Segment Information

Arconic is a global leader in lightweight metals engineering and manufacturing. Arconic’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, building and construction, industrial applications, defense, and packaging. Arconic’s segments are organized by product on a worldwide basis. In the first quarter of 2018, the Company changed its primary measure of segment performance from Adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) to Segment operating profit, which more closely aligns segment performance with Operating income as presented in the Statement of Consolidated Operations. Segment performance under Arconic’s management reporting system is evaluated based on a number of factors; however, the primary measure of performance is Segment operating profit. Arconic’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 also includes certain items that, under the previous segment performance measure, were recorded in Corporate, such as the impact of LIFO inventory accounting, metal price lag, intersegment profit eliminations, and derivative activities. Segment operating profit may not be comparable to similarly titled measures of other companies. Prior period financial information has been recast to conform to current year presentation. Differences between segment totals and consolidated Arconic are in Corporate.

The operating results of Arconic’s reportable segments were as follows:



	Engineered Products and Solutions		Global Rolled Products			Transportation and Construction Solutions		Total Segment
First quarter ended March 31, 2018
Sales:
Third-party sales	$	1,541	$	1,366		$	537	$	3,444
Intersegment sales	—		42			—		42
Total sales	$	1,541	$	1,408		$	537	$	3,486
Profit and loss:
Segment operating profit	221		112			67		400
Restructuring and other charges	1		(1		)	—		—
Provision for depreciation and amortization	71		51			13		135

First quarter ended March 31, 2017
Sales:
Third-party sales	$	1,487	$	1,248		$	456	$	3,191
Intersegment sales	—		34			—		34
Total sales	$	1,487	$	1,282		$	456	$	3,225
Profit and loss:
Segment operating profit	247		136			68		451
Restructuring and other charges	6		57			3		66
Provision for depreciation and amortization	64		50			12		126

The following table reconciles Total segment operating profit to Consolidated income before income taxes:



	First quarter ended
	March 31,
	2018			2017
Total segment operating profit	$	400		$	451
Unallocated amounts:
Restructuring and other charges	(7		)	(73		)
Corporate expense	(60		)	(95		)
Consolidated operating income	$	333		$	283
Interest expense	(114		)	(115		)
Other (expense) income, net	(20		)	316
Consolidated income before income taxes	$	199		$	484

The total assets of Arconic's reportable segment were as follows:



	March 31, 2018		December 31, 2017
Engineered Products and Solutions	10,561		10,325
Global Rolled Products	4,193		3,955
Transportation and Construction Solutions	1,108		1,041
Total segment assets	$	15,862	$	15,321

The following table reconciles Total segment assets to Consolidated assets:



	March 31, 2018		December 31, 2017
Total segment assets	$	15,862	$	15,321
Unallocated amounts:
Cash and cash equivalents	1,205		2,150
Deferred income taxes	675		743
Corporate fixed assets, net	307		310
Fair value of derivative contracts	53		91
Other	117		103
Consolidated assets	$	18,219	$	18,718