Arconic Reports Fourth Quarter 2022 and Full Year 2022 Results
Arconic Corporation (NYSE: ARNC) reported a fourth-quarter 2022 revenue of $1.9 billion, a 9% year-over-year decline, though up 2% organically. The company faced a net loss of $273 million ($2.70 per share), significantly higher than a $38 million loss in Q4 2021, partly due to a $304 million after-tax loss from divested Russian operations. For the full year, Arconic's revenue rose 19% to $9.0 billion, with a net loss of $182 million ($1.75 per share), improving from a $397 million loss in 2021. Adjusted EBITDA was $706 million for 2022. The company expects 2023 revenues between $8.0 billion and $8.5 billion.
- Full-year 2022 revenue increased by 19% to $9.0 billion compared to 2021.
- The company repurchased approximately 6.9 million shares at a cost of $185 million in 2022.
- Adjusted EBITDA, excluding Russian operations, increased by 2% year-over-year, reaching $635 million.
- Fourth-quarter revenue declined 9% year-over-year.
- Net loss for Q4 2022 was $273 million, substantially higher than Q4 2021.
- Operational challenges led to a decrease in Adjusted EBITDA by 5% on a comparable basis.
Fourth Quarter 2022 Highlights
-
Sales of
, down$1.9 billion 9% year over year, up2% organically -
Net loss of
, or$273 million per share, compared with net loss of$2.70 , or$38 million per share, in fourth quarter 2021. Fourth quarter 2022 includes a$0.36 after-tax loss related to the sale of the Company’s Russian operations$304 million -
Adjusted EBITDA of
; Adjusted EBITDA excluding Russian Operations of$154 million , down$145 million 5% year over year on a comparable basis -
Repurchased approximately 2.1 million shares at a cost of
$46 million -
Sale of Russian operations closed on
November 15, 2022
Full Year 2022 Highlights
-
Sales of
, up$9.0 billion 19% year over year, up10% organically -
Net loss of
, or$182 million per share, compared with net loss of$1.75 , or$397 million per share, in 2021. Full-year 2022 includes the after-tax loss related to$3.65 Russia and an after-tax, non-cash asset impairment charge of related to the Extrusions segment business review$70 million -
Adjusted EBITDA of
; Adjusted EBITDA excluding Russian Operations of$706 million , up$635 million 2% year over year on a comparable basis -
Repurchased approximately 6.9 million shares at a cost of
; repurchased approximately$185 million 10% of shares outstanding for since separation$346 million
Fourth Quarter 2022 Results
The Company reported revenue of
Fourth quarter 2022 Adjusted EBITDA was
Full-Year 2022 Results
Revenues of
Full-year 2022 Adjusted EBITDA was
Fourth Quarter Segment Performance
Revenue by Segment (in millions) |
||||||||
|
Quarter ended |
|||||||
|
|
|
|
|||||
Rolled Products |
$ |
1,535 |
|
|
$ |
1,790 |
||
Building and Construction Systems |
|
304 |
|
|
|
261 |
||
Extrusions |
|
109 |
|
|
|
87 |
Adjusted EBITDA (in millions) |
||||||||
|
||||||||
|
Quarter ended |
|||||||
|
|
|
|
|||||
Rolled Products |
$ |
120 |
|
|
$ |
162 |
|
|
Building and Construction Systems |
|
49 |
|
|
|
33 |
|
|
Extrusions |
|
(17 |
) |
|
|
(9 |
) |
|
Subtotal |
|
152 |
|
|
|
186 |
|
|
Corporate |
|
2 |
|
|
|
(11 |
) |
|
Adjusted EBITDA |
$ |
154 |
|
|
$ |
175 |
|
Adjusted EBITDA excluding Russian Operations (in millions) |
||||||||
|
Quarter ended |
|||||||
|
|
|
||||||
Rolled Products |
$ |
111 |
|
|
|
$ |
140 |
|
Building and Construction Systems |
|
49 |
|
|
|
|
33 |
|
Extrusions |
|
(17 |
) |
|
|
|
(9 |
) |
Subtotal |
|
143 |
|
|
|
|
164 |
|
Corporate |
|
2 |
|
|
|
|
(11 |
) |
Adjusted EBITDA |
$ |
145 |
|
|
|
$ |
153 |
|
Outlook
The Company expects full-year 2023 revenue to be in a range of
Share Repurchase Program
The Company repurchased approximately 2.1 million shares in fourth quarter 2022 for
About
Dissemination of Company Information
Forward-Looking Statements
This release contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning. All statements that reflect Arconic’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, relating to the condition of, or trends or developments in, the ground transportation, aerospace, building and construction, industrial, packaging and other end markets; Arconic’s future financial results, operating performance, working capital, cash flows, liquidity and financial position; cost savings and restructuring programs;
Non-GAAP Financial Measures
Some of the information included in this release is derived from Arconic’s consolidated financial information but is not presented in Arconic’s financial statements prepared in accordance with accounting principles generally accepted in
Statement of Consolidated Operations (unaudited) (dollars in millions, except per-share amounts) |
|||||||||||
|
Quarter ended |
||||||||||
|
|
|
|
||||||||
|
2022 |
2022 |
2021 |
||||||||
Sales |
$ |
1,942 |
|
$ |
2,280 |
|
$ |
2,138 |
|
||
|
|
|
|
||||||||
Cost of goods sold (exclusive of expenses below)(1) |
|
1,744 |
|
|
2,074 |
|
|
1,899 |
|
||
Selling, general administrative, and other expenses(1) |
|
46 |
|
|
62 |
|
|
64 |
|
||
Research and development expenses |
|
10 |
|
|
9 |
|
|
9 |
|
||
Provision for depreciation and amortization |
|
56 |
|
|
59 |
|
|
67 |
|
||
Impairment of goodwill(2) |
|
– |
|
|
– |
|
|
65 |
|
||
Restructuring and other charges(3) |
|
337 |
|
|
112 |
|
|
12 |
|
||
Operating (loss) income |
|
(251 |
) |
|
(36 |
) |
|
22 |
|
||
|
|
|
|
||||||||
Interest expense |
|
26 |
|
|
27 |
|
|
26 |
|
||
Other expenses, net(4) |
|
32 |
|
|
27 |
|
|
15 |
|
||
|
|
|
|||||||||
Loss before income taxes |
|
(309 |
) |
|
(90 |
) |
|
(19 |
) |
||
(Benefit) Provision for income taxes |
|
(36 |
) |
|
(25 |
) |
|
19 |
|
||
|
|||||||||||
Net loss |
|
(273 |
) |
|
(65 |
) |
|
(38 |
) |
||
|
|
|
|
||||||||
Less: Net income attributable to noncontrolling interest |
|
– |
|
|
– |
|
|
– |
|
||
|
|||||||||||
NET LOSS ATTRIBUTABLE TO ARCONIC
|
$ |
(273 |
) |
$ |
(65 |
) |
$ |
(38 |
) |
||
|
|||||||||||
|
|||||||||||
EARNINGS PER SHARE ATTRIBUTABLE TO ARCONIC
|
|
|
|
||||||||
Basic: |
|
|
|
||||||||
Net loss |
$ |
(2.70 |
) |
$ |
(0.64 |
) |
$ |
(0.36 |
) |
||
Weighted-average number of shares |
|
100,956,393 |
|
|
101,483,656 |
|
|
106,262,953 |
|
||
|
|
|
|
||||||||
Diluted: |
|
|
|
||||||||
Net loss |
$ |
(2.70 |
) |
$ |
(0.64 |
) |
$ |
(0.36 |
) |
||
Weighted-average number of shares(5) |
|
100,956,393 |
|
|
101,483,656 |
|
|
106,262,953 |
|
||
|
|
|
|
||||||||
|
|
|
|
||||||||
COMMON STOCK OUTSTANDING AT THE END OF THE
|
|
99,432,194 |
|
|
101,484,590 |
|
|
105,326,885 |
|
(1) |
In the quarter ended |
|
|
(2) |
In the quarter ended |
|
|
(3) |
On |
|
|
|
In the quarter ended |
|
|
|
Also, in the quarters ended |
|
|
(4) |
In the quarter ended |
|
|
(5) |
For periods in which the Company generates net income, the diluted weighted-average number of shares include common share equivalents associated with outstanding employee stock awards. For periods in which the Company generates a net loss, the diluted weighted-average number of shares does not include any common share equivalents as their effect is anti-dilutive. |
Statement of Consolidated Operations (unaudited), continued (dollars in millions, except per-share amounts) |
|||||||
|
Year ended |
||||||
|
|
||||||
|
2022 |
2021 |
|||||
Sales |
$ |
8,961 |
|
$ |
7,504 |
|
|
|
|
|
|||||
Cost of goods sold (exclusive of expenses below)(1) |
|
8,032 |
|
|
6,573 |
|
|
Selling, general administrative, and other expenses(1) |
|
246 |
|
|
247 |
|
|
Research and development expenses |
|
37 |
|
|
34 |
|
|
Provision for depreciation and amortization |
|
237 |
|
|
253 |
|
|
Impairment of goodwill(2) |
|
– |
|
|
65 |
|
|
Restructuring and other charges(3) |
|
456 |
|
|
624 |
|
|
Operating loss |
|
(47 |
) |
|
(292 |
) |
|
|
|
|
|||||
Interest expense |
|
104 |
|
|
100 |
|
|
Other expenses, net(4) |
|
41 |
|
|
67 |
|
|
|
|
|
|||||
Loss before income taxes |
|
(192 |
) |
|
(459 |
) |
|
Benefit for income taxes |
|
(11 |
) |
|
(62 |
) |
|
|
|
|
|||||
Net loss |
|
(181 |
) |
|
(397 |
) |
|
|
|||||||
Less: Net income attributable to noncontrolling interest |
|
1 |
|
|
– |
|
|
|
|
|
|||||
NET LOSS ATTRIBUTABLE TO ARCONIC CORPORATION |
$ |
(182 |
) |
$ |
(397 |
) |
|
|
|
|
|||||
EARNINGS PER SHARE ATTRIBUTABLE TO ARCONIC
|
|
|
|||||
Basic: |
|
|
|||||
Net loss |
$ |
(1.75 |
) |
$ |
(3.65 |
) |
|
Weighted-average number of shares |
|
103,555,875 |
|
|
108,692,910 |
|
|
|
|
|
|||||
Diluted: |
|
|
|||||
Net loss |
$ |
(1.75 |
) |
$ |
(3.65 |
) |
|
Weighted-average number of shares(5) |
|
103,555,875 |
|
|
108,692,910 |
|
|
|
|
|
|||||
|
|
|
|||||
COMMON STOCK OUTSTANDING AT THE END OF THE PERIOD |
|
99,432,194 |
|
|
105,326,885 |
|
(1) |
In the quarter ended |
|
|
(2) |
In the quarter ended |
|
|
(3) |
In the year ended |
|
|
(4) |
In the year ended |
|
|
(5) |
For periods in which the Company generates net income, the diluted weighted-average number of shares include common share equivalents associated with outstanding employee stock awards. For periods in which the Company generates a net loss, the diluted weighted-average number of shares does not include any common share equivalents as their effect is anti-dilutive. |
Consolidated Balance Sheet (unaudited) (in millions) |
|||||||
|
|
||||||
ASSETS |
|
|
|||||
Current assets: |
|
|
|||||
Cash and cash equivalents |
$ |
261 |
|
$ |
335 |
|
|
Receivables from customers, less allowances of
|
|
791 |
|
|
922 |
|
|
Other receivables |
|
183 |
|
|
226 |
|
|
Inventories |
|
1,622 |
|
|
1,630 |
|
|
Fair value of hedging instruments and derivatives |
|
21 |
|
|
1 |
|
|
Prepaid expenses and other current assets(2) |
|
124 |
|
|
54 |
|
|
Total current assets |
|
3,002 |
|
|
3,168 |
|
|
|
|
|
|||||
Properties, plants, and equipment |
|
6,957 |
|
|
7,529 |
|
|
Less: accumulated depreciation and amortization |
|
4,596 |
|
|
4,878 |
|
|
Properties, plants, and equipment, net(3) |
|
2,361 |
|
|
2,651 |
|
|
|
|
292 |
|
|
322 |
|
|
Operating lease right-of-use-assets |
|
115 |
|
|
122 |
|
|
Deferred income taxes |
|
188 |
|
|
229 |
|
|
Other noncurrent assets |
|
57 |
|
|
88 |
|
|
Total assets |
$ |
6,015 |
|
$ |
6,580 |
|
|
|
|
|
|||||
LIABILITIES |
|
|
|||||
Current liabilities: |
|
|
|||||
Accounts payable, trade |
$ |
1,578 |
|
$ |
1,718 |
|
|
Accrued compensation and retirement costs |
|
119 |
|
|
116 |
|
|
Taxes, including income taxes |
|
43 |
|
|
61 |
|
|
Environmental remediation |
|
40 |
|
|
15 |
|
|
Operating lease liabilities |
|
34 |
|
|
35 |
|
|
Fair value of hedging instruments and derivatives |
|
7 |
|
|
23 |
|
|
Other current liabilities(2) |
|
150 |
|
|
95 |
|
|
Total current liabilities |
|
1,971 |
|
|
2,063 |
|
|
Long-term debt |
|
1,597 |
|
|
1,594 |
|
|
Accrued pension benefits |
|
586 |
|
|
717 |
|
|
Accrued other postretirement benefits |
|
302 |
|
|
411 |
|
|
Environmental remediation |
|
45 |
|
|
49 |
|
|
Operating lease liabilities |
|
83 |
|
|
90 |
|
|
Deferred income taxes |
|
3 |
|
|
12 |
|
|
Other noncurrent liabilities |
|
71 |
|
|
85 |
|
|
Total liabilities |
|
4,658 |
|
|
5,021 |
|
|
|
|
|
|||||
EQUITY |
|
|
|||||
|
|
|
|||||
Common stock |
|
1 |
|
|
1 |
|
|
Additional capital |
|
3,373 |
|
|
3,368 |
|
|
Accumulated deficit |
|
(734 |
) |
|
(552 |
) |
|
|
|
(346 |
) |
|
(161 |
) |
|
Accumulated other comprehensive loss |
|
(937 |
) |
|
(1,111 |
) |
|
|
|
1,357 |
|
|
1,545 |
|
|
Noncontrolling interest |
|
– |
|
|
14 |
|
|
Total equity |
|
1,357 |
|
|
1,559 |
|
|
Total liabilities and equity |
$ |
6,015 |
|
$ |
6,580 |
|
(1) |
On |
|
|
(2) |
In the quarter ended |
|
|
(3) |
In 2022 third quarter, the Company recorded an impairment charge of |
|
|
(4) |
On |
Statement of Consolidated Cash Flows (unaudited) (dollars in millions) |
|||||||||||
|
Quarter ended |
||||||||||
|
|
|
|
||||||||
|
2022 |
2022 |
2021 |
||||||||
OPERATING ACTIVITIES |
|
|
|
||||||||
Net loss |
$ |
(273 |
) |
$ |
(65 |
) |
$ |
(38 |
) |
||
Adjustments to reconcile net loss to cash provided from operations: |
|
|
|
||||||||
Depreciation and amortization |
|
56 |
|
|
59 |
|
|
67 |
|
||
Impairment of goodwill(1) |
|
– |
|
|
– |
|
|
65 |
|
||
Deferred income taxes |
|
(29 |
) |
|
(42 |
) |
|
11 |
|
||
Restructuring and other charges(2) |
|
337 |
|
|
112 |
|
|
12 |
|
||
Net periodic pension benefit cost |
|
28 |
|
|
19 |
|
|
13 |
|
||
Stock-based compensation |
|
(4 |
) |
|
6 |
|
|
7 |
|
||
Amortization of debt issuance costs |
|
1 |
|
|
2 |
|
|
1 |
|
||
Other |
|
13 |
|
|
5 |
|
|
(1 |
) |
||
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: |
|
|
|
||||||||
(Increase) Decrease in receivables(3) |
|
(32 |
) |
|
207 |
|
|
(74 |
) |
||
Decrease (Increase) in inventories |
|
21 |
|
|
134 |
|
|
(108 |
) |
||
(Increase) Decrease in prepaid expenses and other current assets |
|
(49 |
) |
|
(12 |
) |
|
6 |
|
||
Increase (Decrease) in accounts payable, trade |
|
76 |
|
|
(339 |
) |
|
193 |
|
||
Increase (Decrease) in accrued expenses |
|
63 |
|
|
(8 |
) |
|
(74 |
) |
||
(Decrease) Increase in taxes, including income taxes |
|
(17 |
) |
|
14 |
|
|
6 |
|
||
Pension contributions |
|
(9 |
) |
|
(9 |
) |
|
(2 |
) |
||
(Increase) Decrease in noncurrent assets |
|
(9 |
) |
|
2 |
|
|
(3 |
) |
||
Increase in noncurrent liabilities |
|
15 |
|
|
6 |
|
|
15 |
|
||
CASH PROVIDED FROM OPERATIONS |
|
188 |
|
|
91 |
|
|
96 |
|
||
|
|||||||||||
FINANCING ACTIVITIES |
|
|
|
||||||||
Net change in short term borrowings (original maturities of three months or less)(4) |
|
(150 |
) |
|
100 |
|
|
– |
|
||
Repurchases of common stock(5) |
|
(46 |
) |
|
(86 |
) |
|
(55 |
) |
||
Other |
|
(1 |
) |
|
1 |
|
|
– |
|
||
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES |
|
(197 |
) |
|
15 |
|
|
(55 |
) |
||
|
|||||||||||
INVESTING ACTIVITIES |
|
|
|
||||||||
Capital expenditures |
|
(70 |
) |
|
(47 |
) |
|
(61 |
) |
||
Proceeds from the sale of assets and businesses(6) |
|
27 |
|
|
3 |
|
|
1 |
|
||
Other |
|
– |
|
|
– |
|
|
4 |
|
||
CASH USED FOR INVESTING ACTIVITIES |
|
(43 |
) |
|
(44 |
) |
|
(56 |
) |
||
|
|
|
|
||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
1 |
|
|
(2 |
) |
|
1 |
|
||
Net change in cash and cash equivalents and restricted cash |
|
(51 |
) |
|
60 |
|
|
(14 |
) |
||
Cash and cash equivalents and restricted cash at beginning of period(7) |
|
312 |
|
|
252 |
|
|
349 |
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD(7) |
$ |
261 |
|
$ |
312 |
|
$ |
335 |
|
(1) |
See footnote 2 to the Statement of Consolidated Operations for the quarter ended |
|
|
(2) |
See footnote 3 to the Statement of Consolidated Operations for the quarterly periods presented included in this release. |
|
|
(3) |
In |
|
|
(4) |
|
|
|
(5) |
In the quarter ended |
|
|
(6) |
In the quarter ended |
|
|
(7) |
Cash and cash equivalents and restricted cash at beginning of period for all periods presented and Cash and cash equivalents and restricted cash at end of period for all periods presented includes Restricted cash of less than |
Segment Adjusted EBITDA Reconciliation (unaudited) (in millions) |
|||||||||||
|
Quarter ended |
||||||||||
|
|
|
|
||||||||
|
2022 |
2022 |
2021 |
||||||||
Total Segment Adjusted EBITDA(1) |
$ |
152 |
|
$ |
147 |
|
$ |
186 |
|
||
Unallocated amounts: |
|
|
|
||||||||
Corporate expenses(2) |
|
(6 |
) |
|
(4 |
) |
|
(7 |
) |
||
Stock-based compensation expense |
|
4 |
|
|
(6 |
) |
|
(7 |
) |
||
Metal price lag(3) |
|
8 |
|
|
15 |
|
|
11 |
|
||
Unrealized losses on mark-to-market hedging instruments and derivatives |
|
(10 |
) |
|
(7 |
) |
|
– |
|
||
Provision for depreciation and amortization |
|
(56 |
) |
|
(59 |
) |
|
(67 |
) |
||
Impairment of goodwill(4) |
|
– |
|
|
– |
|
|
(65 |
) |
||
Restructuring and other charges(5) |
|
(337 |
) |
|
(112 |
) |
|
(12 |
) |
||
Other(6) |
|
(6 |
) |
|
(10 |
) |
|
(17 |
) |
||
Operating (loss) income |
|
(251 |
) |
|
(36 |
) |
|
22 |
|
||
Interest expense |
|
(26 |
) |
|
(27 |
) |
|
(26 |
) |
||
Other expenses, net(7) |
|
(32 |
) |
|
(27 |
) |
|
(15 |
) |
||
Benefit (Provision) for income taxes |
|
36 |
|
|
25 |
|
|
(19 |
) |
||
Net income attributable to noncontrolling interest |
|
– |
|
|
– |
|
|
– |
|
||
Consolidated net loss attributable to |
$ |
(273 |
) |
$ |
(65 |
) |
$ |
(38 |
) |
(1) |
Arconic’s profit or loss measure for its reportable segments is Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization). The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus each of (i) Cost of goods sold, (ii) Selling, general administrative, and other expenses, and (iii) Research and development expenses, plus each of (i) Stock-based compensation expense, (ii) Metal price lag (see footnote 3), and (iii) Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below). Arconic’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments. |
|
|
|
Effective in the first quarter of 2022, management modified the Company’s definition of Segment Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as |
|
|
|
Total Segment Adjusted EBITDA is the sum of the respective Segment Adjusted EBITDA for each of the Company’s three reportable segments: Rolled Products, Building and Construction Systems, and Extrusions. This amount is being presented for the sole purpose of reconciling Segment Adjusted EBITDA to the Company’s Consolidated net loss. |
|
|
(2) |
Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities. |
|
|
(3) |
Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions. |
|
|
(4) |
See footnote 2 to the Statement of Consolidated Operations for the quarter ended |
|
|
(5) |
See footnote 3 to the Statement of Consolidated Operations for the quarterly periods presented included in this release. |
|
|
(6) |
Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on the Company’s Statement of Consolidated Operations that are not included in Segment Adjusted EBITDA, including those described as “Other special items” (see footnote 5 to the reconciliation of Adjusted EBITDA within Calculation of Non-GAAP Financial Measures included in this release). |
|
|
(7) |
See footnote 4 to the Statement of Consolidated Operations for the quarter ended |
Calculation of Non-GAAP Financial Measures (unaudited) (in millions) |
||||||||||||||||||
Adjusted EBITDA |
Quarter ended |
Year ended |
||||||||||||||||
|
|
|
|
|
||||||||||||||
|
2022 |
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net loss attributable to |
$ |
(273 |
) |
$ |
(65 |
) |
$ |
(38 |
) |
$ |
(182 |
) |
$ |
(397 |
) |
|||
|
|
|
|
|
|
|||||||||||||
Add: |
|
|
|
|
|
|||||||||||||
Net income attributable to noncontrolling interest |
– |
|
|
– |
|
|
– |
|
|
1 |
|
|
– |
|
||||
(Benefit) Provision for income taxes |
|
(36 |
) |
|
(25 |
) |
|
19 |
|
|
(11 |
) |
|
(62 |
) |
|||
Other expenses, net(1) |
|
32 |
|
|
27 |
|
|
15 |
|
|
41 |
|
|
67 |
|
|||
Interest expense |
|
26 |
|
|
27 |
|
|
26 |
|
|
104 |
|
|
100 |
|
|||
Restructuring and other charges(2) |
|
337 |
|
|
112 |
|
|
12 |
|
|
456 |
|
|
624 |
|
|||
Impairment of goodwill(3) |
|
– |
|
|
– |
|
|
65 |
|
– |
|
|
65 |
|
||||
Provision for depreciation and amortization |
|
56 |
|
|
59 |
|
|
67 |
|
|
237 |
|
|
253 |
|
|||
Stock-based compensation |
|
(4 |
) |
|
6 |
|
|
7 |
|
|
15 |
|
|
22 |
|
|||
Metal price lag(4) |
|
(8 |
) |
|
(15 |
) |
|
(11 |
) |
|
(17 |
) |
|
16 |
|
|||
Unrealized losses (gains) on mark-to-market hedging instruments and derivatives |
|
10 |
|
|
7 |
|
|
– |
|
|
(6 |
) |
|
– |
|
|||
Other special items(5) |
|
14 |
|
|
10 |
|
|
13 |
|
|
68 |
|
|
24 |
|
|||
|
|
|
|
|
|
|||||||||||||
Adjusted EBITDA |
$ |
154 |
|
$ |
143 |
|
$ |
175 |
|
$ |
706 |
|
$ |
712 |
|
|||
|
||||||||||||||||||
Sales |
$ |
1,942 |
|
$ |
2,280 |
|
$ |
2,138 |
|
$ |
8,961 |
|
$ |
7,504 |
|
|||
|
||||||||||||||||||
Adjusted EBITDA Margin |
|
7.9 |
% |
|
6.3 |
% |
|
8.2 |
% |
|
7.9 |
% |
|
9.5 |
% |
Arconic’s definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for the following items: Provision for depreciation and amortization; Stock-based compensation; Metal price lag (see footnote 4); Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below); and Other special items. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items are composed of restructuring and other charges, discrete income tax items, and other items as deemed appropriate by management. There can be no assurances that additional special items will not occur in future periods. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to Arconic’s operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. |
|
Effective in the first quarter of 2022, management modified the Company’s definition of Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as |
(1) |
See footnote 4 for the quarter ended |
|
|
(2) |
See footnote 3 for the quarterly and annual periods presented to the respective Statement of Consolidated Operations included in this release. |
|
|
(3) |
See footnote 2 for the quarter and year ended |
|
|
(4) |
Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions. |
|
|
(5) |
Other special items include the following: |
|
|
Calculation of Non-GAAP Financial Measures (unaudited) (in millions) |
||||||||||||||||||||||
Adjusted EBITDA
excluding |
Quarter ended |
Quarter ended |
||||||||||||||||||||
|
|
|||||||||||||||||||||
|
As reported |
|
As recast(1) |
As reported |
|
As recast(1) |
||||||||||||||||
Net (loss) income attributable to |
$ |
(273 |
) |
$ |
7 |
|
$ |
(280 |
) |
$ |
(38 |
) |
$ |
11 |
|
$ |
(49 |
) |
||||
|
|
|
|
|
|
|
||||||||||||||||
Add: |
|
|
|
|
|
|
||||||||||||||||
Net income attributable to noncontrolling interest |
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
||||
(Benefit) Provision for income taxes |
|
(36 |
) |
|
– |
|
|
(36 |
) |
|
19 |
|
|
3 |
|
|
16 |
|
||||
Other expenses (income), net |
|
32 |
|
|
(1 |
) |
|
33 |
|
|
15 |
|
|
2 |
|
|
13 |
|
||||
Interest expense |
|
26 |
|
|
– |
|
|
26 |
|
|
26 |
|
|
– |
|
|
26 |
|
||||
Restructuring and other charges(2) |
337 |
|
|
– |
|
|
337 |
|
|
12 |
|
|
– |
|
|
12 |
|
|||||
Impairment of goodwill(3) |
|
– |
|
|
– |
|
|
– |
|
|
65 |
|
|
– |
|
|
65 |
|
||||
Provision for depreciation and amortization |
|
56 |
|
|
3 |
|
|
53 |
|
|
67 |
|
|
6 |
|
|
61 |
|
||||
Stock-based compensation |
|
(4 |
) |
|
– |
|
|
(4 |
) |
|
7 |
|
|
– |
|
|
7 |
|
||||
Metal price lag(4) |
|
(8 |
) |
|
– |
|
|
(8 |
) |
|
(11 |
) |
|
– |
|
|
(11 |
) |
||||
Unrealized losses on mark-to-market hedging instruments and derivatives |
|
10 |
|
|
– |
|
|
10 |
|
|
– |
|
|
– |
|
|
– |
|
||||
Other special items(5) |
|
14 |
|
|
– |
|
|
14 |
|
|
13 |
|
|
– |
|
|
13 |
|
||||
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA |
$ |
154 |
|
$ |
9 |
|
$ |
145 |
|
$ |
175 |
|
$ |
22 |
|
$ |
153 |
|
||||
|
||||||||||||||||||||||
Sales |
$ |
1,942 |
|
$ |
116 |
|
$ |
1,826 |
|
$ |
2,138 |
|
$ |
280 |
|
$ |
1,858 |
|
||||
|
||||||||||||||||||||||
Adjusted EBITDA Margin |
|
7.9 |
% |
|
7.8 |
% |
|
7.9 |
% |
|
8.2 |
% |
|
7.9 |
% |
|
8.2 |
% |
Adjusted EBITDA
excluding |
Year ended |
Year ended |
||||||||||||||||||||
|
|
|||||||||||||||||||||
|
As reported |
|
As recast(1) |
As reported |
|
As recast(1) |
||||||||||||||||
Net (loss) income attributable to |
$ |
(182 |
) |
$ |
75 |
|
$ |
(257 |
) |
$ |
(397 |
) |
$ |
46 |
|
$ |
(443 |
) |
||||
|
|
|
|
|
|
|
||||||||||||||||
Add: |
|
|
|
|
|
|
||||||||||||||||
Net income attributable to noncontrolling interest |
|
1 |
|
|
1 |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
||||
(Benefit) Provision for income taxes |
|
(11 |
) |
|
17 |
|
|
(28 |
) |
|
(62 |
) |
|
14 |
|
|
(76 |
) |
||||
Other expenses (income), net(6) |
|
41 |
|
|
(44 |
) |
|
85 |
|
|
67 |
|
|
2 |
|
|
65 |
|
||||
Interest expense |
|
104 |
|
|
– |
|
|
104 |
|
|
100 |
|
|
– |
|
|
100 |
|
||||
Restructuring and other charges(2) |
|
456 |
|
|
– |
|
|
456 |
|
|
624 |
|
|
– |
|
|
624 |
|
||||
Impairment of goodwill(3) |
|
– |
|
|
– |
|
|
– |
|
|
65 |
|
|
– |
|
|
65 |
|
||||
Provision for depreciation and amortization |
|
237 |
|
|
22 |
|
|
215 |
|
|
253 |
|
|
25 |
|
|
228 |
|
||||
Stock-based compensation |
|
15 |
|
|
– |
|
|
15 |
|
|
22 |
|
|
– |
|
|
22 |
|
||||
Metal price lag(4) |
|
(17 |
) |
|
– |
|
|
(17 |
) |
|
16 |
|
|
– |
|
|
16 |
|
||||
Unrealized gains on mark-to-market hedging instruments and derivatives |
|
(6 |
) |
|
– |
|
|
(6 |
) |
|
– |
|
|
– |
|
|
– |
|
||||
Other special items(5) |
|
68 |
|
|
– |
|
|
68 |
|
|
24 |
|
|
– |
|
|
24 |
|
||||
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA |
$ |
706 |
|
$ |
71 |
|
$ |
635 |
|
$ |
712 |
|
$ |
87 |
|
$ |
625 |
|
||||
|
||||||||||||||||||||||
Sales |
$ |
8,961 |
|
$ |
903 |
|
$ |
8,058 |
|
$ |
7,504 |
|
$ |
968 |
|
$ |
6,536 |
|
||||
|
||||||||||||||||||||||
Adjusted EBITDA Margin |
|
7.9 |
% |
|
7.9 |
% |
|
7.9 |
% |
|
9.5 |
% |
|
9.0 |
% |
|
9.6 |
% |
(1) |
Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation of Adjusted EBITDA included in this release for (i) the Company’s definition of Adjusted EBITDA and (ii) management’s rationale for the presentation of this non-GAAP measure. The “As reported” column presents a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure. |
|
|
|
Adjusted EBITDA excluding |
|
|
|
The “Russia” column presents the unaudited combined financial information of Arconic’s subsidiaries that held the Company’s former operations in |
|
|
|
The amounts in the “As recast” column are equal to the amounts in the “As reported” column less the amounts in the “Russia” column. Consequently, there are limitations in the usefulness of the amounts presented in the “As recast” column for Net (loss) income attributable to |
|
|
(2) |
See footnote 3 for the quarterly and annual periods presented to the respective Statement of Consolidated Operations included in this release. |
|
|
(3) |
See footnote 2 for the quarter and year ended |
|
|
(4) |
See footnote 4 for the quarterly and annual periods presented to the reconciliation of Adjusted EBITDA included in this release. |
|
|
(5) |
See footnote 5 for the quarterly and annual periods presented to the reconciliation of Adjusted EBITDA included in this release. |
|
|
(6) |
See footnote 4 for the year ended |
Adjusted EBITDA to
|
Quarter ended |
||||||||||||||||||
|
|
|
|
|
|||||||||||||||
|
2022 |
2022 |
2022 |
2022 |
2021 |
||||||||||||||
Adjusted EBITDA(1) |
$ |
154 |
|
$ |
143 |
|
$ |
204 |
|
$ |
205 |
|
$ |
175 |
|
||||
|
|
|
|
|
|
||||||||||||||
Change in working capital(2) |
|
65 |
|
|
2 |
|
|
(49 |
) |
|
(200 |
) |
|
11 |
|
||||
Cash payments for: |
|
|
|
|
|
||||||||||||||
Environmental remediation |
|
(4 |
) |
|
(1 |
) |
|
(2 |
) |
|
(4 |
) |
|
(40 |
) |
||||
Pension contributions |
|
(9 |
) |
|
(9 |
) |
|
(9 |
) |
|
(4 |
) |
|
(2 |
) |
||||
Other postretirement benefits |
|
(7 |
) |
|
(7 |
) |
|
(8 |
) |
|
(8 |
) |
|
(10 |
) |
||||
Restructuring actions |
|
– |
|
|
(2 |
) |
|
(1 |
) |
|
(2 |
) |
|
(4 |
) |
||||
Interest |
|
(24 |
) |
|
(30 |
) |
|
(23 |
) |
|
(29 |
) |
|
(22 |
) |
||||
Income taxes |
|
1 |
|
|
(3 |
) |
|
(23 |
) |
|
(4 |
) |
|
(10 |
) |
||||
Capital expenditures |
|
(70 |
) |
|
(47 |
) |
|
(33 |
) |
|
(95 |
) |
|
(61 |
) |
||||
Other(3) |
|
12 |
|
|
(2 |
) |
|
73 |
|
|
(57 |
) |
|
(2 |
) |
||||
|
|
|
|
|
|
||||||||||||||
Free Cash Flow(4) |
$ |
118 |
|
$ |
44 |
|
$ |
129 |
|
$ |
(198 |
) |
$ |
35 |
|
(1) |
Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation of Adjusted EBITDA included in this release for (i) Arconic’s definition of Adjusted EBITDA, (ii) management’s rationale for the presentation of this non-GAAP measure, and (iii) a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure. |
|
|
(2) |
Arconic’s definition of working capital is Receivables plus Inventories less Accounts payable, trade. |
|
|
(3) |
Other includes the impact of metal price lag as follows: 4Q22- |
|
|
(4) |
Arconic’s definition of Free Cash Flow is Cash from operations less capital expenditures. Free Cash Flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures, which are both necessary to maintain and expand the Company’s asset base and expected to generate future cash flows from operations. It is important to note that Free Cash Flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. |
|
|
Reconciliation of Organic Revenue (in millions) |
|
|
|
Quarter Ended |
Total |
Revenue |
|
Less: |
|
Sales – |
280 |
Organic Revenue |
|
|
|
Quarter Ended |
|
Revenue |
|
Less: |
|
Sales - |
116 |
Aluminum price impact |
(35) |
Foreign currency impact |
(31) |
Organic Revenue |
|
|
|
Year Ended |
Total |
Revenue |
|
Less: |
|
Sales – |
280 |
Organic Revenue |
|
|
|
Year Ended |
|
Revenue |
|
Less: |
|
Sales - |
116 |
Aluminum price impact |
969 |
Foreign currency impact |
(83) |
Organic Revenue |
|
Organic revenue is a non-GAAP financial measure. Management believes this measure is meaningful to investors as it presents revenue on a comparable basis for all periods presented due to the impact of divestitures, changes in aluminum prices and foreign currency fluctuations relative to the prior year period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005277/en/
Investor Contact
(412) 315-2984
Investor.Relations@arconic.com
Media Contact
(412) 992-2525
Tracie.Gliozzi@arconic.com
Source:
FAQ
What were Arconic's fourth quarter 2022 financial results?
How did Arconic's net loss in Q4 2022 compare to Q4 2021?
What was Arconic's full-year 2022 revenue?
What are Arconic's revenue expectations for 2023?