Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment and Geographic Area Information

Segment and Geographic Area Information

Howmet is a global leader in lightweight metals engineering and manufacturing. Howmet’s innovative, multi-material products, which include nickel, titanium, aluminum, and cobalt, are used worldwide in the aerospace (commercial and defense), commercial transportation, and industrial and other markets. Segment performance under Howmet’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Howmet’s definition of Segment operating profit is Operating income excluding Special items. Special items include Restructuring and other charges and Impairment of Goodwill. Segment operating profit may not be comparable to similarly titled measures of other companies. Differences between the total segment and consolidated totals are in Corporate.

Following the Arconic Inc. Separation Transaction, Howmet’s operations consist of four worldwide reportable segments as follows:

Engine Products

Engine Products produces investment castings, including airfoils, 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, industrial and other 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 commercial transportation vehicles, automobiles, construction and industrial equipment, and renewable energy sector.

Engineered Structures

Engineered Structures produces titanium 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.

The operating results and assets of the Company's reportable segments were as follows:

Year ended	Engine Products		Fastening Systems		Engineered Structures		Forged Wheels		Total Segment
2021
Sales:
Third-party sales	$	2,282	$	1,044	$	725	$	921	$	4,972
Inter-segment sales	4		—		6		—		10
Total sales	$	2,286	$	1,044	$	731	$	921	$	4,982
Profit and loss:
Segment operating profit	$	440	$	190	$	54	$	255	$	939
Restructuring and other charges	74		—		16		—		90
Provision for depreciation and amortization	124		49		49		39		261
Other:
Capital expenditures	$	74	$	42	$	21	$	45	$	182
Total Assets	4,663		2,635		1,280		684		9,262
2020
Sales:
Third-party sales	$	2,406	$	1,245	$	927	$	679	$	5,257
Inter-segment sales	5		—		7		—		12
Total sales	$	2,411	$	1,245	$	934	$	679	$	5,269
Profit and loss:
Segment operating profit	$	417	$	247	$	73	$	153	$	890
Restructuring and other charges	36		39		28		3		106
Provision for depreciation and amortization	123		48		52		39		262
Other:
Capital expenditures	$	77	$	39	$	19	$	23	$	158
Total Assets	4,756		2,707		1,444		628		9,535
2019
Sales:
Third-party sales	$	3,320	$	1,561	$	1,255	$	969	$	7,105
Inter-segment sales	11		—		13		—		24
Total sales	$	3,331	$	1,561	$	1,268	$	969	$	7,129
Profit and loss:
Segment operating profit	$	621	$	396	$	120	$	253	$	1,390
Restructuring and other charges	297		6		199		4		506
Provision for depreciation and amortization	131		48		58		32		269
Other:
Capital expenditures	$	211	$	36	$	27	$	70	$	344
Total Assets	5,445		2,810		1,151		629		10,035

The following table reconciles Total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the Statement of Consolidated Cash Flows. Differences between the total segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period.

For the year ended December 31,	2021		2020		2019
Total segment capital expenditures	$	182	$	158	$	344
Corporate and discontinued operations	17		109		297
Capital expenditures	$	199	$	267	$	641

The following tables reconcile certain segment information to consolidated totals:

For the year ended December 31,	2021		2020		2019
Sales:
Total segment sales	$	4,982	$	5,269	$	7,129
Elimination of inter-segment sales	(10)		(12)		(24)
Corporate	—		2		(7)
Consolidated sales	$	4,972	$	5,259	$	7,098

For the year ended December 31,	2021		2020		2019
Total segment operating profit	$	939	$	890	$	1,390
Unallocated amounts:
Restructuring and other charges	(90)		(182)		(582)
Corporate expense	(101)		(82)		(229)
Consolidated operating income	$	748	$	626	$	579
Loss on debt redemption	(146)		(64)		—
Interest expense, net	(259)		(317)		(338)
Other expense, net	(19)		(74)		(31)
Income from continuing operations before income taxes	$	324	$	171	$	210

December 31,	2021		2020
Assets:
Total segment assets	$	9,262	$	9,535
Unallocated amounts:
Cash and cash equivalents	720		1,610
Deferred income taxes	184		272
Corporate fixed assets, net	133		140
Fair value of derivative contracts	2		5
Accounts receivable securitization	(239)		(241)
Other	157		122
Consolidated assets	$	10,219	$	11,443

Segment assets include third-party receivables while the accounts receivable securitization item includes the impact of sold receivables under the Company's Accounts Receivable securitization programs. (See Note M)

Geographic information for sales was as follows (based upon the destination of the sale):

For the year ended December 31,	2021		2020		2019
Sales:
United States	$	2,542	$	2,782	$	3,534
France	330		327		546
Japan	319		388		480
Germany	257		309		385
Mexico	225		185		277
United Kingdom	213		231		420
Italy	181		181		195
Canada	127		119		179
Poland	77		76		131
China	71		75		168
Other	630		586		783
	$	4,972	$	5,259	$	7,098

Geographic information for long-lived tangible assets was as follows (based upon the physical location of the assets):

December 31,	2021		2020
Long-lived assets:
United States	$	1,868	$	1,967
Hungary	205		213
France	127		150
United Kingdom	116		109
Germany	66		78
Mexico	61		62
China	53		59
Canada	39		44
Japan	25		25
Other	15		16
	$	2,575	$	2,723

The following table disaggregates segment revenue by major market served. Differences between total segment and consolidated totals are in Corporate.

	Engine Products		Fastening Systems		Engineered Structures		Forged Wheels		Total Segment
Year ended December 31, 2021
Aerospace - Commercial	$	1,105	$	537	$	387	$	—	$	2,029
Aerospace - Defense	523		158		270		—		951
Commercial Transportation	—		208		—		921		1,129
Industrial and Other	654		141		68		—		863
Total end-market revenue	$	2,282	$	1,044	$	725	$	921	$	4,972
Year ended December 31, 2020
Aerospace - Commercial	$	1,247	$	808	$	542	$	—	$	2,597
Aerospace - Defense	557		156		303		—		1,016
Commercial Transportation	—		155		—		679		834
Industrial and Other	602		126		82		—		810
Total end-market revenue	$	2,406	$	1,245	$	927	$	679	$	5,257
Year ended December 31, 2019
Aerospace - Commercial	$	2,229	$	1,060	$	897	$	—	$	4,186
Aerospace - Defense	475		158		256		—		889
Commercial Transportation	20		227		—		970		1,217
Industrial and Other	596		116		102		(1)		813
Total end-market revenue	$	3,320	$	1,561	$	1,255	$	969	$	7,105

The Company derived 60%, 69%, and 71% of its revenue for the year ended December 31, 2021, 2020, and 2019, respectively, from aerospace markets.

General Electric Company represented approximately 13% of the Company’s third-party sales for the year ended December 31, 2021, primarily from the Engine Products segment.