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Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information Segment Information
Following the Arconic Inc. Separation Transaction, Howmet’s operations consist of four worldwide reportable segments as follows:
Engine Products
Engine Products produces investment castings and seamless rolled rings primarily for aircraft engines and industrial gas turbines. Engine Products produces rotating parts as well as structural parts.
Fastening Systems
Fastening Systems produces aerospace fastening systems, as well as commercial transportation fasteners. The business’s high-tech, multi-material fastening systems are found nose to tail on aircraft and aero engines. The business’s products are also critical components of automobiles, commercial transportation vehicles, and construction and industrial equipment.
Engineered Structures
Engineered Structures produces titanium and aluminum ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, extrusions forming and machining services for airframe, wing, aero-engine, and landing gear components. Engineered Structures also produces aluminum forgings, nickel forgings, and aluminum machined components and assemblies for aerospace and defense applications.
Forged Wheels
Forged Wheels provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation markets.
Goodwill     
The Company had $4,072 of Goodwill at September 30, 2020, and the Company reviews it for impairment annually in the fourth quarter or more frequently if indicators exist or if a decision is made to sell or realign a business.
On January 1, 2020, management transferred the Savannah business from the Engine Products segment to the Engineered Structures segment, based on synergies with forgings technologies and manufacturing capabilities. As a result of the reorganization, goodwill of $17 was reallocated from Engine Products to Engineered Structures, and these reporting units were evaluated for impairment during the first quarter of 2020. The estimated fair value of each of these reporting units substantially exceeded their carrying value; thus, there was no goodwill impairment at the date the business was transferred.
During the first quarter of 2020, Howmet's market capitalization declined significantly compared to the fourth quarter of 2019. Over the same period, the equity value of our peer group companies, and the overall U.S. stock market also declined significantly amid market volatility. In addition, as a result of the COVID-19 pandemic and measures designed to contain the spread, sales globally to customers in the aerospace and commercial transportation industries that are impacted by COVID-19 have been and are expected to be negatively impacted as a result of disruption in demand. As a result of these macroeconomic factors, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of any of our reporting units is less than its carrying value.
As a result of this assessment, the Company performed a quantitative impairment test in the first quarter for the Engineered Structures reporting unit and concluded that though the margin between the fair value of the reporting unit and carrying value had declined from approximately 60% to approximately 15%, it was not impaired. Consistent with prior practice, a discounted cash flow model was used to estimate the current fair value of the reporting unit. The significant assumptions and estimates utilized to determine fair value were developed utilizing current market and forecast information reflecting the disruption in demand that has and is expected to negatively impact the Company’s sales globally in the aerospace industry. In the second and third quarters of 2020, there were no indicators of impairment identified for the Engineered Structures reporting unit as the margin between fair value of the reporting unit and carrying value exceeded 20%. If our actual results or external market factors decline significantly from management’s estimates, future goodwill impairment charges may be necessary and could be material.
The operating results of the Company’s reportable segments were as follows. Differences between total segment and consolidated totals are in Corporate.
   Engine Products   Fastening Systems   Engineered Structures   Forged WheelsTotal
Segment
Third quarter ended September 30, 2020
Sales:
Third-party sales$485 $271 $206 $172 $1,134 
Inter-segment sales1 — 1 — 2 
Total sales$486 $271 $207 $172 $1,136 
Profit and loss:
Segment operating profit$39 $33 $10 $35 $117 
Restructuring and other charges9 — 9 — 18 
Provision for depreciation and amortization31 12 13 10 66 
Capital expenditures15 9 3 6 33 
Third quarter ended September 30, 2019
Sales:
Third-party sales$844 $391 $318 $241 $1,794 
Inter-segment sales1 — 4 — 5 
Total sales$845 $391 $322 $241 $1,799 
Profit and loss:
Segment operating profit$161 $102 $40 $60 $363 
Restructuring and other charges43 — 1 — 44 
Provision for depreciation and amortization31 12 15 8 66 
Capital expenditures39 7 4 11 61 
   Engine Products   Fastening Systems   Engineered Structures   Forged WheelsTotal
Segment
Nine months ended September 30, 2020
Sales:
Third-party sales$1,851 $982 $710 $476 $4,019 
Inter-segment sales4 — 6 — 10 
Total sales$1,855 $982 $716 $476 $4,029 
Profit and loss:
Segment operating profit$309 $199 $57 $91 $656 
Restructuring and other charges44 26 21 3 94 
Provision for depreciation and amortization92 36 40 29 197 
Capital expenditures48 24 11 17 100 
Nine months ended September 30, 2019
Sales:
Third-party sales$2,492 $1,185 $943 $752 $5,372 
Inter-segment sales9 — 10 — 19 
Total sales$2,501 $1,185 $953 $752 $5,391 
Profit and loss:
Segment operating profit$465 $297 $81 $193 $1,036 
Restructuring and other charges296 6 198 5 505 
Provision for depreciation and amortization100 36 46 24 206 
Capital expenditures165 24 22 56 267 
The following table reconciles Total segment operating profit to Income (loss) from continuing operations before income taxes:
Third quarter endedNine months ended
September 30,September 30,
2020201920202019
Total segment operating profit$117 $363 $656 $1,036 
Unallocated amounts:
Restructuring and other charges(22)(56)(166)(572)
Corporate expense(22)(51)(85)(170)
Consolidated operating income$73 $256 $405 $294 
Interest expense, net(77)(85)(305)(256)
Other expense, net(8)(8)— (26)
Income (loss) from continuing operations before income taxes$(12)$163 $100 $12 

The following table reconciles Total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the statement of cash flows. Differences between segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period.
Third quarter endedNine months ended
September 30,September 30,
2020201920202019
Total segment capital expenditures$33 $61 $100 $267 
Corporate and discontinued operations3 66 120 265 
Capital expenditures$36 $127 $220 $532 

The following table disaggregates segment revenue by major end market served. Differences between total segment and consolidated totals are in Corporate.
   Engine Products   Fastening Systems   Engineered Structures   Forged WheelsTotal
Segment
Third quarter ended September 30, 2020
Aerospace - Commercial$199 $169 $104 $— $472 
Aerospace - Defense 142 37 82 — 261 
Commercial Transportation— 38 — 172 210 
Industrial and Other144 27 20 — 191 
Total end-market revenue$485 $271 $206 $172 $1,134 
Third quarter ended September 30, 2019
Aerospace - Commercial$571 $267 $226 $— $1,064 
Aerospace - Defense 120 41 65 — 226 
Commercial Transportation5 59 — 241 305 
Industrial and Other148 24 27 — 199 
Total end-market revenue$844 $391 $318 $241 $1,794 
Nine months ended September 30, 2020
Aerospace - Commercial$1,018 $650 $432 $— $2,100 
Aerospace - Defense 394 120 216 — 730 
Commercial Transportation— 118 — 476 594 
Industrial and Other439 94 62 — 595 
Total end-market revenue$1,851 $982 $710 $476 $4,019 
Nine months ended September 30, 2019
Aerospace - Commercial$1,689 $803 $672 $— $3,164 
Aerospace - Defense 350 115 194 — 659 
Commercial Transportation17 179 — 754 950 
Industrial and Other436 88 77 (2)599 
Total end-market revenue$2,492 $1,185 $943 $752 $5,372 

In the nine months ended September 30 , 2020, the Company derived 70% of its revenue from aerospace end markets of which 11% related to General Electric Company.