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Segment Information
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Information Segment 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 end 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. Segment operating profit may not be comparable to similarly titled measures of other companies. Differences between segment totals and consolidated Howmet are in Corporate.
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.
Goodwill     
The Company had $4,086 of Goodwill at March 31, 2021 and reviews it annually for impairment in the fourth quarter, or more frequently, if indicators exist or if a decision is made to sell or realign a business.
On January 1, 2020, management transferred the Savannah business from the Engine Products segment to the Engineered Structures segment, based on synergies with forgings technologies and manufacturing capabilities. As a result of the reorganization, goodwill of $17 was reallocated from Engine Products to Engineered Structures, and these reporting units were evaluated for impairment during the first quarter of 2020. The estimated fair value of each of these reporting units substantially exceeded their carrying value; thus, there was no goodwill impairment at the date the business was transferred.
During the first quarter of 2020, Howmet's market capitalization declined significantly compared to the fourth quarter of 2019. Over the same period, the equity value of our peer group companies, and the overall U.S. stock market also declined significantly amid market volatility. In addition, as a result of the COVID-19 pandemic and measures designed to contain the spread, global sales to customers in the aerospace and commercial transportation industries impacted by COVID-19 have been and are expected to be negatively impacted as a result of disruption in demand. As a result of these macroeconomic factors, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of any of our reporting units is less than its carrying value. As a result of this assessment, the Company performed a quantitative impairment test in the first quarter of 2020 for the Engineered Structures reporting unit and concluded that though the margin between the fair value of the reporting unit and carrying value had declined from approximately 60% to approximately 15%, it was not impaired. Consistent with prior practice, a discounted cash flow model was used to estimate the current fair value of the reporting unit. The significant assumptions and estimates utilized to determine fair value were developed utilizing current market and forecast information reflecting the disruption in demand that has and is expected to negatively impact the Company’s sales globally in the aerospace industry. If our actual results or external market factors decline significantly from management’s estimates, future goodwill impairment charges may be necessary and could be material. Since the first quarter of 2020, there have been no indicators of impairment identified for the Engineered Structures reporting unit or any other reporting units or indefinite-lived intangible assets.
The operating results of the Company’s reportable segments were as follows. Differences between total segment and consolidated totals are in Corporate.
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
First quarter ended March 31, 2021
Sales:
Third-party sales$534 $272 $176 $227 $1,209 
Inter-segment sales1 — 1 — 2 
Total sales$535 $272 $177 $227 $1,211 
Profit and loss:
Segment operating profit$101 $45 $10 $70 $226 
Restructuring and other charges5 2 1 — 8 
Provision for depreciation and amortization31 12 12 10 65 
Capital expenditures11 5 5 9 30 
First quarter ended March 31, 2020
Sales:
Third-party sales$781 $385 $275 $191 $1,632 
Inter-segment sales2 — 3 — 5 
Total sales$783 $385 $278 $191 $1,637 
Profit and loss:
Segment operating profit$165 $96 $28 $50 $339 
Restructuring and other charges13 2 17 2 34 
Provision for depreciation and amortization30 12 13 10 65 
Capital expenditures19 8 3 7 37 
The following table reconciles Total segment operating profit to Income from continuing operations before income taxes:
First quarter ended
March 31,
20212020
Total segment operating profit$226 $339 
Unallocated amounts:
Restructuring and other charges(9)(39)
Corporate expense(28)(42)
Consolidated operating income$189 $258 
Interest expense(72)(84)
Other (expense) income, net(4)24 
Income from continuing operations before income taxes$113 $198 
The following table reconciles Total segment capital expenditures, which are presented on an accrual basis, with Capital expenditures as presented on the statement of cash flows. Differences between segment and consolidated totals are in Corporate and discontinued operations, including the impact of changes in accrued capital expenditures during the period.
First quarter ended
March 31,
20212020
Total segment capital expenditures$30 $37 
Corporate and discontinued operations25 115 
Capital expenditures$55 $152 
The following table disaggregates segment revenue by major end market served. Differences between total segment and consolidated totals are in Corporate.
Engine ProductsFastening SystemsEngineered StructuresForged WheelsTotal
Segment
First quarter ended March 31, 2021
Aerospace - Commercial$227 $148 $80 $— $455 
Aerospace - Defense 151 42 77 — 270 
Commercial Transportation— 46 — 227 273 
Industrial and Other156 36 19 — 211 
Total end-market revenue$534 $272 $176 $227 $1,209 
First quarter ended March 31, 2020
Aerospace - Commercial$507 $257 $184 $— $948 
Aerospace - Defense 127 44 70 — 241 
Commercial Transportation— 46 — 191 237 
Industrial and Other147 38 21 — 206 
Total end-market revenue$781 $385 $275 $191 $1,632 

The Company derived 60% and 73% of its revenue from aerospace end markets in the first quarter of 2021 and 2020, respectively.
General Electric Company represented approximately 11% and 13% of the Company’s third-party sales for the first quarter of 2021 and 2020, respectively, primarily from Engine Products.