Delaware
|
|
25-0317820
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
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Title of each class
|
|
Name of each exchange on which registered
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Common Stock, par value $1.00 per share
|
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New York Stock Exchange
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$3.75 Cumulative Preferred Stock, par value $100.00 per share
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NYSE American
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|
Page(s)
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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•
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Commenced plans to reduce operating costs by approximately $200 million on an annual run-rate basis, designed to maximize the impact in 2019;
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•
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Announced the planned separation of its portfolio into Engineered Products and Forgings and Global Rolled Products, with a spin-off of one of the businesses;
|
•
|
Considering the potential sale of businesses that do not best fit into one of the two segments above;
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•
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Intends to execute its previously authorized $500 million share repurchase program in the first half of 2019;
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•
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The Board also authorized an additional $500 million of share repurchases, effective through the end of 2020; and
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•
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Expects to reduce its quarterly common stock dividend from $0.06 to $0.02 per share.
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Item
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Page(s)
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Discussion of Recent Business Developments:
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Management’s Discussion and Analysis of Financial Condition and Results of Operations:
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Notes to Consolidated Financial Statements:
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Segment Information:
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Business Descriptions, Principal Products, Principal Markets, Methods of Distribution, Seasonality and Dependence Upon Customers:
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Financial Information about Segments and Geographic Areas:
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For the Year Ended
December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Innovative flat-rolled products
|
40
|
%
|
|
39
|
%
|
|
39
|
%
|
Engines
|
21
|
%
|
|
21
|
%
|
|
21
|
%
|
Engineered structures
|
13
|
%
|
|
13
|
%
|
|
14
|
%
|
Fastening systems
|
11
|
%
|
|
11
|
%
|
|
12
|
%
|
Country
|
|
Facility
|
|
Products
|
Australia
|
|
Oakleigh
|
|
Fasteners
|
Canada
|
|
Georgetown, Ontario
2
|
|
Aerospace Castings
|
|
|
Laval, Québec
|
|
Aerospace Castings and Machining
|
China
|
|
Suzhou
2
|
|
Fasteners and Rings
|
France
|
|
Dives-sur-Mer
|
|
Aerospace and Industrial Gas Turbine Castings
|
|
|
Evron
|
|
Aerospace and Specialty Castings
|
|
|
Gennevilliers
|
|
Aerospace and Industrial Gas Turbine Castings
|
|
|
Montbrison
|
|
Fasteners
|
|
|
St. Cosme-en-Vairais
2
|
|
Fasteners
|
|
|
Toulouse
|
|
Fasteners
|
|
|
Us-par-Vigny
|
|
Fasteners
|
Germany
|
|
Bestwig
|
|
Aerospace Castings
|
|
|
Erwitte
|
|
Aerospace Castings
|
|
|
Hannover
2
|
|
Extrusions
|
|
|
Hildesheim-Bavenstedt
2
|
|
Fasteners
|
|
|
Kelkheim
2
|
|
Fasteners
|
Hungary
|
|
Nemesvámos
|
|
Fasteners
|
|
|
Székesfehérvár
|
|
Aerospace and Industrial Gas Turbine Castings and Forgings
|
Japan
|
|
Nomi
|
|
Aerospace and Industrial Gas Turbine Castings
|
Mexico
|
|
Ciudad Acuña
2
|
|
Aerospace Castings/Fasteners and Rings
|
Morocco
|
|
Casablanca
2
|
|
Fasteners
|
South Korea
|
|
Kyoungnam
|
|
Extrusions
|
United Kingdom
|
|
Darley Dale
|
|
Forgings
|
|
|
Ecclesfield
|
|
Ingot Castings
|
|
|
Exeter
2
|
|
Aerospace and Industrial Gas Turbine Castings and Alloy
|
|
|
Glossop
|
|
Ingot Castings
|
|
|
Ickles
|
|
Ingot Castings
|
|
|
Leicester
2
|
|
Fasteners
|
|
|
Low Moor
|
|
Extrusions
|
|
|
Meadowhall
|
|
Forgings
|
|
|
Provincial Park
|
|
Forgings
|
|
|
Redditch
2
|
|
Fasteners
|
|
|
River Don
|
|
Forgings
|
|
|
Telford
|
|
Fasteners
|
|
|
Welwyn Garden City
|
|
Aerospace Formed Parts
|
Country
|
|
Facility
|
|
Products
|
United States
|
|
Chandler, AZ
|
|
Extrusions
|
|
|
Tucson, AZ
2
|
|
Fasteners
|
|
|
Carson, CA
2
|
|
Fasteners
|
|
|
City of Industry, CA
2
|
|
Fasteners
|
|
|
Fontana, CA
|
|
Rings
|
|
|
Fullerton, CA
2
|
|
Fasteners
|
|
|
Rancho Cucamonga, CA
|
|
Rings
|
|
|
Sylmar, CA
|
|
Fasteners
|
|
|
Torrance, CA
|
|
Fasteners
|
|
|
Branford, CT
|
|
Aerospace Coatings
|
|
|
Winsted, CT
|
|
Aerospace Machining
|
|
|
Savannah, GA
|
|
Forgings
|
|
|
Lafayette, IN
|
|
Extrusions
|
|
|
La Porte, IN
|
|
Aerospace and Industrial Gas Turbine Castings
|
|
|
Baltimore, MD
2
|
|
Extrusions
|
|
|
Whitehall, MI
|
|
Aerospace and Industrial Gas Turbine Castings and Coatings, Titanium Alloy and Specialty Products
|
|
|
Washington, MO
|
|
Aerospace Formed Parts, Titanium Mill Products
|
|
|
Big Lake, MN
|
|
Aerospace Machining
|
|
|
New Brighton, MN
|
|
Aerospace Machining
|
|
|
Dover, NJ
|
|
Aerospace and Industrial Gas Turbine Castings and Alloy
|
|
|
Verdi, NV
|
|
Rings
|
|
|
Kingston, NY
2
|
|
Fasteners
|
|
|
Massena, NY
|
|
Extrusions
|
|
|
Rochester, NY
|
|
Rings
|
|
|
Canton, OH
2
|
|
Ferro-Titanium Alloys and Titanium Mill Products
|
|
|
Cleveland, OH
|
|
Investment Casting Equipment, Aerospace Components, Castings, Forgings and Oil & Gas Drilling Products
|
|
|
Niles, OH
|
|
Titanium Mill Products
|
|
|
Morristown, TN
2
|
|
Aerospace and Industrial Gas Turbine Ceramic Products
|
|
|
Austin, TX
2
|
|
Additively Manufactured Parts
|
|
|
Houston, TX
2
|
|
Extrusions
|
|
|
Spring, TX
|
|
Deep Water Drilling Machining
|
|
|
Waco, TX
2
|
|
Fasteners
|
|
|
Wichita Falls, TX
|
|
Aerospace and Industrial Gas Turbine Castings
|
|
|
Hampton, VA
2
|
|
Aerospace and Industrial Gas Turbine Castings
|
|
|
Martinsville, VA
|
|
Titanium Mill Products
|
1
|
Principal facilities are listed, and do not include 14 locations that serve as sales and administrative offices, distribution centers or warehouses.
|
2
|
Leased property or partially leased property.
|
Country
|
|
Location
|
|
Products
|
Brazil
|
|
Itapissuma
|
|
Specialty Foil
|
China
|
|
Kunshan
|
|
Sheet and Plate
|
|
|
Qinhuangdao
1
|
|
Sheet and Plate
|
Hungary
|
|
Székesfehérvár
|
|
Sheet and Plate/Slabs and Billets
|
Russia
|
|
Samara
|
|
Sheet and Plate/Extrusions and Forgings
|
United Kingdom
|
|
Birmingham
|
|
Plate
|
United States
|
|
Davenport, IA
|
|
Sheet and Plate
|
|
|
Danville, IL
2
|
|
Sheet and Plate
|
|
|
Hutchinson, KS
2
|
|
Sheet and Plate
|
|
|
Lancaster, PA
|
|
Sheet and Plate
|
|
|
Alcoa, TN
|
|
Sheet
|
|
|
Texarkana, TX
1, 3
|
|
Slabs
|
|
|
San Antonio, TX
4
|
|
Micromill™
|
1
|
Leased property or partially leased property.
|
2
|
Properties are satellite locations of the Davenport, Iowa facility.
|
3
|
The aluminum slab that is cast at Texarkana is turned into aluminum sheets at Arconic’s expanded automotive facility in Davenport, Iowa and its rolling mill in Lancaster, Pennsylvania. See discussion above concerning the sale of this facility.
|
4
|
Micromill™ production facility produces sheet for automotive and industrial applications using Arconic innovative production process.
|
Country
|
|
Facility
|
|
Products
|
Canada
|
|
Lethbridge, Alberta
|
|
Architectural Products
|
China
|
|
Suzhou
2
|
|
Forgings
|
France
|
|
Merxheim
2
|
|
Architectural Products
|
Hungary
|
|
Székesfehérvár
|
|
Forgings
|
Japan
|
|
Jôetsu City
2
|
|
Forgings
|
Mexico
|
|
Monterrey
|
|
Forgings
|
United Kingdom
|
|
Runcorn
|
|
Architectural Products
|
United States
|
|
Springdale, AR
|
|
Architectural Products
|
|
|
Visalia, CA
|
|
Architectural Products
|
|
|
Eastman, GA
|
|
Architectural Products
|
|
|
Barberton, OH
|
|
Forgings
|
|
|
Cleveland, OH
|
|
Forgings
|
|
|
Bloomsburg, PA
|
|
Architectural Products
|
|
|
Cranberry, PA
|
|
Architectural Products
|
1
|
Principal facilities are listed, and do not include 8 locations that serve as sales and administrative offices, distribution centers or warehouses. In addition to the facilities listed above, TCS has 20 service centers. These centers perform light manufacturing, such as assembly and fabrication of certain products.
|
2
|
Leased property or partially leased property.
|
Engineered Products and Solutions
|
|
Global Rolled Products
|
Alloying materials
|
|
Alloying materials
|
Cobalt
|
|
Aluminum scrap
|
Electricity
|
|
Coatings
|
Natural gas
|
|
Electricity
|
Nickel alloys
|
|
Lube oil
|
Primary aluminum (ingot, billet, P1020, high purity)
|
|
Natural gas
|
Stainless steel
|
|
Packaging materials
|
Steel
|
|
Primary aluminum (ingot, slab, billet, P1020, high purity)
|
Titanium alloys
|
|
Steam
|
Titanium sponge
|
|
|
|
|
|
Transportation and Construction Solutions
|
|
|
Aluminum coil
|
|
|
Aluminum scrap
|
|
|
Electricity
|
|
|
Natural gas
|
|
|
Paint/Coating
|
|
|
Primary aluminum (billet)
|
|
|
Resin
|
|
|
•
|
Kaiser Aluminum - for extruded products
|
•
|
Universal Alloy Corp., part of Montana Tech Components - for extruded products
|
•
|
Doncasters Group Ltd. (UK) - for investment castings
|
•
|
Consolidated Precision Products Corp., part of Warburg Pincus - for investment castings
|
•
|
Weber Metals, part of Otto Fuchs - for precision forgings
|
•
|
Forgital - for seamless rings
|
•
|
Frisa (Mexico) - for seamless rings
|
•
|
Constellium (The Netherlands)
|
•
|
Novelis
|
•
|
Kaiser Aluminum
|
•
|
AMAG (Austria)
|
•
|
UACJ (Japan)
|
•
|
Aleris
|
•
|
Hydro (Norway)
|
•
|
Nanshan (China)
|
•
|
Granges (Sweden)
|
•
|
Kobe (Japan)
|
•
|
Accuride Corporation
|
•
|
Nippon Steel & Sumitomo Metal Corporation (Japan)
|
•
|
Zhejiang Dicastal Hongxin Technology Co. Ltd (China)
|
•
|
Wheels India Limited (India)
|
•
|
Speedline (member of the Ronal Group in Switzerland)
|
•
|
Apogee, Oldcastle and YKK
|
•
|
Alpolic, Alucobond and Alucoil
|
•
|
Schüco (Germany), Hydro/SAPA (Norway), Reynaers (Belgium) and Corialis (Belgium)
|
•
|
Alucobond, Alucoil, Euramax and Novelis
|
•
|
identify and evolve with emerging technological and broader industry trends in Arconic’s target end-markets;
|
•
|
identify and successfully execute on a strategy to remain an essential and sustainable element of its customer’s supply chain;
|
•
|
fund, develop, manufacture and bring innovative new products and services to market quickly and cost-effectively;
|
•
|
monitor disruptive technologies and understand customers’ and competitors’ abilities to deploy those disruptive technologies; and
|
•
|
achieve sufficient return on investment for new products based on capital expenditures and research and development spending.
|
•
|
economic and commercial instability risks, including those caused by sovereign and private debt default, corruption, and changes in local government laws, regulations and policies, such as those related to tariffs, sanctions and trade barriers, taxation, exchange controls, employment regulations and repatriation of earnings;
|
•
|
geopolitical risks such as political instability, civil unrest, expropriation, nationalization of properties by a government, imposition of sanctions, and renegotiation or nullification of existing agreements;
|
•
|
war or terrorist activities;
|
•
|
kidnapping of personnel;
|
•
|
major public health issues such as an outbreak of a pandemic or epidemic (such as Sudden Acute Respiratory Syndrome, Avian Influenza, H7N9 virus, or the Ebola virus), which could cause disruptions in Arconic’s operations or workforce;
|
•
|
difficulties enforcing intellectual property and contractual rights in certain jurisdictions;
|
•
|
changes in trade and tax laws that may result in our customers being subjected to increased taxes, duties and tariffs and reduce their willingness to use our services in countries in which we are currently manufacturing their products;
|
•
|
rising labor costs;
|
•
|
labor unrest, including strikes;
|
•
|
compliance with antitrust and competition regulations;
|
•
|
compliance with foreign labor laws, which generally provide for increased notice, severance and consultation requirements compared to U.S. laws;
|
•
|
aggressive, selective or lax enforcement of laws and regulations by national governmental authorities;
|
•
|
compliance with the Foreign Corrupt Practices Act (“FCPA”) and other anti-bribery and corruption laws;
|
•
|
compliance with U.S. laws concerning trade, including the International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations (“EAR”), and the sanctions, regulations and embargoes administered by the U.S. Department of Treasury’s Office of Foreign Asset Controls (“OFAC”);
|
•
|
imposition of currency controls;
|
•
|
adverse tax audit rulings; and
|
•
|
unexpected events, including fires or explosions at facilities, and natural disasters.
|
•
|
have economic or business interests or goals that are inconsistent with or opposed to those of the Company;
|
•
|
exercise veto rights to block actions that Arconic believes to be in its or the joint venture’s or strategic alliance’s best interests;
|
•
|
take action contrary to Arconic’s policies or objectives with respect to investments; or
|
•
|
as a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture, strategic alliance or other agreements, such as contributing capital to expansion or maintenance projects.
|
As of December 31,
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
Arconic Inc.
|
$
|
100
|
|
|
$
|
149.83
|
|
|
$
|
94.62
|
|
|
$
|
80.22
|
|
|
$
|
119.02
|
|
|
$
|
74.47
|
|
S&P 500
®
Index
|
100
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
||||||
S&P 500
®
Materials Index
|
100
|
|
|
106.91
|
|
|
97.95
|
|
|
114.30
|
|
|
141.55
|
|
|
120.74
|
|
||||||
S&P Aerospace & Defense Select Industry Index
|
100
|
|
|
111.43
|
|
|
117.49
|
|
|
139.70
|
|
|
197.50
|
|
|
181.56
|
|
||||||
S&P 500
®
Industrials Index
|
100
|
|
|
109.83
|
|
|
107.04
|
|
|
127.23
|
|
|
153.99
|
|
|
133.53
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Sales
|
$
|
14,014
|
|
|
$
|
12,960
|
|
|
$
|
12,394
|
|
|
$
|
12,413
|
|
|
$
|
12,542
|
|
Amounts attributable to Arconic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
(1)
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(1,062
|
)
|
|
$
|
(157
|
)
|
|
$
|
(61
|
)
|
Income (loss) from discontinued operations
(2)
|
—
|
|
|
—
|
|
|
121
|
|
|
(165
|
)
|
|
329
|
|
|||||
Net income (loss)
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(941
|
)
|
|
$
|
(322
|
)
|
|
$
|
268
|
|
Earnings (loss) per share attributable to Arconic common shareholders:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
1.33
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.21
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.27
|
|
|
(0.39
|
)
|
|
0.85
|
|
|||||
Net income (loss)
|
$
|
1.33
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.31
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
0.64
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
1.30
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.58
|
)
|
|
$
|
(0.54
|
)
|
|
$
|
(0.21
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.27
|
|
|
(0.39
|
)
|
|
0.84
|
|
|||||
Net income (loss)
|
$
|
1.30
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.31
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
0.63
|
|
Cash dividends declared per common share
(1)
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Total assets
|
18,693
|
|
|
18,718
|
|
|
20,038
|
|
|
36,477
|
|
|
37,298
|
|
|||||
Total debt
|
6,330
|
|
|
6,844
|
|
|
8,084
|
|
|
8,827
|
|
|
8,445
|
|
|||||
Cash provided from (used for) operations
(4)
|
217
|
|
|
(39
|
)
|
|
95
|
|
|
764
|
|
|
1,674
|
|
|||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures—continuing operations
|
768
|
|
|
596
|
|
|
827
|
|
|
789
|
|
|
775
|
|
|||||
Capital expenditures—discontinued operations
|
—
|
|
|
—
|
|
|
298
|
|
|
391
|
|
|
444
|
|
|||||
Total capital expenditures
|
$
|
768
|
|
|
$
|
596
|
|
|
$
|
1,125
|
|
|
$
|
1,180
|
|
|
$
|
1,219
|
|
(1)
|
Calculated from the accompanying Statement of Consolidated Operations as Income (loss)
from continuing operations after income taxes less Net income from continuing operations attributable to noncontrolling interests.
|
(2)
|
Calculated from the accompanying Statement of Consolidated Operations as Income from discontinued operations after income taxes less Net income from discontinued operations attributable to noncontrolling interests.
|
(3)
|
Per share data has been retroactively restated to reflect the 1-for-3 reverse stock split which became effective on October 6, 2016 (see Note
I
to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and Supplementary Data) of this Form 10-K).
|
(4)
|
Cash provided from (used for) operations has not been restated for discontinued operations presentation for 2016 and all prior periods presented (see Basis of Presentation section of Note
A
to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and Supplementary Data) of this Form 10-K). Cash provided from (used for) operations in 2014 has not been recast for the impact of the new accounting pronouncements that were adopted in the first quarter of 2018 (see Recently Adopted Accounting Guidance section of Note
A
to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and Supplementary Data) of this Form 10-K).
|
•
|
Sales of
$14,014
, up 8% from 2017, with growth from all segments as key end markets remained healthy, and Net income of
$642
, or
$1.30
per diluted share;
|
•
|
Total segment operating profit of
$1,581
, a
decrease
of
$97
, or
6%
, from
2017
1
;
|
•
|
Cash provided from
operations of
$217
, cash used for financing activities of $649, and cash provided from investing activities of $565, reflecting improvements in working capital;
|
•
|
Cash on hand at the end of the year of
$2,277
; and
|
•
|
Total debt of
$6,330
, a
decrease
in total debt of
$514
from
2017
.
|
•
|
Commenced plans to reduce operating costs by approximately $200 on an annual run-rate basis, designed to maximize the impact in 2019;
|
•
|
Announced the planned separation of its portfolio into Engineered Products and Forgings and Global Rolled Products, with a spin-off of one of the businesses;
|
•
|
Considering the potential sale of businesses that do not best fit into one of the two segments above;
|
•
|
Intends to execute its previously authorized $500 share repurchase program in the first half of 2019;
|
•
|
The Board also authorized an additional $500 of share repurchases, effective through the end of 2020; and
|
•
|
Expects to reduce its quarterly common stock dividend from $0.06 to $0.02 per share.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Third-party sales
|
$
|
6,316
|
|
|
$
|
5,943
|
|
|
$
|
5,728
|
|
Segment operating profit
|
$
|
891
|
|
|
$
|
964
|
|
|
$
|
955
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Third-party sales
|
$
|
5,604
|
|
|
$
|
5,000
|
|
|
$
|
4,865
|
|
Intersegment sales
|
160
|
|
|
148
|
|
|
118
|
|
|||
Total sales
|
$
|
5,764
|
|
|
$
|
5,148
|
|
|
$
|
4,983
|
|
Segment operating profit
|
$
|
386
|
|
|
$
|
424
|
|
|
$
|
421
|
|
Third-party aluminum shipments (kmt)
|
1,249
|
|
|
1,197
|
|
|
1,339
|
|
(1)
|
Excludes the Warrick, IN rolling operations and the equity interest in the rolling mill at the joint venture in Saudi Arabia, both of which were previously part of the Global Rolled Products segment but became part of Alcoa Corporation effective November 1, 2016.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Third-party sales
|
$
|
2,126
|
|
|
$
|
2,011
|
|
|
$
|
1,802
|
|
Segment operating profit
|
$
|
304
|
|
|
$
|
290
|
|
|
$
|
246
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total segment operating profit
|
$
|
1,581
|
|
|
$
|
1,678
|
|
|
$
|
1,622
|
|
Unallocated amounts:
|
|
|
|
|
|
||||||
Impairment of goodwill
|
—
|
|
|
(719
|
)
|
|
—
|
|
|||
Restructuring and other charges
|
(9
|
)
|
|
(165
|
)
|
|
(155
|
)
|
|||
Corporate expense
|
(247
|
)
|
|
(314
|
)
|
|
(513
|
)
|
|||
Consolidated operating income
|
$
|
1,325
|
|
|
$
|
480
|
|
|
$
|
954
|
|
Interest expense
|
(378
|
)
|
|
(496
|
)
|
|
(499
|
)
|
|||
Other (expense) income, net
|
(79
|
)
|
|
486
|
|
|
(41
|
)
|
|||
Consolidated income from continuing operations before income taxes
|
$
|
868
|
|
|
$
|
470
|
|
|
$
|
414
|
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Energy-related purchase obligations
|
$
|
72
|
|
|
$
|
37
|
|
|
$
|
28
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Raw material purchase obligations
|
829
|
|
|
652
|
|
|
155
|
|
|
19
|
|
|
3
|
|
|||||
Other purchase obligations
|
102
|
|
|
81
|
|
|
13
|
|
|
6
|
|
|
2
|
|
|||||
Operating leases
|
379
|
|
|
94
|
|
|
128
|
|
|
70
|
|
|
87
|
|
|||||
Interest related to total debt
|
2,326
|
|
|
351
|
|
|
592
|
|
|
370
|
|
|
1,013
|
|
|||||
Estimated minimum required pension funding
|
1,860
|
|
|
255
|
|
|
840
|
|
|
765
|
|
|
—
|
|
|||||
Other postretirement benefit payments
|
730
|
|
|
90
|
|
|
170
|
|
|
170
|
|
|
300
|
|
|||||
Layoff and other restructuring payments
|
25
|
|
|
19
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|||||
Deferred revenue arrangements
|
18
|
|
|
12
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||
Uncertain tax positions
|
187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total debt
|
6,330
|
|
|
421
|
|
|
2,243
|
|
|
623
|
|
|
3,043
|
|
|||||
Dividends to shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital projects
|
665
|
|
|
532
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|||||
Totals
|
$
|
13,523
|
|
|
$
|
2,544
|
|
|
$
|
4,312
|
|
|
$
|
2,031
|
|
|
$
|
4,636
|
|
/s/ John C. Plant
|
John C. Plant
Chairman and Chief Executive Officer
|
/s/ Ken Giacobbe
|
Ken Giacobbe
Executive Vice President and
Chief Financial Officer
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
$
|
14,014
|
|
|
$
|
12,960
|
|
|
$
|
12,394
|
|
|
Cost of goods sold (exclusive of expenses below)
|
11,397
|
|
|
10,221
|
|
|
9,696
|
|
|||
Selling, general administrative, and other expenses
|
604
|
|
|
715
|
|
|
924
|
|
|||
Research and development expenses
|
103
|
|
|
109
|
|
|
130
|
|
|||
Provision for depreciation and amortization
|
576
|
|
|
551
|
|
|
535
|
|
|||
—
|
|
|
719
|
|
|
—
|
|
||||
Restructuring and other charges (
D
)
|
9
|
|
|
165
|
|
|
155
|
|
|||
Operating income
|
1,325
|
|
|
480
|
|
|
954
|
|
|||
Interest expense (
E
)
|
378
|
|
|
496
|
|
|
499
|
|
|||
Other expense (income), net (
F
)
|
79
|
|
|
(486
|
)
|
|
41
|
|
|||
Income from continuing operations before income taxes
|
868
|
|
|
470
|
|
|
414
|
|
|||
Provision for income taxes (
H
)
|
226
|
|
|
544
|
|
|
1,476
|
|
|||
Income (loss) from continuing operations after income taxes
|
642
|
|
|
(74
|
)
|
|
(1,062
|
)
|
|||
Income from discontinued operations after income taxes (
V
)
|
—
|
|
|
—
|
|
|
184
|
|
|||
Net income (loss)
|
642
|
|
|
(74
|
)
|
|
(878
|
)
|
|||
Less: Net income from discontinued operations attributable to noncontrolling interests (
V
)
|
—
|
|
|
—
|
|
|
63
|
|
|||
Net income (loss) Attributable to Arconic
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(941
|
)
|
Amounts Attributable to Arconic Common Shareholders (
J
):
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
651
|
|
|
$
|
(127
|
)
|
|
$
|
(1,010
|
)
|
Earnings (loss) per share—basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.33
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.58
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.27
|
|
|||
Net earnings (loss) per share-basic
|
$
|
1.33
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.31
|
)
|
Earnings (loss) per share—diluted
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
1.30
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.58
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.27
|
|
|||
Net earnings (loss) per share-diluted
|
$
|
1.30
|
|
|
$
|
(0.28
|
)
|
|
$
|
(2.31
|
)
|
|
Arconic
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||||||||||||||||
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
Net income (loss)
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(941
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
63
|
|
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(878
|
)
|
Other comprehensive income (loss), net of tax (
K
):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits
|
255
|
|
|
(220
|
)
|
|
(479
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
255
|
|
|
(220
|
)
|
|
(482
|
)
|
|||||||||
Foreign currency translation adjustments
|
(146
|
)
|
|
252
|
|
|
268
|
|
|
—
|
|
|
2
|
|
|
182
|
|
|
(146
|
)
|
|
254
|
|
|
450
|
|
|||||||||
Net change in unrealized gains on available-for-sale securities
|
(1
|
)
|
|
(134
|
)
|
|
137
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(134
|
)
|
|
137
|
|
|||||||||
Net change in unrecognized gains/losses on cash flow hedges
|
(23
|
)
|
|
26
|
|
|
(617
|
)
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(23
|
)
|
|
26
|
|
|
(612
|
)
|
|||||||||
Total Other comprehensive income (loss), net of tax
|
85
|
|
|
(76
|
)
|
|
(691
|
)
|
|
—
|
|
|
2
|
|
|
184
|
|
|
85
|
|
|
(74
|
)
|
|
(507
|
)
|
|||||||||
Comprehensive income (loss)
|
$
|
727
|
|
|
$
|
(150
|
)
|
|
$
|
(1,632
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
247
|
|
|
$
|
727
|
|
|
$
|
(148
|
)
|
|
$
|
(1,385
|
)
|
December 31,
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
2,277
|
|
|
$
|
2,150
|
|
|
Receivables from customers, less allowances of $4 in 2018 and $8 in 2017 (
L
)
|
1,047
|
|
|
1,035
|
|
||
Other receivables (
L
)
|
451
|
|
|
339
|
|
||
Inventories (
M
)
|
2,492
|
|
|
2,480
|
|
||
Prepaid expenses and other current assets
|
314
|
|
|
374
|
|
||
Total current assets
|
6,581
|
|
|
6,378
|
|
||
Properties, plants, and equipment, net (
N
)
|
5,704
|
|
|
5,594
|
|
||
4,500
|
|
|
4,535
|
|
|||
Deferred income taxes (
H
)
|
573
|
|
|
743
|
|
||
Intangibles, net (
O
)
|
919
|
|
|
987
|
|
||
Other noncurrent assets
|
416
|
|
|
481
|
|
||
Total assets
|
$
|
18,693
|
|
|
$
|
18,718
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable, trade
|
2,129
|
|
|
$
|
1,839
|
|
|
Accrued compensation and retirement costs
|
370
|
|
|
399
|
|
||
Taxes, including income taxes
|
118
|
|
|
75
|
|
||
Accrued interest payable
|
113
|
|
|
124
|
|
||
Other current liabilities
|
356
|
|
|
349
|
|
||
434
|
|
|
38
|
|
|||
Total current liabilities
|
3,520
|
|
|
2,824
|
|
||
5,896
|
|
|
6,806
|
|
|||
Accrued pension benefits (
G
)
|
2,230
|
|
|
2,564
|
|
||
Accrued other postretirement benefits (
G
)
|
723
|
|
|
841
|
|
||
Other noncurrent liabilities and deferred credits (
Q
)
|
739
|
|
|
759
|
|
||
Total liabilities
|
13,108
|
|
|
13,794
|
|
||
Contingencies and commitments (
U
)
|
|
|
|
||||
Equity
|
|
|
|
||||
Arconic shareholders’ equity:
|
|
|
|
||||
Preferred stock (
I
)
|
55
|
|
|
55
|
|
||
Common stock (
I
)
|
483
|
|
|
481
|
|
||
Additional capital
|
8,319
|
|
|
8,266
|
|
||
Accumulated deficit (
A
)
|
(358
|
)
|
|
(1,248
|
)
|
||
(2,926
|
)
|
|
(2,644
|
)
|
|||
Total Arconic shareholders’ equity
|
5,573
|
|
|
4,910
|
|
||
Noncontrolling interests
|
12
|
|
|
14
|
|
||
Total equity
|
5,585
|
|
|
4,924
|
|
||
Total liabilities and equity
|
$
|
18,693
|
|
|
$
|
18,718
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(878
|
)
|
Adjustments to reconcile net income (loss) to cash provided from (used for) operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
576
|
|
|
551
|
|
|
1,132
|
|
|||
Deferred income taxes
|
31
|
|
|
434
|
|
|
1,125
|
|
|||
Equity income, net of dividends
|
—
|
|
|
—
|
|
|
42
|
|
|||
—
|
|
|
719
|
|
|
—
|
|
||||
Restructuring and other charges
|
9
|
|
|
165
|
|
|
257
|
|
|||
Net loss (gain) from investing activities - asset sales
|
10
|
|
|
(513
|
)
|
|
(156
|
)
|
|||
Net periodic pension benefit cost (
G
)
|
130
|
|
|
217
|
|
|
304
|
|
|||
Stock-based compensation
|
50
|
|
|
67
|
|
|
86
|
|
|||
Other
|
75
|
|
|
112
|
|
|
63
|
|
|||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
|
|
|
|
|
|
||||||
(Increase) in receivables (
A
)
|
(1,142
|
)
|
|
(915
|
)
|
|
(1,016
|
)
|
|||
(Increase) in inventories
|
(74
|
)
|
|
(192
|
)
|
|
(29
|
)
|
|||
(Increase) decrease in prepaid expenses and other current assets
|
(1
|
)
|
|
11
|
|
|
(76
|
)
|
|||
Increase in accounts payable, trade
|
339
|
|
|
62
|
|
|
232
|
|
|||
(Decrease) in accrued expenses
|
(190
|
)
|
|
(116
|
)
|
|
(394
|
)
|
|||
Increase (decrease) in taxes, including income taxes
|
104
|
|
|
(23
|
)
|
|
93
|
|
|||
Pension contributions
|
(298
|
)
|
|
(310
|
)
|
|
(290
|
)
|
|||
(Increase) in noncurrent assets
|
(20
|
)
|
|
(41
|
)
|
|
(152
|
)
|
|||
(Decrease) in noncurrent liabilities
|
(24
|
)
|
|
(193
|
)
|
|
(248
|
)
|
|||
Cash provided from (used for) operations
|
217
|
|
|
(39
|
)
|
|
95
|
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Net change in short-term borrowings (original maturities of three months or less)
|
(7
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
Additions to debt (original maturities greater than three months) (
P
)
|
600
|
|
|
816
|
|
|
1,962
|
|
|||
Payments on debt (original maturities greater than three months) (
P
)
|
(1,103
|
)
|
|
(1,634
|
)
|
|
(2,734
|
)
|
|||
(17
|
)
|
|
(52
|
)
|
|
(3
|
)
|
||||
Proceeds from exercise of employee stock options
|
16
|
|
|
50
|
|
|
4
|
|
|||
Dividends paid to shareholders
|
(119
|
)
|
|
(162
|
)
|
|
(228
|
)
|
|||
Distributions to noncontrolling interests
|
—
|
|
|
(14
|
)
|
|
(226
|
)
|
|||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
51
|
|
|||
Net cash transferred from Alcoa Corporation at separation
|
—
|
|
|
—
|
|
|
421
|
|
|||
Other
|
(19
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|||
Cash used for financing activities
|
(649
|
)
|
|
(1,015
|
)
|
|
(757
|
)
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(768
|
)
|
|
(596
|
)
|
|
(1,125
|
)
|
|||
Acquisitions, net of cash acquired (
S
)
|
—
|
|
|
—
|
|
|
10
|
|
|||
Proceeds from the sale of assets and businesses (
S
)
|
309
|
|
|
(9
|
)
|
|
692
|
|
|||
9
|
|
|
890
|
|
|
280
|
|
||||
1,016
|
|
|
792
|
|
|
778
|
|
||||
Other (
V
)
|
(1
|
)
|
|
243
|
|
|
(44
|
)
|
|||
Cash provided from investing activities
|
565
|
|
|
1,320
|
|
|
591
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(4
|
)
|
|
9
|
|
|
(8
|
)
|
|||
Net change in cash, cash equivalents and restricted cash (
A
)
|
129
|
|
|
275
|
|
|
(79
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year (
A
)
|
2,153
|
|
|
1,878
|
|
|
1,957
|
|
|||
Cash, cash equivalents and restricted cash at end of year (
A
)
|
$
|
2,282
|
|
|
$
|
2,153
|
|
|
$
|
1,878
|
|
|
Arconic Shareholders
|
|
|
||||||||||||||||||||||||
|
Preferred
stock
|
Mandatory
convertible
preferred
stock
|
Common
stock
|
Additional
capital
|
Retained earnings (deficit)
|
Treasury
stock
|
Accumulated
Other
Comprehensive
Loss
|
Noncontrolling
interests
|
Total
equity
|
||||||||||||||||||
Balance at December 31, 2015
|
$
|
55
|
|
$
|
3
|
|
$
|
1,391
|
|
$
|
10,019
|
|
$
|
8,834
|
|
$
|
(2,825
|
)
|
$
|
(5,431
|
)
|
$
|
2,085
|
|
$
|
14,131
|
|
Net (loss) income
|
—
|
|
—
|
|
—
|
|
—
|
|
(941
|
)
|
—
|
|
—
|
|
63
|
|
(878
|
)
|
|||||||||
Other comprehensive (loss) income (
K
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(691
|
)
|
184
|
|
(507
|
)
|
|||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred–Class A @ $3.75 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
|||||||||
Preferred–Class B @ $26.8750 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(67
|
)
|
—
|
|
—
|
|
—
|
|
(67
|
)
|
|||||||||
Common @ $0.36 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(159
|
)
|
—
|
|
—
|
|
—
|
|
(159
|
)
|
|||||||||
Stock-based compensation (
I
)
|
—
|
|
—
|
|
—
|
|
86
|
|
—
|
|
—
|
|
—
|
|
—
|
|
86
|
|
|||||||||
Common stock issued: compensation plans (
I
)
|
—
|
|
—
|
|
—
|
|
(205
|
)
|
—
|
|
186
|
|
—
|
|
—
|
|
(19
|
)
|
|||||||||
Retirement of Treasury stock (
I
)
|
|
|
(76
|
)
|
(2,563
|
)
|
|
2,639
|
|
|
|
—
|
|
||||||||||||||
Reverse stock split (
I
)
|
|
|
(877
|
)
|
877
|
|
|
|
|
|
—
|
|
|||||||||||||||
Distribution of Alcoa Corporation
|
|
|
|
|
(8,692
|
)
|
|
3,554
|
|
(2,133
|
)
|
(7,271
|
)
|
||||||||||||||
Distributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(226
|
)
|
(226
|
)
|
|||||||||
Contributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
51
|
|
51
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
|||||||||
Balance at December 31, 2016
|
$
|
55
|
|
$
|
3
|
|
$
|
438
|
|
$
|
8,214
|
|
$
|
(1,027
|
)
|
$
|
—
|
|
$
|
(2,568
|
)
|
$
|
26
|
|
$
|
5,141
|
|
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(74
|
)
|
—
|
|
—
|
|
—
|
|
(74
|
)
|
|||||||||
Other comprehensive loss (
K
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(76
|
)
|
2
|
|
(74
|
)
|
|||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred–Class A @ $3.75 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
|||||||||
Preferred–Class B @ $20.1563 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(51
|
)
|
—
|
|
—
|
|
—
|
|
(51
|
)
|
|||||||||
Common @ $0.24 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(109
|
)
|
—
|
|
—
|
|
—
|
|
(109
|
)
|
|||||||||
Stock-based compensation (
I
)
|
—
|
|
—
|
|
—
|
|
67
|
|
—
|
|
—
|
|
—
|
|
—
|
|
67
|
|
|||||||||
Common stock issued: compensation plans (
I
)
|
—
|
|
—
|
|
—
|
|
21
|
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|||||||||
Conversion of mandatory convertible preferred stock (
I
)
|
—
|
|
(3
|
)
|
39
|
|
(36
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Issuance of common stock (
I
)
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||||||
Distributions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14
|
)
|
(14
|
)
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
15
|
|
—
|
|
—
|
|
—
|
|
15
|
|
|||||||||
Balance at December 31, 2017
|
$
|
55
|
|
$
|
—
|
|
$
|
481
|
|
$
|
8,266
|
|
$
|
(1,248
|
)
|
$
|
—
|
|
$
|
(2,644
|
)
|
$
|
14
|
|
$
|
4,924
|
|
Adoption of accounting standard (
A
)
|
—
|
|
—
|
|
—
|
|
—
|
|
367
|
|
—
|
|
(367
|
)
|
—
|
|
—
|
|
|||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
642
|
|
—
|
|
—
|
|
—
|
|
642
|
|
|||||||||
Other comprehensive income
(
K
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
85
|
|
—
|
|
85
|
|
|||||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred–Class A @ $3.75 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
|||||||||
Common @ $0.24 per share
|
—
|
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
—
|
|
—
|
|
—
|
|
(117
|
)
|
|||||||||
Stock-based compensation (
I
)
|
—
|
|
—
|
|
—
|
|
50
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
|
|||||||||
Common stock issued: compensation plans (
I
)
|
—
|
|
—
|
|
2
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
(2
|
)
|
|||||||||
Balance at December 31, 2018
|
$
|
55
|
|
$
|
—
|
|
$
|
483
|
|
$
|
8,319
|
|
$
|
(358
|
)
|
$
|
—
|
|
$
|
(2,926
|
)
|
$
|
12
|
|
$
|
5,585
|
|
|
Structures
|
|
Machinery and equipment
|
Engineered Products and Solutions
|
29
|
|
17
|
Global Rolled Products
|
31
|
|
21
|
Transportation and Construction Solutions
|
27
|
|
18
|
|
Software
|
|
Other intangible assets
|
Engineered Products and Solutions
|
5
|
|
33
|
Global Rolled Products
|
5
|
|
9
|
Transportation and Construction Solutions
|
5
|
|
16
|
For the year ended December 31,
|
Engineered
Products and
Solutions
|
|
Global Rolled
Products
|
|
Transportation
and Construction
Solutions
|
|
Total
Segment
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Aerospace
|
$
|
4,947
|
|
|
$
|
891
|
|
|
$
|
—
|
|
|
$
|
5,838
|
|
Transportation
|
440
|
|
|
2,443
|
|
|
969
|
|
|
3,852
|
|
||||
Building and construction
|
—
|
|
|
217
|
|
|
1,150
|
|
|
1,367
|
|
||||
Industrial and Other
|
929
|
|
|
2,053
|
|
|
7
|
|
|
2,989
|
|
||||
Total end-market revenue
|
$
|
6,316
|
|
|
$
|
5,604
|
|
|
$
|
2,126
|
|
|
$
|
14,046
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Aerospace
|
$
|
4,572
|
|
|
$
|
883
|
|
|
$
|
—
|
|
|
$
|
5,455
|
|
Transportation
|
383
|
|
|
1,981
|
|
|
805
|
|
|
3,169
|
|
||||
Building and construction
|
—
|
|
|
204
|
|
|
1,113
|
|
|
1,317
|
|
||||
Industrial and Other
|
988
|
|
|
1,932
|
|
|
93
|
|
|
3,013
|
|
||||
Total end-market revenue
|
$
|
5,943
|
|
|
$
|
5,000
|
|
|
$
|
2,011
|
|
|
$
|
12,954
|
|
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Aerospace
|
$
|
4,358
|
|
|
$
|
942
|
|
|
$
|
—
|
|
|
$
|
5,300
|
|
Transportation
|
347
|
|
|
1,577
|
|
|
708
|
|
|
2,632
|
|
||||
Building and construction
|
—
|
|
|
200
|
|
|
1,060
|
|
|
1,260
|
|
||||
Industrial and Other
|
1,023
|
|
|
2,146
|
|
|
34
|
|
|
3,203
|
|
||||
Total end-market revenue
|
$
|
5,728
|
|
|
$
|
4,865
|
|
|
$
|
1,802
|
|
|
$
|
12,395
|
|
|
Engineered Products and Solutions
|
|
Global Rolled Products
|
|
Transportation and Construction Solutions
|
|
Total
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Third-party sales
|
$
|
6,316
|
|
|
$
|
5,604
|
|
|
$
|
2,126
|
|
|
$
|
14,046
|
|
Intersegment sales
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
||||
Total sales
|
$
|
6,316
|
|
|
$
|
5,764
|
|
|
$
|
2,126
|
|
|
$
|
14,206
|
|
Profit and loss:
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
$
|
891
|
|
|
$
|
386
|
|
|
$
|
304
|
|
|
$
|
1,581
|
|
Restructuring and other charges
|
71
|
|
|
(156
|
)
|
|
1
|
|
|
(84
|
)
|
||||
Provision for depreciation and amortization
|
282
|
|
|
212
|
|
|
50
|
|
|
544
|
|
||||
2017
|
|
|
|
|
|
|
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Third-party sales
|
$
|
5,943
|
|
|
$
|
5,000
|
|
|
$
|
2,011
|
|
|
$
|
12,954
|
|
Intersegment sales
|
—
|
|
|
148
|
|
|
—
|
|
|
148
|
|
||||
Total sales
|
$
|
5,943
|
|
|
$
|
5,148
|
|
|
$
|
2,011
|
|
|
$
|
13,102
|
|
Profit and loss:
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
$
|
964
|
|
|
$
|
424
|
|
|
$
|
290
|
|
|
$
|
1,678
|
|
Restructuring and other charges
|
30
|
|
|
72
|
|
|
52
|
|
|
154
|
|
||||
Provision for depreciation and amortization
|
268
|
|
|
205
|
|
|
50
|
|
|
523
|
|
||||
2016
|
|
|
|
|
|
|
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Third-party sales
|
$
|
5,728
|
|
|
$
|
4,865
|
|
|
$
|
1,802
|
|
|
$
|
12,395
|
|
Intersegment sales
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
||||
Total sales
|
$
|
5,728
|
|
|
$
|
4,983
|
|
|
$
|
1,802
|
|
|
$
|
12,513
|
|
Profit and loss:
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
$
|
955
|
|
|
$
|
421
|
|
|
$
|
246
|
|
|
$
|
1,622
|
|
Restructuring and other charges
|
78
|
|
|
40
|
|
|
14
|
|
|
132
|
|
||||
Provision for depreciation and amortization
|
255
|
|
|
201
|
|
|
48
|
|
|
504
|
|
||||
2018
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
$
|
349
|
|
|
$
|
255
|
|
|
$
|
111
|
|
|
$
|
715
|
|
Goodwill
|
4,179
|
|
|
245
|
|
|
76
|
|
|
4,500
|
|
||||
Total assets
|
10,346
|
|
|
3,934
|
|
|
1,089
|
|
|
15,369
|
|
||||
2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures
|
$
|
308
|
|
|
$
|
178
|
|
|
$
|
57
|
|
|
$
|
543
|
|
Goodwill
|
4,205
|
|
|
252
|
|
|
78
|
|
|
4,535
|
|
||||
Total assets
|
10,325
|
|
|
3,955
|
|
|
1,041
|
|
|
15,321
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
Total segment sales
|
$
|
14,206
|
|
|
$
|
13,102
|
|
|
$
|
12,513
|
|
Elimination of intersegment sales
|
(160
|
)
|
|
(148
|
)
|
|
(118
|
)
|
|||
Corporate
|
(32
|
)
|
|
6
|
|
|
(1
|
)
|
|||
Consolidated sales
|
$
|
14,014
|
|
|
$
|
12,960
|
|
|
$
|
12,394
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Total segment operating profit
|
$
|
1,581
|
|
|
$
|
1,678
|
|
|
$
|
1,622
|
|
Unallocated amounts:
|
|
|
|
|
|
||||||
Impairment of goodwill
|
—
|
|
|
(719
|
)
|
|
—
|
|
|||
Restructuring and other charges
|
(9
|
)
|
|
(165
|
)
|
|
(155
|
)
|
|||
Corporate expense
|
(247
|
)
|
|
(314
|
)
|
|
(513
|
)
|
|||
Consolidated operating income
|
$
|
1,325
|
|
|
$
|
480
|
|
|
$
|
954
|
|
Interest expense
|
(378
|
)
|
|
(496
|
)
|
|
(499
|
)
|
|||
Other (expense) income, net
|
(79
|
)
|
|
486
|
|
|
(41
|
)
|
|||
Consolidated income before income taxes
|
$
|
868
|
|
|
$
|
470
|
|
|
$
|
414
|
|
December 31,
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
||||
Total segment assets
|
$
|
15,369
|
|
|
$
|
15,321
|
|
Unallocated amounts:
|
|
|
|
||||
Cash and cash equivalents
|
2,277
|
|
|
2,150
|
|
||
Deferred income taxes
|
573
|
|
|
743
|
|
||
Corporate fixed assets, net
|
305
|
|
|
310
|
|
||
Fair value of derivative contracts
|
37
|
|
|
91
|
|
||
Other
|
132
|
|
|
103
|
|
||
Consolidated assets
|
$
|
18,693
|
|
|
$
|
18,718
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
Innovative flat-rolled products
|
$
|
5,588
|
|
|
$
|
4,992
|
|
|
$
|
4,864
|
|
Engines
|
2,940
|
|
|
2,708
|
|
|
2,560
|
|
|||
Engineered structures
|
1,839
|
|
|
1,743
|
|
|
1,683
|
|
|||
Fastening systems
|
1,531
|
|
|
1,484
|
|
|
1,463
|
|
|||
Architectural aluminum systems
|
1,140
|
|
|
1,065
|
|
|
1,010
|
|
|||
Aluminum wheels
|
969
|
|
|
805
|
|
|
689
|
|
|||
Other
|
7
|
|
|
163
|
|
|
125
|
|
|||
|
$
|
14,014
|
|
|
$
|
12,960
|
|
|
$
|
12,394
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
United States
|
$
|
9,137
|
|
|
$
|
8,167
|
|
|
$
|
7,823
|
|
France
|
936
|
|
|
965
|
|
|
930
|
|
|||
Hungary
|
823
|
|
|
739
|
|
|
619
|
|
|||
United Kingdom
|
737
|
|
|
721
|
|
|
711
|
|
|||
China
|
632
|
|
|
615
|
|
|
582
|
|
|||
Russia
|
553
|
|
|
500
|
|
|
433
|
|
|||
Germany
|
302
|
|
|
309
|
|
|
284
|
|
|||
Canada
|
285
|
|
|
261
|
|
|
262
|
|
|||
Brazil
|
214
|
|
|
285
|
|
|
250
|
|
|||
Japan
|
170
|
|
|
141
|
|
|
145
|
|
|||
Other
|
225
|
|
|
257
|
|
|
355
|
|
|||
|
$
|
14,014
|
|
|
$
|
12,960
|
|
|
$
|
12,394
|
|
December 31,
|
2018
|
|
2017
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
4,148
|
|
|
$
|
4,005
|
|
China
|
326
|
|
|
347
|
|
||
Hungary
|
257
|
|
|
227
|
|
||
Russia
|
253
|
|
|
276
|
|
||
United Kingdom
|
253
|
|
|
259
|
|
||
France
|
163
|
|
|
159
|
|
||
Germany
|
84
|
|
|
88
|
|
||
Canada
|
61
|
|
|
63
|
|
||
Brazil
|
54
|
|
|
62
|
|
||
Other
|
105
|
|
|
108
|
|
||
|
$
|
5,704
|
|
|
$
|
5,594
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Asset impairments
|
$
|
13
|
|
|
$
|
58
|
|
|
$
|
80
|
|
Layoff costs
|
20
|
|
|
64
|
|
|
68
|
|
|||
Pension and Other postretirement benefits - net settlement and curtailment charges
|
91
|
|
|
—
|
|
|
2
|
|
|||
Net (gain) loss on divestitures of assets and businesses (
T
)
|
(109
|
)
|
|
57
|
|
|
3
|
|
|||
Other
|
13
|
|
|
(3
|
)
|
|
27
|
|
|||
Reversals of previously recorded layoff costs
|
(19
|
)
|
|
(11
|
)
|
|
(25
|
)
|
|||
Restructuring and other charges
|
$
|
9
|
|
|
$
|
165
|
|
|
$
|
155
|
|
|
Layoff
costs
|
|
Other
exit costs
|
|
Total
|
||||||
Reserve balances at December 31, 2015
|
$
|
84
|
|
|
$
|
9
|
|
|
$
|
93
|
|
2016
|
|
|
|
|
|
||||||
Cash payments
|
(73
|
)
|
|
(13
|
)
|
|
(86
|
)
|
|||
Restructuring charges
|
70
|
|
|
27
|
|
|
97
|
|
|||
Other
(1)
|
(31
|
)
|
|
(14
|
)
|
|
(45
|
)
|
|||
Reserve balances at December 31, 2016
|
$
|
50
|
|
|
$
|
9
|
|
|
$
|
59
|
|
2017
|
|
|
|
|
|
||||||
Cash payments
|
$
|
(59
|
)
|
|
$
|
(6
|
)
|
|
$
|
(65
|
)
|
Restructuring charges
|
64
|
|
|
1
|
|
|
65
|
|
|||
Other
(2)
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|||
Reserve balances at December 31, 2017
|
$
|
56
|
|
|
$
|
2
|
|
|
$
|
58
|
|
2018
|
|
|
|
|
|
||||||
Cash payments
|
$
|
(47
|
)
|
|
$
|
(2
|
)
|
|
$
|
(49
|
)
|
Restructuring charges
|
111
|
|
|
13
|
|
|
124
|
|
|||
Other
(3)
|
(110
|
)
|
|
2
|
|
|
(108
|
)
|
|||
Reserve balances at December 31, 2018
|
$
|
10
|
|
|
$
|
15
|
|
|
$
|
25
|
|
(1)
|
In 2016, Other for layoff costs included reversals of previously recorded restructuring charges of
$25
, effects of foreign currency translation and other of
$4
, and a reclassification of
$2
in pension costs, as the impact was reflected in Arconic’s separate liability for Accrued pension benefits. Other for other exit costs included reclassifications of
$8
in asset retirement and
$2
in environmental obligations, as the impacts were reflected in Arconic’s separate liabilities
|
(2)
|
In 2017, Other for layoff costs included a reclassification of a stock awards reversal of
$13
, offset by reversals of previously recorded restructuring charges of
$11
and foreign currency translation of
$1
.
|
(3)
|
In 2018, Other for layoff costs included reclassifications of
$119
in pension costs and a
$28
credit in postretirement benefits, as the impacts were reflected in Arconic's separate liabilities for Accrued pension benefits and Accrued postretirement benefits, and reversals of previously recorded restructuring charges of
$19
.
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Amount charged to expense
|
$
|
378
|
|
|
$
|
496
|
|
|
$
|
499
|
|
Amount capitalized
|
23
|
|
|
22
|
|
|
32
|
|
|||
|
$
|
401
|
|
|
$
|
518
|
|
|
$
|
531
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Non-service related net periodic benefit cost
|
$
|
112
|
|
|
$
|
154
|
|
|
$
|
135
|
|
Interest income
|
(23
|
)
|
|
(19
|
)
|
|
(16
|
)
|
|||
Foreign currency losses (gains), net
|
26
|
|
|
(5
|
)
|
|
(4
|
)
|
|||
Net loss (gain) from asset sales
|
10
|
|
|
(513
|
)
|
|
11
|
|
|||
Other, net
|
(46
|
)
|
|
(103
|
)
|
|
(85
|
)
|
|||
|
$
|
79
|
|
|
$
|
(486
|
)
|
|
$
|
41
|
|
|
Pension benefits
|
|
Other
postretirement benefits
|
||||||||||||
December 31,
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
7,359
|
|
|
$
|
7,026
|
|
|
$
|
927
|
|
|
$
|
980
|
|
Service cost
|
46
|
|
|
90
|
|
|
7
|
|
|
7
|
|
||||
Interest cost
|
219
|
|
|
234
|
|
|
28
|
|
|
30
|
|
||||
Amendments
|
18
|
|
|
1
|
|
|
(25
|
)
|
|
—
|
|
||||
Actuarial (gains) losses
|
(372
|
)
|
|
311
|
|
|
(51
|
)
|
|
1
|
|
||||
Settlements
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailments
|
(154
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(422
|
)
|
|
(425
|
)
|
|
(86
|
)
|
|
(98
|
)
|
||||
Medicare Part D subsidy receipts
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
||||
Foreign currency translation impact
|
(72
|
)
|
|
122
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at end of year
(1)
|
$
|
6,476
|
|
|
$
|
7,359
|
|
|
$
|
806
|
|
|
$
|
927
|
|
Change in plan assets
(1)
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
4,862
|
|
|
$
|
4,666
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
(144
|
)
|
|
212
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
298
|
|
|
310
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(397
|
)
|
|
(404
|
)
|
|
—
|
|
|
—
|
|
||||
Administrative expenses
|
(33
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency translation impact
|
(74
|
)
|
|
111
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
(1)
|
$
|
4,334
|
|
|
$
|
4,862
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net funded status
|
$
|
(2,142
|
)
|
|
$
|
(2,497
|
)
|
|
$
|
(806
|
)
|
|
$
|
(927
|
)
|
Amounts recognized in the Consolidated Balance Sheet consist of:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
111
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(23
|
)
|
|
(22
|
)
|
|
(83
|
)
|
|
(86
|
)
|
||||
Noncurrent liabilities
|
(2,230
|
)
|
|
(2,564
|
)
|
|
(723
|
)
|
|
(841
|
)
|
||||
Net amount recognized
|
$
|
(2,142
|
)
|
|
$
|
(2,497
|
)
|
|
$
|
(806
|
)
|
|
$
|
(927
|
)
|
Amounts recognized in Accumulated Other Comprehensive Loss consist of:
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss
|
$
|
2,957
|
|
|
$
|
3,240
|
|
|
$
|
87
|
|
|
$
|
146
|
|
Prior service cost (benefit)
|
3
|
|
|
10
|
|
|
(27
|
)
|
|
(37
|
)
|
||||
Net amount recognized, before tax effect
|
$
|
2,960
|
|
|
$
|
3,250
|
|
|
$
|
60
|
|
|
$
|
109
|
|
Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss consist of:
|
|
|
|
|
|
|
|
||||||||
Net actuarial (gain) loss
|
$
|
(19
|
)
|
|
$
|
481
|
|
|
$
|
(52
|
)
|
|
$
|
1
|
|
Amortization of accumulated net actuarial loss
|
(264
|
)
|
|
(220
|
)
|
|
(7
|
)
|
|
(5
|
)
|
||||
Prior service cost (benefit)
|
19
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
||||
Amortization of prior service (cost) benefit
|
(26
|
)
|
|
(5
|
)
|
|
35
|
|
|
8
|
|
||||
Net amount recognized, before tax effect
|
$
|
(290
|
)
|
|
$
|
256
|
|
|
$
|
(49
|
)
|
|
$
|
4
|
|
(1)
|
At
December 31, 2018
, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were
$5,282
,
$3,123
, and
$(2,159)
, respectively. At
December 31, 2017
, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were
$6,018
,
$3,544
, and
$(2,474)
respectively.
|
|
Pension benefits
|
||||||
|
2018
|
|
2017
|
||||
The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans was as follows:
|
|
|
|
||||
Projected benefit obligation
|
$
|
6,476
|
|
|
$
|
7,359
|
|
Accumulated benefit obligation
|
6,444
|
|
|
7,169
|
|
||
The aggregate projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets was as follows:
|
|
|
|
||||
Projected benefit obligation
|
5,435
|
|
|
6,600
|
|
||
Fair value of plan assets
|
3,182
|
|
|
4,016
|
|
||
The aggregate accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets was as follows:
|
|
|
|
||||
Accumulated benefit obligation
|
5,415
|
|
|
6,422
|
|
||
Fair value of plan assets
|
3,179
|
|
|
3,998
|
|
|
Pension benefits
(1)
|
|
Other postretirement benefits
(2)
|
||||||||||||||||||||
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
$
|
46
|
|
|
$
|
90
|
|
|
$
|
155
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
13
|
|
Interest cost
|
219
|
|
|
234
|
|
|
431
|
|
|
28
|
|
|
30
|
|
|
63
|
|
||||||
Expected return on plan assets
|
(306
|
)
|
|
(332
|
)
|
|
(677
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial loss
|
168
|
|
|
220
|
|
|
380
|
|
|
7
|
|
|
5
|
|
|
24
|
|
||||||
Amortization of prior service cost (benefit)
|
3
|
|
|
5
|
|
|
13
|
|
|
(7
|
)
|
|
(8
|
)
|
|
(24
|
)
|
||||||
Settlements
(3)
|
96
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailments
(4)
|
23
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
||||||
Special termination benefits
(5)
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
(6)
|
$
|
249
|
|
|
$
|
217
|
|
|
$
|
323
|
|
|
$
|
7
|
|
|
$
|
34
|
|
|
$
|
76
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
41
|
|
||||||
Net amount recognized in Statement of Consolidated Operations
|
$
|
249
|
|
|
$
|
217
|
|
|
$
|
201
|
|
|
$
|
7
|
|
|
$
|
34
|
|
|
$
|
35
|
|
Note:
|
the footnotes below include components of Net Periodic Benefit Cost related to Alcoa Corporation through the completion of the Separation Transaction in 2016.
|
(1)
|
In
2018
,
2017
and
2016
, net periodic benefit cost for U.S. pension plans was
$239
,
$206
, and
$261
, respectively.
|
(2)
|
In
2018
,
2017
and
2016
, net periodic benefit cost for other postretirement benefits reflects a reduction of
$10
,
$11
, and
$22
, respectively, related to the recognition of the federal subsidy awarded under Medicare Part D.
|
(3)
|
In 2018 and 2016, settlements were due to workforce reductions (see Note
D
) and the payment of lump sum benefits and/or purchases of annuity contracts.
|
(4)
|
In 2018, curtailments were due to a reduction of future benefits, resulting in the recognition of favorable and unfavorable plan amendments.
|
(5)
|
In 2016, special termination benefits were due to workforce reductions (see Note
D
).
|
(6)
|
Amounts attributed to joint venture partners are not included. Service cost was included within Cost of goods sold,
Selling, general administrative, and other expenses
, and
Research and development expenses
; curtailments and settlements were included in Restructuring and other charges; and all other cost components were recorded in
Other expense (income), net
in the Statement of Consolidated Operations.
|
|
Pension benefits
|
|
Other postretirement benefits
|
||||
December 31,
|
2019
|
|
2019
|
||||
Net actuarial loss recognition
|
$
|
139
|
|
|
$
|
3
|
|
Prior service cost (benefit) recognition
|
2
|
|
|
(4
|
)
|
December 31,
|
2018
|
|
2017
|
||
Discount rate
|
4.35
|
%
|
|
3.75
|
%
|
Rate of compensation increase
|
3.50
|
|
|
3.50
|
|
Cash balance plan interest crediting rate
|
3.00
|
|
|
3.00
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate to calculate service cost
(1)
|
3.75
|
%
|
|
4.20
|
%
|
|
4.29
|
%
|
Discount rate to calculate interest cost
(1)
|
3.30
|
|
|
3.60
|
|
|
3.15
|
|
Expected long-term rate of return on plan assets
|
7.00
|
|
|
7.75
|
|
|
7.75
|
|
Rate of compensation increase
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
Cash balance plan interest crediting rate
|
3.00
|
|
|
3.00
|
|
|
3.00
|
|
(1)
|
In all periods presented, the respective discount rates were used to determine net periodic benefit cost for most U.S. pension plans for the full annual period. However, the discount rates for a limited number of plans were updated during
2018
,
2017
, and
2016
to reflect the remeasurement of these plans due to new union labor agreements, settlements, and/or curtailments. The updated discount rates used were not significantly different from the discount rates presented.
|
|
2018
|
|
2017
|
|
2016
|
|||
Health care cost trend rate assumed for next year
|
5.50
|
%
|
|
5.50
|
%
|
|
5.50
|
%
|
Rate to which the cost trend rate gradually declines
|
4.50
|
|
|
4.50
|
|
|
4.50
|
|
Year that the rate reaches the rate at which it is assumed to remain
|
2022
|
|
|
2021
|
|
|
2020
|
|
|
1% increase
|
|
1% decrease
|
||||
Effect on other postretirement benefit obligations
|
$
|
22
|
|
|
$
|
(22
|
)
|
Effect on total of service and interest cost components
|
1
|
|
|
(1
|
)
|
|
|
Plan assets
at
December 31,
|
||||
Asset class
|
Policy range
|
2018
|
|
2017
|
||
Equities
|
20–55%
|
29
|
%
|
|
28
|
%
|
Fixed income
|
25–55%
|
48
|
|
|
47
|
|
Other investments
|
15–35%
|
23
|
|
|
25
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
December 31, 2018
|
Level 1
|
|
Level 2
|
|
Net asset value
|
|
Total
|
||||||||
Equities:
|
|
|
|
||||||||||||
Equity securities
|
$
|
318
|
|
|
$
|
—
|
|
|
$
|
578
|
|
|
$
|
896
|
|
Long/short equity hedge funds
|
—
|
|
|
—
|
|
|
232
|
|
|
232
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
147
|
|
|
147
|
|
||||
|
$
|
318
|
|
|
$
|
—
|
|
|
$
|
957
|
|
|
$
|
1,275
|
|
Fixed income:
|
|
|
|
||||||||||||
Intermediate and long duration government/credit
|
$
|
200
|
|
|
$
|
934
|
|
|
$
|
770
|
|
|
$
|
1,904
|
|
Other
|
9
|
|
|
9
|
|
|
152
|
|
|
170
|
|
||||
|
$
|
209
|
|
|
$
|
943
|
|
|
$
|
922
|
|
|
$
|
2,074
|
|
Other investments:
|
|
|
|
||||||||||||
Real estate
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
164
|
|
|
$
|
245
|
|
Discretionary and systematic macro hedge funds
|
—
|
|
|
—
|
|
|
471
|
|
|
471
|
|
||||
Other
|
56
|
|
|
—
|
|
|
212
|
|
|
268
|
|
||||
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
847
|
|
|
$
|
984
|
|
Net plan assets
(1)
|
$
|
664
|
|
|
$
|
943
|
|
|
$
|
2,726
|
|
|
$
|
4,333
|
|
December 31, 2017
|
Level 1
|
|
Level 2
|
|
Net Asset Value
|
|
Total
|
||||||||
Equities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
593
|
|
|
$
|
972
|
|
Long/short equity hedge funds
|
—
|
|
|
—
|
|
|
230
|
|
|
230
|
|
||||
Private equity
|
—
|
|
|
—
|
|
|
155
|
|
|
155
|
|
||||
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
978
|
|
|
$
|
1,357
|
|
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Intermediate and long duration government/credit
|
$
|
201
|
|
|
$
|
981
|
|
|
$
|
779
|
|
|
$
|
1,961
|
|
Other
|
164
|
|
|
8
|
|
|
145
|
|
|
317
|
|
||||
|
$
|
365
|
|
|
$
|
989
|
|
|
$
|
924
|
|
|
$
|
2,278
|
|
Other investments:
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
172
|
|
|
$
|
257
|
|
Discretionary and systematic macro hedge funds
|
—
|
|
|
—
|
|
|
583
|
|
|
583
|
|
||||
Other
|
77
|
|
|
7
|
|
|
275
|
|
|
359
|
|
||||
|
$
|
162
|
|
|
$
|
7
|
|
|
$
|
1,030
|
|
|
$
|
1,199
|
|
Net plan assets
(2)
|
$
|
906
|
|
|
$
|
996
|
|
|
$
|
2,932
|
|
|
$
|
4,834
|
|
(1)
|
As of December 31,
2018
, the total fair value of pension plans’ assets excludes a net receivable of
$1
, which represents securities purchased and sold but not yet settled plus interest and dividends earned on various investments.
|
(2)
|
As of December 31,
2017
, the total fair value of pension plans’ assets excludes a net receivable of
$28
, which represents assets due from Alcoa Corporation as a result of plan separations and securities sold not yet settled plus interest and dividends earned on various investments.
|
For the year ended December 31,
|
Pension
benefits paid
|
|
Gross Other post-
retirement
benefits
|
|
Medicare Part D
subsidy receipts
|
|
Net Other post-
retirement
benefits
|
||||||||
2019
|
$
|
460
|
|
|
$
|
90
|
|
|
$
|
5
|
|
|
$
|
85
|
|
2020
|
460
|
|
|
85
|
|
|
5
|
|
|
80
|
|
||||
2021
|
455
|
|
|
85
|
|
|
5
|
|
|
80
|
|
||||
2022
|
455
|
|
|
85
|
|
|
5
|
|
|
80
|
|
||||
2023
|
450
|
|
|
85
|
|
|
5
|
|
|
80
|
|
||||
Thereafter
|
2,170
|
|
|
300
|
|
|
25
|
|
|
275
|
|
||||
|
$
|
4,450
|
|
|
$
|
730
|
|
|
$
|
50
|
|
|
$
|
680
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
518
|
|
|
$
|
500
|
|
|
$
|
84
|
|
Foreign
|
350
|
|
|
(30
|
)
|
|
330
|
|
|||
|
$
|
868
|
|
|
$
|
470
|
|
|
$
|
414
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
(1)
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign
|
138
|
|
|
98
|
|
|
133
|
|
|||
State and local
|
4
|
|
|
(2
|
)
|
|
1
|
|
|||
|
187
|
|
|
96
|
|
|
134
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
146
|
|
|
489
|
|
|
1,208
|
|
|||
Foreign
|
(94
|
)
|
|
37
|
|
|
136
|
|
|||
State and local
|
(13
|
)
|
|
(78
|
)
|
|
(2
|
)
|
|||
|
39
|
|
|
448
|
|
|
1,342
|
|
|||
Total
|
$
|
226
|
|
|
$
|
544
|
|
|
$
|
1,476
|
|
(1)
|
Includes U.S. taxes related to foreign income
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
|||
U.S. federal statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Taxes on foreign operations
|
4.0
|
|
|
(8.8
|
)
|
|
(11.5
|
)
|
U.S. State and local taxes
|
1.5
|
|
|
0.7
|
|
|
(0.4
|
)
|
Federal benefit of state tax
|
(0.3
|
)
|
|
3.7
|
|
|
0.4
|
|
Permanent differences on restructuring and other charges and asset disposals
(1)
|
(16.9
|
)
|
|
(167.4
|
)
|
|
(107.8
|
)
|
Non-deductible acquisition costs
|
—
|
|
|
0.3
|
|
|
8.4
|
|
Statutory tax rate and law changes
(2)
|
6.5
|
|
|
52.5
|
|
|
(15.7
|
)
|
Tax holidays
|
(1.6
|
)
|
|
(3.0
|
)
|
|
(0.8
|
)
|
Changes in valuation allowances
|
0.9
|
|
|
137.9
|
|
|
426.8
|
|
Impairment of goodwill
|
—
|
|
|
53.5
|
|
|
—
|
|
Company-owned life insurance/split-dollar net premiums
|
—
|
|
|
—
|
|
|
23.0
|
|
Changes in uncertain tax positions
|
12.8
|
|
|
10.1
|
|
|
2.1
|
|
Prior year tax adjustments
|
(2.6
|
)
|
|
(0.9
|
)
|
|
(1.7
|
)
|
Other
|
0.7
|
|
|
2.1
|
|
|
(1.3
|
)
|
Effective tax rate
|
26.0
|
%
|
|
115.7
|
%
|
|
356.5
|
%
|
(1)
|
Additional losses were reported in Spain's 2017 tax return related to the Separation Transaction which are offset by an increased valuation allowance.
|
(2)
|
In 2018, the Company finalized its accounting for the Tax Cuts and Jobs Act of 2017 ("the 2017 Act”) and recorded an additional
$59
charge. In December 2017, an estimated
$272
tax charge was recorded with respect to the enactment of the 2017 Act. In December 2016, Spain and the United States enacted tax law changes which resulted in the remeasurement of certain deferred tax liabilities recorded by Arconic.
|
|
2018
|
|
2017
|
||||||||||||
December 31,
|
Deferred
tax
assets
|
|
Deferred
tax
liabilities
|
|
Deferred
tax
assets
|
|
Deferred
tax
liabilities
|
||||||||
Depreciation
|
$
|
38
|
|
|
$
|
694
|
|
|
$
|
31
|
|
|
$
|
693
|
|
Employee benefits
|
836
|
|
|
27
|
|
|
936
|
|
|
23
|
|
||||
Loss provisions
|
94
|
|
|
—
|
|
|
134
|
|
|
14
|
|
||||
Deferred income/expense
|
22
|
|
|
1,102
|
|
|
19
|
|
|
1,144
|
|
||||
Tax loss carryforwards
|
3,159
|
|
|
—
|
|
|
3,305
|
|
|
—
|
|
||||
Tax credit carryforwards
|
579
|
|
|
—
|
|
|
638
|
|
|
—
|
|
||||
Other
|
94
|
|
|
20
|
|
|
24
|
|
|
33
|
|
||||
|
$
|
4,822
|
|
|
$
|
1,843
|
|
|
$
|
5,087
|
|
|
$
|
1,907
|
|
Valuation allowance
|
(2,486
|
)
|
|
—
|
|
|
(2,584
|
)
|
|
—
|
|
||||
|
$
|
2,336
|
|
|
$
|
1,843
|
|
|
$
|
2,503
|
|
|
$
|
1,907
|
|
December 31, 2018
|
Expires
within
10 years
|
|
Expires
within
11-20 years
|
|
No
expiration
(1)
|
|
Other
(2)
|
|
Total
|
||||||||||
Tax loss carryforwards
|
$
|
300
|
|
|
$
|
461
|
|
|
$
|
2,398
|
|
|
$
|
—
|
|
|
$
|
3,159
|
|
Tax credit carryforwards
|
497
|
|
|
70
|
|
|
12
|
|
|
—
|
|
|
579
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
64
|
|
|
1,020
|
|
|
1,084
|
|
|||||
Valuation allowance
|
(752
|
)
|
|
(287
|
)
|
|
(1,390
|
)
|
|
(57
|
)
|
|
(2,486
|
)
|
|||||
|
$
|
45
|
|
|
$
|
244
|
|
|
$
|
1,084
|
|
|
$
|
963
|
|
|
$
|
2,336
|
|
(1)
|
Deferred tax assets with no expiration may still have annual limitations on utilization.
|
(2)
|
Other represents deferred tax assets whose expiration is dependent upon the reversal of the underlying temporary difference. A substantial amount of Other relates to employee benefits that will become deductible for tax purposes over an extended period of time as contributions are made to employee benefit plans and payments are made to retirees.
|
December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
$
|
2,584
|
|
|
$
|
1,940
|
|
|
$
|
1,291
|
|
Increase to allowance
|
136
|
|
|
831
|
|
|
772
|
|
|||
Release of allowance
|
(154
|
)
|
|
(246
|
)
|
|
(209
|
)
|
|||
Acquisitions and divestitures
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Tax apportionment, tax rate and tax law changes
|
(14
|
)
|
|
(24
|
)
|
|
106
|
|
|||
Foreign currency translation
|
(66
|
)
|
|
84
|
|
|
(19
|
)
|
|||
Balance at end of year
|
$
|
2,486
|
|
|
$
|
2,584
|
|
|
$
|
1,940
|
|
December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
$
|
73
|
|
|
$
|
28
|
|
|
$
|
18
|
|
Additions for tax positions of the current year
|
—
|
|
|
23
|
|
|
12
|
|
|||
Additions for tax positions of prior years
|
143
|
|
|
27
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
(42
|
)
|
|
—
|
|
|
—
|
|
|||
Settlements with tax authorities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Expiration of the statute of limitations
|
(6
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|||
Foreign currency translation
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
$
|
166
|
|
|
$
|
73
|
|
|
$
|
28
|
|
|
Common stock
|
||||
|
Treasury
|
|
Outstanding
|
||
Balance at end of 2015
|
81,051,103
|
|
|
1,310,160,141
|
|
Issued for stock-based compensation plans
|
(5,219,660
|
)
|
|
5,302,128
|
|
Treasury stock retirement
|
(75,831,443
|
)
|
|
—
|
|
Reverse Stock Split
|
—
|
|
|
(876,942,489
|
)
|
Balance at end of 2016
|
—
|
|
|
438,519,780
|
|
Conversion of convertible notes
|
—
|
|
|
39,242,706
|
|
Issued for stock-based compensation plans
|
—
|
|
|
3,654,051
|
|
Balance at end of 2017
|
—
|
|
|
481,416,537
|
|
Issued for stock-based compensation plans
|
—
|
|
|
1,854,180
|
|
Balance at end of 2018
|
—
|
|
|
483,270,717
|
|
|
Stock options
|
|
Stock awards
|
||||||||||
|
Number of
options
|
|
Weighted
average
exercise price
|
|
Number of
awards
|
|
Weighted
average FMV
per award
|
||||||
Outstanding, January 1, 2018
|
11
|
|
|
$
|
23.94
|
|
|
7
|
|
|
$
|
21.49
|
|
Granted
|
1
|
|
|
29.97
|
|
|
2
|
|
|
26.48
|
|
||
Exercised
|
(1
|
)
|
|
18.95
|
|
|
—
|
|
|
—
|
|
||
Converted
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
32.75
|
|
||
Expired or forfeited
|
(1
|
)
|
|
26.96
|
|
|
(1
|
)
|
|
21.10
|
|
||
Performance share adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
18.47
|
|
||
Outstanding, December 31, 2018
|
10
|
|
|
$
|
24.95
|
|
|
7
|
|
|
$
|
21.13
|
|
For the year ended December 31,
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) from continuing operations attributable to Arconic
|
$
|
642
|
|
|
$
|
(74
|
)
|
|
$
|
(1,062
|
)
|
Less: preferred stock dividends declared
|
(2
|
)
|
|
(53
|
)
|
|
(69
|
)
|
|||
Income (loss) from continuing operations available to Arconic common shareholders
|
640
|
|
|
(127
|
)
|
|
(1,131
|
)
|
|||
Income from discontinued operations after income taxes and noncontrolling interests
(1)
|
—
|
|
|
—
|
|
|
121
|
|
|||
Net income (loss) available to Arconic common shareholders—basic
|
640
|
|
|
(127
|
)
|
|
(1,010
|
)
|
|||
Add: interest expense related to convertible notes
|
11
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) available to Arconic common shareholders - diluted
|
$
|
651
|
|
|
$
|
(127
|
)
|
|
$
|
(1,010
|
)
|
Average shares outstanding - basic
|
483
|
|
|
451
|
|
|
438
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
1
|
|
|
—
|
|
|
—
|
|
|||
Stock and performance awards
|
5
|
|
|
—
|
|
|
—
|
|
|||
Convertible notes
|
14
|
|
|
—
|
|
|
—
|
|
|||
Average shares outstanding - diluted
|
503
|
|
|
451
|
|
|
438
|
|
(1)
|
Calculated from the Statement of Consolidated Operations as Income from discontinued operations after income taxes less Net income from discontinued operations attributable to noncontrolling interests.
|
|
2018
|
|
2017
|
|
2016
|
|||
Mandatory convertible preferred stock
|
n/a
|
|
|
39
|
|
|
39
|
|
Convertible notes
|
—
|
|
|
14
|
|
|
14
|
|
Stock options
(1)
|
9
|
|
|
11
|
|
|
13
|
|
Stock awards
|
—
|
|
|
7
|
|
|
8
|
|
(1)
|
The average exercise price of options per share was
$26.79
,
$33.32
, and
$26.93
for
2018
,
2017
, and
2016
, respectively.
|
|
Arconic
|
|
Noncontrolling Interests
|
||||||||||||||||
|
2018
|
2017
|
2016
|
|
2018
|
2017
|
2016
|
||||||||||||
Pension and other postretirement benefits (
G
)
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
(2,230
|
)
|
$
|
(2,010
|
)
|
$
|
(3,611
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(56
|
)
|
Adoption of accounting standard
(A)
|
(369
|
)
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||||||
Unrecognized net actuarial loss and prior service cost/benefit
|
70
|
|
(466
|
)
|
(1,112
|
)
|
|
—
|
|
—
|
|
(9
|
)
|
||||||
Tax (expense) benefit
|
(19
|
)
|
102
|
|
380
|
|
|
—
|
|
—
|
|
3
|
|
||||||
Total Other comprehensive income (loss) before reclassifications, net of tax
|
51
|
|
(364
|
)
|
(732
|
)
|
|
—
|
|
—
|
|
(6
|
)
|
||||||
Amortization of net actuarial loss and prior service cost
(1)
|
262
|
|
222
|
|
389
|
|
|
—
|
|
—
|
|
4
|
|
||||||
Tax expense
(2)
|
(58
|
)
|
(78
|
)
|
(136
|
)
|
|
—
|
|
—
|
|
(1
|
)
|
||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax
(8)
|
204
|
|
144
|
|
253
|
|
|
—
|
|
—
|
|
3
|
|
||||||
Total Other comprehensive income (loss)
|
255
|
|
(220
|
)
|
(479
|
)
|
|
—
|
|
—
|
|
(3
|
)
|
||||||
Transfer to Alcoa Corporation
|
—
|
|
—
|
|
2,080
|
|
|
—
|
|
—
|
|
59
|
|
||||||
Balance at end of period
|
$
|
(2,344
|
)
|
$
|
(2,230
|
)
|
$
|
(2,010
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Foreign currency translation
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
(437
|
)
|
$
|
(689
|
)
|
$
|
(2,412
|
)
|
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
(780
|
)
|
Other comprehensive (loss) income
(3)
|
(146
|
)
|
252
|
|
268
|
|
|
—
|
|
2
|
|
182
|
|
||||||
Transfer to Alcoa Corporation
|
—
|
|
—
|
|
1,455
|
|
|
—
|
|
—
|
|
596
|
|
||||||
Balance at end of period
|
$
|
(583
|
)
|
$
|
(437
|
)
|
$
|
(689
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
Available-for-sale securities
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
(2
|
)
|
$
|
132
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Other comprehensive (loss) income
(4)
|
(1
|
)
|
(134
|
)
|
137
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Balance at end of period
|
$
|
(3
|
)
|
$
|
(2
|
)
|
$
|
132
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
$
|
25
|
|
$
|
(1
|
)
|
$
|
597
|
|
|
—
|
|
$
|
—
|
|
$
|
(3
|
)
|
|
Adoption of accounting standard (
A
)
|
2
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||||||
Net change from periodic revaluations
|
(15
|
)
|
37
|
|
(843
|
)
|
|
—
|
|
—
|
|
36
|
|
||||||
Tax benefit (expense)
|
3
|
|
(9
|
)
|
252
|
|
|
—
|
|
—
|
|
(10
|
)
|
||||||
Total Other comprehensive (loss) income before reclassifications, net of tax
|
(12
|
)
|
28
|
|
(591
|
)
|
|
—
|
|
—
|
|
26
|
|
||||||
Net amount reclassified to earnings
|
|
|
|
|
|
|
|
||||||||||||
Aluminum contracts
(5)
|
(8
|
)
|
(2
|
)
|
1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Energy contracts
(6)
|
—
|
|
—
|
|
(49
|
)
|
|
—
|
|
—
|
|
(34
|
)
|
||||||
Interest rate contracts
(7)
|
(2
|
)
|
—
|
|
9
|
|
|
—
|
|
—
|
|
5
|
|
||||||
Nickel contracts
(6)
|
(4
|
)
|
(1
|
)
|
1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Sub-total
|
(14
|
)
|
(3
|
)
|
(38
|
)
|
|
—
|
|
—
|
|
(29
|
)
|
||||||
Tax benefit
(2)
|
3
|
|
1
|
|
12
|
|
|
—
|
|
—
|
|
8
|
|
||||||
Total amount reclassified from Accumulated other comprehensive loss, net of tax
(8)
|
(11
|
)
|
(2
|
)
|
(26
|
)
|
|
—
|
|
—
|
|
(21
|
)
|
||||||
Total Other comprehensive (loss) income
|
(23
|
)
|
26
|
|
(617
|
)
|
|
—
|
|
—
|
|
5
|
|
||||||
Transfer to Alcoa Corporation
|
—
|
|
—
|
|
19
|
|
|
—
|
|
—
|
|
(2
|
)
|
||||||
Balance at end of period
|
$
|
4
|
|
$
|
25
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total balance at end of period
|
$
|
(2,926
|
)
|
$
|
(2,644
|
)
|
$
|
(2,568
|
)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
(1)
|
These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note
G
).
|
(2)
|
These amounts were included in
Provision for income taxes
on the accompanying Statement of Consolidated Operations.
|
(3)
|
In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.
|
(4)
|
Realized gains and losses were included in
Other expense (income), net
, net on the accompanying Statement of Consolidated Operations.
|
(5)
|
These amounts were included in Sales on the accompanying Statement of Consolidated Operations.
|
(6)
|
These amounts were included in Cost of goods sold on the accompanying Statement of Consolidated Operations.
|
(7)
|
These amounts were included in
Interest expense
on the accompanying Statement of Consolidated Operations.
|
(8)
|
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 1 through 7.
|
|
Customer receivables
|
|
Other receivables
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Balance at beginning of year
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
34
|
|
|
$
|
32
|
|
|
$
|
34
|
|
Provision for doubtful accounts
|
2
|
|
|
1
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|
6
|
|
||||||
Write off of uncollectible accounts
|
(2
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Recoveries of prior write-offs
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
1
|
|
||||||
Other
|
(4
|
)
|
|
(1
|
)
|
|
2
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(8
|
)
|
||||||
Balance at end of year
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
13
|
|
|
$
|
31
|
|
|
$
|
34
|
|
|
$
|
32
|
|
December 31,
|
2018
|
|
2017
|
||||
Finished goods
|
$
|
668
|
|
|
$
|
669
|
|
Work-in-process
|
1,371
|
|
|
1,349
|
|
||
Purchased raw materials
|
366
|
|
|
381
|
|
||
Operating supplies
|
87
|
|
|
81
|
|
||
Total inventories
|
$
|
2,492
|
|
|
$
|
2,480
|
|
December 31,
|
2018
|
|
2017
|
||||
Land and land rights
|
$
|
136
|
|
|
$
|
140
|
|
Structures:
|
|
|
|
||||
Engineered Products and Solutions
|
796
|
|
|
784
|
|
||
Global Rolled Products
|
1,068
|
|
|
1,090
|
|
||
Transportation and Construction Solutions
|
248
|
|
|
268
|
|
||
Other
|
252
|
|
|
253
|
|
||
|
2,364
|
|
|
2,395
|
|
||
Machinery and equipment:
|
|
|
|
||||
Engineered Products and Solutions
|
3,437
|
|
|
3,054
|
|
||
Global Rolled Products
|
4,629
|
|
|
4,641
|
|
||
Transportation and Construction Solutions
|
748
|
|
|
777
|
|
||
Other
|
420
|
|
|
358
|
|
||
|
9,234
|
|
|
8,830
|
|
||
|
11,734
|
|
|
11,365
|
|
||
Less: accumulated depreciation and amortization
|
6,769
|
|
|
6,392
|
|
||
|
4,965
|
|
|
4,973
|
|
||
Construction work-in-progress
|
739
|
|
|
621
|
|
||
|
$
|
5,704
|
|
|
$
|
5,594
|
|
|
Engineered
Products and Solutions |
|
Global
Rolled
Products
|
|
Transportation
and
Construction
Solutions
|
|
Total
|
||||||||
Balances at December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
4,832
|
|
|
$
|
241
|
|
|
$
|
128
|
|
|
$
|
5,201
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
(53
|
)
|
||||
Goodwill, net
|
4,832
|
|
|
241
|
|
|
75
|
|
|
5,148
|
|
||||
Impairment (
A
)
|
(719
|
)
|
|
—
|
|
|
—
|
|
|
(719
|
)
|
||||
Translation and other
|
92
|
|
|
11
|
|
|
3
|
|
|
106
|
|
||||
Balances at December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
4,924
|
|
|
252
|
|
|
131
|
|
|
5,307
|
|
||||
Accumulated impairment losses
|
(719
|
)
|
|
—
|
|
|
(53
|
)
|
|
(772
|
)
|
||||
Goodwill, net
|
4,205
|
|
|
252
|
|
|
78
|
|
|
4,535
|
|
||||
Divestitures (
T
)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Translation and other
|
(25
|
)
|
|
(7
|
)
|
|
(2
|
)
|
|
(34
|
)
|
||||
Balances at December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
4,898
|
|
|
245
|
|
|
129
|
|
|
5,272
|
|
||||
Accumulated impairment losses
|
(719
|
)
|
|
—
|
|
|
(53
|
)
|
|
(772
|
)
|
||||
Goodwill, net
|
$
|
4,179
|
|
|
$
|
245
|
|
|
$
|
76
|
|
|
$
|
4,500
|
|
December 31, 2018
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Intangibles, net
|
||||||
Computer software
|
$
|
768
|
|
|
$
|
(657
|
)
|
|
$
|
111
|
|
Patents and licenses
|
110
|
|
|
(107
|
)
|
|
3
|
|
|||
Other intangibles
|
922
|
|
|
(149
|
)
|
|
773
|
|
|||
Total amortizable intangible assets
|
1,800
|
|
|
(913
|
)
|
|
887
|
|
|||
Indefinite-lived trade names and trademarks
|
32
|
|
|
—
|
|
|
32
|
|
|||
Total other intangible assets
|
$
|
1,832
|
|
|
$
|
(913
|
)
|
|
$
|
919
|
|
December 31, 2017
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Intangibles, net
|
||||||
Computer software
|
$
|
789
|
|
|
$
|
(674
|
)
|
|
$
|
115
|
|
Patents and licenses
|
110
|
|
|
(107
|
)
|
|
3
|
|
|||
Other intangibles
|
953
|
|
|
(116
|
)
|
|
837
|
|
|||
Total amortizable intangible assets
|
1,852
|
|
|
(897
|
)
|
|
955
|
|
|||
Indefinite-lived trade names and trademarks
|
32
|
|
|
—
|
|
|
32
|
|
|||
Total other intangible assets
|
$
|
1,884
|
|
|
$
|
(897
|
)
|
|
$
|
987
|
|
December 31,
|
2018
|
|
2017
|
||||
5.72% Notes, due 2019
|
$
|
—
|
|
|
$
|
500
|
|
1.63% Convertible Notes, due 2019
|
403
|
|
|
403
|
|
||
6.150% Notes, due 2020
|
1,000
|
|
|
1,000
|
|
||
5.40% Notes, due 2021
|
1,250
|
|
|
1,250
|
|
||
5.87% Notes, due 2022
|
627
|
|
|
627
|
|
||
5.125% Notes, due 2024
|
1,250
|
|
|
1,250
|
|
||
5.90% Notes, due 2027
|
625
|
|
|
625
|
|
||
6.75% Bonds, due 2028
|
300
|
|
|
300
|
|
||
5.95% Notes due 2037
|
625
|
|
|
625
|
|
||
Iowa Finance Authority Loan, due 2042 (4.75%)
|
250
|
|
|
250
|
|
||
Other
(1)
|
(29
|
)
|
|
(23
|
)
|
||
|
6,301
|
|
|
6,807
|
|
||
Less: amount due within one year
|
405
|
|
|
1
|
|
||
|
$
|
5,896
|
|
|
$
|
6,806
|
|
(1)
|
Includes various financing arrangements related to subsidiaries, unamortized debt discounts related to outstanding notes and bonds listed in the table above, an equity option related to the convertible notes due in 2019, and unamortized debt issuance costs.
|
•
|
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.
|
|
2018
|
|
2017
|
||||||||
December 31,
|
Carrying
value
|
|
Fair
value
|
|
Carrying
value
|
|
Fair
value
|
||||
Long-term debt, less amount due within one year
|
5,896
|
|
|
5,873
|
|
|
6,806
|
|
|
7,443
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest, net of amount capitalized
|
$
|
391
|
|
|
$
|
508
|
|
|
$
|
524
|
|
Income taxes, net of amount refunded
|
$
|
74
|
|
|
$
|
118
|
|
|
$
|
324
|
|
|
Ten months
ended October 31,
|
||
|
2016
|
||
Sales
|
$
|
6,752
|
|
Cost of goods sold (exclusive of expenses below)
|
5,655
|
|
|
Selling, general administrative, and other expenses
|
164
|
|
|
Research and development
|
28
|
|
|
Provision for depreciation, depletion and amortization
|
593
|
|
|
Restructuring and other charges
|
102
|
|
|
Interest expense
|
28
|
|
|
Other (income) expenses, net
|
(75
|
)
|
|
Income from discontinued operations before income taxes
|
257
|
|
|
Provision for income taxes
|
73
|
|
|
Income from discontinued operations after income taxes
|
184
|
|
|
Less: Net income from discontinued operations attributable to noncontrolling interests
|
63
|
|
|
Net income from discontinued operations
|
$
|
121
|
|
For the year ended December 31,
|
2016
|
||
Depreciation, depletion and amortization
|
$
|
593
|
|
Restructuring and other charges
|
$
|
102
|
|
Capital expenditures
|
$
|
298
|
|
|
First
|
Second
|
Third
|
Fourth
(2)
|
Year
|
||||||||||
2018
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,445
|
|
$
|
3,573
|
|
$
|
3,524
|
|
$
|
3,472
|
|
$
|
14,014
|
|
Net income
|
$
|
143
|
|
$
|
120
|
|
$
|
161
|
|
$
|
218
|
|
$
|
642
|
|
Earnings per share attributable to Arconic common shareholders
(1)
:
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
||||||||||
Net income per share—basic
|
$
|
0.30
|
|
$
|
0.25
|
|
$
|
0.33
|
|
$
|
0.45
|
|
$
|
1.33
|
|
Diluted
|
|
|
|
|
|
||||||||||
Net income per share—diluted
|
$
|
0.29
|
|
$
|
0.24
|
|
$
|
0.32
|
|
$
|
0.44
|
|
$
|
1.30
|
|
2017
|
|
|
|
|
|
||||||||||
Sales
|
$
|
3,192
|
|
$
|
3,261
|
|
$
|
3,236
|
|
$
|
3,271
|
|
$
|
12,960
|
|
Net income (loss)
|
$
|
322
|
|
$
|
212
|
|
$
|
119
|
|
$
|
(727
|
)
|
$
|
(74
|
)
|
Earnings (loss) per share attributable to Arconic common shareholders
(1)
:
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
||||||||||
Net income (loss) per share—basic
|
$
|
0.69
|
|
$
|
0.44
|
|
$
|
0.23
|
|
$
|
(1.51
|
)
|
$
|
(0.28
|
)
|
Diluted
|
|
|
|
|
|
||||||||||
Net income (loss) per share—basic
|
$
|
0.65
|
|
$
|
0.43
|
|
$
|
0.22
|
|
$
|
(1.51
|
)
|
$
|
(0.28
|
)
|
(1)
|
Per share amounts are calculated independently for each period presented; therefore, the sum of the quarterly per share amounts may not equal the per share amounts for the year.
|
(2)
|
In the fourth quarter of 2018, Arconic recorded a gain of
$119
(
$154
pre-tax) on the sale of the Texarkana rolling mill, offset by pension plan settlement charges of
$72
($
92
pre-tax) associated with significant lump sum payments made to participants and a loss of
$39
($
43
pre-tax) on the sale of the Eger, Hungary forgings business. Additionally, Arconic recorded discrete tax items primarily comprised of a benefit related to certain prior year foreign investment losses no longer recapturable. In the fourth quarter of 2017, Arconic recorded an impairment of goodwill related to the forgings and extrusions business of
$719
(
$719
pre-tax); a provisional charge of
$272
associated with the revaluation of U.S. net deferred tax assets due to a decrease in the U.S. corporate tax rate from
35%
to
21%
, as well as a one-time transition tax on the non-previously taxed earnings and profits of certain U.S.-owned foreign corporations as of December 31, 2017; a favorable adjustment to the Firth Rixson earn-out liability of
$81
(
$81
pre-tax); and a favorable adjustment to a separation-related guarantee liability of
$16
(
$25
pre-tax).
|
Exhibit
Number
|
|
Description*
|
|
Share Purchase Agreement, dated as of June 25, 2014, by and among Alcoa Inc., Alcoa IH Limited, FR Acquisition Corporation (US), Inc., FR Acquisitions Corporation (Europe) Limited, FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to exhibit 2.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated June 27, 2014.
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Separation and Distribution Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa Corporation, incorporated by reference to exhibit 2.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Tax Matters Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa Corporation, incorporated by reference to exhibit 2.3 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Employee Matters Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa Corporation, incorporated by reference to exhibit 2.4 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Amendment No. 1, dated December 13, 2016, to Employee Matters Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa Corporation, incorporated by reference to exhibit 2(e)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Alcoa Corporation to Arconic Inc. Patent, Know-How, and Trade Secret License Agreement, dated as of October 31, 2016, by and between Alcoa USA Corp. and Arconic Inc., incorporated by reference to exhibit 2.5 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Arconic Inc. to Alcoa Corporation Patent, Know-How, and Trade Secret License Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa USA Corp., incorporated by reference to exhibit 2.6 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Amended and Restated Alcoa Corporation to Arconic Inc. Trademark License Agreement, dated as of June 25, 2017, by and between Alcoa USA Corp. and Arconic Inc., incorporated by reference to exhibit 2 to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2017.
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Master Agreement for the Supply of Primary Aluminum, dated as of October 31, 2016, by and between Alcoa Corporation and its affiliates and Arconic Inc., incorporated by reference to exhibit 2.9 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Massena Lease and Operations Agreement, dated as of October 31, 2016, by and between Arconic Inc. and Alcoa Corporation, incorporated by reference to exhibit 2.10 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 4, 2016.
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Agreement and Plan of Merger, dated October 12, 2017, by and between Arconic Inc., a Pennsylvania corporation, and Arconic Inc., a Delaware corporation, incorporated by reference to exhibit 2.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Certificate of Incorporation of Arconic Inc., a Delaware corporation, incorporated by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Bylaws of Arconic Inc., a Delaware corporation, incorporated by reference to exhibit 3.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Form of Certificate for Shares of Common Stock of Arconic Inc., a Delaware corporation, incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Bylaws. See exhibit 3(b) above.
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4(c)
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Form of Indenture, dated as of September 30, 1993, between Alcoa Inc. and The Bank of New York Trust Company, N.A., as successor to J. P. Morgan Trust Company, National Association (formerly Chase Manhattan Trust Company, National Association), as successor Trustee to PNC Bank, National Association, as Trustee (undated form of Indenture incorporated by reference to exhibit 4(a) to Registration Statement No. 33-49997 on Form S-3).
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First Supplemental Indenture, dated as of January 25, 2007, between Alcoa Inc. and The Bank of New York Trust Company, N.A., as successor to J.P. Morgan Trust Company, National Association (formerly Chase Manhattan Trust Company, National Association), as successor Trustee to PNC Bank, National Association, as Trustee, incorporated by reference to exhibit 99.4 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 25, 2007.
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Second Supplemental Indenture, dated as of July 15, 2008, between Alcoa Inc. and The Bank of New York Mellon Trust Company, N.A., as successor in interest to J. P. Morgan Trust Company, National Association (formerly Chase Manhattan Trust Company, National Association, as successor to PNC Bank, National Association), as Trustee, incorporated by reference to exhibit 4(c) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated July 15, 2008.
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Fourth Supplemental Indenture, dated as of December 31, 2017, between Arconic Inc., a Pennsylvania corporation, Arconic Inc., a Delaware corporation, and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to exhibit 4.3 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Form of 6.75% Bonds Due 2028, incorporated by reference to exhibit 4(d) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Form of 5.90% Notes Due 2027, incorporated by reference to exhibit 4(e) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2008.
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Form of 5.95% Notes Due 2037, incorporated by reference to exhibit 4(f) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2008.
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Form of 5.87% Notes Due 2022, incorporated by reference to exhibit 4.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated February 21, 2007.
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Form of 6.150% Notes Due 2020, incorporated by reference to exhibit 4 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated August 3, 2010.
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Form of 5.40% Notes Due 2021, incorporated by reference to exhibit 4 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated April 21, 2011.
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Form of 5.125% Notes Due 2024, incorporated by reference to exhibit 4.5 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated September 22, 2014.
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Indenture, dated as of December 14, 2010, between RTI International Metals, Inc. and The Bank of New York Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4(m) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Third Supplemental Indenture, dated as of April 17, 2013, between RTI International Metals, Inc. and The Bank of New York Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4(n) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Fourth Supplemental Indenture, dated as of July 23, 2015, between RTI International Metals, Inc. and The Bank of New York Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4.1 on Form 8-K (Commission file number 1-3610) dated July 23, 2015.
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Fifth Supplemental Indenture, dated as of November 30, 2017, between RTI International Metals, Inc. and The Bank of New York Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated December 4, 2017.
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Sixth Supplemental Indenture, dated as of December 31, 2017, between Arconic Inc., a Pennsylvania corporation, Arconic Inc., a Delaware corporation, and The Bank of New York Mellon Trust Company, N.A., as Trustee, incorporated by reference to exhibit 4.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Form of 1.625% Convertible Senior Notes Due 2019. See exhibit 4(k)(1) above.
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Arconic Bargaining Retirement Savings Plan (formerly known as the Alcoa Retirement Savings Plan for Bargaining Employees), as Amended and Restated effective January 1, 2015, incorporated by reference to exhibit 4(p) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Arconic Hourly Non-Bargaining Retirement Savings Plan (formerly known as the Alcoa Retirement Savings Plan for Hourly Non-Bargaining Employees), as Amended and Restated effective January 1, 2015, incorporated by reference to exhibit 4(q) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Arconic Fastener Systems and Rings Retirement Savings Plan (formerly known as the Alcoa Retirement Savings Plan for Fastener Systems Employees), as Amended and Restated effective January 1, 2015, incorporated by reference to exhibit 4(r) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Arconic Salaried Retirement Savings Plan (formerly known as the Alcoa Retirement Savings Plan for Salaried Employees), as Amended and Restated effective January 1, 2015, incorporated by reference to exhibit 4(s) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2015.
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Arconic Retirement Savings Plan for ATEP Bargaining Employees, effective January 1, 2017, incorporated by reference to exhibit 4 to Post-Effective Amendment, dated December 30, 2016, to Registration Statement No. 333-32516 on Form S-8.
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Earnout Agreement, dated as of June 25, 2014, by and among Alcoa Inc., FR Acquisition Finance Subco (Luxembourg), S.à.r.l. and Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P., collectively in their capacity as the Seller Representative, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated June 27, 2014.
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Five-Year Revolving Credit Agreement, dated as of July 25, 2014, among Alcoa Inc., the Lenders and Issuers named therein, Citibank, N.A., as Administrative Agent for the Lenders and Issuers, and JPMorgan Chase Bank, N.A., as Syndication Agent, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated July 31, 2014.
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Extension Request and Amendment Letter, dated as of June 5, 2015, among Alcoa Inc., each lender and issuer party thereto, and Citibank, N.A., as Administrative Agent, effective July 7, 2015, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated July 13, 2015.
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Amendment No. 1, dated September 16, 2016, to the Five-Year Revolving Credit Agreement dated as of July 25, 2014, among Arconic Inc., the lenders and issuers named therein, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A. as syndication agent, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated September 19, 2016.
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Assumption Agreement, dated as of December 31, 2017, by Arconic Inc., a Delaware corporation, in favor of and for the benefit of the Lenders and Citibank, N.A., as administrative agent, incorporated by reference to exhibit 4.4 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 4, 2018.
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Amendment No. 2, dated as of June 29, 2018, to the Company’s Five-Year Revolving Credit Agreement dated as of July 25, 2014, by and among the Company, a syndicate of lenders and issuers named therein, Citibank, N.A., as administrative agent for the lenders and issuers, and JPMorgan Chase Bank, N.A., as syndication agent, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 2, 2018.
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Plea Agreement dated January 8, 2014, between the United States of America and Alcoa World Alumina LLC, incorporated by reference to exhibit 10(l) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2013.
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Agreement, dated February 1, 2016, by and between Elliott Associates, L.P., Elliott International, L.P., Elliott International Capital Advisors Inc. and Alcoa Inc., incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated February 1, 2016.
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Settlement Agreement, dated as of May 22, 2017, by and among Elliott Associates, L.P., Elliott International, L.P., Elliott International Capital Advisors Inc. and Arconic Inc., incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 22, 2017 (reporting an event on May 21, 2017).
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Letter Agreement, by and among Arconic Inc. and Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc., dated as of December 19, 2017, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated December 19, 2017.
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Registration Rights Agreement, by and among Arconic Inc. and Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc., dated as of December 19, 2017, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated December 19, 2017.
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Amendment to Registration Rights Agreement, by and among Arconic Inc. and Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc., dated as of February 2, 2018, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated February 6, 2018.
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Alcoa Internal Revenue Code Section 162(m) Compliant Annual Cash Incentive Compensation Plan, as Amended and Restated, incorporated by reference to Exhibit 10(b) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 11, 2016.
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2004 Summary Description of the Alcoa Incentive Compensation Plan, incorporated by reference to exhibit 10(g) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2004.
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Incentive Compensation Plan of Alcoa Inc., as revised and restated effective November 8, 2007, incorporated by reference to exhibit 10(k)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2007.
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Amendment to Incentive Compensation Plan of Alcoa Inc., effective December 18, 2009, incorporated by reference to exhibit 10(n)(2) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2009.
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Arconic Employees’ Excess Benefits Plan C (formerly referred to as the Alcoa Inc. Employees’ Excess Benefits Plan, Plan C), as amended and restated effective August 1, 2016, incorporated by reference to exhibit 10(j) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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First Amendment to Arconic Employees’ Excess Benefits Plan C (as amended and restated effective August 1, 2016), effective January 1, 2018, incorporated by reference to exhibit 10(l)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Second Amendment to Arconic Employees’ Excess Benefits Plan C (as amended and restated effective August 1, 2016), effective January 1, 2018, incorporated by reference to exhibit 10(l)(2) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Third Amendment to Arconic Employees’ Excess Benefits Plan C (as amended and restated effective August 1, 2016), incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 8, 2018.
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Deferred Fee Plan for Directors, as amended effective July 9, 1999, incorporated by reference to exhibit 10(g)(1) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 1999.
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Amended and Restated Deferred Fee Plan for Directors, effective November 1, 2016, incorporated by reference to exhibit 10(c) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2016.
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Non-Employee Director Compensation Policy, effective February 6, 2019.
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10(n)
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Fee Continuation Plan for Non-Employee Directors, incorporated by reference to exhibit 10(k) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 1989.
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Amendment to Fee Continuation Plan for Non-Employee Directors, effective November 10, 1995, incorporated by reference to exhibit 10(i)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 1995.
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Second Amendment to the Fee Continuation Plan for Non-Employee Directors, effective September 15, 2006, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated September 20, 2006.
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Arconic Deferred Compensation Plan, as amended and restated effective August 1, 2016, incorporated by reference to exhibit 10(p) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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First Amendment to the Arconic Deferred Compensation Plan (as amended and restated effective August 1, 2016), effective January 1, 2018, incorporated by reference to exhibit 10(r)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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10(p)
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Summary of the Executive Split Dollar Life Insurance Plan, dated November 1990, incorporated by reference to exhibit 10(m) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 1990.
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Amended and Restated Dividend Equivalent Compensation Plan, effective January 1, 1997, incorporated by reference to exhibit 10(h) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2004.
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10(r)
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Form of Indemnity Agreement between the Company and individual directors or officers, incorporated by reference to exhibit 10(j) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 1987.)
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Form of Indemnification Agreement between the Company and individual directors or officers, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated January 25, 2018.
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Amended and Restated 2009 Alcoa Stock Incentive Plan, dated February 15, 2011, incorporated by reference to exhibit 10(z)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2010.
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Arconic Supplemental Pension Plan for Senior Executives (formerly referred to as the Alcoa Supplemental Pension Plan for Senior Executives), as amended and restated effective August 1, 2016, incorporated by reference to exhibit 10(v) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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First Amendment to Arconic Supplemental Pension Plan for Senior Executives (as amended and restated effective August 1, 2016), effective January 1, 2018, incorporated by reference to exhibit 10(x)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Second Amendment to Arconic Supplemental Pension Plan for Senior Executives (as amended and restated effective August 1, 2016), effective January 1, 2018, incorporated by reference to exhibit 10(x)(2) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Deferred Fee Estate Enhancement Plan for Directors, effective July 10, 1998, incorporated by reference to exhibit 10(r) to the Company’s Annual Report on Form 10-K (Commission file number 1- 3610) for the year ended December 31, 1998.
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Arconic Inc. Change in Control Severance Plan, as amended and restated effective February 1, 2018, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated February 6, 2018.
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Letter Agreement, dated August 14, 2007, between Alcoa Inc. and Klaus Kleinfeld, incorporated by reference to exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2007.
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Executive Severance Agreement, as amended and restated effective December 8, 2008, between Alcoa Inc. and Klaus Kleinfeld, incorporated by reference to exhibit 10(gg) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2008.
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Letter Agreement between Arconic Inc. and Klaus Kleinfeld, dated February 27, 2017, incorporated by reference to exhibit 10(y)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Separation Agreement between Arconic Inc. and Klaus Kleinfeld, dated July 31, 2017, incorporated by reference to exhibit 10(c) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2017.
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Form of Executive Severance Agreement between the Company and new officers entered into after July 22, 2010, incorporated by reference to exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2010.
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Arconic Inc. Executive Severance Plan, as effective February 27, 2017, incorporated by reference to exhibit 10(aa) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Letter Agreement, by and between Alcoa Inc. and Katherine H. Ramundo, dated as of July 28, 2016, incorporated by reference to exhibit 10(ff) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Letter Agreement, from Arconic Inc. to Katherine H. Ramundo, dated as of May 31, 2018, incorporated by reference to exhibit 10(c) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2018.
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Letter Agreement between Arconic Inc. and David P. Hess, dated May 17, 2017, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 22, 2017 (reporting an event on May 17, 2017).
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Letter Agreement, by and between Arconic Inc. and Charles P. Blankenship, dated as of October 19, 2017, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated October 23, 2017
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Letter Agreement, by and between Arconic Inc. and Mark J. Krakowiak, dated as of January 20, 2018, incorporated by reference to exhibit 10(ii) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Letter Agreement, from Arconic Inc. to Ken Giacobbe, dated as of February 14, 2019.
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Arconic Global Pension Plan, as amended and restated effective August 1, 2016, incorporated by reference to exhibit 10(bb) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Global Expatriate Employee Policy (pre-January 1, 2003), incorporated by reference to exhibit 10(uu) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2005.
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Arconic Inc. Legal Fee Reimbursement Plan, effective as of April 30, 2018, incorporated by reference to exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended March 31, 2018.
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Summary Description of Equity Choice Program for Performance Equity Award Participants, dated November 2005, incorporated by reference to exhibit 10.6 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated November 16, 2005.
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2013 Arconic Stock Incentive Plan, as Amended and Restated, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 22, 2018.
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Terms and Conditions (Australian Addendum) to the 2013 Arconic Stock Incentive Plan, effective May 3, 2013, incorporated by reference to exhibit 10(d) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 8, 2013.
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RTI International Metals, Inc. 2004 Stock Plan, incorporated by reference to exhibit 4(b) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated July 23, 2015.
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RTI International Metals, Inc. 2014 Stock and Incentive Plan, incorporated by reference to exhibit 4(a) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated July 23, 2015.
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First Amendment to the RTI International Metals, Inc. 2014 Stock and Incentive Plan, as amended and assumed by Arconic Inc., dated February 1, 2018, incorporated by reference to exhibit 10(oo)(1) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Form of Award Agreement for Stock Options, effective May 8, 2009, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 13, 2009.
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Form of Award Agreement for Stock Options, effective January 1, 2010, incorporated by reference to exhibit 10(ddd) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2009.
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Terms and Conditions for Stock Options, effective January 1, 2011, incorporated by reference to exhibit 10(c) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2011.
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Terms and Conditions for Stock Option Awards, effective May 3, 2013, incorporated by reference to exhibit 10(b) to the Company’s Current Report on Form 8-K (Commission file number 1-3610) dated May 8, 2013.
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Terms and Conditions for Stock Option Awards under the 2013 Arconic Stock Incentive Plan, effective July 22, 2016, incorporated by reference to Exhibit 10(d) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2016.
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Global Stock Option Award Agreement, effective January 19, 2018, incorporated by reference to exhibit 10(uu) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Form of Stock Option Award Agreement, incorporated by reference to exhibit 10(f) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2018.
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Terms and Conditions for Restricted Share Units, effective May 3, 2013, incorporated by reference to exhibit 10(c) to the Company’s Current Report on Form 8-K (Commission file number 1- 3610) dated May 8, 2013.
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Terms and Conditions for Restricted Share Units under the 2013 Arconic Stock Incentive Plan, effective July 22, 2016, incorporated by reference to Exhibit 10(c) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2016.
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Terms and Conditions for Restricted Share Units for Annual Director Awards under the 2013 Arconic Stock Incentive Plan, effective November 30, 2016, incorporated by reference to exhibit 10(vv) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Terms and Conditions for Restricted Share Units for Annual Director Awards under the 2013 Arconic Stock Incentive Plan, as Amended and Restated, effective December 5, 2017, incorporated by reference to exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended March 31, 2018.
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Terms and Conditions for Deferred Fee Restricted Share Units for Director Awards under the 2013 Arconic Stock Incentive Plan, effective November 30, 2016, incorporated by reference to exhibit 10(ww) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Terms and Conditions for Restricted Share Units issued on or after January 13, 2017, under the 2013 Arconic Stock Incentive Plan, effective January 13, 2017, incorporated by reference to exhibit 10(xx) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2016.
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Terms and Conditions for Restricted Share Units - Interim CEO (David P. Hess) Award, effective October 23, 2017, incorporated by reference to exhibit 10(ccc) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Terms and Conditions for Restricted Share Units - Non-Executive Chairman (John C. Plant) Director Award, effective October 23, 2017, incorporated by reference to exhibit 10(ddd) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Terms and Conditions for Restricted Share Units - Non-Executive Chairman (John C. Plant) Director Award, effective October 23, 2018, incorporated by reference to exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended September 30, 2018.
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Global Restricted Share Unit Award Agreement, effective January 19, 2018, incorporated by reference to exhibit 10(eee) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Terms and Conditions for Restricted Share Units issued on or after January 19, 2018, under the 2013 Arconic Stock Incentive Plan, effective January 19, 2018, incorporated by reference to exhibit 10(fff) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Form of Restricted Share Unit Award Agreement, incorporated by reference to exhibit 10(g) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2018.
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Terms and Conditions for Special Retention Awards under the 2013 Arconic Stock Incentive Plan, effective January 1, 2015, incorporated by reference to exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2015.
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Terms and Conditions for Special Retention Awards under the 2013 Arconic Stock Incentive Plan, effective July 22, 2016, incorporated by reference to exhibit 10(e) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2016.
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Global Special Retention Award Agreement, effective January 19, 2018, incorporated by reference to exhibit 10(kkk) to the Company’s Annual Report on Form 10-K (Commission file number 1-3610) for the year ended December 31, 2017.
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Special Retention Award Agreement - Katherine H. Ramundo, effective May 16, 2018, incorporated by reference to exhibit 10(d) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2018.
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Special Retention Award Agreement - Paul Myron, effective May 16, 2018, incorporated by reference to exhibit 10(e) to the Company’s Quarterly Report on Form 10-Q (Commission file number 1-3610) for the quarter ended June 30, 2018.
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Special Retention Award Agreement - Ken Giacobbe, effective February 12, 2019.
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Subsidiaries of the Registrant.
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Consent of Independent Registered Public Accounting Firm.
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Power of Attorney for certain directors.
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Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101. INS
|
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XBRL Instance Document.
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101. SCH
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XBRL Taxonomy Extension Schema Document.
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101. CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101. DEF
|
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XBRL Taxonomy Extension Definition Linkbase Document.
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101. LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101. PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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|
ARCONIC INC.
|
|
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February 21, 2019
|
By
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/s/ Paul Myron
|
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Paul Myron
|
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Vice President and Controller (Also signing as Principal Accounting Officer)
|
Signature
|
Title
|
Date
|
/s/ John C. Plant
|
Chairman and Chief Executive Officer
|
February 21, 2019
|
John C. Plant
|
(Principal Executive Officer and Director)
|
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/s/ Ken Giacobbe
|
|
February 21, 2019
|
Ken Giacobbe
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
*By
|
|
/s/ Paul Myron
|
|
|
Paul Myron
|
|
|
Attorney-in-Fact
|
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•
Involuntary Termination without Cause
: An unvested Special Retention Award held by a Participant who is involuntarily terminated without Cause (as defined below) from employment with the Company or a Subsidiary during the vesting period is not forfeited in whole but only in part upon termination of employment. The portion of the Special Retention Award that is not forfeited vests on the original stated vesting date set forth in paragraph 2 and is calculated based on a proportionate share of the time during the vesting period that the Participant remained actively employed with the Company or a Subsidiary, with the remaining portion being automatically forfeited. The
|
|
•
Death or Disability
: An unvested Special Retention Award held by a Participant, who dies while an employee or who is permanently and totally disabled while an employee, is not forfeited but vests on the original stated vesting date set forth in paragraph 2.
|
|
•
Change in Control
: A Special Retention Award vests if a Replacement Award is not provided following certain Change in Control events, as described in the Plan. If the Change in Control qualifies as a “change in control event” within the meaning of Treas. Reg. § 1.409-3(i)(5), the vested Special Retention Award will be paid to the Participant within 30 days following the Change in Control. If the Change in Control does not so qualify, the vested Special Retention Award will be paid to the Participant on the original stated vesting date set forth in paragraph 2.
|
|
•
Termination Following Change in Control
: As further described in the Plan, if a Replacement Award is provided following a Change in Control, but within 24 months of such Change in Control the Participant’s employment is terminated without Cause (as defined in the Arconic Inc. Change in Control Severance Plan) or by the Participant for Good Reason (as defined in the Arconic Inc. Change in Control Severance Plan), the Replacement Award will vest and will be paid to the Participant on the original stated vested date set forth in paragraph 2.
|
1.
|
General
. This Non-Employee Director Compensation Policy (the "
Policy
"), sets forth the cash and equity-based compensation that has been approved by the Board of Directors (the "
Board
") of Arconic Inc., a Delaware corporation, (the "
Company
") as payable to eligible non-employee members of the Board ("
Non-Employee Directors
"), as of February 6, 2019 or such other date stated herein. The cash and equity-based compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board, to each Non-Employee Director who may be eligible to receive such compensation. This Policy shall remain in effect until it is revised or rescinded by further action of the Board. The terms and conditions of this Policy shall supersede any prior cash or equity compensation arrangements between the Company and its Non-Employee Directors.
|
2.
|
Cash Compensation
.
|
(a)
|
Annual Retainers
. Each Non-Employee Director shall be eligible to receive an annual cash retainer of $120,000 for service on the Board. In addition, a Non-Employee Director shall receive the following additional annual retainers, as applicable:
|
Non-Employee Director Position
|
Additional Annual Cash Retainer Fee
|
Lead Director
|
$40,000
|
Audit Committee Chair Fee (includes Audit Committee Member Fee)
|
$27,500
|
Audit Committee Member Fee
|
$11,000
|
Compensation and Benefits Committee Chair Fee
|
$20,000
|
Other Committee Chair Fee
|
$16,500
|
(b)
|
Payment of Retainers
. The annual retainers described in Section 2(a) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the third business day following the end of each calendar quarter (if not deferred by the Non-Employee Director in accordance with subsection (d) hereof). In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Section 2(a), for an entire calendar quarter, the retainer paid to such Non-Employee Director shall be prorated for the portion of such calendar quarter actually served as a Non-Employee Director, or in such positions, as applicable.
|
(c)
|
Exceptional Meeting Fees
. A fee of $1,500 shall be paid to a Non-Employee Director for each Board or committee meeting attended by such Non-Employee Director in excess of the number of regular Board or committee meetings scheduled by the Board for the applicable calendar year. Such exceptional meeting fees shall be paid by the Company in arrears not later than the third business day following the end of the
|
(d)
|
Deferral of Retainers
. Non-Employee Directors may elect to defer payment of all or a portion of the annual retainers described in Section 2(a) and the exceptional meeting fees described in Section 2(c) into specified investment funds and/or into vested restricted share units for shares of the Company's common stock, which deferral will be made pursuant to the terms of the Company's Amended and Restated Deferred Fee Plan for Directors or its successor plan (the "
Deferred Fee Plan
"). Unless otherwise determined by the Board, any restricted share units will be granted under the 2013 Arconic Stock Incentive Plan or its successor plan (the "
Equity Plan
"), on the date on which such retainer(s) would otherwise have been paid in cash. The extent to which a Non-Employee Director may defer annual retainer payments into vested restricted share units will therefore be subject to any limit on awards granted to a Non-Employee Director set forth in the Equity Plan.
|
3.
|
Equity Compensation
. Non-Employee Directors shall be granted the equity awards described below. The awards described below in paragraphs 3(a) and 3(b) shall be granted under and shall be subject to the terms and provisions of the Equity Plan and shall be granted subject to an award agreement in substantially the same form approved by the Board prior to or as of the grant date, setting forth the terms of the award (the "
Award Terms
"), consistent with the Equity Plan. For purposes of this Section 3, the number of shares subject to any restricted share unit award will be determined by dividing the grant date dollar value specified under subsection (a) or (b) hereof by the Fair Market Value (as defined in the Equity Plan) of a share of the Company's common stock on the date of grant.
|
(a)
|
Annual Equity Award
. A person who is a Non-Employee Director immediately following each annual meeting of the Company's stockholders and who will continue to serve as a Non-Employee Director following such annual meeting shall be automatically granted on the second market trading day following the date of each such annual meeting a restricted share unit award with a grant date value equal to $150,000 (the "
Annual Equity Award
"). The Annual Equity Award shall vest on the earlier of the first anniversary date of the grant date or the date of the Company's next subsequent annual meeting of stockholders following the grant date.
|
(b)
|
Pro-Rated Annual Equity Award
. On the fifth market trading day following a person's initial appointment as a Non-Employee Director, and provided such person has not otherwise received an Annual Equity Award for the relevant year under Section 3(a), the Non-Employee Director shall be automatically granted a restricted share unit award with a grant date value equal to $150,000, in each case multiplied by a fraction, the numerator of which is 365 less the number of days that have elapsed since the date of the Company's last annual meeting of stockholders and the Non-Employee Director's date of initial appointment, and the denominator of which is 365 (the "
Pro-Rated Award
"). The Pro-Rated Award shall vest on the date of the Company's next subsequent annual meeting of stockholders following the date of the Non-Employee Director's appointment to the Board.
|
(c)
|
Special Vesting of Equity Awards
. Notwithstanding Sections 3(a) or (b) above and as shall be further set forth in the Award Terms: (i) unvested equity awards shall vest in full upon the death of a Non-Employee
|
(d)
|
Deferral of Equity Award
. Payment of the Annual Equity Award or any Pro-Rated Award will be deferred until the Non-Employee Director's separation from service, in accordance with the terms of the Deferred Fee Plan, unless otherwise required by applicable laws.
|
4.
|
Stock
Ownership Guideline
. Within a period of six years from the date of a person's initial appointment as a Non-Employee Director, each Non-Employee Director is required to attain ownership of at least $750,000 in the Company's common stock and must maintain such ownership until retirement from the Board.
|
5.
|
Director
Compensation Limit
. As further set forth in the Equity Plan, the sum of the grant date value of all equity awards granted and all cash compensation paid by the Company to a Non-Employee Director as compensation for services as a Non-Employee Director shall not exceed $750,000 during any calendar year. For avoidance of doubt, compensation shall count towards this limit for the fiscal year in which it is granted or earned, and not later when distributed, in the event it is deferred.
|
6.
|
Policy
Subject to Amendment, Modification and Termination
. This Policy may be amended, modified or terminated by the Board in the future at its sole discretion, provided that no such action that would materially and adversely impact the rights with respect to annual retainers payable in the fiscal quarter during which a Non-Employee Director is then performing services shall be effective without the consent of the affected Non-Employee Director.
|
Name
|
State or
Country of
Organization
|
||
Arconic Domestic LLC
|
Delaware
|
||
Arconic Securities LLC
|
Delaware
|
||
Howmet International Inc.
|
Delaware
|
||
Howmet Holdings Corporation
|
Delaware
|
||
Howmet Corporation
|
Delaware
|
||
Arconic International Holding Company LLC
|
Delaware
|
||
Arconic Luxembourg S.à r.l.
|
Luxembourg
|
||
Arconic Inversiones España S.L.
|
Spain
|
||
Arconic Inversiones Internacionales S.L.
|
Spain
|
||
Arconic-Köfém Kft
|
Hungary
|
||
Arconic Global Treasury Services S.a.r.l.
|
Luxembourg
|
||
Alumax LLC
|
Delaware
|
||
Alumax Mill Products, Inc.
|
Delaware
|
||
Cordant Technologies Holding Company
|
Delaware
|
||
Arconic Global Fasteners & Rings, Inc.
|
Delaware
|
||
Huck International Inc.
|
Delaware
|
||
FR Acquisition Corporation (US), Inc.
|
Delaware
|
||
JFB Firth Rixson Inc.
|
Delaware
|
/s/ James F. Albaugh
|
|
/s/ Amy E. Alving
|
James F. Albaugh
|
|
Amy E. Alving
|
|
|
|
/s/ Christopher L. Ayers
|
|
/s/ Arthur D. Collins, Jr.
|
Christopher L. Ayers
|
|
Arthur D. Collins, Jr.
|
|
|
|
/s/ Elmer L. Doty
|
|
/s/ Rajiv L. Gupta
|
Elmer L. Doty
|
|
Rajiv L. Gupta
|
|
|
|
/s/ David P. Hess
|
|
/s/ Sean O. Mahoney
|
David P. Hess
|
|
Sean O. Mahoney
|
|
|
|
/s/ David J. Miller
|
|
/s/ E. Stanley O’Neal
|
David J. Miller
|
|
E. Stanley O’Neal
|
|
|
|
/s/ Ulrich R. Schmidt
|
|
|
Ulrich R. Schmidt
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Arconic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John C. Plant
|
Name: John C. Plant
|
Title: Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Arconic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Ken Giacobbe
|
Name: Ken Giacobbe
|
Title: Executive Vice President and Chief Financial Officer
|
Dated:
|
February 21, 2019
|
/s/ John C. Plant
|
|
|
|
Name:
|
John C. Plant
|
|
|
Title:
|
Chairman and Chief Executive Officer
|
|
|
|
|
Dated:
|
February 21, 2019
|
/s/ Ken Giacobbe
|
|
|
|
Name:
|
Ken Giacobbe
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|