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 2019, management transferred its aluminum extrusions operations (Aluminum Extrusions) from the Arconic Engineered Structures (AES) business unit within the Engineered Products and Solutions (EP&S) segment to the Global Rolled Products (GRP) segment, based on synergies with GRP including similar customer base, technologies, and manufacturing capabilities. Prior period financial information has been recast to conform to current year presentation.

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. Segment operating profit includes 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. Differences between segment totals and consolidated Arconic are in Corporate.

As a result of the reorganization of the business noted above, management assessed and concluded that the remaining AES business unit within the EP&S segment and the Aluminum Extrusions business unit within the GRP segment represent reporting units for purposes of evaluating goodwill for impairment. Goodwill of approximately $110 was reallocated from the AES reporting unit to the Aluminum Extrusions reporting unit and these reporting units were evaluated for impairment during the first quarter of 2019. The estimated fair value of each of these reporting units substantially exceeded their carrying value; thus, there was no goodwill impairment.

The Company will continue to evaluate its organizational structure and portfolio in conjunction with its planned separation (see Note S), which may result in further changes to its reportable segments and the need to evaluate assets for impairment in future periods.

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, 2019
Sales:
Third-party sales	$	1,502	$	1,503		$	535	$	3,540
Intersegment sales	—		55			—		55
Total sales	$	1,502	$	1,558		$	535	$	3,595
Profit and loss:
Segment operating profit	$	253	$	107		$	87	$	447
Restructuring and other charges	14		6			9		29
Provision for depreciation and amortization	64		54			13		131

First quarter ended March 31, 2018
Sales:
Third-party sales	$	1,426	$	1,481		$	537	$	3,444
Intersegment sales	—		57			—		57
Total sales	$	1,426	$	1,538		$	537	$	3,501
Profit and loss:
Segment operating profit	$	209	$	124		$	67	$	400
Restructuring and other charges	1		(1		)	—		—
Provision for depreciation and amortization	65		56			13		134

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



	First quarter ended
	March 31,
	2019			2018
Total segment operating profit	$	447		$	400
Unallocated amounts:
Restructuring and other charges	(12		)	(7		)
Corporate expense	(61		)	(60		)
Consolidated operating income	$	374		$	333
Interest expense	(85		)	(114		)
Other expense, net	(32		)	(20		)
Consolidated income before income taxes	$	257		$	199

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



	March 31, 2019		December 31, 2018
Engineered Products and Solutions	$	10,153	$	9,797
Global Rolled Products	4,768		4,486
Transportation and Construction Solutions	1,206		1,089
Total segment assets	$	16,127	$	15,372

Segment assets at March 31, 2019 included operating lease right-of-use assets (see Notes B and N).

The following table reconciles Total segment assets to Consolidated assets:



	March 31, 2019		December 31, 2018
Total segment assets	$	16,127	$	15,372
Unallocated amounts:
Cash and cash equivalents	1,319		2,277
Deferred income taxes	480		573
Corporate fixed assets, net	308		305
Fair value of derivative contracts	8		37
Other	119		129
Consolidated assets	$	18,361	$	18,693

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



	Engineered Products and Solutions		Global Rolled Products		Transportation and Construction Solutions			Total Segment
First quarter ended March 31, 2019
Aerospace	$	1,250	$	302	$	—		$	1,552
Transportation	87		649		255			991
Building and construction	—		49		281			330
Industrial and Other	165		503		(1		)	667
Total end-market revenue	$	1,502	$	1,503	$	535		$	3,540

First quarter ended March 31, 2018
Aerospace	$	1,141	$	248	$	—		$	1,389
Transportation	73		622		243			938
Building and construction	—		48		285			333
Industrial and Other	212		563		9			784
Total end-market revenue	$	1,426	$	1,481	$	537		$	3,444