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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arconic Inc. | AMEX:ARNC.PR | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0 | - |
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
25-0317820
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
390 Park Avenue, New York, New York
|
|
10022-4608
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
|
✓
|
Accelerated filer
|
__
|
Non-accelerated filer
|
__
|
Smaller reporting company
|
__
|
|
|
Emerging growth company
|
__
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $1.00 per share
|
ARNC
|
New York Stock Exchange
|
$3.75 Cumulative Preferred Stock, par value $100 per share
|
ARNC PR
|
NYSE American
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Sales (
C
)
|
$
|
3,541
|
|
|
$
|
3,445
|
|
Cost of goods sold (exclusive of expenses below)
|
2,818
|
|
|
2,768
|
|
||
Selling, general administrative, and other expenses
|
178
|
|
|
172
|
|
||
Research and development expenses
|
22
|
|
|
23
|
|
||
Provision for depreciation and amortization
|
137
|
|
|
142
|
|
||
Restructuring and other charges (
D
)
|
12
|
|
|
7
|
|
||
Operating income
|
374
|
|
|
333
|
|
||
Interest expense
|
85
|
|
|
114
|
|
||
Other expense, net (
E
)
|
32
|
|
|
20
|
|
||
Income before income taxes
|
257
|
|
|
199
|
|
||
Provision for income taxes (
G
)
|
70
|
|
|
56
|
|
||
Net income
|
$
|
187
|
|
|
$
|
143
|
|
|
|
|
|
||||
Amounts Attributable to Arconic Common Shareholders (
I
):
|
|
|
|
||||
Net income
|
$
|
186
|
|
|
$
|
142
|
|
Earnings per share - basic
|
$
|
0.40
|
|
|
$
|
0.30
|
|
Earnings per share - diluted
|
$
|
0.39
|
|
|
$
|
0.29
|
|
Average Shares Outstanding (
I
):
|
|
|
|
||||
Average shares outstanding - basic
|
471
|
|
|
482
|
|
||
Average shares outstanding - diluted
|
489
|
|
|
503
|
|
|
Arconic
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||||
First quarter ended March 31,
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Net income
|
$
|
187
|
|
|
$
|
143
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
143
|
|
Other comprehensive income, net of tax
(
J
):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits
|
40
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
143
|
|
||||||
Foreign currency translation adjustments
|
26
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
122
|
|
||||||
Net change in unrealized gains on available-for-sale securities
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||||
Net change in unrecognized losses/gains on cash flow hedges
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(7
|
)
|
||||||
Total Other comprehensive income, net of tax
|
76
|
|
|
258
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
258
|
|
||||||
Comprehensive income
|
$
|
263
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
263
|
|
|
$
|
401
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,319
|
|
|
$
|
2,277
|
|
Receivables from customers, less allowances of $4 in 2019 and 2018 (
K
)
|
1,170
|
|
|
1,047
|
|
||
Other receivables (
K
)
|
646
|
|
|
451
|
|
||
Inventories (
L
)
|
2,612
|
|
|
2,492
|
|
||
Prepaid expenses and other current assets
|
306
|
|
|
314
|
|
||
Total current assets
|
6,053
|
|
|
6,581
|
|
||
Properties, plants, and equipment, net (
M
)
|
5,727
|
|
|
5,704
|
|
||
Goodwill (
C
)
|
4,509
|
|
|
4,500
|
|
||
Deferred income taxes
|
480
|
|
|
573
|
|
||
Intangibles, net
|
912
|
|
|
919
|
|
||
Other noncurrent assets (
N
)
|
680
|
|
|
416
|
|
||
Total assets
|
$
|
18,361
|
|
|
$
|
18,693
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable, trade
|
$
|
2,193
|
|
|
$
|
2,129
|
|
Accrued compensation and retirement costs
|
339
|
|
|
370
|
|
||
Taxes, including income taxes
|
114
|
|
|
118
|
|
||
Accrued interest payable
|
97
|
|
|
113
|
|
||
Other current liabilities (
N
)
|
481
|
|
|
356
|
|
||
Short-term debt
|
435
|
|
|
434
|
|
||
Total current liabilities
|
3,659
|
|
|
3,520
|
|
||
5,899
|
|
|
5,896
|
|
|||
Accrued pension benefits (
F
)
|
2,172
|
|
|
2,230
|
|
||
Accrued other postretirement benefits (
F
)
|
636
|
|
|
723
|
|
||
817
|
|
|
739
|
|
|||
Total liabilities
|
13,183
|
|
|
13,108
|
|
||
Contingencies and commitments (
R
)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Arconic shareholders’ equity:
|
|
|
|
||||
Preferred stock
|
55
|
|
|
55
|
|
||
Common stock
|
453
|
|
|
483
|
|
||
Additional capital
|
7,644
|
|
|
8,319
|
|
||
Accumulated deficit
|
(134
|
)
|
|
(358
|
)
|
||
Accumulated other comprehensive loss (
J
)
|
(2,852
|
)
|
|
(2,926
|
)
|
||
Total Arconic shareholders’ equity
|
5,166
|
|
|
5,573
|
|
||
Noncontrolling interests
|
12
|
|
|
12
|
|
||
Total equity
|
5,178
|
|
|
5,585
|
|
||
Total liabilities and equity
|
$
|
18,361
|
|
|
$
|
18,693
|
|
|
Three months ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
187
|
|
|
$
|
143
|
|
Adjustments to reconcile net income to cash used for operations:
|
|
|
|
||||
Depreciation and amortization
|
137
|
|
|
142
|
|
||
Deferred income taxes
|
8
|
|
|
18
|
|
||
Restructuring and other charges
|
12
|
|
|
7
|
|
||
Net loss from investing activities - asset sales
|
2
|
|
|
3
|
|
||
Net periodic pension benefit cost (
F
)
|
29
|
|
|
41
|
|
||
Stock-based compensation
|
10
|
|
|
15
|
|
||
Other
|
11
|
|
|
49
|
|
||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
|
|
|
|
||||
(Increase) in receivables
|
(489
|
)
|
|
(403
|
)
|
||
(Increase) in inventories
|
(118
|
)
|
|
(141
|
)
|
||
(Increase) in prepaid expenses and other current assets
|
(14
|
)
|
|
(12
|
)
|
||
Increase in accounts payable, trade
|
65
|
|
|
14
|
|
||
(Decrease) in accrued expenses
|
(69
|
)
|
|
(118
|
)
|
||
Increase in taxes, including income taxes
|
47
|
|
|
8
|
|
||
Pension contributions
|
(55
|
)
|
|
(177
|
)
|
||
(Increase) decrease in noncurrent assets
|
(1
|
)
|
|
1
|
|
||
(Decrease) in noncurrent liabilities
|
(20
|
)
|
|
(26
|
)
|
||
Cash used for operations
|
(258
|
)
|
|
(436
|
)
|
||
Financing Activities
|
|
|
|
||||
Net change in short-term borrowings (original maturities of three months or less)
|
1
|
|
|
5
|
|
||
Additions to debt (original maturities greater than three months)
|
150
|
|
|
150
|
|
||
Payments on debt (original maturities greater than three months)
|
(151
|
)
|
|
(651
|
)
|
||
Premiums paid on early redemption of debt
|
—
|
|
|
(17
|
)
|
||
Proceeds from exercise of employee stock options
|
1
|
|
|
12
|
|
||
Dividends paid to shareholders
|
(29
|
)
|
|
(30
|
)
|
||
Repurchase of common stock (
H
)
|
(700
|
)
|
|
—
|
|
||
Other
|
(13
|
)
|
|
(11
|
)
|
||
Cash used for financing activities
|
(741
|
)
|
|
(542
|
)
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(168
|
)
|
|
(117
|
)
|
||
Proceeds from the sale of assets and businesses
|
4
|
|
|
—
|
|
||
Sales of investments
|
47
|
|
|
9
|
|
||
Cash receipts from sold receivables (
K
)
|
160
|
|
|
136
|
|
||
Other
|
(1
|
)
|
|
1
|
|
||
Cash provided from investing activities
|
42
|
|
|
29
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1
|
|
|
4
|
|
||
Net change in cash, cash equivalents and restricted cash
|
(956
|
)
|
|
(945
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of year
|
2,282
|
|
|
2,153
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,326
|
|
|
$
|
1,208
|
|
|
Arconic Shareholders
|
|
|
|
|
||||||||||||||||||||||
|
Preferred
stock |
|
Common
stock |
|
Additional
capital |
|
Accumulated deficit
|
|
Accumulated
other comprehensive loss |
|
Noncontrolling
interests |
|
Total
Equity |
||||||||||||||
Balance at December 31, 2017
|
$
|
55
|
|
|
$
|
481
|
|
|
$
|
8,266
|
|
|
$
|
(1,248
|
)
|
|
$
|
(2,644
|
)
|
|
$
|
14
|
|
|
$
|
4,924
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|||||||
Other comprehensive income (
J
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|
—
|
|
|
258
|
|
|||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Preferred-Class A @ $0.9375 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Common @ $0.12 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||||
Common stock issued: compensation plans
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Balance at March 31, 2018
|
$
|
55
|
|
|
$
|
483
|
|
|
$
|
8,280
|
|
|
$
|
(1,164
|
)
|
|
$
|
(2,386
|
)
|
|
$
|
14
|
|
|
$
|
5,282
|
|
|
Arconic Shareholders
|
|
|
|
|
||||||||||||||||||||||
|
Preferred
stock |
|
Common
stock |
|
Additional
capital |
|
Accumulated deficit
|
|
Accumulated
other comprehensive loss |
|
Noncontrolling
interests |
|
Total
Equity |
||||||||||||||
Balance at December 31, 2018
|
$
|
55
|
|
|
$
|
483
|
|
|
$
|
8,319
|
|
|
$
|
(358
|
)
|
|
$
|
(2,926
|
)
|
|
$
|
12
|
|
|
$
|
5,585
|
|
Adoption of accounting standards
(
B
)
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
(2
|
)
|
|
—
|
|
|
73
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|||||||
Other comprehensive income (
J
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
|||||||
Cash dividends declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Preferred-Class A @ $0.9375 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Common @ $0.08 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|||||||
Repurchase and retirement of common stock (
H
)
|
—
|
|
|
(32
|
)
|
|
(668
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(700
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||||
Common stock issued: compensation plans
|
—
|
|
|
2
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Balance at March 31, 2019
|
$
|
55
|
|
|
$
|
453
|
|
|
$
|
7,644
|
|
|
$
|
(134
|
)
|
|
$
|
(2,852
|
)
|
|
$
|
12
|
|
|
$
|
5,178
|
|
|
|
|
Engineered
Products and
Solutions
|
|
Global Rolled
Products
|
|
Transportation
and Construction
Solutions
|
|
Total
Segment
|
||||||||
First quarter ended March 31, 2019
|
|
|
|
|
|
|
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Third-party sales
|
$
|
1,502
|
|
|
$
|
1,503
|
|
|
$
|
535
|
|
|
$
|
3,540
|
|
Intersegment sales
|
—
|
|
|
55
|
|
|
—
|
|
|
55
|
|
||||
Total sales
|
$
|
1,502
|
|
|
$
|
1,558
|
|
|
$
|
535
|
|
|
$
|
3,595
|
|
Profit and loss:
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
$
|
253
|
|
|
$
|
107
|
|
|
$
|
87
|
|
|
$
|
447
|
|
Restructuring and other charges
|
14
|
|
|
6
|
|
|
9
|
|
|
29
|
|
||||
Provision for depreciation and amortization
|
64
|
|
|
54
|
|
|
13
|
|
|
131
|
|
||||
|
|
|
|
|
|
|
|
||||||||
First quarter ended March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Sales:
|
|
|
|
|
|
|
|
||||||||
Third-party sales
|
$
|
1,426
|
|
|
$
|
1,481
|
|
|
$
|
537
|
|
|
$
|
3,444
|
|
Intersegment sales
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Total sales
|
$
|
1,426
|
|
|
$
|
1,538
|
|
|
$
|
537
|
|
|
$
|
3,501
|
|
Profit and loss:
|
|
|
|
|
|
|
|
||||||||
Segment operating profit
|
$
|
209
|
|
|
$
|
124
|
|
|
$
|
67
|
|
|
$
|
400
|
|
Restructuring and other charges
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Provision for depreciation and amortization
|
65
|
|
|
56
|
|
|
13
|
|
|
134
|
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Total segment operating profit
|
$
|
447
|
|
|
$
|
400
|
|
Unallocated amounts:
|
|
|
|
||||
Restructuring and other charges
|
(12
|
)
|
|
(7
|
)
|
||
Corporate expense
|
(61
|
)
|
|
(60
|
)
|
||
Consolidated operating income
|
$
|
374
|
|
|
$
|
333
|
|
Interest expense
|
(85
|
)
|
|
(114
|
)
|
||
Other expense, net
|
(32
|
)
|
|
(20
|
)
|
||
Consolidated income before income taxes
|
$
|
257
|
|
|
$
|
199
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Engineered Products and Solutions
|
$
|
10,153
|
|
|
$
|
9,797
|
|
Global Rolled Products
|
4,768
|
|
|
4,486
|
|
||
Transportation and Construction Solutions
|
1,206
|
|
|
1,089
|
|
||
Total segment assets
|
$
|
16,127
|
|
|
$
|
15,372
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Total segment assets
|
$
|
16,127
|
|
|
$
|
15,372
|
|
Unallocated amounts:
|
|
|
|
||||
Cash and cash equivalents
|
1,319
|
|
|
2,277
|
|
||
Deferred income taxes
|
480
|
|
|
573
|
|
||
Corporate fixed assets, net
|
308
|
|
|
305
|
|
||
Fair value of derivative contracts
|
8
|
|
|
37
|
|
||
Other
|
119
|
|
|
129
|
|
||
Consolidated assets
|
$
|
18,361
|
|
|
$
|
18,693
|
|
|
Engineered
Products and
Solutions
|
|
Global Rolled
Products
|
|
Transportation
and Construction
Solutions
|
|
Total
Segment
|
||||||||
First quarter ended March 31, 2019
|
|
|
|
|
|
|
|
||||||||
Aerospace
|
$
|
1,250
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
1,552
|
|
Transportation
|
87
|
|
|
649
|
|
|
255
|
|
|
991
|
|
||||
Building and construction
|
—
|
|
|
49
|
|
|
281
|
|
|
330
|
|
||||
Industrial and Other
|
165
|
|
|
503
|
|
|
(1
|
)
|
|
667
|
|
||||
Total end-market revenue
|
$
|
1,502
|
|
|
$
|
1,503
|
|
|
$
|
535
|
|
|
$
|
3,540
|
|
|
|
|
|
|
|
|
|
||||||||
First quarter ended March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Aerospace
|
$
|
1,141
|
|
|
$
|
248
|
|
|
$
|
—
|
|
|
$
|
1,389
|
|
Transportation
|
73
|
|
|
622
|
|
|
243
|
|
|
938
|
|
||||
Building and construction
|
—
|
|
|
48
|
|
|
285
|
|
|
333
|
|
||||
Industrial and Other
|
212
|
|
|
563
|
|
|
9
|
|
|
784
|
|
||||
Total end-market revenue
|
$
|
1,426
|
|
|
$
|
1,481
|
|
|
$
|
537
|
|
|
$
|
3,444
|
|
|
Layoff
costs
|
|
Other exit
costs
|
|
Total
|
||||||
Reserve balances at December 31, 2017
|
$
|
56
|
|
|
$
|
2
|
|
|
$
|
58
|
|
Cash payments
|
(47
|
)
|
|
(2
|
)
|
|
(49
|
)
|
|||
Restructuring charges
|
111
|
|
|
13
|
|
|
124
|
|
|||
Other
(1)
|
(110
|
)
|
|
2
|
|
|
(108
|
)
|
|||
Reserve balances at December 31, 2018
|
10
|
|
|
15
|
|
|
25
|
|
|||
Cash payments
|
(14
|
)
|
|
(3
|
)
|
|
(17
|
)
|
|||
Restructuring charges
|
11
|
|
|
—
|
|
|
11
|
|
|||
Other
(1)
|
57
|
|
|
(9
|
)
|
|
48
|
|
|||
Reserve balances at March 31, 2019
|
$
|
64
|
|
|
$
|
3
|
|
|
$
|
67
|
|
(1)
|
Other includes adjustments of previously recorded restructuring charges and credits, and the effects of foreign currency translation. In 2019, Other for layoff costs included reclassifications of a
$58
credit for elimination of life insurance benefits for U.S. salaried and non-bargaining hourly retirees and a
$2
pension settlement charge, as the impacts were reflected in Arconic's separate liabilities for Accrued pension benefits and Accrued postretirement benefits. Other for other exit costs included a reclassification of
$9
in lease exit costs to right-of-use assets within Other noncurrent assets in accordance with the new lease accounting standard. 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
.
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Non-service related net periodic benefit cost
|
$
|
29
|
|
|
$
|
28
|
|
Interest income
|
(10
|
)
|
|
(6
|
)
|
||
Foreign currency gains, net
|
—
|
|
|
(3
|
)
|
||
Net loss from asset sales
|
2
|
|
|
3
|
|
||
Other, net
|
11
|
|
|
(2
|
)
|
||
|
$
|
32
|
|
|
$
|
20
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Pension benefits
|
|
|
|
||||
Service cost
|
$
|
7
|
|
|
$
|
20
|
|
Interest cost
|
59
|
|
|
55
|
|
||
Expected return on plan assets
|
(72
|
)
|
|
(77
|
)
|
||
Recognized net actuarial loss
|
35
|
|
|
42
|
|
||
Amortization of prior service cost (benefit)
|
—
|
|
|
1
|
|
||
Settlements
|
2
|
|
|
—
|
|
||
Curtailments
|
—
|
|
|
5
|
|
||
Net periodic benefit cost
(1)
|
$
|
31
|
|
|
$
|
46
|
|
|
|
|
|
||||
Other postretirement benefits
|
|
|
|
||||
Service cost
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
7
|
|
|
7
|
|
||
Recognized net actuarial loss
|
1
|
|
|
2
|
|
||
Amortization of prior service cost (benefit)
|
(1
|
)
|
|
(2
|
)
|
||
Curtailments
|
(58
|
)
|
|
—
|
|
||
Net periodic benefit cost
(1)
|
$
|
(49
|
)
|
|
$
|
9
|
|
(1)
|
Service cost was included within Cost of goods sold,
Selling, general administrative, and other expenses
, and
Research and development expenses
; curtailments were included in Restructuring and other charges; and all other cost components were recorded in
Other expense, net
in the Statement of Consolidated Operations.
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Pre-tax income at estimated annual effective income tax rate before discrete items
|
$
|
67
|
|
|
$
|
53
|
|
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized
|
2
|
|
|
1
|
|
||
Other discrete items
|
1
|
|
|
2
|
|
||
Provision for income taxes
|
$
|
70
|
|
|
$
|
56
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
187
|
|
|
$
|
143
|
|
Less: preferred stock dividends declared
|
(1
|
)
|
|
(1
|
)
|
||
Net income available to Arconic common shareholders - basic
|
186
|
|
|
142
|
|
||
Add: Interest expense related to convertible notes
|
4
|
|
|
3
|
|
||
Net income available to Arconic common shareholders - diluted
|
$
|
190
|
|
|
$
|
145
|
|
|
|
|
|
||||
Average shares outstanding - basic
|
471
|
|
|
482
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Stock options
|
—
|
|
|
5
|
|
||
Stock and performance awards
|
4
|
|
|
2
|
|
||
Convertible notes
|
14
|
|
|
14
|
|
||
Average shares outstanding - diluted
|
489
|
|
|
503
|
|
(1)
|
The average exercise price per share of options was
$26.67
and
$30.75
for the
first
quarter of
2019
and
2018
, respectively.
|
First quarter ended March 31,
|
2019
|
|
2018
|
||||
Pension and other postretirement benefits (
F
)
|
|
|
|
||||
Balance at beginning of period
|
$
|
(2,344
|
)
|
|
$
|
(2,230
|
)
|
Other comprehensive income:
|
|
|
|
||||
Unrecognized net actuarial loss and prior service cost/benefit
|
72
|
|
|
137
|
|
||
Tax expense
|
(16
|
)
|
|
(31
|
)
|
||
Total Other comprehensive income before reclassifications, net of tax
|
56
|
|
|
106
|
|
||
Amortization of net actuarial loss and prior service cost
(1)
|
(21
|
)
|
|
48
|
|
||
Tax benefit (expense)
(2)
|
5
|
|
|
(11
|
)
|
||
Total amount reclassified from Accumulated other comprehensive loss, net of tax
(5)
|
(16
|
)
|
|
37
|
|
||
Total Other comprehensive income
|
40
|
|
|
143
|
|
||
Balance at end of period
|
$
|
(2,304
|
)
|
|
$
|
(2,087
|
)
|
Foreign currency translation
|
|
|
|
||||
Balance at beginning of period
|
$
|
(583
|
)
|
|
$
|
(437
|
)
|
Other comprehensive income
(3)
|
26
|
|
|
122
|
|
||
Balance at end of period
|
$
|
(557
|
)
|
|
$
|
(315
|
)
|
Available-for-sale securities
|
|
|
|
||||
Balance at beginning of period
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
Other comprehensive income
(4)
|
3
|
|
|
—
|
|
||
Balance at end of period
|
$
|
—
|
|
|
$
|
(2
|
)
|
Cash flow hedges
|
|
|
|
||||
Balance at beginning of period
|
$
|
4
|
|
|
$
|
25
|
|
Adoption of accounting standards
(B)
|
(2
|
)
|
|
—
|
|
||
Other comprehensive income (loss):
|
|
|
|
||||
Net change from periodic revaluations
|
8
|
|
|
(6
|
)
|
||
Tax (expense) benefit
|
(1
|
)
|
|
1
|
|
||
Total Other comprehensive income (loss) before reclassifications, net of tax
|
7
|
|
|
(5
|
)
|
||
Net amount reclassified to earnings
|
—
|
|
|
(3
|
)
|
||
Tax benefit
(2)
|
—
|
|
|
1
|
|
||
Total amount reclassified from Accumulated other comprehensive income, net of tax
(5)
|
—
|
|
|
(2
|
)
|
||
Total Other comprehensive income (loss)
|
7
|
|
|
(7
|
)
|
||
Balance at end of period
|
$
|
9
|
|
|
$
|
18
|
|
|
|
|
|
||||
Total balance at end of period
|
$
|
(2,852
|
)
|
|
$
|
(2,386
|
)
|
(1)
|
These amounts were included in the computation of net periodic benefit cost for pension and other postretirement benefits (see Note
F
).
|
(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, net
on the accompanying Statement of Consolidated Operations.
|
(5)
|
A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
699
|
|
|
$
|
668
|
|
Work-in-process
|
1,448
|
|
|
1,371
|
|
||
Purchased raw materials
|
371
|
|
|
366
|
|
||
Operating supplies
|
94
|
|
|
87
|
|
||
Total inventories
|
$
|
2,612
|
|
|
$
|
2,492
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Land and land rights
|
$
|
137
|
|
|
$
|
136
|
|
Structures
|
2,357
|
|
|
2,364
|
|
||
Machinery and equipment:
|
9,267
|
|
|
9,234
|
|
||
|
11,761
|
|
|
11,734
|
|
||
Less: accumulated depreciation and amortization
|
6,811
|
|
|
6,769
|
|
||
|
4,950
|
|
|
4,965
|
|
||
Construction work-in-progress
|
777
|
|
|
739
|
|
||
|
$
|
5,727
|
|
|
$
|
5,704
|
|
|
March 31, 2019
|
||
Right-of-use assets classified in Other noncurrent assets
|
$
|
302
|
|
|
|
||
Current portion of lease liabilities
classified in Other current liabilities
|
94
|
|
|
Long-term portion of lease liabilities classified in Other noncurrent liabilities and deferred credits
|
215
|
|
|
Total lease liabilities
|
$
|
309
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
2019
|
$
|
75
|
|
|
$
|
94
|
|
2020
|
79
|
|
|
74
|
|
||
2021
|
59
|
|
|
54
|
|
||
2022
|
43
|
|
|
40
|
|
||
2023
|
31
|
|
|
30
|
|
||
Thereafter
|
91
|
|
|
87
|
|
||
Total lease payments
|
$
|
378
|
|
|
$
|
379
|
|
Less: Imputed interest
|
(69
|
)
|
|
|
|||
Present value of lease liabilities
|
$
|
309
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
1.63% Convertible Notes, due 2019
|
403
|
|
|
403
|
|
||
6.150% Notes, due 2020
|
1,000
|
|
|
1,000
|
|
||
5.40% Notes due 2021
|
1,250
|
|
|
1,250
|
|
||
5.87% Notes, due 2022
|
627
|
|
|
627
|
|
||
5.125% Notes, due 2024
|
1,250
|
|
|
1,250
|
|
||
5.90% Notes, due 2027
|
625
|
|
|
625
|
|
||
6.75% Bonds, due 2028
|
300
|
|
|
300
|
|
||
5.95% Notes, due 2037
|
625
|
|
|
625
|
|
||
Iowa Finance Authority Loan, due 2042
|
250
|
|
|
250
|
|
||
Other
(1)
|
(26
|
)
|
|
(29
|
)
|
||
|
6,304
|
|
|
6,301
|
|
||
Less: amount due within one year
|
405
|
|
|
405
|
|
||
Total long-term debt
|
$
|
5,899
|
|
|
$
|
5,896
|
|
(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.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
value
|
|
Fair
value
|
|
Carrying
value
|
|
Fair
value
|
||||||||
Long-term debt, less amount due within one year
|
$
|
5,899
|
|
|
$
|
6,125
|
|
|
$
|
5,896
|
|
|
$
|
5,873
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Third-party sales
|
$
|
1,502
|
|
|
$
|
1,426
|
|
Segment operating profit
|
253
|
|
|
209
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Third-party sales
|
$
|
1,503
|
|
|
$
|
1,481
|
|
Intersegment sales
|
55
|
|
|
57
|
|
||
Total sales
|
$
|
1,558
|
|
|
$
|
1,538
|
|
Segment operating profit
|
107
|
|
|
124
|
|
||
Third-party aluminum shipments (kmt)
|
331
|
|
|
322
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Third-party sales
|
$
|
535
|
|
|
$
|
537
|
|
Segment operating profit
|
87
|
|
|
67
|
|
|
First quarter ended
|
||||||
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Total segment operating profit
|
$
|
447
|
|
|
$
|
400
|
|
Unallocated amounts:
|
|
|
|
||||
Restructuring and other charges
|
(12
|
)
|
|
(7
|
)
|
||
Corporate expense
|
(61
|
)
|
|
(60
|
)
|
||
Consolidated operating income
|
$
|
374
|
|
|
$
|
333
|
|
Interest expense
|
(85
|
)
|
|
(114
|
)
|
||
Other expense, net
|
(32
|
)
|
|
(20
|
)
|
||
Consolidated income before income taxes
|
$
|
257
|
|
|
$
|
199
|
|
|
Long-Term Debt
|
Short-Term Debt
|
Outlook
|
Date of Last Update
|
Standard and Poor’s
|
BBB-
|
A-3
|
Negative
|
April 26, 2019
|
Moody’s
|
Ba2
|
Speculative Grade Liquidity-2
|
Stable
|
October 8, 2018
|
Fitch
|
BB+
|
B
|
Positive
|
September 27, 2018
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 1 - January 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,000,000,000
|
|
|
February 1 - February 28, 2019
(2)
|
|
31,908,831
|
|
|
$
|
17.55
|
|
|
31,908,831
|
|
|
$
|
300,000,000
|
|
March 1 - March 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
300,000,000
|
|
|
Total for quarter ended March 31, 2019
|
|
31,908,831
|
|
|
|
|
31,908,831
|
|
|
|
(1)
|
On February 5, 2018, the Company announced that its Board of Directors had authorized the repurchase of up to $500
|
(2)
|
On February 19, 2019, the Company entered into an accelerated share repurchase (ASR) agreement with JPMorgan Chase Bank (“JPM”) to repurchase $700 million of its common stock, and received an initial delivery of 31,908,831 shares. The term of the ASR concluded on April 25, 2019, with JPM delivering
4,525,592
additional shares to Arconic on April 29, 2019. A total of
36,434,423
shares, at an average price of $
19.21
per share, were repurchased under the agreement.
|
Letter Agreement, by and between Arconic Inc. and John C. Plant, dated as of February 6, 2019.
|
|
Letter Agreement, by and between Arconic Inc. and Elmer L. Doty, dated as of February 6, 2019.
|
|
Letter Agreement, by and between Arconic Inc. and Neil E. Marchuk, dated as of February 13, 2019.
|
|
Special Retention Award Agreement - Paul Myron, effective February 28, 2019.
|
|
Separation Agreement between Arconic Inc. and Charles P. Blankenship, dated as of March 14, 2019, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated March 18, 2019.
|
|
Restricted Share Unit Award Agreement - Executive Vice President, Human Resources (Neil E. Marchuk) Annual Equity Award, effective March 15, 2019.
|
|
Restricted Share Unit Award Agreement - Executive Vice President, Human Resources (Neil E. Marchuk) Sign-on Equity Award, effective March 15, 2019.
|
|
Letter regarding unaudited interim financial information.
|
|
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Arconic Inc.
|
|
|
May 1, 2019
|
/s/ Ken Giacobbe
|
Date
|
Ken Giacobbe
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
|
May 1, 2019
|
/s/ Paul Myron
|
Date
|
Paul Myron
|
|
Vice President and Controller
|
|
(Principal Accounting Officer)
|
1 Year Arconic Inc. Chart |
1 Month Arconic Inc. Chart |
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