Item 1. Business.

General

Arconic Inc. is a Delaware corporation with its principal office in New York, New York and the successor to Arconic Pennsylvania (as defined below) which was formed in 1888 and formerly known as Alcoa Inc. In this report, unless the context otherwise requires, “Arconic” or the “Company” means Arconic Inc., a Delaware corporation, and all subsidiaries consolidated for the purposes of its financial statements.

The Company’s Internet address is http://www.arconic.com. Arconic makes available free of charge on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the Securities and Exchange Commission (SEC). The information on the Company’s Internet site is not a part of, or incorporated by reference in, this annual report on Form 10-K. The SEC maintains an Internet site that contains these reports at http://www.sec.gov.

Forward-Looking Statements

This report contains (and oral communications made by Arconic may contain) 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 or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts relating to the growth of the aerospace, automotive, commercial transportation and other end markets; statements and guidance regarding future financial results or operating performance; statements about Arconic’s strategies, outlook, business and financial prospects; and statements regarding potential share gains. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Although Arconic believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

For a discussion of some of the specific factors that may cause Arconic’s actual results to differ materially from those projected in any forward-looking statements, see the following sections of this report: Part I, Item 1A. (Risk Factors), Part II, Item 7. (Management’s Discussion and Analysis of Financial Condition and Results of Operations), including the disclosures under Segment Information and Critical Accounting Policies and Estimates, and Note K and the Derivatives Section of Note U to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and Supplementary Data). Market projections are subject to the risks discussed in this report and other risks in the market. Arconic disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.

Overview

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, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications.

Arconic is a global company operating in 18 countries. Based upon the country where the point of sale occurred, the United States and Europe generated 63% and 26%, respectively, of Arconic’s sales in 2017. In addition, Arconic has operating activities in Brazil, Canada, China, Japan, and Russia, among others. Governmental policies, laws and regulations, and other economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, affect the results of operations in these countries.

Arconic’s operations consist of three worldwide reportable segments: Engineered Products and Solutions, Global Rolled Products and Transportation and Construction Solutions.

Background

Arconic Inc. Reincorporation

On December 31, 2017 (the “Effective Date”), Arconic Inc., a Pennsylvania corporation (“Arconic Pennsylvania” or, prior to the Reincorporation (as defined below), the “Company”), effected the change of the Company’s jurisdiction of incorporation from Pennsylvania to Delaware (the “Reincorporation”) by merging (the “Reincorporation Merger”) with a direct wholly owned Delaware subsidiary, Arconic (in this section, “Arconic Delaware” or, following the Reincorporation, the “Company”), pursuant to an Agreement and Plan of Merger (the “Reincorporation Merger Agreement”), dated as of October 12, 2017, by and between Arconic Pennsylvania and Arconic Delaware. Arconic Pennsylvania shareholders approved the Reincorporation Merger to effect the Reincorporation at a Special Meeting of Shareholders held on November 30, 2017. As a result of the Reincorporation, (i) Arconic Pennsylvania has ceased to exist, (ii) Arconic Delaware automatically inherited the reporting obligations of Arconic Pennsylvania under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iii) Arconic Delaware is deemed to be the successor issuer to Arconic Pennsylvania.

The common stock, par value $1.00 per share, of Arconic Pennsylvania (the “Arconic Pennsylvania Common Stock”) was listed for trading on the New York Stock Exchange and traded under the symbol “ARNC.” As of the Effective Date, this symbol, without interruption, represents shares of common stock, par value $1.00 per share, of Arconic Delaware (the “Arconic Delaware Common Stock”). There was no change in the Exchange Act File Number assigned by the SEC as a result of the Reincorporation.

As of the Effective Date, the rights of the Company’s stockholders began to be governed by the General Corporation Law of the State of Delaware, the Certificate of Incorporation of Arconic Delaware (the “Delaware Certificate”) and the Bylaws of Arconic Delaware (the “Delaware Bylaws”).

Other than the change in corporate domicile, the Reincorporation did not result in any change in the business, physical location, management, financial condition or number of authorized shares of the Company, nor did it result in any change in location of its current employees, including management. On the Effective Date, (i) the directors and officers of Arconic Pennsylvania prior to the Reincorporation continued as the directors and officers of Arconic Delaware after the Reincorporation, (ii) each outstanding share of Arconic Pennsylvania Common Stock was automatically converted into one share of Arconic Delaware Common Stock, (iii) each outstanding share of Serial Preferred Stock, par value $100 per share, of Arconic Pennsylvania (the “Arconic Pennsylvania Preferred Stock”) was automatically converted into one share of Serial Preferred Stock, par value $100 per share, of Arconic Delaware (the “Arconic Delaware Preferred Stock”) and (iv) all of Arconic Pennsylvania’s employee benefit and compensation plans immediately prior to the Reincorporation were continued by Arconic Delaware, and each outstanding equity award and notional share unit relating to shares of Arconic Pennsylvania Common Stock was converted into an equity award or notional share unit, as applicable, relating to an equivalent number of shares of Arconic Delaware Common Stock on the same terms and subject to the same conditions. Beginning at the effective time of the Reincorporation, each certificate representing Arconic Pennsylvania Common Stock or Arconic Pennsylvania Preferred Stock was deemed for all corporate purposes to evidence ownership of Arconic Delaware Common Stock or Arconic Delaware Preferred Stock, as applicable. The Company’s stockholders may, but are not required to, exchange their stock certificates as a result of the Reincorporation.

The foregoing descriptions of the Arconic Delaware Common Stock, the Arconic Delaware Preferred Stock, the Delaware Certificate and the Delaware Bylaws are qualified in their entirety by the full text of the Delaware Certificate and the Delaware Bylaws, which are filed as Exhibits 3(a) and 3(b), respectively, to this report.

Alcoa Corporation Separation Transaction

On November 1, 2016, Alcoa Inc. completed the separation of its business into two independent, publicly traded companies (the “Separation”) – Alcoa Corporation and Arconic Inc. (the new name for Alcoa Inc.). Following the Separation, Alcoa Corporation holds the Alumina and Primary Metals segments, the rolling mill at the Warrick, Indiana operations and the 25.1% stake in the Ma’aden Rolling Company in Saudi Arabia previously held by the Company. The Company retained the Global Rolled Products (other than the rolling mill at the Warrick, Indiana operations and the 25.1% ownership stake in the Ma’aden Rolling Company), Engineered Products and Solutions and Transportation and Construction Solutions segments.

The Separation was effected by a pro rata distribution of 80.1% of the outstanding shares of Alcoa Corporation common stock to the Company’s shareholders (the “Distribution”). The Company’s shareholders of record as of the close of business on October 20, 2016 (the “Record Date”) received one share of Alcoa Corporation common stock for every three shares of the Company’s common stock held as of the Record Date. The Company did not issue fractional shares of Alcoa Corporation common stock in the Distribution. Instead, each shareholder otherwise entitled to receive a fractional share of Alcoa Corporation common stock received cash in lieu of fractional shares.

The Company distributed 146,159,428 shares of common stock of Alcoa Corporation in the Distribution and retained 36,311,767 shares, or approximately 19.9%, of the common stock of Alcoa Corporation immediately following the Distribution. As a result of the Distribution, Alcoa Corporation became an independent public company trading under the symbol “AA” on the New York Stock Exchange, and the Company trades under the symbol “ARNC” on the New York Stock Exchange.

During 2017, the Company disposed of its retained interest in Alcoa Corporation. In February 2017, the Company sold 23,353,000 shares of Alcoa Corporation stock at $38.03 per share, which resulted in cash proceeds of $888 million and a gain of $351 million. In April and May 2017, the Company acquired a portion of its outstanding notes held by two investment banks (the “Investment Banks”) in exchange for cash and the Company’s remaining 12,958,767 shares (valued at $35.91 per share) in Alcoa Corporation stock (the “Debt-for-Equity Exchange”) and recorded a gain of $167 million. The gains of $351 million and $167 million associated with the disposition of the Alcoa Corporation shares were recorded in Other Income, Net in the accompanying Statement of Consolidated Operations in Part II, Item 8 (Financial Statements and Supplementary Data).

On October 31, 2016, in connection with the Separation and the Distribution, Arconic entered into several agreements with Alcoa Corporation or its subsidiaries that govern the relationship of the parties following the Distribution, including the following: Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, certain Patent, Know-How, Trade Secret License and Trademark License Agreements, Toll Processing and Services Agreement, Master Agreement for the Supply of Primary Aluminum, Massena Lease and Operations Agreement, Fusina Lease and Operations Agreement, and Stockholder and Registration Rights Agreement.

Description of the Business

Information describing Arconic’s businesses can be found on the indicated pages of this report:

Item	Page(s)
Discussion of Recent Business Developments:
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Overview—Results of Operations (Earnings Summary)	34
Notes to Consolidated Financial Statements:
Note C. Separation Transaction and Discontinued Operations	74
Note D. Restructuring and Other Charges	76
Note E. Goodwill and Other Intangible Assets	78
Note F. Acquisitions and Divestitures	79
Note K. Contingencies and Commitments	84
Note Q. Income Taxes	96
Segment Information:
Business Descriptions, Principal Products, Principal Markets, Methods of Distribution, Seasonality and Dependence Upon Customers:
Engineered Products and Solutions	40
Global Rolled Products	41
Transportation and Construction Solutions	42
Financial Information about Segments and Financial Information about Geographic Areas:
Note N. Segment and Geographic Area Information	88

Major Product Revenues

Products that contributed 10% or more to consolidated revenues for the years ended December 31, 2017, 2016 and 2015, were:

	For the Years Ended December 31,
	2017		2016		2015
Flat-rolled aluminum	39	%	39	%	42	%
Fastening systems and rings	16	%	17	%	18	%
Investment castings	15	%	15	%	15	%
Other extruded and forged products	12	%	12	%	11	%

See Note N to the Consolidated Financial Statements in Part II, Item 8. (Financial Statements and Supplementary Data) for operating results of the Company’s reportable segments. Arconic has no customers that account for more than 10% of its consolidated revenues. However, certain of the Company’s businesses are dependent upon a few significant customers. The loss of any such significant customer could have a material adverse effect on such businesses.

Engineered Products and Solutions

Arconic’s Engineered Products and Solutions segment (“EP&S”) develops and manufactures high performance products mainly for the aerospace (commercial and defense), commercial transportation, and power generation end markets. Such products include fastening systems (titanium, steel, and nickel superalloys); seamless rolled rings (mostly nickel superalloys); investment castings (nickel superalloys, titanium, and aluminum), including airfoils and structural components; forged airframe and jet engine components (nickel superalloys, titanium, aluminum), including bulkheads, disks and shafts; extruded airframe components (aluminum); and various other forged and extruded metallic components for the oil and gas, industrial products, automotive, and land and sea defense end markets.

Throughout 2017, EP&S was comprised of four business units: Arconic Power and Propulsion; Arconic Fastening Systems and Rings; Arconic Forgings and Extrusions; and Arconic Titanium and Engineered Products.

Arconic Power and Propulsion (APP). APP produced investment cast airfoils for aero engine and industrial gas turbines and structural aero engine and airframe components. APP also provided additive manufacturing technologies, superalloy and titanium ingots, machining, performance coatings, and hot isostatic pressing for high performance parts.

Arconic Fastening Systems and Rings (AFSR). AFSR produced aerospace fastening systems and seamless rolled rings, as well as commercial transportation 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 industrial gas turbines, automobiles, commercial transportation vehicles, and construction and industrial equipment.

Arconic Forgings and Extrusions (AFE). AFE produced defense airframe forgings and extrusions, such as forged bulkheads, wing and landing gear components, closed-die aero engine forgings, such as disks, and lightweight drive shafts for commercial transportation industries.

Arconic Titanium and Engineered Products (ATEP). ATEP produced titanium aero ingots and mill products, and provided multi-material airframe subassemblies and solutions related to advanced technologies and materials, such as 3D printing and titanium aluminides.

In January 2018, EP&S announced a change in the organizational structure of the segment, from four business units to three business units, with a focus on aligning its internal structure to core markets and customers and reducing costs. The three new business units are Arconic Engines; Arconic Fastening Systems; and Arconic Engineered Structures.

Arconic Engines (AE). AE will produce investment cast airfoils, seamless rolled rings and closed-die (including isothermal) forged turbine disks for aero engine and industrial gas turbines, as well as other structural aero engine components. AE also will provide additive manufacturing technologies, superalloy ingots, open-die forging, machining, performance coatings, and hot isostatic pressing for high performance parts.

Arconic Fastening Systems (AFS). AFS will produce aerospace fastening systems, as well as commercial transportation 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 industrial gas turbines, automobiles, commercial transportation vehicles, and construction and industrial equipment.

Arconic Engineered Structures (AES). AES will produce titanium and aluminum ingots and mill products for aerospace and defense applications and is vertically integrated to produce structural investment castings, forgings and extrusions, for airframe, wing, aero-engine, and landing gear components, as well as lightweight drive shafts for the commercial transportation industries. AES will also provide multi-material airframe subassemblies and solutions related to advanced technologies and materials, such as 3D printing and titanium aluminides.

For additional discussion of the EP&S's business, see “Results of Operations—Segment Information” in Part II, Item 7. (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Note N to the Consolidated Financial Statements—Segment and Geographic Area Information in Part II, Item 8. (Financial Statements and Supplementary Data).

In November 2017, Arconic announced a multi-year cooperative research agreement with Airbus to advance metal 3D printing for aircraft manufacturing. Together, the companies will develop customized processes and parameters to produce and qualify large, structural 3D printed components, such as pylon spars and rib structures, up to approximately 1 meter (3 feet) in length. The arrangement combines Arconic’s expertise in metal additive manufacturing and metallurgy with Airbus’s design and qualification capabilities. In September 2017, the Company announced that Airbus and Arconic achieved a 3D printing first - the installation of a 3D printed titanium bracket on a series production Airbus commercial aircraft, the A350 XWB. Arconic is 3D printing these parts using laser power bed technologies at its additive manufacturing facility in Austin, Texas.

This 3D printed titanium bracket is part of an ongoing arrangement between the Company and Airbus. In 2016, Arconic announced three agreements with Airbus to produce titanium and nickel 3D printed parts for commercial aircraft, including the A320 platform and A350 XWB. These agreements draw on Arconic’s cutting-edge 3D printing technology capabilities, including laser powder bed and electron beam processes.

Engineered Products and Solutions Principal Facilities1

Country		Facility		Products
Australia		Oakleigh		Fasteners
Canada		Georgetown, Ontario2		Aerospace Castings
		Laval, Québec		Aerospace Castings and Machining
China		Suzhou2		Fasteners and Rings
France		Dives-sur-Mer		Aerospace and Industrial Gas Turbine Castings
		Evron		Aerospace and Specialty Castings
		Gennevilliers		Aerospace and Industrial Gas Turbine Castings
		Montbrison		Fasteners
		St. Cosme-en-Vairais2		Fasteners
		Toulouse		Fasteners
		Us-par-Vigny		Fasteners
Germany		Bestwig		Aerospace Castings
		Erwitte		Aerospace Castings
		Hannover2		Extrusions
		Hildesheim-Bavenstedt2		Fasteners
		Kelkheim2		Fasteners
Hungary		Eger		Forgings
		Nemesvámos		Fasteners
		Székesfehérvár		Aerospace and Industrial Gas Turbine Castings and Forgings
Japan		Nomi		Aerospace and Industrial Gas Turbine Castings
Mexico		Ciudad Acuña2		Aerospace Castings/Fasteners and Rings
Morocco		Casablanca2		Fasteners
South Korea		Kyoungnam		Extrusions
United Kingdom		Darley Dale		Forgings
		Ecclesfield		Ingot Castings
		Exeter2		Aerospace and Industrial Gas Turbine Castings and Alloy
		Glossop		Ingot Castings
		Ickles		Ingot Castings
		Leicester2		Fasteners
		Low Moor		Extrusions
		Meadowhall		Forgings
		Provincial Park		Forgings
		Redditch2		Fasteners
		River Don		Forgings
		Telford		Fasteners
		Welwyn Garden City		Aerospace Formed Parts

Country		Facility		Products
United States		Chandler, AZ		Extrusions
		Tucson, AZ2		Fasteners
		Carson, CA2		Fasteners
		City of Industry, CA2		Fasteners
		Fontana, CA		Rings
		Fullerton, CA2		Fasteners
		Newbury Park, CA		Fasteners
		Rancho Cucamonga, CA		Rings
		Sylmar, CA		Fasteners
		Torrance, CA		Fasteners
		Branford, CT		Aerospace Coatings
		Winsted, CT		Aerospace Machining
		Savannah, GA		Forgings
		Lafayette, IN		Extrusions
		La Porte, IN		Aerospace and Industrial Gas Turbine Castings
		Burlington, MA2		Powdered Metal Parts
		Baltimore, MD2		Extrusions
		Whitehall, MI		Aerospace and Industrial Gas Turbine Castings and Coatings, Titanium Alloy and Specialty Products
		Sullivan, MO		Titanium Mill Products
		Washington, MO		Aerospace Formed Parts
		Big Lake, MN		Aerospace Machining
		New Brighton, MN		Aerospace Machining
		Dover, NJ		Aerospace and Industrial Gas Turbine Castings and Alloy
		Verdi, NV		Rings
		Kingston, NY2		Fasteners
		Massena, NY		Extrusions
		Rochester, NY		Rings
		Canton, OH2		Ferro-Titanium Alloys and Titanium Mill Products
		Cleveland, OH		Investment Casting Equipment, Aerospace Components, Castings, Forgings and Oil & Gas Drilling Products
		Niles, OH		Titanium Mill Products
		Morristown, TN2		Aerospace and Industrial Gas Turbine Ceramic Products
		Austin, TX2		Additively Manufactured Parts
		Houston, TX2		Extrusions
		Spring, TX		Deep Water Drilling Machining
		Waco, TX2		Fasteners
		Wichita Falls, TX		Aerospace and Industrial Gas Turbine Castings
		Hampton, VA2		Aerospace and Industrial Gas Turbine Castings
		Martinsville, VA		Titanium Mill Products

1	Principal facilities are listed, and do not include 13 locations that serve as sales and administrative offices, distribution centers or warehouses.

2	Leased property or partially leased property.

Global Rolled Products

Arconic’s Global Rolled Products segment (“GRP”) produces a range of aluminum sheet and plate products for the following markets:

Aerospace and Automotive - GRP provides a wide range of products, including many highly-differentiated sheet and plate products, for the worldwide aerospace and regional automotive markets.

Brazing, Commercial Transportation and Industrial - GRP provides specialty aluminum sheet and plate products for automotive, commercial transportation and industrial applications including proprietary heat exchanger products like multilayer brazing sheet.

Packaging - GRP serves the packaging market in Russia, Asia and Latin America through regional facilities.

In July 2017, GRP announced a new organization, streamlining and consolidating its businesses into a single group organization structure.

For additional discussion of the Global Rolled Products segment’s business, see “Results of Operations—Segment Information” in Part II, Item 7. (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Note N to the Consolidated Financial Statements—Segment and Geographic Area Information in Part II, Item 8. (Financial Statements and Supplementary Data).

In November 2017, the Company announced plans to install a new horizontal heat treat furnace at its Davenport, Iowa facility. This new furnace will enable Arconic to heat treat longer and thicker plate than ever before, including material for its new state of the art "very thick plate stretcher."

This stretcher, the world’s largest, improves the performance of thick aluminum and aluminum-lithium plate in aerospace and industrial applications, and enables the Company to produce the largest high-strength monolithic wing ribs in the industry. In April 2017, the Company announced the completion of the installation of the stretcher.

Also in April 2017, the Company announced the divestiture of its Fusina, Italy rolling mill to Slim Aluminum. The transaction was part of GRP’s drive to improve portfolio mix.

Global Rolled Products Principal Facilities

Country		Location		Products
Brazil		Itapissuma		Specialty Foil
China		Kunshan		Sheet and Plate
		Qinhuangdao1		Sheet and Plate
Hungary		Székesfehérvár		Sheet and Plate/Slabs and Billets
Russia		Samara		Sheet and Plate/Extrusions and Forgings
United Kingdom		Birmingham		Plate
United States		Davenport, IA		Sheet and Plate
		Danville, IL2		Sheet and Plate
		Hutchinson, KS2		Sheet and Plate
		Lancaster, PA		Sheet and Plate
		Alcoa, TN		Sheet
		Texarkana, TX3		Slabs
		San Antonio, TX4		Micromill™

1	Leased property or partially leased property.

2	Properties are satellite locations of the Davenport, Iowa facility.

3

The Texarkana rolling mill facility had been idle since September 2009 due to a continued weak outlook in common alloy markets. In January 2016, the Company restarted its Texarkana cast house to meet demand for aluminum slab for the automotive industry. The aluminum slab that is cast at Texarkana is turned into aluminum sheets at Arconic’s expanded automotive facility in Davenport, Iowa and its rolling mill in Lancaster, Pennsylvania.

4	Micromill™ production facility produces sheet for automotive and industrial applications using Arconic innovative production process.

Transportation and Construction Solutions

Arconic’s Transportation and Construction Solutions segment ("TCS") produces products that are used mostly in the commercial transportation and nonresidential building and construction end markets. Such products include integrated aluminum structural systems, architectural extrusions, forged aluminum commercial vehicle wheels, and aluminum products for the industrial products end market.

The Transportation and Construction Solutions segment is comprised of three business units: Arconic Wheel and Transportation Products; Building and Construction Systems; and Latin America Extrusions.

Arconic Wheel and Transportation Products (AWTP). AWTP provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation markets.

Building and Construction Systems (BCS). BCS provides building and construction architectural framing products and aluminum curtain wall and front entry systems.

Latin America Extrusions (LAE). LAE serves both the building and construction and the industrial markets in Latin America, with products including aluminum architectural systems for doors, windows and curtain walls, and a wide range of extruded solutions for the automotive, defense and other industrial industries. In December 2017, Arconic announced an agreement to divest its LAE business. Customary regulatory and antitrust reviews are complete, and the ownership of LAE will be transferred to a subsidiary of Hydro Extruded Solutions AS. The deal is expected to close in the first half of 2018.

For additional discussion of the Transportation and Construction Solutions segment’s business, see “Results of Operations—Segment Information” in Part II, Item 7. (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Note N to the Consolidated Financial Statements—Segment and Geographic Area Information in Part II, Item 8. (Financial Statements and Supplementary Data).

Transportation and Construction Solutions Principal Facilities1

Country		Facility		Products
Brazil		Itapissuma2		Forgings
		Tubarão3		Extrusions
		Utinga3		Extrusions
Canada		Lethbridge, Alberta		Architectural Products
China		Suzhou2		Forgings
France		Merxheim2		Architectural Products
Hungary		Székesfehérvár		Forgings
Japan		Jôetsu City2		Forgings
Mexico		Monterrey		Forgings
United Kingdom		Runcorn		Architectural Products
United States		Springdale, AR		Architectural Products
		Visalia, CA		Architectural Products
		Eastman, GA		Architectural Products
		Barberton, OH		Forgings
		Cleveland, OH		Forgings
		Bloomsburg, PA		Architectural Products
		Cranberry, PA		Architectural Products

1	Principal facilities are listed, and do not include 9 locations that serve as sales and administrative offices, distribution centers or warehouses. In addition to the facilities listed above, TCS has 21 service centers. These centers perform light manufacturing, such as assembly and fabrication of certain products.

2	Leased property or partially leased property.

3	Location is part of the planned divestiture of LAE, the sale of which is expected to be completed in the first half of 2018.

Sources and Availability of Raw Materials

The major raw materials purchased in 2017 for each of the Company’s reportable segments are listed below.

Engineered Products and Solutions		Global Rolled Products
Alloying materials		Alloying materials
Electricity		Aluminum scrap
Natural gas		Coatings
Nickel alloys		Electricity
Primary aluminum (ingot, billet, P1020, high purity)		Lube oil
Resin		Natural gas
Stainless steel		Packaging materials
Steel		Primary aluminum (ingot, slab, billet, P1020, high purity)
Titanium alloys		Steam
Titanium sponge
Transportation and Construction Solutions
Aluminum coil
Aluminum scrap
Electricity
Natural gas
Paint/Coating
Polyethylene
Primary aluminum
Resin

Generally, other materials are purchased from third-party suppliers under competitively priced supply contracts or bidding arrangements. The Company believes that the raw materials necessary to its business are and will continue to be available.

Patents, Trade Secrets and Trademarks

The Company believes that its domestic and international patent, trade secret and trademark assets provide it with a significant competitive advantage. The Company’s rights under its patents, as well as the products made and sold under them, are important to the Company as a whole and, to varying degrees, important to each business segment. The patents owned by Arconic generally concern particular products or manufacturing equipment or techniques. Arconic’s business as a whole is not, however, materially dependent on any single patent, trade secret or trademark. As a result of product development and technological advancement, the Company continues to pursue patent protection in jurisdictions throughout the world. As of the end of 2017, the Company’s worldwide patent portfolio consists of approximately 1,669 granted patents and 807 pending patent applications.

The Company also has a significant number of trade secrets, mostly regarding manufacturing processes and material compositions that give many of its businesses important advantages in their markets. The Company continues to strive to improve those processes and generate new material compositions that provide additional benefits.

With respect to domestic and international registered trademarks, the Company has many that have significant recognition within the markets that are served. Examples include the name “Arconic” and the Arconic symbol for aluminum, nickel, and titanium products, Howmet® metal castings, Huck® fasteners, Kawneer® building panels and Dura-Bright® wheels with easy-

clean surface treatments. A significant trademark filing campaign for the name “Arconic” was completed in 2016, in support of the corporate launch of Arconic Inc. As of the end of 2017, the Company’s worldwide trademark portfolio consists of approximately 1,793 registered trademarks and 625 pending trademark applications. The Company’s rights under its trademarks are important to the Company as a whole and, to varying degrees, important to each business segment.

Competitive Conditions

Engineered Products and Solutions (EP&S)

EP&S’s business units - AFS (Arconic Fastening Systems), AE (Arconic Engines) and AES (Arconic Engineered Structures) -are subject to substantial and intense competition in the markets they serve. Although Arconic believes its advanced technology, manufacturing processes and experience provide advantages to Arconic’s customers, such as high quality and superior mechanical properties that meet the Company’s customers’ most stringent requirements, many of the products Arconic makes can be produced by competitors using similar types of manufacturing processes as well as alternative forms of manufacturing. Despite intense competition, Arconic continues as a market leader in most of its principal markets. Several factors, including Arconic’s legacy of technical innovation, state-of-the-art capabilities, engaged employees and long-standing customer relationships, enable the Company to maintain its competitive position.

Principal competitors in the EP&S segment include Berkshire Hathaway Inc., through its acquisition of Precision Castparts Corporation and subsidiaries, for titanium and titanium-based alloys, precision forgings, seamless rolled rings, investment castings and aerospace fasteners; VSMPO (Russia) for titanium and titanium-based alloys and precision forgings; the High-Performance Materials & Components segment of Allegheny Technologies, Inc. (ATI) for titanium and titanium-based alloys, precision forgings, and investment castings; Lisi Aerospace (France) for aerospace fasteners; and Aubert & Duval (part of Eramet Group in France) for precision forgings.

Other competitors include:

• Kaiser Aluminum - for extruded products

• Universal Alloy Corp., part of Montana Tech Components - for extruded products

• Doncasters Group Ltd. (UK) - for investment castings

• Consolidated Precision Products Corp., part of Warburg Pincus - for investment castings

• Weber Metals, part of Otto Fuchs - for precision forgings

• Forgital - for seamless rings

Several of Arconic’s largest customers have captive superalloy furnaces for producing airfoil investment castings for their own use. Many other companies around the world also produce superalloy investment castings, and some of these companies currently compete with Arconic in the aerospace and other markets, while others are capable of competing with the Company should they choose to do so.

International competition in the investment casting, fastener, ring and forging markets may also increase in the future as a result of strategic alliances among engine original equipment manufacturers (OEMs), aero-structure prime contractors, and overseas companies, especially in developing markets, particularly where “offset” or “local content” requirements create purchase obligations with respect to products manufactured in or directed to a particular country.

Global Rolled Products (GRP)

GRP is one of the leaders in many of the aluminum flat rolled products markets in which it participates, including aerospace, automotive, brazing sheet, commercial transportation, industrial markets and packaging. However, much like other Arconic businesses, GRP is subject to substantial and intense competition in all of its markets.

While GRP participates in markets where Arconic believes the Company has a significant competitive advantage due to customer intimacy, advanced manufacturing capability, unique technology and/or differentiated products, in certain cases, the Company’s competitors are capable of making products similar to Arconic’s. The Company continuously works to maintain and enhance its competitive advantage through innovation: new alloys such as Arconic’s new aerospace alloys, new products such as the Company’s 5-layer brazing products and break-through processes such as Arconic Micromill® technology.

Some of GRP’s markets are worldwide and some are more regionally focused. Participation in these segments by GRP’s competitors varies. For example, Novelis is the largest flat rolled products producer competing in automotive, but it does not participate in the aerospace market. On the other hand, Constellium participates in all major market segments including aerospace, brazing, industrial, commercial transportation and packaging. Granges participates only in the brazing sheet market. Other GRP competitors include Aleris, AMAG, Kaiser, Kobe, Nanshan, and UACJ.

Additionally, there are a number of new competitors emerging, particularly in China and other developing economies. For example, in the brazing business, the number of viable competitors has doubled over a five-year period. Arconic expects that this competitive pressure will continue and increase in the future as customers seek to globalize their supply bases in order to reduce costs. The Company continually monitors and plans for these new emerging players.

Summary of Major Competitors for GRP:

•	Constellium (The Netherlands)

•	Novelis

•	Kaiser Aluminum

•	UACJ (Japan)

•	Aleris

•	Hydro (Norway)

•	Nanshan (China)

•	Granges (Sweden)

•	Kobe (Japan)

Transportation and Construction Solutions (TCS)

In the forged aluminum wheels business, AWTP competes in commercial transportation, under the product brand name Alcoa® Wheels, for the major regions that it serves (Americas, Europe, Japan, China, and Australia). AWTP competes against steel wheels, as well as aluminum. Its larger competitors are Accuride Corporation, Nippon Steel & Sumitomo Metal Corporation, Zhejiang Dicastal Hongxin Technology Co. Ltd, Wheels India Limited and Speedline (member of the Ronal Group). In recent years, AWTP has seen an increase in the number of aluminum wheel suppliers (both forged and cast aluminum wheels) from China, Taiwan, India and South Korea attempting to penetrate the commercial transportation market.

BCS is a manufacturer of aluminum architectural systems and products in North America and with a growing presence in Europe and the Middle East. In North America, BCS primarily competes in the nonresidential building segment. In Europe and the Middle East, it competes in both the residential and the nonresidential building segments. BCS competes with regional and local players in the architectural systems and more global companies in the products markets. BCS’s competitive advantage is the cornerstone to its strong brand, innovative products, customer intimacy and technical services. Over the past decade, the regional competitors, primarily in North America, have narrowed the product portfolio and technical services advantages. However, BCS has maintained its competitive advantage through innovative products like highly energy-efficient high-thermal products and differentiated services. BCS sales are derived mainly from the retail, office, education and healthcare building segments.

BCS is organized into two business segments: architectural systems and architectural products. The primary product categories in architectural systems are storefront, framing and entrances (SEF), curtain walls, and windows. In the SEF and curtain wall businesses, BCS competes with competitors like Apogee, YKK, Oldcastle, Schüco, Hydro/SAPA and Reynaers in their aluminum framing systems business. The architectural products business is more global and is primarily served by subsidiaries of larger companies like Alpolic (Mitsubishi Corporation), Alucobond (Schweiter Technologies) and Novelis (Aditya Birla Group). The primary product categories are aluminum composite material and coil coated sheet. The competitive landscape in the architectural systems market has been relatively stable since the mid-2000s, with the major competitors in North America and Europe still operating in their markets, despite some industry consolidation in North America during the late 2000s.

As noted above, in December 2017, Arconic announced the divestiture of its LAE business which is expected to close in the first half of 2018. LAE has participated in two distinct segments: building and construction and industrial. In the building and construction market, LAE develops and markets aluminum architectural systems for both commercial and residential buildings. In the industrial business market, LAE manufactures and sells soft alloy extruded profiles and solutions, mainly for the automotive, consumer goods, machinery and equipment segments. Overall, LAE has held a strong presence in Brazil, where competition is very fragmented, composed mainly of small local extruders and a few multinationals such as CBA (Votorantim Group) and SAPA.

Summary of Major Competitors:

AWTP:

•	Accuride Corporation

•	Nippon Steel & Sumitomo Metal Corporation (Japan)

•	Zhejiang Dicastal Hongxin Technology Co. Ltd (China)

•	Wheels India Limited (India)

•	Speedline (member of the Ronal Group in Switzerland)

BCS:

•	Apogee, Oldcastle and YKK

•	Alpolic, Alucobond and Alucoil

•	Schüco (Germany), Hydro/SAPA (Norway), Reynaers (Belgium) and Corialis (Belgium)

•	Alucobond, Alucoil, Euramax and Novelis

LAE:

•	Belmetal (Brazil)

•	CBA (Brazil)

•	SAPA (Norway)

•	Aluk (Brazil)

Research and Development

Arconic, at its light metals research center, engages in research and development (R&D) programs that include process and product development, and basic and applied research. R&D expenditures were $111 million, $132 million and $169 million in 2017, 2016 and 2015, respectively.

Throughout 2017, the Company continued working on new developments in all business segments and leveraging new technologies. The Company has continued investing in additive manufacturing, with a focus on producing metal powder materials tailored for a range of additive process technologies, and furthering its development of advanced 3D printing design and manufacturing techniques-such as Arconic’s Ampliforge™ process-to improve production speeds, reduce costs, and achieve material properties not possible through other additive flowpaths. The Company’s new powder production facility was completed at the Arconic Technology Center in 2016. This facility will continue its focus on material development in aluminum, nickel and titanium alloys.

The Company is also producing and qualifying additively manufactured aerospace components via laser powder bed printing technology. It also is developing more formable titanium plate based wrought products for customers.

The Arconic Micromill® technology located in San Antonio continues to transition to commercial production, as the Company has invested in further developing Micromill™ technology, including installation of a pilot line at the Arconic Technology Center.

The Company continues to develop differentiated pretreatment technology, continuing to improve on its patented A951 technology, joining methods/fasteners (like RSR™) and highly formable and high strength automotive sheet products for automotive original equipment manufacturer applications in both cosmetic hang on parts and structural body-in-white applications.

The Company continued its differentiation in the commercial transportation market with Dura-Bright® EVO, UltraOne™ and European UltraOne™ wheel products.

The Company also continues to develop and deploy proprietary processing technologies in the manufacture of aerospace components, as well as a continued commitment and commercialization of a portfolio of proprietary aerospace fasteners. One such example is Ergo-Tech® blind fasteners which enable automated assembly operations.

Environmental Matters

Information relating to environmental matters is included in Note K to the Consolidated Financial Statements under the caption “Environmental Matters” on page 84. Approved capital expenditures for new or expanded facilities for environmental control are $19 million for 2018 and estimated expenditures for such purposes are $2 million for 2019.

Employees

Total worldwide employment at the end of 2017 was approximately 41,500 employees in 25 countries. About 20,900 of these employees are represented by labor unions. The Company believes that relations with its employees and any applicable union representatives generally are good.

In the United States, approximately 7,600 employees are represented by various labor unions. The largest collective bargaining agreement is the master collective bargaining agreement between Arconic and the United Steelworkers (USW). The USW master agreement covers approximately 3,300 employees at four U.S. locations; the current labor agreement expires on May 15, 2019. There are 17 other collective bargaining agreements in the United States with varying expiration dates.

On a regional basis, collective bargaining agreements with varying expiration dates cover approximately 9,300 employees in Europe and Russia, 10,000 employees in North America, 600 employees in South America, and 1,000 employees in Asia.

Executive Officers of the Registrant

The names, ages, positions and areas of responsibility of the executive officers of the Company as of February 23, 2018 are listed below.

Charles P. “Chip” Blankenship, 51, Chief Executive Officer. Mr. Blankenship was elected Chief Executive Officer of Arconic and a member of the Arconic Board of Directors effective January 15, 2018. Mr. Blankenship was Senior Vice President of Haier Group, and President and Chief Executive Officer of its GE Appliances business from June 2016 to June 2017. GE Appliances was a division of General Electric Company until June 2016, when it was acquired by Qingdao Haier Co., Ltd., and Mr. Blankenship served as its President and Chief Executive Officer from December 2011 until June 2016. Prior to GE Appliances, Mr. Blankenship served as Vice President and General Manager of the Commercial Engines Operation for GE Aviation from July 2008 until December 2011. From April 2006 to July 2008, Mr. Blankenship was the General Manager of Aero Energy, a division of GE Energy.

Ken Giacobbe, 52, Executive Vice President and Chief Financial Officer. Mr. Giacobbe was elected Executive Vice President and Chief Financial Officer of Arconic effective November 1, 2016. Mr. Giacobbe joined Arconic in 2004 as Vice President of Finance for Global Extruded Products, part of Alcoa Forgings and Extrusions. He then served as Vice President of Finance for the Company’s Building and Construction Systems business from 2008 until 2011. In 2011, he assumed the role of Group Controller for the Engineered Products and Solutions segment. From January 2013 until October 2016, Mr. Giacobbe served as Chief Financial Officer of the Engineered Products and Solutions segment. Before joining Arconic, Mr. Giacobbe held senior finance roles at Avaya and Lucent Technologies.

Mark J. Krakowiak, 57, Executive Vice President, Strategy and Development. Mr. Krakowiak was elected to his current position effective January 29, 2018. Prior to joining Arconic, Mr. Krakowiak had a 33-year career at General Electric Company, where he held a range of financial and strategy roles, including positions in financial planning, business development and M&A, treasury and commercial. Most recently, Mr. Krakowiak was Chief Financial Officer of GE Appliances, a Haier Company, from June 2016 to January 2017. Previously, Mr. Krakowiak served as Vice President and Chief Financial Officer of General Electric’s Appliances and Lighting business from September 2011 to June 2016. From July 2009 to September 2011, Mr. Krakowiak was Chief Risk Officer of GE’s global enterprise risk function, and from January 2003 to July 2009, he was Vice President of GE’s Industrial Treasury and Insurance Operations.

Timothy D. Myers, 52, Executive Vice President and Group President, Global Rolled Products and Transportation and Construction Solutions. Mr. Myers was appointed Executive Vice President and Group President, Global Rolled Products and Transportation and Construction Solutions in October 2017. Prior to being appointed to his current role, he was Executive Vice President and Group President, Transportation and Construction Solutions from May 2016 to October 2017. Prior to that assignment, he was President of Alcoa Wheel and Transportation Products, from June 2009 to May 2016. Mr. Myers was Vice President and General Manager, Commercial Vehicle Wheels for the Alcoa Wheel Products business from January 2006 to June 2009. Mr. Myers joined Arconic in 1991 as an automotive applications engineer in the Commercial Rolled Products Division, and held a series of engineering, marketing, sales and management positions with the Company since that time.

Paul Myron, 51, Vice President and Controller. Mr. Myron was elected Vice President and Controller of Arconic effective November 1, 2016. Mr. Myron joined Arconic as a systems analyst in Pittsburgh and in 1992 relocated to the Company’s Davenport, Iowa facility as a product accountant. He served in numerous financial management positions from 1995 until 2000 when he was named Commercial Manager and Controller for the Atlantic division of the Alcoa World Alumina and Chemicals business. In 2002, Mr. Myron was appointed Vice President of Finance, Alcoa Primary Metals and later became Vice President of Finance, Alcoa World Alumina and Chemicals. In 2005 Mr. Myron was named Director of Financial Planning and Analysis, accountable for Arconic’s financial planning, analysis, and reporting worldwide. In February 2012, he became Director of Finance Initiatives for the Engineered Products and Solutions segment, overseeing specific financial initiatives and projects within the group. From July 2012 until his most recent appointment, Mr. Myron served as Vice President, Finance and Business Excellence for the Arconic Power and Propulsion business.

Vas Nair, 52, Executive Vice President, Human Resources. Ms. Nair was appointed Executive Vice President, Human Resources in November 2015. Prior to being appointed to her current role, Ms. Nair was Arconic’s Chief Talent and Diversity Officer, with global responsibility for diversity and inclusion from February 2015 to October 2015. Prior to joining Arconic, Ms. Nair was VP of Global Learning and Talent Development at Estee Lauder from November 2010 to January 2015. Ms. Nair was Vice President and Chief Learning Officer at Schering-Plough from November 2003 to October 2009.

Katherine H. Ramundo, 50, Executive Vice President, Chief Legal Officer and Secretary. Ms. Ramundo was elected to her current position effective November 1, 2016. Prior to joining Arconic, from January 2013 through August 2015, she was Executive Vice President, General Counsel and Secretary of ANN INC., the parent company of ANN TAYLOR and LOFT brands, based in New York. Prior to ANN INC., she served as Vice President, Deputy General Counsel and Assistant Secretary at Colgate-Palmolive, where she held various legal roles from November 1997 to January 2013. She began her career as a litigator in New York, practicing at major law firms, including Cravath, Swaine & Moore and Sidley & Austin.

Eric V. Roegner, 48, Executive Vice President and Group President, Engineered Products and Solutions, and President, Arconic Defense. Mr. Roegner was elected Executive Vice President and Group President, Engineered Products and Solutions effective October 2017, and President, Arconic Defense effective June 2012. Previously, Mr. Roegner served as Executive Vice President and Group President, Global Rolled Products from May 2017 until October 2017; Chief Operating Officer of Arconic Investment Castings, Titanium and Engineered Products from July 2015 until May 2017; and Chief Operating Officer of Alcoa Investment Castings, Forgings and Extrusions from January 2013 until July 2015. Mr. Roegner joined the Company in 2006 as Chief Operating Officer of Arconic’s Global Engineered Products business.

The Company’s executive officers are elected or appointed to serve until the next annual meeting of the Board of Directors (held in conjunction with the annual meeting of shareholders) except in the case of earlier death, retirement, resignation or removal.