 8 | 4 | 19 |
Amortization of prior service cost (benefits) | (2) | (6) | (6) | (19) |
Net periodic benefit cost | 9 | 21 | 26 | 63 |
Net periodic benefit costs continuing and discontinued | ||||
Discontinued operations | 12 | 37 | ||
Net amount recognized in Statement of Consolidated Operations | 9 | 9 | 26 | 26 |
Net periodic benefit cost | $ 9 | $ 21 | $ 26 | $ 63 |
Pension and Other Postretirem58
Pension and Other Postretirement Benefits - Additional Information (Detail) | Apr. 18, 2017USD ($) | Sep. 30, 2017USD ($)Installments |
Retirement Benefits [Abstract] | ||
Cash contribution term to pension plan | 30 months | |
Number of installments | Installments | 3 | |
Minimum required cash contribution to pension plan | $ 50,000,000 | |
Aggregate cash cash contribution to pension plan | $ 150,000,000 | |
First payment to pension plan | $ 50,000,000 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Carrying Values and Fair Values of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Carrying Value [Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | $ 1,815 | $ 1,863 |
Restricted cash | 5 | 15 |
Derivatives - current asset | 41 | 14 |
Noncurrent receivables | 18 | 21 |
Derivatives - noncurrent asset | 24 | 10 |
Available-for-sale securities | 106 | 102 |
Investment in common stock of Alcoa Corporation | 1,020 | |
Short-term borrowings | 54 | 36 |
Derivatives - current liability | 31 | 5 |
Long-term debt due within one year | 1 | 4 |
Derivatives - noncurrent liability | 11 | 3 |
Contingent payment related to an acquisition | 81 | 78 |
Long-term debt, less amount due within one year | 6,802 | 8,044 |
Fair Value [Member] | ||
Derivative [Line Items] | ||
Cash and cash equivalents | 1,815 | 1,863 |
Restricted cash | 5 | 15 |
Derivatives - current asset | 41 | 14 |
Noncurrent receivables | 18 | 21 |
Derivatives - noncurrent asset | 24 | 10 |
Available-for-sale securities | 106 | 102 |
Investment in common stock of Alcoa Corporation | 1,020 | |
Short-term borrowings | 54 | 36 |
Derivatives - current liability | 31 | 5 |
Long-term debt due within one year | 1 | 4 |
Derivatives - noncurrent liability | 11 | 3 |
Contingent payment related to an acquisition | 81 | 78 |
Long-term debt, less amount due within one year | $ 7,440 | $ 8,519 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 02, 2017$ / sharesshares | Feb. 28, 2017shares | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Oct. 13, 2017USD ($) |
Subsequent Event [Line Items] | |||||||||
Depository shares | 23,353,000 | 12,958,767 | |||||||
Non-operating income | $ | $ 1 | $ 11 | $ 526 | $ 40 | |||||
Scenario, Forecast [Member] | Alcoa Corporation [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Non-operating income | $ | $ 25 | ||||||||
Non cash non-operating income, after-tax | $ | $ 16 | ||||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Depository shares | 24,022 | ||||||||
Preferred stock converted to common stock | 31,428 | ||||||||
Subsequent Event [Member] | Mandatory Convertible Preferred Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Depository shares | 24,975,978 | ||||||||
Interest in preferred stock | 0.1 | ||||||||
Preferred stock conversion price | $ / shares | $ 1.56996 | ||||||||
Preferred stock converted to common stock | 39,211,286 | ||||||||
Subsequent Event [Member] | Alcoa Corporation [Member] | Electricity Contract [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Guarantees of third party related to project financing | $ | $ 485 |