XML 32 R12.htm IDEA: XBRL DOCUMENT v3.22.0.1
Arconic Inc Separation Transaction and Discontinued Operations
 12 Months Ended
Dec. 31, 2021
Restructuring and Related Activities [Abstract]  
Arconic Inc Separation Transaction and Discontinued Operations Arconic Inc. Separation Transaction and Discontinued Operations
On April 1, 2020, the Company completed the separation of its business into two independent, publicly-traded companies, which was effected by the distribution (the “Distribution”) by the Company of all of the outstanding common stock of Arconic Corporation to the Company’s stockholders. Following the Arconic Inc. Separation Transaction, Arconic Corporation held the Global Rolled Products businesses (global rolled products, aluminum extrusions, and building and construction systems) previously held by the Company. The Company retained the Engineered Products and Forgings businesses (engine products, fastening systems, engineered structures, and forged wheels).
In connection with the Arconic Inc. Separation Transaction, the Company entered into several agreements with Arconic Corporation, including the following: a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, certain Patent, Know-How, Trade Secret License and Trademark License Agreements, and Raw Material Supply Agreements.
On February 7, 2020, Arconic Corporation completed an offering of $600 aggregate principal amount of 6.125% senior secured second-lien notes due 2028. On March 25, 2020, Arconic Corporation entered into a credit agreement which provided for a $600 aggregate principal amount seven-year senior secured first-lien loan B facility and a revolving credit facility which is guaranteed by certain of Arconic Corporation's wholly-owned domestic subsidiaries and secured on a first-priority basis by liens on substantially all assets of Arconic Corporation and subsidiary guarantors. Arconic Corporation used the proceeds to make payment to the Company to fund the transfer of certain assets to Arconic Corporation relating to the Arconic Inc. Separation Transaction and for general corporate purposes. The Company incurred debt issuance costs of $45 associated with these issuances for the first quarter of 2020 and year ended December 31, 2020.
On February 1, 2020, the Company completed the sale of its rolling mill in Itapissuma, Brazil for $50 in cash, which resulted in a loss of $59, of which $53 was recognized in Restructuring and other charges within discontinued operations in the second half of 2019 and $6 in the first quarter of 2020 and year ended December 31, 2020. On March 1, 2020, the Company sold its hard alloy extrusions plant in South Korea for $62 in cash, which resulted in a gain that was recognized in Restructuring and other charges within discontinued operations in the first quarter of 2020 and year ended December 31, 2020.
On October 31, 2018, the Company sold its Texarkana, Texas rolling mill and cast house, which included contingent consideration of up to $50. The contingent consideration related to the achievement of various milestones within 36 months of the transaction closing date associated with operationalizing the rolling mill equipment. In 2019, the Company received additional contingent consideration of $20 and recorded a gain. These amounts were recorded in discontinued operations in the Statement of Consolidated Operations.
Discontinued Operations
The results of operations of Arconic Corporation are presented as Income from discontinued operations after income taxes in the Statement of Consolidated Operations as summarized below:
Year ended December 31,
20202019
Sales$1,575 $7,094 
Cost of goods sold1,293 6,013 
Selling, general administrative, research and development and other expenses106 346 
Provision for depreciation and amortization 58 241 
Restructuring and other (credits) charges(18)38 
Operating income from discontinued operations136 456 
Interest expense, net7 — 
Other expense, net41 91 
Income from discontinued operations88 365 
Provision for income taxes38 21 
Income from discontinued operations after income taxes $50 $344 

The following table presents purchases of properties, plants, and equipment, proceeds from the sale of businesses, and the provision for depreciation and amortization of discontinued operations related to Arconic Corporation:
Year ended December 31,
20202019
Capital expenditures$72 $210 
Proceeds from the sales of businesses$112 $20 
Provision for depreciation and amortization$58 $241 

On April 1, 2020, management evaluated the net assets of Arconic Corporation for potential impairment and determined that no impairment charge was required.
The cash flows and equity related to Arconic Corporation have not been segregated and are included in the Statement of Consolidated Cash Flows or Statement of Comprehensive Income for all periods presented prior to the Arconic Inc. Separation Transaction.
The carrying amount of the major classes of assets and liabilities related to Arconic Corporation were classified as assets and liabilities of discontinued operations in the 2019 Consolidated Balance Sheet consisted of the following:
December 31, 2019
Total assets of discontinued operations
Cash and cash equivalents$71 
Receivables from customers385 
Other receivables135 
Inventories822 
Prepaid expenses and other current assets29 
Current assets of discontinued operations1,442 
Properties, plants, and equipment, net2,834 
Goodwill426 
Intangibles, net60 
Deferred income taxes383 
Other noncurrent assets196 
Noncurrent assets of discontinued operations3,899 
Total assets of discontinued operations$5,341 
Total liabilities of discontinued operations:
Accounts payable, trade$1,067 
Accrued compensation and retirement costs147 
Taxes, including income taxes22 
Other current liabilities188 
Current liabilities of discontinued operations1,424 
Accrued pension benefits1,429 
Accrued other postretirement benefits514 
Other noncurrent liabilities and deferred credits315 
Noncurrent liabilities of discontinued operations2,258 
Total liabilities of discontinued operations$3,682