Arconic Annual Report 2019

FY2019 Annual Report · Arconic

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-39162
ARCONIC ROLLED PRODUCTS CORPORATION*
(Exact name of Registrant as specified in its charter)

Delaware
(State of incorporation)

84-2745636
(I.R.S. Employer Identification No.)

201 Isabella Street, Pittsburgh, Pennsylvania 15212-5872
(Address of principal executive offices) (Zip code)

(412) 992-2500
(Registrant’s telephone number, including area code)

Securities to be registered pursuant to Section 12(b) of the Act**

Title of each class

Common Stock

Trading Symbol

Name of each exchange on which registered

ARNC

New York Stock Exchange

Securities to be registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes ☐ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the
past 90 days. Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files). Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Non-accelerated filer

Accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of June 30, 2019, the registrant's common stock was not publicly traded. As of March 19, 2020, there were 109,021,376
shares of common stock, par value $0.01 per share, of the registrant outstanding.***

______________________

* The registrant is currently named Arconic Rolled Products Corporation. The registrant plans to change its name to “Arconic
Corporation” in connection with the consummation of the separation described in this Annual Report on Form 10-K.
**“When-issued” trading of Arconic Rolled Products Corporation common stock began on March 18, 2020 under the ticker
symbol “ARNC WI” and will continue until the distribution date. “Regular-way” trading of Arconic Rolled Products
Corporation common stock is expected to begin with the opening of the New York Stock Exchange on April 1, 2020 under the
ticker symbol “ARNC.”

*** Following the separation from Arconic Inc. described in this Annual Report on Form 10-K, Arconic Rolled Products
Corporation expects to have outstanding 109,021,376 shares of common stock based upon the 436,085,504 shares of Arconic
Inc. common stock issued and outstanding on March 19, 2020 and applying the distribution ratio.

TABLE OF CONTENTS

Part I

Item 1.

Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2.

Item 3.

Properties

Legal Proceedings

Item 4. Mine Safety Disclosures

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Item 6.

Selected Financial Data

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Part III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accounting Fees and Services

Part IV

Item 15. Exhibits, Financial Statement Schedules

Item 16.

Form 10-K Summary

Signatures

Page

100

101

115

129

132

138

139

142

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Forward-Looking Statements

Unless otherwise specified or the context otherwise requires, when used in this Annual Report on Form 10-K, the terms “we,”
“our,” “us,” “Arconic,” “Arconic Corporation” or the “Company” refer to Arconic Rolled Products Corporation and its
subsidiaries.

This Annual Report on Form 10-K contains (and oral communications made by Arconic Corporation 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
Corporation’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact,
are forward-looking statements, including, without limitation, statements regarding forecasts relating to the rolled aluminum
products, aluminum extrusions, and architectural products markets; statements and guidance regarding future financial results or
operating performance; statements about Arconic Corporation’s strategies, outlook, business and financial prospects; expectations
relating to the growth of the aerospace, ground transportation, industrials, packaging and other end markets; projected sources of
cash flow and our ability to optimize cash accessibility and minimize tax expense; existing or potential capital expenditures and
investments; statements regarding the industry and our competition, statements regarding potential share gains, potential legal
liability, proposed legislation and regulatory action, the possible impacts and our preparedness to respond to implications of
coronavirus (COVID-19). These statements reflect beliefs and assumptions that are based on Arconic Corporation’s perception of
historical trends, current conditions and expected future developments, as well as other factors Arconic Corporation believes are
appropriate in the circumstances. 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 Corporation 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 Corporation’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 T 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 Corporation 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.

Item 1. Business.

General

PART I

Arconic Rolled Products Corporation is a Delaware corporation with its principal office in Pittsburgh, Pennsylvania. In
conjunction with the separation described in this Annual Report on Form 10-K, the registrant plans to change its name to “Arconic
Corporation”.

The Company’s Internet address is http://www.arconic.com. 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 Separation

In February 2019, Arconic Inc. (to be renamed Howmet Aerospace Inc.) (“ParentCo” or "Howmet Aerospace") announced its

plan to separate into two independent, publicly traded companies. The separation will occur through a pro rata distribution to the
ParentCo stockholders of 100% of the outstanding shares of common stock of Arconic Corporation (the “distribution”), which was
formed to hold the rolled aluminum products, aluminum extrusions, and architectural products operations of ParentCo, as well as
the Latin America extrusions operations sold in April 2018 (the “Arconic Corporation Businesses”). On February 5, 2020,
ParentCo's Board of Directors approved the completion of the separation, which is scheduled to become effective on April 1, 2020
(the “Separation Date”) at 12:01 a.m. Eastern Daylight Time.

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In connection with the separation, Arconic Corporation incurred approximately $1.2 billion of indebtedness (see -Indebtedness

below) and we expect that:

• ParentCo will complete the internal reorganization as a result of which Arconic Rolled Products Corporation will become
the holding company for the ParentCo operations comprising, and the entities that will conduct, the Arconic Corporation
Businesses;

• ParentCo will change its name to “Howmet Aerospace Inc.”;

•

“Arconic Rolled Products Corporation” will change its name to “Arconic Corporation”; and

• using a portion of the net proceeds from one or more financing transactions on or prior to the completion of the

distribution, Arconic Corporation will make a cash distribution to ParentCo. The payment to ParentCo will be calculated
as the difference between (i) the approximately $1,165 of net proceeds from the aggregate indebtedness and (ii) the
difference between a beginning cash balance at the Separation Date of $500 and the amount of cash held by Arconic
Corporation Businesses at March 31, 2020 ($72 as of December 31, 2019).

“When-issued” trading of Arconic Corporation common stock began on March 18, 2020 under the ticker symbol “ARNC WI”

and will continue until the distribution date. “Regular-way” trading of Arconic Corporation common stock is expected to begin
with the opening of the New York Stock Exchange on April 1, 2020 under the ticker symbol “ARNC.”

At 12:01 a.m., Eastern Time, on April 1, 2020, the distribution date, each ParentCo stockholder will receive one share of
Arconic Corporation common stock for every four shares of ParentCo common stock held at the close of business on March 19,
2020, the record date for the distribution. ParentCo stockholders will receive cash in lieu of any fractional shares of Arconic
Corporation common stock that they would have received after application of this ratio. Upon completion of the separation, each
Arconic stockholder as of the record date will continue to own shares of ParentCo (which, as a result of ParentCo’s name change to
Howmet Aerospace Inc., will be Howmet Aerospace shares) and will receive a proportionate share of the outstanding common
stock of Arconic Corporation to be distributed. The distribution of Arconic Corporation common stock is subject to the satisfaction
or waiver of certain conditions, as described in Part III, Item 13. Certain Relationships and Related Transactions, and Director
Independence.

Formation of Arconic Corporation

Arconic Rolled Products Corporation was incorporated in Delaware on August 14, 2019 for the purpose of holding the
Arconic Corporation Businesses, and will be renamed Arconic Corporation in connection with the separation. As part of the
separation, and prior to the distribution, ParentCo and its subsidiaries expect to complete an internal reorganization in order to
transfer to Arconic Corporation the Arconic Corporation Businesses that it will hold following the separation. Among other things
and subject to limited exceptions, the internal reorganization is expected to result in Arconic Corporation owning, directly or
indirectly, the operations comprising, and the entities that conduct, the Arconic Corporation Businesses.

After the separation, Howmet Aerospace and Arconic Corporation will each be separate companies with separate management

teams and separate boards of directors. In connection with the separation, we have entered into and will also enter into various
other agreements to effect the separation and to provide a framework for our relationship with Howmet Aerospace after the
separation, including a tax matters agreement, an employee matters agreement, intellectual property license agreements, an
agreement relating to the Davenport plant, metal supply agreements and real estate and office leases. These agreements will
provide for the allocation between Arconic Corporation and Howmet Aerospace of the assets, employees, liabilities and obligations
(including, among others, investments, property and employee benefits and tax-related assets and liabilities) of ParentCo and its
subsidiaries attributable to periods prior to, at and after the separation and will govern the relationship between Arconic
Corporation and Howmet Aerospace subsequent to the completion of the separation. For additional information regarding the
separation agreement and other transaction agreements, see Part III, Item 13. Certain Relationships and Related Transactions, and
Director Independence.

Indebtedness

On February 7, 2020, we closed our offering of $600 million aggregate principal amount of 6.125% second-lien notes due
2028 (the “2028 Notes”). We intend to use a portion of the proceeds from the offering to make a payment to ParentCo to fund the
transfer of certain assets from ParentCo to us in connection with the separation and for general corporate purposes. The net
proceeds from the offering will be held in escrow until the satisfaction of the escrow release conditions, including the substantially
concurrent completion of the separation. Prior to the separation, the 2028 Notes will not be guaranteed. Following the escrow

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release, the 2028 Notes will be guaranteed by certain of our wholly-owned domestic subsidiaries. Each of the 2028 Notes and the
related guarantees will be secured on a second-priority basis by liens on certain assets of ours and the guarantors.

The 2028 Notes and related guarantees were sold in a private placement to qualified institutional buyers in accordance with

Rule 144A under the Securities Act (the “Securities Act”), and to certain non-United States persons in offshore transactions in
accordance with Regulation S under the Securities Act. The 2028 Notes and related guarantees have not been and will not be
registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United
States or to, or for the benefit of, US persons absent registration under, or an applicable exemption from, the registration
requirements of the Securities Act.

Additionally, on March 25, 2020, Arconic Corporation entered into a credit agreement, which provides a $600 million Senior
Secured First-Lien Term B Loan Facility (variable rate and seven-year term) (the “Term Loan”) and a $1.0 billion Senior Secured
First-Lien Revolving Credit Facility (variable rate and five-year term) ("the Credit Facility”), with a syndicate of lenders and
issuers named therein (“the Credit Agreement”). The gross availability of $1.0 billion under the Credit Facility is subject to
compliance with certain financial covenants based on the trailing twelve months of financial performance. For illustrative
purposes, assuming the separation had previously occurred and the capital structure had been in place on December 31, 2019, the
pro forma 2019 last twelve months of earnings would have resulted in approximately $760 million of net availability under the
Credit Facility. The illustrative availability is based upon a variety of assumptions and, though considered reasonable by the
Company, may not be indicative of future availability. We intend to use the proceeds from the Term Loan to make a payment to
ParentCo to fund the transfer of certain assets from ParentCo to us in connection with the separation, to pay fees, costs and
expenses and for general corporate purposes. See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations, for additional information about the 2028 Notes and the Credit Facility.

The variable interest rate with respect to the Term Loan is currently based on LIBOR for the relevant interest period plus an

applicable margin of 2.75% and the variable commitment fee for undrawn capacity related to the Credit Facility is 0.35%. The
provisions of the Term Loan require a mandatory 1% repayment of the initial $600 million borrowing each annual period during
the seven-year term. Following the Separation, the Term Loan and the Credit Facility will be guaranteed by certain of Arconic
Corporation’s wholly-owned domestic subsidiaries. Each of the Term Loan, the Credit Facility, and the related guarantees will be
secured on a first-priority basis by liens on certain assets of Arconic Corporation and the guarantors, as defined therein.

The following discussion of Arconic Corporation’s business assumes the completion of the separation and the related

transactions described above.

Overview

Arconic Corporation is a global leader in manufacturing aluminum sheet, plate, extrusions and architectural products, serving

primarily the ground transportation, aerospace, building and construction, industrial, and packaging end-markets. We maintain a
leadership position in our targeted markets through our global footprint of 46 manufacturing, sales and service facilities located
across North America, Europe, the United Kingdom, Russia and Asia. For the year ended December 31, 2019, we generated
revenues of $7.3 billion and operating income of $277 million.

Description of the Business

Our Portfolio

We manage our business operations through three segments: Rolled Products, Extrusions, and Building and Construction

Systems ("BCS").

Rolled Products

Rolled products are used in the production of finished goods ranging from airframes and automotive body panels to industrial
plate and brazing sheet. Sheet and plate are used extensively in the transportation industries as well as in building and construction.
They are also used for industrial applications such as tooling plate for the production of plastic products.

Arconic Corporation’s Rolled Products segment produces a range of aluminum sheet and plate products for the following

markets:

Ground Transportation — provides specialty aluminum sheet and plate products, including auto body sheet, structural
reinforcement, proprietary heat exchanger products like multilayer brazing sheet, trailer and cab structures and sheet for fuel tanks.

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Aerospace — supplies a wide range of highly differentiated sheet and plate products that meet strict quality requirements for

aerospace applications, including polished fuselage sheet, structural parts, aluminum-lithium stringers, and wing skins.

Industrial — supplies a diverse range of industrial solutions for applications that include mold and tooling plate for
semiconductors; general engineering/machinery and injection molding applications; specialty finishes for appliances, cosmetic
packaging, RVs and vehicle components; tread plate/sheet for toolbox and flooring applications; and circles for cookware.

Packaging — serves the packaging market in Europe and Asia through regional facilities located in Russia and China. The

packaging market includes a full range of can stock products, from coated end and tab stock to body stock.

Rolled Products — Competitive Conditions

Arconic Corporation’s Rolled Products segment is one of the leaders in many of the aluminum flat rolled markets in which it
participates, including ground transportation (including brazing sheet), aerospace, industrial and packaging markets. While Rolled
Products participates in markets where Arconic Corporation believes it has a significant competitive advantage due to customer
intimacy, advanced manufacturing capability, unique technology and/or differentiated products, in certain cases, our competitors
are capable of making products similar to Arconic Corporation’s products. We continuously work to maintain and enhance our
competitive position through innovation: new alloys such as high-formability automotive alloys, aluminum lithium aerospace
alloys, differentiated products such as our 5-layer brazing products and break-through processes such as A951™ bonding
technology.

Some of Arconic Corporation’s Rolled Products markets are global and some are more regionally focused. Participation in

these segments by 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, Kaiser participates in aerospace, but does not participate in
the automotive sheet market. Other competitors include Aleris, AMAG, Constellium, Hydro, Kobe, Nanshan, and UACJ.

Additionally, there are a number of new competitors emerging, particularly in China and other developing economies. Arconic

Corporation 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.

List of Major Competitors for Rolled Products:

Aleris
AMAG (Austria)

Constellium (Netherlands)
Granges (Sweden)

Rolled Products Principal Facilities

Hydro (Norway)
Kaiser Aluminum

Kobe (Japan)

Nanshan (China)
Novelis
UACJ (Japan)

Country
Brazil

China

Hungary

Russia

United Kingdom

United States

Location

Products

Itapissuma(1)
Kunshan
Qinhuangdao(2)
Székesfehérvár

Samara

Birmingham

Davenport, IA

Danville, IL

Hutchinson, KS

Lancaster, PA
Alcoa, TN(3)
San Antonio, TX(4)
Texarkana, TX(2)(5)

Specialty Foil

Sheet and Plate

Sheet and Plate/Slabs and Billets

Sheet and Plate/Extrusions and Forgings

Plate

Sheet and Plate

Sheet

Slabs

___________________

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(1)
Brasileira de Aluminio. The transaction closed February 1, 2020.

On August 23, 2019, we reached an agreement to sell the aluminum rolling mill in Itapissuma, Brazil to Companhia

(2)

Leased property or partially leased property.

(3)
In February 2019, we announced an investment of approximately $100 million to expand our hot mill capability and add
downstream equipment capabilities to manufacture industrial and automotive aluminum products in our Alcoa, Tennessee facility.
This project began in early 2019 and is expected to be completed by the end of 2020.

(4)

We curtailed operations in San Antonio in late December 2019.

The aluminum slab that is cast at Texarkana is turned into aluminum sheets at our expanded automotive facility in

(5)
Davenport, Iowa and our rolling mill in Lancaster, Pennsylvania. In October 2018, we sold the rolling mill and cast house to Ta
Chen International, Inc. and leased the cast house building and equipment for a term of 18 months. Our lease expires April 30,
2020.

Extrusions

Arconic Corporation’s Extrusions segment produces a range of extruded products, including aerospace shapes (wing stringer,

floor beams, fuselage, cargo), automotive shapes (driveshafts, anti-lock brake housings, turbo charger), seamless tube, hollows,
mortar fins and high strength rod and bar. With process and product technologies that include large and small extrusion presses,
integrated cast houses, horizontal heat treat furnaces, vertical heat treat furnaces, annealing furnaces, induction billet heating and
ultrasonic inspection capabilities, Arconic Corporation’s Extrusions operating segment serves a broad range of customers in several
of our core market segments, including the following:

Ground Transportation — provides aluminum extrusions for applications that include drive shafts for the automotive market

and aluminum frame rails for the commercial transportation market.

Aerospace — supplies a wide range of applications for commercial airframes.

Industrial — supplies a diverse range of industrial solutions for applications that include rods and bars for building supplies

and other industrial applications.

Arconic Corporation’s Extrusions plants are strategically located in close proximity to key customers, which offers a

competitive advantage for markets that require products within short lead times. It also fosters close collaboration with customers
who work with us to develop solutions that drive performance, safety and efficiency in their end products.

Extrusions — Competitive Conditions

The Extrusions segment is a leader in many of the markets in which it participates, including aerospace, automotive
(including driveshafts) and industrial markets. While Extrusions participates in markets where Arconic Corporation believes we
have a significant competitive position due to customer intimacy, advanced manufacturing capability, unique technology and/or
differentiated products, in certain cases, our competitors are capable of making products similar to Arconic Corporation’s products.
We continuously work to maintain and enhance our competitive position through innovation: new alloys such as aluminum lithium
aerospace alloys and differentiated products.

Some of Arconic Corporation’s Extrusions markets are worldwide and some are more regionally focused. Participation in

these segments by competitors varies. For example, UAC is the largest competitor in aerospace extrusions, but it does not
participate in the drawn tubing market. On the other hand, Unna participates in drawn tubing, but they do not compete in
extrusions. Other competitors include Kaiser, Constellium, Otto Fuchs, Taber, Ye Fong, and Impol.

Additionally, there are a number of other competitors emerging, particularly in China and other developing economies. We
expect that this competitive pressure will continue and increase in the future as customers seek to globalize their supply bases in
order to reduce costs.

List of Major Competitors for Extrusions:

Constellium (France)

Impol (Poland)
Kaiser (USA)

Otto Fuchs (Germany)

Taber (USA)
UAC (USA/Romania)

Unna (Germany)
Ye Fong (Taiwan)

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Extrusions Principal Facilities

Country

Germany

South Korea

United States

Location

Products

Hannover(1)
Kyoungnam(2)
Chandler, AZ(1)
Lafayette, IN
Baltimore, MD(1)
Massena, NY(1)

Extrusions

___________________

(1)

Leased property or partially leased property.

(2)
transaction was completed on March 1, 2020.

In October 2019, Arconic Corporation reached an agreement to sell its hard alloy extrusions plant in South Korea. This

Building and Construction Systems

Our BCS business manufactures differentiated products and building envelope solutions, including entrances, curtain walls,
windows, composite panel and coil coated sheet. The business operates in two market segments: architectural systems, which carry
the Kawneer® brand, and architectural products, which carry the Reynobond® and Reynolux® brands. The BCS business has
competitive positions in both market segments, attributable to its strong brand recognition, high quality products and strong
relationships through the building and construction value chain.

As the inventor of the modern storefront more than 100 years ago, our Kawneer® branded architectural systems products
include windows, doors and curtain walling. Kawneer is a premium brand, known for the breadth, depth and performance of its
product portfolio and is a leading manufacturer of architectural systems in North America, with an established presence in Europe.
Key customers of this market segment include fabricators and glazing subcontractors.

The Reynobond and Reynolux brands deliver innovative exterior and interior cladding and coil coated sheet solutions with
end uses that include building façades, retail, sign and display, interior applications and various industrial applications. Reynobond
is composite material that consists of an extruded core that is fused between two sheets of coil-coated aluminum and Reynolux is
coil-coated aluminum sheet that can be sold in coil or flat-sheet form. Key customers include metal fabricators and installers.

BCS differentiates itself through its global footprint and by offering a broad portfolio of building envelope products that span

the range of building end-use and building complexities. Architects, general contractors and fabricators consider BCS a go-to
provider of products that are offered as systems and are localized to address functional and building code requirements. We believe
that our products and systems have a reputation for quality and reliability.

Building and Construction Systems — Competitive Conditions

In North America, Arconic Corporation’s BCS segment primarily competes in the nonresidential building segment. In Europe,
it competes in both the residential and the nonresidential building segments. Arconic Corporation’s competitive advantage is based
on strong brands, innovative products, customer intimacy and technical services.

In the architectural systems market, Arconic Corporation competes with regional competitors like Apogee, YKK, and
Oldcastle in North America and Schüco, Hydro/SAPA and Reynaers in Europe. 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 remaining
constant, despite some industry consolidation in North America during the late 2000s.

The primary product categories in architectural products are aluminum composite material and coil coated sheet. The
architectural products business is a more global market and is primarily served by subsidiaries of larger companies like Alpolic
(Mitsubishi Corporation), Alucobond (Schweiter Technologies) and Novelis (Aditya Birla Group).

List of Major Competitors for Architectural Systems:

• North America — Apogee, Oldcastle and YKK

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

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List of Major Competitors for Architectural Products:

• Composite Material — Alucobond, Alucoil and Alpolic

• Coil Coated Sheet — Euramax, Novelis and Hydro

Building and Construction Systems Principal Facilities

Country

Canada

France

United Kingdom

United States

Location

Products

Lethbridge, Alberta
Merxheim(1)
Runcorn

Springdale, AR

Visalia, CA

Eastman, GA

Bloomsburg, PA

Cranberry, PA

Architectural Products and Systems

Architectural Products

Architectural Products and Systems

Architectural Products

Architectural Products and Systems

___________________

(1)

Leased property or partially leased property.

Principal facilities are listed, and do not include 20 locations that serve as service centers or administrative offices. The

service centers perform light manufacturing, such as assembly and fabrication of certain products.

Major Product and Customer Revenues

Products that contributed 10% or more to combined revenues were as follows:

Rolled products
Architectural systems

For the Years Ended December 31,

2019

2018

2017

77 %
15 %

75 %
15 %

75 %
16 %

Sales to Arconic Corporation’s largest customer, Ford, accounted for 13% of our total revenue for 2019. These sales were

made under various contracts relating to Ford vehicle programs, such as the F-150, F-250/350, Explorer and Navigator vehicles.
The loss of sales to Ford under all of these contracts could have a material adverse effect on our business if such sales are not
replaced by sales to other customers. No other customer accounted for 10% or more of our total revenue in 2019.

Customer and Distribution Channel

Rolled Products and Extrusions

Arconic Corporation’s Rolled Products group and Extrusions group have two primary sales channels for the segments in

which we operate: direct sales to our customers and sales to distributors.

Direct Sales

Arconic Corporation’s Rolled Products group and Extrusions group supply various segments all over the world through a

direct sales force operating from individual facilities or sales offices. The direct sales channel typically serves very large,
sophisticated customers and OEMs, but can also service medium and small size customers as well. Long-standing relationships are
maintained with leading companies in industries using aluminum rolled and extruded products. Supply contracts for large global
customers generally range from one to five years in length and historically, in segments such as aerospace, there has been a high
degree of renewal business with these customers. As the manufacture of aluminum-intensive and higher content aluminum vehicles
continues to grow, we continue to develop long-term relationships with the automotive OEMs. In some cases, the products Arconic
Corporation supplies are proprietary in nature. Further, certain industries, such as automotive and aerospace, and their related
customers require suppliers to complete a rigorous qualification process; the ability to obtain and maintain these qualifications is

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an important part of doing business in these segments. A customer’s cost to switch and either find a new product or qualify a new
supplier can be significant, so it is in both the customer’s and the supplier’s best interest to maintain these relationships.

Distributors

Arconic Corporation’s Rolled Products group and Extrusions group also sell their products through third-party distributors.
Customers of distributors are typically widely dispersed, and sales through this channel are usually highly fragmented. Distributors
sell mostly commodity or less specialized products into many end-use segments in smaller quantities.

BCS

Arconic Corporation’s BCS business supplies architectural facade systems and products principally in North America and
Europe but also globally through both direct sales and distributors. Its typical customers are installers or fabricators who purchase
product on a project-by-project basis. Long-standing relationships are maintained with its leading customers. BCS also maintains
an e-commerce platform for numerous standard architectural products for use by its North American customers and offers standard
architectural products for purchase in its service centers.

Sources and Availability of Raw Materials

Important raw materials used by Arconic Corporation are: primary aluminum for remelting (sows, t-bars, and ingots,

including high purity and off-grade), aluminum alloyed and unalloyed casthouse products (including rolling slab and billet),
aluminum scrap, alloying materials (including, but not limited to, magnesium, copper, and zinc), aluminum coil, electricity, natural
gas, coatings, lube oil, packaging materials, and resin. Generally, other materials are purchased from third-party suppliers under
competitively priced supply contracts or bidding arrangements. We believe that the raw materials necessary to the Arconic
Corporation businesses are and will continue to be available.

Patents, Trade Secrets and Trademarks

We believe that our domestic and international patent, trade secret and trademark assets provide us with a significant
competitive advantage. Our rights under our patents, as well as the products made and sold under them, are important to us as a
whole, and to varying degrees, important to each business segment. The patents owned by us generally concern metal alloys,
particular products, manufacturing equipment or techniques. The Arconic Corporation 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, we continue to pursue patent protection in jurisdictions throughout the world. As of December 31, 2019, our
worldwide patent portfolio consists of approximately 631 granted patents and 254 pending patent applications.

We also have a significant number of trade secrets, mostly regarding manufacturing processes and material compositions that

give us important advantages in our markets. We continue to strive to improve those processes and generate new material
compositions that provide additional benefits.

With respect to domestic and foreign trademarks, we have many that have significant recognition within the markets that are
served. Examples include the name “Arconic” and the Arconic symbol for aluminum products, Kawneer for building panels, and
Reynobond and Reynolux for architectural products. As of December 31, 2019, our worldwide trademark portfolio consists of
approximately 616 registered trademarks and 457 pending trademark applications. Our rights under our trademarks are important
to us as a whole and, to varying degrees, important to each business segment.

Research and Development

We engage in research and development programs that include process and product development, and basic and applied

research. Throughout 2019, we continued working on new developments and leveraging new technologies. The Arconic
Technology Center (ATC), located in New Kensington, Pennsylvania, serves as the headquarters for our research and development
efforts, and we also have R&D facilities in Norcross, Georgia, Merxheim, France, Vendargues, France, and Harderwijk,
Netherlands. These facilities focus on innovation and have given us a leading position in the development of proprietary next-
generation specialty alloys and manufacturing processes as evidenced by our robust intellectual property portfolio.

Environmental Matters

Approved capital expenditures for new or expanded facilities for environmental control are $9.2 million for 2020 and
estimated expenditures for such purposes are $12.6 million for 2021. Information relating to environmental matters is included in
Note T to the Combined Financial Statements under the caption “Contingencies and Commitments — Contingencies -
Environmental Matters.”

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Employees

Total worldwide employment at the end of 2019 was approximately 15,400 employees with plant operations in 10 countries.
Many of these employees are represented by labor unions. We believe that relations with our employees and any applicable union
representatives generally are good.

In the United States, approximately 4,300 employees are represented by various labor unions. The largest collective

bargaining agreement is the master collective bargaining agreement between us 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,
2022. There are eight other collective bargaining agreements in the United States with varying expiration dates.

On a regional basis, there are agreements between Arconic Corporation and unions with varying expiration dates that cover

employees in Europe, Russia, North America, South America, and Asia.

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Item 1A. Risk Factors.

Our business, financial condition and results of operations may be impacted by a number of factors. In addition to the factors
discussed elsewhere in this report, the following risks and uncertainties could materially harm our business, financial
condition, or results of operations, including causing our actual results to differ materially from those projected in any
forward-looking statements. The following list of significant risk factors is not all-inclusive or necessarily in order of
importance. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may
materially adversely affect us in future periods

Risks Related to Our Business

Our business, results of operations and financial condition could be materially adversely affected by the effects of
widespread public health epidemics, including COVID-19, that are beyond our control.

Any outbreaks of contagious diseases, public health epidemics and other adverse public health developments in countries
where we, our customers and suppliers operate could have a material and adverse effect on our business, results of operations
and financial condition. The recent novel strain of COVID-19, initially limited to a region in China and now affecting the
global community, including the United States, is expected to impact our operations, and the nature and extent of the impact
may be highly uncertain and beyond our control. Uncertain factors relating to COVID-19 include the duration of the outbreak,
the severity of the virus, and the actions, or perception of actions that may be taken, to contain or treat its impact, including
declarations of states of emergency, business closures, manufacturing restrictions and a prolonged period of travel, commercial
and/or other similar restrictions and limitations.

As a result of COVID-19 and the measures designed to contain its spread, our sales globally, including to customers in the
aerospace and automotive industries that are impacted by COVID-19, could be negatively impacted as a result of disruption in
demand, which could have a material adverse effect on our business, results of operations and financial condition. For example,
several of our automotive and aerospace customers have temporarily suspended operations, including our largest customer,
Ford, which suspended its North American operations beginning on March 19, 2020 and have announced they are targeting to
restart at least a portion of these operations on April 14, 2020. Similarly, our suppliers may not have the materials, capacity, or
capability to manufacture our products according to our schedule and specifications. If our suppliers’ operations are impacted,
we may need to seek alternate suppliers, which may be more expensive, may not be available or may result in delays in
shipments to us and subsequently to our customers, each of which would affect our results of operations. The duration of the
disruption to our customers and to our supply chain, and related financial impact to us, cannot be estimated at this time. Should
such disruption continue for an extended period of time, the impact could have a material adverse effect on our business, results
of operations and financial condition. Additionally, our availability under the Credit Facility could be impacted by a number of
factors, including but not limited to any impact by disruptions to our operations and financial performance, including due to the
recent COVID-19 pandemic.

The markets for our products are highly cyclical and are influenced by a number of factors, including global economic
conditions.

We are subject to cyclical fluctuations in global economic conditions and lightweight metals end-use markets. Our many
products are sold to industries that are cyclical, such as the aerospace, automotive, commercial transportation and building and
construction industries, and the demand for our products are sensitive to, and quickly impacted by, demand for the finished
goods manufactured by our customers in these industries, which may change as a result of changes in regional or worldwide
economies, currency exchange rates, energy prices or other factors beyond our control.

In particular, we derive a significant portion of our revenue from products sold to the aerospace industry, which can be

highly cyclical and reflective of changes in the general economy. The commercial aerospace industry is historically driven by
the demand from commercial airlines for new aircraft. The U.S. and international commercial aviation industries may face
challenges arising from competitive pressures and fuel costs. Demand for commercial aircraft is influenced by airline industry
profitability, trends in airline passenger traffic, the state of U.S., regional and world economies, the ability of aircraft purchasers
to obtain required financing and numerous other factors, including the effects of terrorism, health and safety concerns,
environmental constraints imposed upon aircraft operators, the retirement of older aircraft, the performance and cost of
alternative materials, and technological improvements to aircraft.

Further, the demand for our ground transportation products is driven by the number of vehicles produced by automotive

and commercial transportation manufacturers and volume of aluminum content per vehicle. The automotive industry is
sensitive to general economic conditions, including credit markets and interest rates, and consumer spending and preferences
regarding vehicle ownership and usage, vehicle size, configuration and features. Automotive and commercial transportation
sales and production can also be affected by other factors, including the age of the vehicle fleet and related scrap rates, labor

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relations issues, fuel prices, regulatory requirements, government initiatives, trade agreements, health and safety concerns and
levels of competition both within and outside of the aluminum industry.

Our products are used in a variety of industrial applications, including mold and tooling plate for semiconductors; general

engineering/machinery and injection molding applications; specialty finishes for appliances, cosmetic packaging, and vehicle
components; tread plate and sheet; and building and construction products. The common alloy sheet market, which is a
significant portion of the total industrial products market, is particularly sensitive to the volume imports of common alloys into
the United States. The implementation of anti-dumping and countervailing duties imposed on Chinese common alloy sheet
during 2018 has led to a significant decrease in the volume of imports from China. However, that decrease has resulted in a
significant increase in imports of common alloy into the United States from other countries, which could lead to softening
prices and market saturation.

We are unable to predict the future course of industry variables, the strength of the U.S., regional or global economies, or

the effects of government actions. Negative economic conditions, such as a major economic downturn, a prolonged recovery
period, or disruptions in the financial markets, could have a material adverse effect on our business, financial condition or
results of operations.

We face significant competition, which may have an adverse effect on profitability.

As discussed in Part I, Item 1. Business “Our Portfolio-Rolled Products—Rolled Products—Competitive Conditions,”
“Our Portfolio—Extrusions—Extrusions Competitive Conditions,” and “Our Portfolio—Building and Construction Systems—
Building and Construction Systems Competitive Conditions,” the markets for our products are highly competitive. Our
competitors include a variety of both U.S. and non-U.S. companies in all major markets. New product offerings, new
technologies in the marketplace or new facilities may compete with or replace our products. The willingness of customers to
accept substitutes for our products , the ability of large customers to exert leverage in the marketplace to affect the pricing for
our products, and technological advancements or other developments by or affecting our competitors or customers could
adversely affect our business, financial condition or results of operations.

In addition, we may face increased competition due to industry consolidation. As companies attempt to strengthen or
maintain their market positions in an evolving industry, companies could be acquired or merged. Companies that are strategic
alliance partners in some areas of our business may acquire or form alliances with our competitors, thereby reducing their
business with us. Industry consolidation may result in stronger competitors who are better able to obtain favorable terms from
suppliers or who are better able to compete as sole-source vendors for customers. Consolidation within our customer base may
result in customers who are better able to command increased leverage in negotiating prices and other terms of sale, which
could adversely affect our profitability. Moreover, if, as a result of increased leverage, customers require us to reduce our
pricing such that our gross margins are diminished, we could decide not to sell certain products to a particular customer, or not
to sell certain products at all, which would decrease our revenue. Consolidation within our customer base may also lead to
reduced demand for our products, a combined entity replacing our products with those of our competitors, and cancellations of
orders. The result of these developments could have a material adverse effect on our business, operating results and financial
condition.

We could be adversely affected by the loss of key customers or significant changes in the business or financial condition of
our customers.

We have long-term contracts with a significant number of our customers, some of which are subject to renewal,

renegotiation or re-pricing at periodic intervals or upon changes in competitive supply conditions. Our failure to successfully
renew, renegotiate or favorably re-price such agreements, or a material deterioration in or termination of these customer
relationships, could result in a reduction or loss in customer purchase volume or revenue.

Additionally, a significant downturn or deterioration in the business or financial condition or loss of a key customer could

affect our financial results. Our customers may experience delays in the launch of new products, labor strikes, diminished
liquidity or credit unavailability, weak demand for their products, or other difficulties in their businesses. For example, in 2019,
Boeing announced a temporary reduction in the production rate of, and subsequently announced a temporary suspension of
production of, the Boeing 737 MAX aircraft, which has resulted in, and is expected to continue to result in, a reduction in sales
of aluminum sheet and plate products that we produce for Boeing airplanes. The Boeing 737 MAX represents less than 8% of
our annual revenue and gross margin for Arconic Corporation, including direct sales to Boeing and sales to its supply chain. As
no firm timeline has been established for either the adjustment of Boeing’s manufacturing plans, or for returning the aircraft
into service, we are currently unable to definitively quantify any such potential impact.

Our customers may also change their business strategies or modify their business relationships with us, including to

reduce the amount of our products they purchase or to switch to alternative suppliers. If our customers reduce, terminate or

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delay purchases from us due to the foregoing factors or otherwise and we are unsuccessful in replacing such business in whole
or in part or replaces it with less profitable business, our financial condition and results of operations may be adversely
affected.

We could encounter manufacturing difficulties or other issues that impact product performance, quality or safety, which
could affect our reputation, business and financial statements.

The manufacture of many of our products is a highly exacting and complex process. Problems may arise during

manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols, specifications and
procedures, including those related to quality or safety, problems with raw materials, supply chain interruptions, natural
disasters, health pandemics (including COVID-19) labor unrest, and environmental factors. Such problems could have an
adverse impact on our ability to fulfill orders or on product quality or performance. Product manufacturing or performance
issues could result in recalls, customer penalties, contract cancellation and product liability exposure. Because of approval,
license and qualification requirements applicable to manufacturers and/or their suppliers, alternatives to mitigate manufacturing
disruptions may not be readily available to us or our customers. Accordingly, manufacturing problems, product defects or other
risks associated with our products, could result in significant costs to and liability for us that could have a material adverse
effect on our business, financial condition or results of operations, including the payment of potentially substantial monetary
damages, fines or penalties, as well as negative publicity and damage to our reputation, which could adversely impact product
demand and customer relationships.

Our business depends, in part, on our ability to meet increased program demand successfully and to mitigate the impact of
program cancellations, reductions and delays.

We are under contract to supply aluminum sheet, plate and extrusions for a number of new and existing commercial and
general aviation aircraft programs, as well as aluminum sheet and extrusions for a number of aluminum-intensive automotive
vehicle programs. Many of these programs are scheduled for production increases over the next several years. If we fail to meet
production levels or encounters difficulty or unexpected costs in meeting such levels, it could have a material adverse effect on
our business, financial condition or results of operations. Similarly, program cancellations, reductions or delays could also have
a material adverse effect on our business.

Product liability, product safety, personal injury, property damage, and recall claims and investigations may materially
affect our financial condition and damage our reputation.

The manufacture and sale of our products exposes us to potential product liability, personal injury, property damage and
related claims. These claims may arise from failure to meet product specifications, design flaws in our products, malfunction of
our products, misuse of our products, use of our products in an unintended, unapproved or unrecommended manner, or use of
our products with systems not manufactured or sold by us. New data and information, including information about the ways in
which our products are used, may lead us regulatory authorities, government agencies or other entities or organizations to
publish guidelines or recommendations, or impose restrictions, related to the manufacturing or use of our products.

In the event that a product of ours fails to perform as expected, regardless of fault, or is used in an unexpected manner, and

such failure or use results in, or is alleged to result in, bodily injury and/or property damage or other losses, we may be subject
to product liability lawsuits and other claims, or may be required or requested by our customers to participate in a recall or
other corrective action involving such product. In addition, if a product of ours is perceived to be defective or unsafe, sales of
our products could be diminished, our reputation could be adversely impacted and we could be subject to further liability
claims. Moreover, events that give rise to actual, potential or perceived product safety concerns could expose us to government
investigations or regulatory enforcement action.

There can be no assurance that we will be successful in defending any such proceedings or that insurance available to us

will be sufficient to cover any losses associated with such proceedings. An adverse outcome in one or more of these
proceedings or investigations could have a material adverse effect on our business, financial condition or profitability; impose
substantial monetary damages and/or non-monetary penalties; result in additional litigation, regulatory investigations or other
proceedings involving us; result in loss of customers; require changes to our products or business operations; damage our
reputation and/or negatively impact the market price of our common stock. Even if we successfully defend against these types
of claims, we could still be required to spend a substantial amount of money in connection with legal proceedings or
investigations with respect to such claims; our management could be required to devote significant time, attention and
operational resources responding to and defending against these claims and responding to these investigations; and our
reputation could suffer. Product liability claims and related lawsuits and investigations, product recalls, and allegations of
product safety or quality issues, regardless of their validity or ultimate outcome, may have a material adverse effect on our
business, financial condition and reputation and on our ability to attract and retain customers.

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For further discussion of potential liability associated with some of our products, including proceedings and investigations

relating to the June 13, 2017 fire at the Grenfell Tower in London, U.K., see “Part 1-Item 3. Legal Proceedings.”

Our global operations expose us to risks that could adversely affect our business, financial condition, results of operations,
cash flows or the market price of our securities.

We have operations or activities in numerous countries and regions outside the United States, including Europe, the United
Kingdom, Canada, China and Russia. As a result, our global operations are affected by economic, political and other conditions
in the foreign countries in which we do business as well as U.S. laws regulating international trade, including:

•

economic and commercial instability risks, including those caused by sovereign and private debt default, corruption,
and changes in local government laws, regulations and policies, such as those related to tariffs, sanctions and trade
barriers (including tariffs imposed by the United States as well as retaliatory tariffs

imposed by China or other foreign entities), taxation, exchange controls, employment regulations and repatriation of
assets or earnings;

• geopolitical risks such as political instability, civil unrest, expropriation, nationalization of properties by a government,

imposition of sanctions, and renegotiation or nullification of existing agreements;

• war or terrorist activities;

• kidnapping of personnel;

• major public health issues such as an outbreak of a pandemic or epidemic (such as the recent novel strain of

coronavirus (“COVID-19”),which has resulted in travel restrictions and shutdown of certain businesses globally,
Sudden Acute Respiratory Syndrome, Avian Influenza, H7N9 virus, or the Ebola virus), which could cause disruptions
in our operations, workforce, supply chain and/or customer demand;

• difficulties enforcing contractual rights and intellectual property, including a lack of remedies for misappropriation, in

certain jurisdictions;

•

changes in trade and tax laws that may impact our operations and financial condition and/or result in our customers
being subjected to increased taxes, duties and tariffs and reduce their willingness to use our services in countries in
which we are currently manufacturing their products;

rising labor costs;

labor unrest, including strikes;

compliance with antitrust and competition regulations;

compliance with foreign labor laws, which generally provide for increased notice, severance and consultation
requirements compared to U.S. laws;

aggressive, selective or lax enforcement of laws and regulations by national governmental authorities;

compliance with the Foreign Corrupt Practices Act and other anti-bribery and corruption laws;

compliance with U.S. laws concerning trade, including the International Traffic in Arms Regulations, the Export
Administration Regulations, and the sanctions, regulations and embargoes administered by the U.S. Department of
Treasury’s Office of Foreign Assets Control;

imposition of currency controls; and

adverse tax laws and audit rulings.

Although the effect of any of the foregoing factors is difficult to predict, any one or more of them could adversely affect

our business, financial condition, or results of operations. Our international operations subject us to complex and dynamic laws
and regulations that, in some cases, could result in conflict or inconsistency between applicable laws and/or legal obligations.
While we believe we have adopted appropriate risk management, compliance programs and insurance arrangements to address
and reduce the associated risks, such measures may provide inadequate protection against costs, penalties, liabilities or other
potential risks such as loss of export privileges or repatriation of assets that may arise from such events.

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A material disruption of our operations, particularly at one or more of our manufacturing facilities, could adversely affect
our business.

If our operations, particularly one of our manufacturing facilities, were to be disrupted as a result of significant equipment
failures, natural disasters, power outages, fires, explosions, terrorism, theft, sabotage, adverse weather conditions, public health
crises, labor disputes or other reasons, we may be unable to effectively meet our obligations to or demand from our customers,
which could adversely affect our financial performance.

Interruptions in production could increase our costs and reduce our sales. Any interruption in production capability could
require us to incur costs for premium freight, make substantial capital expenditures or purchase alternative material at higher
costs to fill customer orders, which could negatively affect our profitability and financial condition. Furthermore, because
customers may be dependent on planned deliveries from us, customers that have to reschedule their own production due to our
delivery delays may be able to pursue financial claims against us, and we may incur costs to correct such problems in addition
to any liability resulting from such claims. We maintain property damage insurance that we believe to be adequate to provide
for reconstruction of facilities and equipment, as well as business interruption insurance to mitigate losses resulting from
significant production interruption or shutdown caused by an insured loss. However, any recovery under our insurance policies
may not offset the lost profits or increased costs that may be experienced during the disruption of operations, which could
adversely affect our business, results of operations, financial condition and cash flow.

We may be unable to realize future targets or goals established for our business segments, or complete projects, at the levels,
projected costs or by the dates targeted.

From time to time, we may announce future targets or goals for our business, which are based on our then current

expectations, estimates, forecasts and projections about the operating environment, economies and markets in which we
operate. Future targets and goals reflect our beliefs and assumptions and our perception of historical trends, then current
conditions and expected future developments, as well as other factors appropriate in the circumstances. As such, targets and
goals are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding
future events, including the risks discussed therein. The actual outcome may be materially different. There can be no assurance
that any targets or goals established by us will be accomplished at the levels or by the dates targeted, if at all. Failure to achieve
our targets or goals may have a material adverse effect on our business, financial condition, results of operations or the market
price of our securities.

In addition, the implementation of our business strategy may involve the entry into and the execution of complex projects,
which place significant demands on our management and personnel, and may depend on numerous factors beyond our control.
There can be no assurance that such projects will be completed within budgeted costs, on a timely basis, or at all, whether due
to the risks described herein, or other factors. The failure to complete a material project as planned, or a significant delay in a
material project, whatever the cause, could have an adverse effect on our business, financial condition, or results of operations.

Information technology system failures, cyber-attacks and security breaches may threaten the integrity of our intellectual
property and sensitive information, disrupt our business operations, and result in reputational harm and other negative
consequences that could have a material adverse effect on our financial condition and results of operations.

We rely on our information technology systems to manage and operate our business, process transactions, and summarize

our operating results. Our information technology systems are subject to damage or interruption from power outages, computer,
network and telecommunications failures, computer viruses, and catastrophic events, such as fires, floods, earthquakes,
tornadoes, hurricanes, acts of war or terrorism, and usage errors by employees. If our information technology systems are
damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer
loss of critical data and interruptions or delays in our operations. Any material disruption in our information technology
systems, or delays or difficulties in implementing or integrating new systems or enhancing current systems, could have an
adverse effect on our business, financial condition or results of operations.

We also face global cybersecurity threats, which may range from uncoordinated individual attempts to sophisticated and
targeted measures, known as advanced persistent threats, directed at us and our customers, suppliers and vendors. Cyber-attacks
and security breaches may include, but are not limited to, attempts to access information, computer viruses, denial of service
and other electronic security breaches.

We believe that we face the threat of cyber-attacks due to the industries we serve, the locations of our operations and our

technological innovations. We have experienced cybersecurity attacks in the past, including breaches of our information
technology systems in which information was taken, and may experience them in the future, potentially with more frequency or
sophistication. Based on information known to date, past attacks have not had a material impact on our financial condition or
results of operations. However, due to the evolving nature of cybersecurity threats, the scope and impact of any future incident

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cannot be predicted. We employ a number of measures to protect and defend against cyber-attacks, including technical security
controls, data encryption, firewalls, intrusion prevention systems, anti-virus software and frequent backups. Additionally, we
conduct regular periodic training of our employees regarding the protection of sensitive information which includes training
intended to prevent the success of “phishing” attacks. While we continually works to safeguard our systems and mitigate
potential risks, there is no assurance that such actions will be sufficient to prevent cyber-attacks or security breaches that
manipulate or improperly use our systems or networks, compromise confidential or otherwise protected information, destroy or
corrupt data, or otherwise disrupt our operations. The occurrence of such events could negatively impact our reputation and
competitive position and could result in litigation with third parties, regulatory action, loss of business, potential liability and
increased remediation costs, any of which could have a material adverse effect on our financial condition and results of
operations. In addition, such attacks or breaches could require significant management attention and resources and could result
in the diminution of the value of our investment in research and development.

Our enterprise risk management program and disclosure controls and procedures address cybersecurity and include
elements intended to ensure that there is an analysis of potential disclosure obligations arising from cyber-attacks and security
breaches. We also maintain compliance programs to address the potential applicability of restrictions against trading while in
possession of material, nonpublic information generally and in connection with a cyber-attack or security breach. However, a
breakdown in existing controls and procedures around our cybersecurity environment may prevent us from detecting, reporting
or responding to cyber incidents in a timely manner and could have a material adverse effect on our financial condition or the
market price of our securities.

We may be unable to develop innovative new products or implement technology initiatives successfully.

Our competitive position and future performance depends, in part, on our ability to:

•

identify and evolve with emerging technological and broader industry trends in our target end-markets;

identify and successfully execute on a strategy to remain an essential and sustainable element of our customers’ supply
chains;

•

fund, develop, manufacture and bring innovative new products and services to market quickly and cost-effectively;

• monitor disruptive technologies and understand customers’ and competitors’ abilities to deploy those disruptive

technologies; and

•

achieve sufficient return on investment for new products based on capital expenditures and research and development
spending.

We are working on new developments for a number of strategic projects, including alloy development, engineered finishes
and product design, high speed continuous casting and rolling technology and other advanced manufacturing technologies. For
more information on our research and development programs, see Part I, Item 1. Business "Research and Development.”

While we intend to continue to commit substantial financial resources and effort to the development of innovative new
products and services, we may not be able to successfully differentiate our products or services from those of our competitors
or match the level of research and development spending of our competitors, including those developing technology to displace
our current products. In addition, we may not be able to adapt to evolving markets and technologies or achieve and maintain
technological advantages. There can be no assurance that any of our new products or services, development programs or
technologies will be commercially adopted or beneficial to us.

We may face challenges to our intellectual property rights which could adversely affect our reputation, business and
competitive position.

We own important intellectual property, including patents, trademarks, copyrights and trade secrets. Our intellectual

property plays an important role in maintaining our competitive position in a number of the markets that we serve. Our
competitors may develop technologies that are similar or superior to our proprietary technologies or design around the patents
we own or license. Despite our controls and safeguards, our technology may be misappropriated by our employees, our
competitors or other third parties. The pursuit of remedies for any misappropriation of our intellectual property is expensive
and the ultimate remedies may be deemed insufficient. Further, in jurisdictions where the enforcement of intellectual property
rights is less robust, the risk of misappropriation of our intellectual property increases despite efforts we undertake to protect it.
Developments or assertions by or against us relating to intellectual property rights, and any inability to protect or enforce our
rights sufficiently, could adversely affect our business and competitive position.

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A decline in our financial performance or outlook or a deterioration in our credit profile could negatively impact our access
to the capital markets and commercial credit, reduce our liquidity, and increase our borrowing costs.

We have significant capital requirements and may require, in the future, the issuance of debt to fund our operations

and contractual commitments or to pursue strategic acquisitions. A decline in our financial performance or outlook due to
internal or external factors could affect our access to, and the availability or cost of, financing on acceptable terms and
conditions. There can be no assurance that we will have access to the capital markets on terms we find acceptable.

We expect to request that the major credit rating agencies evaluate our creditworthiness and give us specified credit
ratings. These ratings would be based on a number of factors, including our financial strength and financial policies as well as
our strategies, operations and execution. These credit ratings are limited in scope, and do not address all material risks related
to investment in us, but rather reflect only the view of each rating agency at the time the rating is issued. Nonetheless, the credit
ratings we receive will impact our borrowing costs as well as the terms upon which we will have access to capital. Failure to
obtain sufficiently high credit ratings could adversely affect the interest rate in future financings, our liquidity or our
competitive position, and could also restrict our access to capital markets.

There can be no assurance that one or more of the rating agencies will not take negative actions with respect to our ratings

in the future. Increased debt levels, macroeconomic conditions, a deterioration in our debt protection metrics, a contraction in
our liquidity, or other factors could potentially trigger such actions. A rating agency may lower, suspend or withdraw entirely a
rating or place it on negative outlook or watch if, in that rating agency’s judgment, circumstances so warrant. A downgrade of
our credit ratings by one or more rating agencies could result in adverse consequences, including: adversely impact the market
price of our securities; adversely affect existing financing; limit access to the capital (including commercial paper) or credit
markets or otherwise adversely affect the availability of other new financing on favorable terms, if at all; result in more
restrictive covenants in agreements governing the terms of any future indebtedness that we incur; increase the cost of
borrowing or fees on undrawn credit facilities; or result in vendors or counterparties seeking collateral or letters of credit from
us.

Limitations on our ability to access the global capital markets, a reduction in our liquidity or an increase in borrowing
costs could materially and adversely affect our ability to maintain or grow our business, which in turn may adversely affect our
financial condition, liquidity and results of operations.

Our business and growth prospects may be negatively impacted by limits in our capital expenditures.

We require substantial capital to invest in growth opportunities and to maintain and prolong the life and capacity of our

existing facilities. Insufficient cash generation or capital project overruns may negatively impact our ability to fund as planned
our sustaining and return-seeking capital projects. Over the long term, Arconic Corporation’s our to take advantage of improved
market conditions or growth opportunities in our businesses may be constrained by earlier capital expenditure restrictions,
which could adversely affect the long-term value of our business and our position in relation to our competitors.

An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets and other factors
could affect Arconic Corporation’s results of operations or amount of pension funding contributions in future periods.

Our results of operations may be negatively affected by the amount of expense we record for our pension and other post-
retirement benefit plans, reductions in the fair value of plan assets and other factors. We calculate income or expense for our
plans using actuarial valuations in accordance with GAAP.

These valuations reflect assumptions about financial market and other economic conditions, which may change based on

changes in key economic indicators. The most significant year-end assumptions used to estimate pension or other post-
retirement benefit income or expense for the following year are the discount rate applied to plan liabilities and the expected
long-term rate of return on plan assets. In addition, we are required to make an annual measurement of plan assets and
liabilities, which may result in a significant charge to stockholders’ equity. For a discussion regarding how our financial
statements can be affected by pension and other post-retirement benefits accounting policies, see Note B to the Combined
Financial Statements in Part II, Item 8. Financial Statements and Supplementary Data. Although GAAP expense and pension
funding contributions are impacted by different regulations and requirements, the key economic factors that affect GAAP
expense would also likely affect the amount of cash or securities we would contribute to the pension plans.

Unanticipated changes in our tax provisions or exposure to additional tax liabilities could affect our future profitability.

We are subject to income taxes in both the United States and various non-U.S. jurisdictions. Our domestic and
international tax liabilities are dependent upon the distribution of income among these different jurisdictions. Changes in
applicable domestic or foreign tax laws and regulations, or their interpretation and application, including the possibility of

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retroactive effect, could affect our tax expense and profitability. Our tax expense includes estimates of additional tax that may
be incurred for tax exposures and reflects various estimates and assumptions. The assumptions include assessments of our
future earnings that could impact the valuation of our deferred tax assets. Our future results of operations could be adversely
affected by changes in the effective tax rate as a result of a change in the mix of earnings in countries with differing statutory
tax rates, changes in our overall profitability, changes in tax legislation and rates, changes in generally accepted accounting
principles, changes in the valuation of deferred tax assets and liabilities, the results of tax audits and examinations of previously
filed tax returns or related litigation and continuing assessments of our tax exposures.

Corporate tax law changes continue to be analyzed in the United States and in many other jurisdictions. In particular, on

December 22, 2017, the Tax Cuts and Jobs Act (the “2017 Act”) was signed into law, significantly reforming the Code. During
2018, the Internal Revenue Service (the “IRS”) began a number of guidance projects which serve to both interpret and
implement the 2017 Act. Those guidance projects, which include both Proposed and Final Treasury Regulations, have
continued in 2019 and may continue into 2020. We continue to review the components of the 2017 Act, as well as the ongoing
interpretive guidance, and evaluate our consequences. As such, the ultimate impact of the 2017 Act may differ from reported
amounts due to, among other things, changes in interpretations and assumptions we have made to date; and actions we may
take as a result of the 2017 Act and related guidance. These changes to the U.S. corporate tax system could have a substantial
impact, positive or negative, on our future effective tax rate, cash tax expenditures, and deferred tax assets and liabilities.

We may be unable to realize the expected benefits from acquisitions, divestitures, joint ventures and strategic alliances.

We have made, and may continue to plan and execute, acquisitions and divestitures and take other actions to grow our

business or streamline our portfolio. There is no assurance that anticipated benefits will be realized. Acquisitions present
significant challenges and risks, including our effective integration of the acquired business, unanticipated costs and liabilities,
and the ability to realize anticipated benefits, such as growth in market share, revenue or margins, at the levels or in the
timeframe expected. We may be unable to manage acquisitions successfully. Additionally, adverse factors may prevent us from
realizing the benefits of our growth projects, including unfavorable global economic conditions, currency fluctuations, or
unexpected delays in target timelines.

With respect to portfolio optimization actions such as divestitures, curtailments and closures, we may face barriers to exit
from unprofitable businesses or operations, including high exit costs or objections from customers, suppliers, unions, local or
national governments, or other stakeholders. In addition, we may retain unforeseen liabilities for divested entities or businesses,
including, but not limited to, if a buyer fails to honor all commitments. Our business operations are capital intensive, and
curtailment or closure of operations or facilities may include significant charges, including employee separation costs, asset
impairment charges and other measures.

In addition, we have participated in, and may continue to participate in, joint ventures, strategic alliances and other similar

arrangements from time to time. Although we have, in connection with past and existing joint ventures, sought to protect our
interests, joint ventures and strategic alliances inherently involve special risks. Whether or not we hold majority interests or
maintains operational control in such arrangements, our partners may:

• have economic or business interests or goals that are inconsistent with or opposed to ours;

•

exercise veto rights to block actions that we believe to be in our or the joint venture’s or strategic alliance’s best
interests;

take action contrary to our policies or objectives with respect to investments; or

as a result of financial or other difficulties, be unable or unwilling to fulfill their obligations under the joint venture,
strategic alliance or other agreements, such as contributing capital to expansion or maintenance projects.

There can be no assurance that acquisitions, growth investments, divestitures, closures, joint ventures, strategic alliances

or similar arrangements will be undertaken or completed in their entirety as planned or that they will be beneficial to us,
whether due to the above-described risks, unfavorable global economic conditions, increases in construction costs, currency
fluctuations, political risks, or other factors.

Our business could be adversely affected by increases in the cost of aluminum or volatility in the availability or cost of other
raw materials.

We derive a significant portion of our revenue from aluminum-based products. The price of primary aluminum has
historically been subject to significant cyclical price fluctuations, and the timing of changes in the market price of aluminum is
largely unpredictable. Although our pricing of products is generally intended to pass substantially all the risk of metal price
fluctuations on to our customers or is otherwise hedged, there are situations where we are unable to pass on the entire cost of

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increases to our customers and there is a potential time lag on certain products between increases in costs for aluminum and the
point when we can implement a corresponding increase in price to our customers and/or there are other timing factors that may
result in our exposure to certain price fluctuations which could have a material adverse effect on our business, financial
condition or results of operations. Further, since metal prices fluctuate among the various exchanges, our competitors may
enjoy a metal price advantage from time to time.

We may be adversely affected by changes in the availability or cost of other raw materials (including, but not limited to,

copper, magnesium and zinc), as well as freight costs associated with transportation of raw materials. The availability and costs
of certain raw materials necessary for the production of our products may be influenced by private or government entities,
including mergers and acquisitions, changes in world politics or regulatory requirements (such as human rights regulations or
environmental regulations), labor relations between the producers and their work forces, unstable governments in exporting
nations, export quotas, sanctions, new or increased import duties, countervailing or anti-dumping duties, market forces of
supply and demand, and inflation. In addition, from time to time, commodity prices may fall rapidly. When this happens,
suppliers may withdraw capacity from the market until prices improve, which may cause periodic supply interruptions. We may
be unable to offset fully the effects of raw material shortages or higher costs through customer price increases, productivity
improvements or cost reduction programs. Shortages or price fluctuations in raw materials could have a material adverse effect
on our operating results.

We are dependent on a limited number of suppliers for a substantial portion of our primary and scrap aluminum and
certain other raw materials essential to our operations.

We have supply arrangements with a limited number of suppliers for aluminum and other raw materials. We maintain

annual or long-term contracts for a majority of our supply requirements, and for the remainder we depend on spot purchases.
From time to time, increasing aluminum demand levels have caused regional supply constraints in the industry and further
increases in demand levels could exacerbate these issues. Such constraints could impact our production or force us to purchase
primary metal and other supplies from alternative sources, which may not be available in sufficient quantities or may only be
available on terms that are less favorable to us. Further, there can be no assurance that we will be able to renew, or obtain
replacements for, any of our long-term contracts when they expire on terms that are as favorable as our existing agreements or
at all. Additionally, we could have exposure if a key supplier in a particular region is unable to deliver sufficient quantities of a
necessary material on a timely basis. For example, our plant in Russia depends on a single supplier, UC Rusal PLC, for
aluminum. A significant interruption in that supply could jeopardize the plant’s ability to continue as a going concern, which
could in turn have a material adverse effect on our financial condition, results of operations and cash flow. In addition, a
significant downturn in the business or financial condition of our significant suppliers exposes us to the risk of default by the
supplier on our contractual agreements, and this risk is increased by weak and deteriorating economic conditions on a global,
regional or industry sector level.

We also depend on scrap aluminum for our operations and acquire our scrap inventory from numerous sources. These
suppliers generally are not bound by long-term contracts and have no obligation to sell scrap metal to us. In periods of low
inventory prices, suppliers may elect to hold scrap until they are able to charge higher prices. If an adequate supply of scrap
metal is not available to us, we would be unable to recycle metals at desired volumes and our results of operation, financial
condition and cash flows could be materially adversely affected.

We are exposed to fluctuations in foreign currency exchange rates and interest rates, as well as inflation, economic factors,
and currency controls in the countries in which we operate.

Economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, competitive

factors in the countries in which we operate, and continued volatility or deterioration in the global economic and financial
environment could affect our revenues, expenses and results of operations. Changes in the valuation of the U.S. dollar against
other currencies, including the Euro, British pound, Canadian dollar, Chinese yuan (renminbi) and Russian ruble, may affect
our profitability as some important inputs are purchased in other currencies, while our products are generally sold in U.S.
dollars.

In addition, we expect a portion of our indebtedness to bear interest at rates equal to the London Interbank Offering Rate
(“LIBOR”) plus a margin. Accordingly, we will be subject to risk from changes in interest rates on the variable component of
the rate. Further, LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform.
These reforms and other pressures may cause LIBOR to disappear entirely or to perform differently than in the past. The
consequences of these developments cannot be entirely predicted, but could include changes in the cost of our variable rate
indebtedness.

We also face risks arising from the imposition of cash repatriation restrictions and exchange controls. Cash repatriation
restrictions and exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and

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other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing restrictions or
controls. While we currently have no need, and does not intend, to repatriate or convert cash held in countries that have
significant restrictions or controls in place, should we need to do so to fund our operations, we may be unable to repatriate or
convert such cash, or be unable to do so without incurring substantial costs. We currently have substantial operations in
countries that have cash repatriation restrictions or exchange controls in place, including China, and, if we were to need to
repatriate or convert such cash, these controls and restrictions may have an adverse effect on our operating results and financial
condition.

Our customers may reduce their demand for aluminum products in favor of alternative materials.

Certain applications of our aluminum-based products compete with products made from other materials, such as steel,
titanium and composites. The willingness of customers to pursue materials other than aluminum often depends upon the desire
to achieve specific attributes. For example, the commercial aerospace industry has used and continues to evaluate the further
use of alternative materials to aluminum, such as titanium and composites, in order to reduce the weight and increase the fuel
efficiency of aircraft. Additionally, the automotive industry, while motivated to reduce vehicle weight through the use of
aluminum, may revert to steel or other materials for certain applications. Further, the decision to use aluminum may be
impacted by aluminum prices or compatibility of aluminum with other materials used by a customer in a given application. The
willingness of customers to accept other materials in lieu of aluminum could adversely affect the demand for certain of our
products, and thus adversely affect our business, financial condition or results of operations.

Labor disputes and other employee relations issues could adversely affect our business, financial condition or results of
operations.

A significant portion of our employees are represented by labor unions in a number of countries under various collective

bargaining agreements with varying durations and expiration dates. While we previously have been successful in renegotiating
our collective bargaining agreements with various unions, we may not be able to satisfactorily renegotiate all collective
bargaining agreements in the United States and other countries when they expire. In addition, existing collective bargaining
agreements may not prevent a strike or work stoppage at our facilities in the future. We may also be subject to general country
strikes or work stoppages unrelated to our business or collective bargaining agreements. Any such work stoppages could have a
material adverse effect on our business, financial condition or results of operations.

A failure to attract, retain or provide adequate succession plans for key personnel could adversely affect our operations and
competitiveness.

Our existing operations and development projects require highly skilled executives and staff with relevant industry and

technical experience. Our inability to attract and retain such people may adversely impact our ability to meet project demands
adequately and fill roles in existing operations. Skills shortages in engineering, manufacturing, technology, construction and
maintenance contractors and other labor market inadequacies may also impact activities. These shortages may adversely impact
the cost and schedule of development projects and the cost and efficiency of existing operations.

In addition, the continuity of key personnel and the preservation of institutional knowledge are vital to the success of our

growth and business strategy. The loss of key members of management and other personnel could significantly harm our
business, and any unplanned turnover, or failure to develop adequate succession plans for key positions, could deplete our
institutional knowledge base, result in loss of technical expertise, delay or impede the execution of our business plans and erode
our competitiveness.

We may be exposed to significant legal proceedings, investigations or changes in U.S. federal, state or foreign law,
regulation or policy.

Our results of operations or liquidity in a particular period could be affected by new or increasingly stringent laws,

regulatory requirements or interpretations, or outcomes of significant legal proceedings or investigations adverse to us. We may
experience an unfavorable change in effective tax rates or become subject to unexpected or rising costs associated with
business operations or provision of health or welfare benefits to employees due to changes in laws, regulations or policies.

We are subject to a variety of legal and regulatory compliance risks in the United States and abroad in connection with our

business and products. These risks include, among other things, potential claims relating to product liability, product testing,
health and safety, environmental matters, employment matters, required record keeping and record retention, compliance with
securities laws, intellectual property rights, government contracts and taxes, insurance or commercial matters, as well as
compliance with U.S. and foreign laws and regulations governing import and export, anti-bribery, antitrust and competition,
sales and trading practices, human rights and modern slavery, sourcing of raw materials, third-party relationships, supply chain
operations and the manufacture and sale of products. We may be a party to litigation in a foreign jurisdiction where geopolitical

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risks might influence the ultimate outcome of such litigation. We could be subject to fines, penalties, damages (in certain cases,
treble damages), or suspension or debarment from government contracts.

The global and diverse nature of our operations means that these risks will continue to exist, and additional legal
proceedings and contingencies may arise from time to time. While we believe we have adopted appropriate risk management
and compliance programs to address and reduce these risks, including insurance arrangements with respect to these risks, such
measures may provide inadequate protection against liabilities that may arise. In addition, various factors or developments can
lead us to change current estimates of liabilities or make such estimates for matters previously insusceptible to reasonable
estimates, such as a significant judicial ruling or judgment, a significant settlement, significant regulatory developments or
changes in applicable law. A future adverse ruling or settlement or unfavorable changes in laws, regulations or policies, or other
contingencies that we cannot predict with certainty could have a material adverse effect on our financial condition, results of
operations or cash flows in a particular period. Litigation and compliance efforts may require substantial attention from
management and could result in significant legal expenses, settlement costs or damage awards that could have a material
impact on our financial position, results of operations and cash flows. For additional information regarding our legal
proceedings, including proceedings and investigations relating to the June 13, 2017 fire at the Grenfell Tower in London, U.K.,
see the section entitled Part I, Item 3. Legal Proceedings.

We are exposed to environmental and safety risks and are subject to a broad range of health, safety and environmental laws
and regulations, which may result in substantial costs and liabilities.

Our operations worldwide are subject to numerous complex and increasingly stringent health, safety and environmental

laws and regulations. The costs of complying with such laws and regulations, including participation in assessments and
cleanups of sites, as well as internal voluntary programs, are significant and will continue to be so for the foreseeable future.
Environmental laws may impose cleanup liability on owners and occupiers of contaminated property, including present, past or
divested properties, regardless of whether the owners and occupiers caused the contamination or whether the activity that
caused the contamination was lawful at the time it was conducted. Environmental matters for which we may be liable may arise
in the future at our present sites, at sites owned or operated by our predecessors or affiliates, at sites that we may acquire in the
future, or at third-party sites used by our predecessors or affiliates for material and waste handling and disposal. Compliance
with health, safety and environmental laws and regulations, including remediation obligations, may prove to be more
challenging and costly than we anticipate. Our results of operations or liquidity in a particular period could be affected by
certain health, safety or environmental matters, including remediation costs and damages related to certain sites as well as other
health and safety risks relating to our operations and products. Additionally, evolving regulatory standards and expectations can
result in increased litigation and/or increased costs, including increased remediation costs, all of which can have a material and
adverse effect on our financial condition, results of operations and cash flows.

In addition, the heavy industrial activities conducted at our facilities present a significant risk of injury or death to our
employees, customers or third parties that may be on site. We have experienced serious injuries in the past, notwithstanding the
safety protocols, practices and precautions we take. Our operations are subject to regulation by various federal, state and local
agencies in the United States and regulation by foreign government entities abroad responsible for employee health and safety,
including the Occupational Safety and Health Administration. From time to time, we have incurred fines for violations of
various health and safety standards. While we maintain insurance and have in place policies to minimize such risks, we may
nevertheless be unable to avoid material liabilities for any injury or death that may occur in the future. These types of incidents
may not be covered by or may exceed our insurance coverage and could have a material adverse effect on our results of
operations and financial condition or result in negative publicity and/or significant reputational harm.

We are subject to privacy and data security/protection laws in the jurisdictions in which it operates and may be exposed to
substantial costs and liabilities associated with such laws and regulations.

The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent

imposition of new and changing requirements. For example, the European Union’s General Data Protection Regulation
(“GDPR”), which became effective in May 2018, imposed significant new requirements on how companies process and
transfer personal data, as well as significant fines for non-compliance. Compliance with changes in privacy and information
security laws and standards may result in significant expense due to increased investment in technology and the development of
new operational processes, which could have a material adverse effect on our financial condition and results of operations. In
addition, the payment of potentially significant fines or penalties in the event of a breach of the GDPR or other privacy and
information security laws, as well as the negative publicity associated with such a breach, could damage our reputation and
adversely impact product demand and customer relationships.

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Failure to comply with domestic or international employment and related laws could result in penalties or costs that could
have a material adverse effect on our business results.

We are subject to a variety of domestic and foreign employment laws, such as the Fair Labor Standards Act (which
governs such matters as minimum wages, overtime and other working conditions), state and local wage laws, the Employee
Retirement Income Security Act, and regulations related to safety, discrimination, organizing, whistle-blowing, classification of
employees, privacy and severance payments, citizenship requirements, and healthcare insurance mandates. Allegations that we
have violated such laws or regulations could damage our reputation and lead to fines from or settlements with federal, state or
foreign regulatory authorities or damages payable to employees, which could have a material adverse impact on our operations
and financial condition.

We may be affected by global climate change or by legal, regulatory, or market responses to such change.

Increased concern over climate change has led to new and proposed legislative and regulatory initiatives, such as cap-and-
trade systems, additional limits on emissions of greenhouse gases or Corporate Average Fuel Economy standards in the United
States. New or revised laws and regulations in this area could directly and indirectly affect us and our customers and suppliers,
including by increasing the costs of production or impacting demand for certain products, which could result in an adverse
effect on our financial condition, results of operations and cash flows. Compliance with any new or more stringent laws or
regulations, or stricter interpretations of existing laws, could require additional expenditures by us or our customers or
suppliers. Also, we rely on natural gas, electricity, fuel oil and transport fuel to operate our facilities. Any increased costs of
these energy sources because of new laws could be passed along to us and our customers and suppliers, which could also have
a negative impact on our profitability.

Changes in the United Kingdom’s economic and other relationships with the European Union could adversely affect us.

In March 2017, the United Kingdom formally triggered the process to withdraw from the European Union (also referred to
as “Brexit”) following the results of a national referendum that took place in June 2016. The ultimate effects of Brexit on us are
difficult to predict, but because we currently operate and conduct business in the United Kingdom and in Europe, Brexit could
cause disruptions and create uncertainty to our businesses, including affecting the business of and/or our relationships with our
customers and suppliers, as well as altering the relationship among tariffs and currencies, including the value of the British
pound and the Euro relative to the U.S. dollar. Such disruptions and uncertainties could adversely affect our financial condition,
operating results and cash flows. In addition, Brexit could result in legal uncertainty and potentially divergent national laws and
regulations as new legal relationships between the United Kingdom and the European Union are established. The ultimate
effects of Brexit on us will also depend on the terms of any agreements the United Kingdom and the European Union make to
retain access to each other’s respective markets either during a transitional period or more permanently.

Risks Related to Separation

We have no recent history of operating as an independent company, and our historical and pro forma financial information
is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may
not be a reliable indicator of our future results.

The historical information about us herein refers to the Arconic Corporation Businesses as operated by and integrated with

ParentCo. Our historical financial information is derived from ParentCo’s accounting records and is presented on a standalone
basis as if the Arconic Corporation Businesses have been conducted independently from ParentCo. Additionally, the pro forma
financial information included in our filings with SEC is derived from our historical financial information and (i) gives effect to
the separation and (ii) reflects our anticipated post-separation capital structure, including the assignment of certain assets and
assumption of certain liabilities not included in the historical financial statements. Accordingly, the historical and pro forma
financial information does not necessarily reflect the financial condition, results of operations or cash flows that we would have
achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future
primarily as a result of the factors described below:

• Generally, our working capital requirements and capital for our general corporate purposes, including capital

expenditures and acquisitions, have historically been satisfied as part of the corporate-wide cash management policies
of ParentCo. Following the completion of the separation, our results of operations and cash flows are likely to be more
volatile, and we may need to obtain additional financing from banks, through public offerings or private placements of
debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be
more costly.

• Prior to the separation, our business has been operated by ParentCo as part of its broader corporate organization, rather
than as an independent company. ParentCo or one of its affiliates performed various corporate functions for us, such as

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legal, treasury, accounting, auditing, human resources, investor relations, and finance. Our historical and pro forma
financial results reflect allocations of corporate expenses from ParentCo for such functions, which may be less than
the expenses we would have incurred had we operated as a separate, publicly traded company.

• Currently, our business is integrated with the other businesses of ParentCo. Historically, we have shared economies of

scope and scale in costs, employees, vendor relationships and customer relationships. While we have sought to
minimize the impact on us when separating these arrangements, there is no guarantee these arrangements will continue
to capture these benefits in the future.

• As a current part of ParentCo, we take advantage of ParentCo’s overall size and scope to obtain more advantageous

procurement terms. After the separation, as a standalone company, we may be unable to obtain similar arrangements to
the same extent as ParentCo did, or on terms as favorable as those ParentCo obtained, prior to completion of the
separation.

• After the completion of the separation, the cost of capital for our business may be higher than ParentCo’s cost of

capital prior to the separation.

• Our historical financial information does not reflect the debt that we have incurred and will incur as part of the

separation.

• As an independent public company, we will separately become subject to, among other things, the reporting

requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act, the
Dodd-Frank Wall Street Reform and Consumer Protection Act, and the regulations of the NYSE and will be required
to prepare our standalone financial statements according to the rules and regulations required by the SEC. These
reporting and other obligations will place significant demands on our management and administrative and operational
resources. Moreover, to comply with these requirements, we anticipate that we will need to migrate our systems,
including information technology systems, implement additional financial and management controls, reporting
systems and procedures and hire additional accounting and finance staff. We expect to incur additional annual
expenses related to these steps, and those expenses may be significant. If we are unable to implement our financial and
management controls, reporting systems, information technology and procedures in a timely and effective fashion, our
ability to comply with our financial reporting requirements and other rules that apply to reporting companies under the
Exchange Act could be impaired.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of

operating as a company separate from ParentCo. For additional information about the past financial performance of our
business, see “Part II, Item 6. Selected Financial Data, Part II, Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations and Part II, Item 8. Financial Statements and Supplementary Data.

If we fail to maintain an effective system of internal control, we may not be able to accurately report financial results or
prevent fraud.

Our financial results previously were included within the consolidated results of ParentCo, and we believe that our
reporting and control systems were appropriate for those of subsidiaries of a public company. However, we were not directly
subject to the reporting and other requirements of the Exchange Act. As a standalone public company, we are directly subject to
reporting and other obligations under the Exchange Act, and will be subject to the requirements of Section 404 of Sarbanes-
Oxley regarding internal control over financial reporting. Internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in
accordance with generally accepted accounting principles. A control system, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance with respect to the reliability of reporting, including financial reporting and
financial statement preparation. If we are not able to maintain the adequacy of our internal control over financial reporting,
including any failure to implement required new or improved controls or if we experience difficulties in their implementation,
our business, financial condition, and operating results could be harmed. Moreover, adequate internal controls are important to
help prevent fraud. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to
accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and
other public reporting, which would harm our business and the trading price of our common stock.

Following the separation, our financial profile will change, and we will be a smaller, less diversified company than
ParentCo prior to the separation.

The separation will result in each of Howmet Aerospace and us being smaller, less diversified companies with more
limited businesses concentrated in respective industries. As a result, we may be more vulnerable to changing market conditions,

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which could have a material adverse effect on our business, financial condition and results of operations. In addition, the
diversification of our revenues, costs, and cash flows will diminish as a standalone company, such that our results of operations,
cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital
expenditures and investments, pay dividends and service debt may be diminished. Following the separation we may also lose
capital allocation efficiency and flexibility, as we will no longer be able to use cash flow from Howmet Aerospace to fund our
investments into one of our other businesses.

We may not achieve some or all of the expected benefits of the separation, and the separation may materially adversely
affect our business.

We may not be able to achieve the full strategic and financial benefits expected to result from the separation, or such

benefits may be delayed or not occur at all. The separation is expected to provide the following benefits, among others:
(1) enabling our management to more effectively pursue our own distinct operating priorities and strategies and to focus on
strengthening our core business and unique needs, and pursue distinct and targeted opportunities for long-term growth and
profitability; (2) permitting us to allocate our financial resources to meet the unique needs of our business, which will allow us
to intensify our focus on distinct strategic priorities and to more effectively pursue our own distinct capital structures and
capital allocation strategies; (3) allowing us to more effectively articulate a clear investment thesis to attract a long-term
investor base suited to our business and providing investors with a distinct and targeted investment opportunity; (4) creating an
independent equity security tracking our underlying business, affording us direct access to the capital markets and facilitating
our ability to consummate future acquisitions or other transactions using our common stock; and (5) permitting us to more
effectively recruit, retain and motivate employees through the use of stock-based compensation that more closely aligns
management and employee incentives with specific business goals and objectives related to our business.

We may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (1) the
separation will demand significant management resources and require significant amounts of management’s time and effort,
which may divert management’s attention from operating and growing our business; (2) following the separation, we may be
more susceptible to market fluctuations and other adverse events than if we were still a part of ParentCo because our business
will be less diversified than ParentCo’s business prior to the completion of the separation; (3) after the separation, as a
standalone company, we may be unable to obtain certain goods, services and technologies at prices or on terms as favorable as
those ParentCo obtained prior to completion of the separation; (4) the separation may require us to pay costs that could be
substantial and material to our financial resources, including accounting, tax, legal and other professional services costs,
recruiting and relocation costs associated with hiring new key senior management and personnel, tax costs and costs to separate
information systems; (5) under the terms of the tax matters agreement that we will enter into with ParentCo, we will be
restricted from taking certain actions that could cause the distribution or certain related transactions to fail to qualify as tax-free
and these restrictions may limit us for a period of time from pursuing certain strategic transactions and equity issuances or
engaging in other transactions that might increase the value of our business; and (6) after the separation, we cannot predict the
trading prices of our common stock or know whether the combined value of one-fourth of a share of our common stock and
one share of Howmet Aerospace common stock will be less than, equal to or greater than the market value of one share of
ParentCo common stock prior to the separation. If we fail to achieve some or all of the benefits expected to result from the
separation, or if such benefits are delayed, it could have a material adverse effect on our competitive position, business,
financial condition, results of operations and cash flows.

ParentCo’s plan to separate into two independent, publicly traded companies is subject to various risks and uncertainties
and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve
significant time and expense, which could disrupt or adversely affect our business.

In February 2019, ParentCo announced its plan to separate into two independent, publicly traded companies. The
separation is subject to the satisfaction of certain conditions (or waiver by ParentCo in its sole and absolute discretion).
Furthermore, the separation is complex in nature, and unanticipated developments or changes, including changes in the law, the
macroeconomic environment, competitive conditions of ParentCo’s markets, regulatory approvals or clearances, the uncertainty
of the financial markets and challenges in executing the separation, could delay or prevent the completion of the proposed
separation, or cause the separation to occur on terms or conditions that are different or less favorable than expected.
Additionally, the ParentCo Board of Directors, in its sole and absolute discretion, may decide not to proceed with the
distribution at any time prior to the separation date.

The process of completing the proposed separation has been and is expected to continue to be time- consuming and
involves significant costs and expenses. The separation costs may be significantly higher than what was currently anticipated
and may not yield a discernible benefit if the separation is not completed or is not well executed, or the expected benefits of the
separation are not realized. Executing the proposed separation will also require significant amounts of management’s time and
effort, which may divert management’s attention from operating and growing our business. Other challenges associated with

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effectively executing the separation include attracting, retaining and motivating employees during the pendency of the
separation and following its completion; addressing disruptions to our supply chain, manufacturing, sales and distribution, and
other operations resulting from separating ParentCo into two independent companies; and separating ParentCo’s information
systems.

Challenges in the commercial and credit environment may adversely affect the expected benefits of the separation, the
expected plans or anticipated timeline to complete the separation and our future access to capital on favorable terms.

Volatility in the world financial markets could increase borrowing costs or affect our ability to access the capital markets.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a
material decline in the demand for our products or in the solvency of our customers or suppliers or if there are other
significantly unfavorable economic conditions. The occurrence of any of the foregoing events may adversely affect our
anticipated timeline to complete the separation and the expected benefits of the separation, including by increasing the time and
expense involved in the separation.

We have incurred, expect to incur, and may in the future incur additional, debt obligations that could adversely affect our
business and profitability and our ability to meet other obligations.

On February 7, 2020, we completed a Rule 144A (U.S. Securities Act of 1933, as amended) debt offering for $600 million

of 6.125% (fixed rate) Senior Secured Second-Lien Notes due 2028 (the “2028 Notes”). Additionally, on March 25, 2020, we
entered into a credit agreement, which provides a $600 million Senior Secured First-Lien Term B Loan Facility (variable rate
and seven-year term) (the “Term Loan”) and a $1.0 billion Senior Secured First-Lien Revolving Credit Facility (variable rate
and five-year term) (the “Credit Facility”), with a syndicate of lenders and issuers named therein (the “Credit Agreement”). A
portion of the aggregate net proceeds of such financings is expected to be used to distribute cash to ParentCo. The payment to
ParentCo will be calculated as the difference between (i) the approximately $1,165 million of net proceeds from the aggregate
indebtedness and (ii) the difference between a beginning cash balance at the Separation Date of $500 million and the amount of
cash held by Arconic Corporation at March 31, 2020 ($72 million as of December 31, 2019). As a result of the transactions, we
anticipate having approximately $1.2 billion of indebtedness outstanding upon completion of the separation. See Note U to the
Combined Financial Statements in Part II, Item 8 Financial Statements and Supplementary Data. We may also incur additional
indebtedness in the future.

This significant amount of debt could potentially have important consequences to us and our debt and equity investors,

including:

•

requiring a substantial portion of our cash flow from operations to make interest payments;

• making it more difficult to satisfy debt service and other obligations;

•

increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit
the future availability of debt financing;

increasing our vulnerability to general adverse economic and industry conditions;

reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business;

limiting our flexibility in planning for, or reacting to, changes in our business and the industry;

• placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and

•

limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay
cash dividends or repurchase securities.

Subject to the restrictions in the Credit Agreement and the indenture governing the 2028 Notes, we, including our
subsidiaries, have the ability to incur significant additional indebtedness, including debt secured by the collateral securing the
obligations under the Credit Agreement and the 2028 Notes. Liens granted in connection with the incurrence of additional
indebtedness may be pari passu with the liens securing the debt under the Credit Agreement and may be senior to or pari passu
with the liens securing the 2028 Notes. Although the terms of the Senior Credit Facilities will, and the indenture governing the
2028 Notes does, include restrictions on the incurrence of additional indebtedness, these restrictions will be and are subject to a
number of important exceptions, and indebtedness incurred in compliance with these restrictions could be substantial.

To the extent that we incur additional indebtedness, the foregoing risks could increase. In addition, our actual cash

requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to repay all of the

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outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable
terms, or at all, to refinance our debt. See Note U to the Combined Financial Statements in Part II, Item 8. Financial Statements
and Supplementary Data of this Form 10-K.

Our indebtedness will restrict our current and future operations, which could adversely affect our ability to respond to
changes in our business and manage our operations.

The terms of the Credit Agreement, and the indenture governing the 2028 Notes, include a number of restrictive covenants

that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

• make investments, loans, advances, guarantees and acquisitions;

• dispose of assets;

•

incur or guarantee additional debt and issue certain disqualified equity interests and preferred stock;

• make certain restricted payments, including a limit on dividends on equity securities or payments to redeem,

repurchase or retire equity securities or other indebtedness;

•

engage in transactions with affiliates;

enter into certain restrictive agreements;

create liens on assets to secure debt; and

consolidate, merge, sell or otherwise dispose of all or substantially all of our or a subsidiary guarantor’s assets.

In addition, the Credit Agreement requires us to comply with financial covenants. The Credit Agreement requires the
maintenance of a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, as defined in the Credit
Agreement. The Consolidated Total Leverage Ratio is the ratio of Consolidated Debt to Consolidated EBITDA, as defined in
the Credit Agreement, and may not exceed a ratio of 2.50 to 1.00 for each fiscal quarter commencing with the fiscal quarter
ending on June 30, 2020 through and including the fiscal quarter ending on March 31, 2021, and 2.25 to 1.00 for each fiscal
quarter thereafter. The Consolidated Interest Coverage Ratio is the ratio of Consolidated EBITDA to Consolidated Interest
Expense, as defined in the Credit Agreement, and may not fall below a ratio of 3.00 to 1.00 for any fiscal quarter during the
term of the Credit Agreement, commencing with the fiscal quarter ending on June 30, 2020. In addition, the Credit Agreement
requires pro forma compliance with these financial covenants at each instance of borrowing, which could limit our ability to
draw the full amount of the Credit Facility. Our availability under the Credit Facility could be impacted by a number of factors,
including but not limited to any impact by disruptions to our operations and financial performance.

Our ability to comply with these agreements may be affected by events beyond our control, including prevailing
economic, financial and industry conditions. These covenants could have an adverse effect on our business by limiting our
ability to take advantage of financing, merger and acquisition or other opportunities. The breach of any of these covenants or
restrictions could result in a default under the Credit Agreement or the indenture governing the 2028 Notes.

Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond
our control, could result in an event of default that could materially and adversely affect our business, financial condition,
results of operations or cash flows.

If there were an event of default under any of the agreements relating to our outstanding indebtedness, including the Credit

Agreement and the indenture governing the 2028 Notes, we may not be able to incur additional indebtedness under the Credit
Agreement and the holders of the defaulted indebtedness could cause all amounts outstanding with respect to that indebtedness
to be immediately due and payable. We cannot assure you that our assets or cash flow would be sufficient to fully repay our
outstanding indebtedness if accelerated upon an event of default, which could have a material adverse effect on our ability to
continue to operate as a going concern. Further, if we are unable to repay, refinance or restructure our secured indebtedness, the
holders of such indebtedness could proceed against the collateral securing that indebtedness. In addition, any event of default
under or declaration of acceleration of any specific indebtedness also could result in an event of default under one or more of
the agreements governing our other indebtedness.

We could experience temporary interruptions in business operations and incur additional costs as we build our information
technology infrastructure and transition our data to our own systems.

We are in the process of creating our own, or engaging third parties to provide, information technology infrastructure and
systems to support our critical business functions, including accounting and reporting, in order to replace many of the systems

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ParentCo currently provides to us. We may incur temporary interruptions in business operations if we cannot transition
effectively from ParentCo’s existing operating systems, databases and programming languages that support these functions to
our own systems. Our failure to implement the new systems and transition our data successfully and cost-effectively could
disrupt our business operations and have a material adverse effect on our profitability. In addition, our costs for the operation of
these systems may be higher than the amounts reflected in our historical combined financial statements.

Our accounting and other management systems and resources may not be adequately prepared to meet the financial
reporting and other requirements to which we will be subject as a standalone, publicly traded company following the
separation.

Moreover, to comply with these requirements, we anticipate that we will need to migrate our systems, including

information technology systems, implement additional financial and management controls, reporting systems and procedures
and hire additional accounting and finance staff. We expect to incur additional annual expenses related to these steps, and those
expenses may be significant. If we are unable to implement our financial and management controls, reporting systems,
information technology and procedures in a timely and effective fashion, our ability to comply with our financial reporting
requirements and other rules that apply to reporting companies under the Exchange Act could be impaired. Any failure to
achieve and maintain effective internal controls could result in adverse regulatory consequences and/or loss of investor
confidence, which could limit our ability to access the global capital markets and could have a material adverse effect on our
business, financial condition, results of operations, cash flows or the market price of our securities.

In connection with the separation into two public companies, we and Howmet Aerospace will indemnify each other for
certain liabilities. If we are required to pay under these indemnities to Howmet Aerospace, our financial results could be
negatively impacted. The Howmet Aerospace indemnities may not be sufficient to hold us harmless from the full amount of
liabilities for which Howmet Aerospace will be allocated responsibility, and Howmet Aerospace may not be able to satisfy its
indemnification obligations in the future.

Pursuant to the separation agreement and certain other agreements between ParentCo and us, each party will agree to

indemnify the other for certain liabilities, in each case for uncapped amounts, as discussed further in the section entitled Part
III, Item 13. Certain Relationships and Related Transactions, and Director Independence —Separation Agreement”. Indemnities
that we may be required to provide Howmet Aerospace are not subject to any cap, may be significant and could negatively
impact our business. Third parties could also seek to hold us responsible for any of the liabilities that Howmet Aerospace has
agreed to retain. Any amounts we are required to pay pursuant to these indemnification obligations and other liabilities could
require us to divert cash that would otherwise have been used in furtherance of our operating business. Further, the indemnities
from Howmet Aerospace for our benefit may not be sufficient to protect us against the full amount of such liabilities, and
Howmet Aerospace may not be able to fully satisfy its indemnification obligations.

Moreover, even if we ultimately succeed in recovering from Howmet Aerospace any amounts for which we are held liable,

we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our business, results
of operations and financial condition.

Howmet Aerospace may fail to perform under various transaction agreements that will be executed as part of the
separation, or we may fail to have necessary systems and services in place when certain of the transaction agreements
expire.

In connection with the separation and prior to the distribution, we and ParentCo have entered into and will enter into the
separation agreement and will also enter into various other agreements, including a tax matters agreement, an employee matters
agreement, intellectual property license agreements, an agreement relating to the Davenport plant, metal supply agreements and
real estate and office leases. The separation agreement, the tax matters agreement and the employee matters agreement,
together with the documents and agreements by which the internal reorganization will be effected, will determine the allocation
of assets and liabilities between the companies following the separation for those respective areas and will include any
necessary indemnifications related to liabilities and obligations. We will rely on Howmet Aerospace to satisfy its performance

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and payment obligations under these agreements. If Howmet Aerospace is unable or unwilling to satisfy its obligations under
these agreements, including its indemnification obligations, we could incur operational difficulties and/or losses. If we do not
have in place our own systems and services, or if we do not have agreements with other providers of these services once certain
transaction agreements expire, we may not be able to operate our business effectively, and our profitability may decline. We are
in the process of creating our own, or engaging third parties to provide, systems and services to replace many of the systems
and services that ParentCo currently provides to us. However, we may not be successful in implementing these systems and
services in a timely manner or at all, we may incur additional costs in connection with, or following, the implementation of
these systems and services, and we may not be successful in transitioning data from ParentCo’s systems to ours.

The terms we will receive in our agreements with ParentCo could be less beneficial than the terms we may have otherwise
received from unaffiliated third parties.

The agreements we have entered into and will enter into with ParentCo in connection with the separation, including the
separation agreement, a tax matters agreement, an employee matters agreement, intellectual property license agreements, an
agreement relating to the Davenport plant, metal supply agreements and real estate and office leases, were prepared in the
context of the separation while we were still a wholly owned subsidiary of ParentCo. Accordingly, during the period in which
the terms of those agreements were prepared, we did not have an independent Board of Directors or a management team that
was independent of ParentCo. As a result, the terms of those agreements may not reflect terms that would have resulted from
arm’s-length negotiations between unaffiliated third parties. See Part III, Item 13. Certain Relationships and Related
Transactions, and Director Independence.

If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for
U.S. federal income tax purposes, we, as well as ParentCo and ParentCo’s stockholders, could be subject to significant tax
liabilities, and, in certain circumstances, we could be required to indemnify ParentCo for material taxes and other related
amounts pursuant to indemnification obligations under the tax matters agreement.

It is a condition to the distribution that ParentCo receive an opinion of its outside counsel, satisfactory to the ParentCo

Board of Directors, regarding the qualification of the distribution, together with certain related transactions, as a
“reorganization” within the meaning of Sections 355 and 368(a)(1)(D) of the Code. The opinion of counsel will be based upon
and rely on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings
of ParentCo and us, including those relating to the past and future conduct of ParentCo and us. If any of these facts,
assumptions, representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if ParentCo breaches its
or we breach any of our respective representations or covenants contained in the separation agreement and certain other
agreements and documents or in any documents relating to the opinion of counsel, the opinion of counsel may be invalid and
the conclusions reached therein could be jeopardized.

Notwithstanding receipt of the opinion of counsel, the IRS could determine that the distribution and/or certain related

transactions should be treated as taxable transactions for U.S. federal income tax purposes if it determines that any of the
representations, assumptions or undertakings upon which the opinion of counsel was based are false or have been violated. In
addition, the opinion of counsel will represent the judgment of such counsel and will not be binding on the IRS or any court,
and the IRS or a court may disagree with the conclusions in the opinion of counsel. Accordingly, notwithstanding receipt of the
opinion of counsel, there can be no assurance that the IRS will not assert that the distribution and/or certain related transactions
do not qualify for tax-free treatment for U.S. federal income tax purposes or that a court would not sustain such a challenge. In
the event the IRS were to prevail with such challenge, we, as well as ParentCo and ParentCo’s stockholders, could be subject to
significant U.S. federal income tax liability.

If the distribution were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes
under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S. federal income tax purposes, ParentCo would recognize
taxable gain as if it had sold the our common stock in a taxable sale for its fair market value, and ParentCo stockholders who
receive our shares in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair
market value of such shares.

Under the tax matters agreement to be entered into between ParentCo and us in connection with the separation, we
generally would be required to indemnify ParentCo for any taxes resulting from the separation (and any related costs and other
damages) to the extent such amounts resulted from (1) an acquisition of all or a portion of our equity securities or assets,
whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition),
(2) certain of our other actions or failures to act, or (3) any of our representations, covenants or undertakings contained in the
separation agreement and certain other agreements and documents or in any documents relating to the opinion of counsel being
incorrect or violated. Any such indemnity obligations could be material. For a more detailed discussion, see “Certain
Relationships and Related Party Transactions and Director Independence—Tax Matters Agreement.” In addition, we, ParentCo,

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and the respective subsidiaries may incur certain tax costs in connection with the separation, including non-U.S. tax costs
resulting from transactions (including the internal reorganization) in non-U.S. jurisdictions, which may be material.

We may not be able to engage in desirable capital-raising or strategic transactions following the separation.

Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered

taxable to the parent corporation and its stockholders as a result of certain post-spin-off transactions, including certain
acquisitions of shares or assets of the spun-off corporation. To preserve the tax-free treatment of the separation and the
distribution, and in addition to our indemnity obligations described above, the tax matters agreement will restrict us, for the
two-year period following the distribution, except in specific circumstances, from, among other things: (1) entering into any
transaction pursuant to which all or a portion of our shares of stock would be acquired, whether by merger or otherwise;
(2) issuing equity securities beyond certain thresholds; (3) repurchasing our shares of stock other than in certain open-market
transactions; and (4) ceasing to actively conduct certain of our businesses. The tax matters agreement will also prohibit us from
taking or failing to take any other action that would prevent the distribution and certain related transactions from qualifying as a
transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code.
These restrictions may limit our ability to pursue certain equity issuances, strategic transactions, repurchases or other
transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.
For more information, see Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence—Tax
Matters Agreement.

The transfer to us of certain contracts, permits and other assets and rights may require the consents or approvals of, or
provide other rights to, third parties and governmental authorities. If such consents or approvals are not obtained, we may
not be entitled to the benefit of such contracts, permits and other assets and rights, which could increase our expenses or
otherwise harm our business and financial performance.

The separation agreement will provide that certain contracts, permits and other assets and rights are to be transferred from
ParentCo or its subsidiaries to us or our subsidiaries in connection with the separation. The transfer of certain of these contracts,
permits and other assets and rights may require consents or approvals of third parties or governmental authorities or provide
other rights to third parties. In addition, in some circumstances, we and ParentCo are joint beneficiaries of contracts, and we
and ParentCo may need the consents of third parties in order to split or separate the existing contracts or the relevant portion of
the existing contracts to us or ParentCo.

Some parties may use consent requirements or other rights to seek to terminate contracts or obtain more favorable
contractual terms from us, which, for example, could take the form of adverse price changes, require us to expend additional
resources in order to obtain the services or assets previously provided under the contract, or require us to seek arrangements
with new third parties or obtain letters of credit or other forms of credit support. If we are unable to obtain required consents or
approvals, we may be unable to obtain the benefits, permits, assets and contractual commitments that are intended to be
allocated to us as part of our separation from ParentCo, and we may be required to seek alternative arrangements to obtain
services and assets which may be more costly and/or of lower quality. The termination or modification of these contracts or
permits or the failure to timely complete the transfer or separation of these contracts or permits could negatively impact our
business, financial condition, results of operations and cash flows.

Until the distribution occurs, the ParentCo Board of Directors has sole and absolute discretion to change the terms of the
separation in ways which may be unfavorable to us.

Until the distribution occurs, we will be a wholly-owned subsidiary of ParentCo. Accordingly, ParentCo will have the sole

and absolute discretion to determine and change the terms of the separation, including the establishment of the record date for
the distribution and the distribution date. These changes could be unfavorable to us. In addition, the ParentCo Board of
Directors, in its sole and absolute discretion, may decide not to proceed with the distribution at any time prior to the distribution
date.

Risks Related to Our Common Stock

We cannot be certain that an active trading market for our common stock will develop or be sustained after the distribution
and, following the separation, our stock price may fluctuate significantly.

Prior to the record date for the distribution, trading of shares of our common stock began on a “when-issued” basis and

may continue through the distribution date. However, we cannot guarantee that an active trading market will develop or be
sustained for our common stock after the separation, nor can we predict the prices at which shares of our common stock may
trade after the separation. Similarly, we cannot predict the effect of the separation on the trading prices of our common stock or
whether the combined market value of one-fourth of a share of our common stock and one share of Howmet Aerospace

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common stock will be less than, equal to or greater than the market value of one share of ParentCo common stock prior to the
distribution.

Until the market has fully evaluated our business as a standalone entity, the prices at which shares of our common stock
trade may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general
volatility, held constant. The increased volatility of our stock price following the separation may have a material adverse effect
on our business, financial condition and results of operations. The market price of our common stock may fluctuate
significantly due to a number of factors, some of which may be beyond our control, including:

•

actual or anticipated fluctuations in our operating results;

changes in earnings estimated by securities analysts or our ability to meet those estimates;

the operating and stock price performance of comparable companies;

changes to the regulatory and legal environment under which we operate;

actual or anticipated fluctuations in commodities prices; and

• domestic and worldwide economic conditions.

A significant number of shares of our common stock may be sold following the separation, which may cause our stock price
to decline.

Any sales of substantial amounts of our common stock in the public market or the perception that such sales might occur,
in connection with the separation or otherwise, may cause the market price of our common stock to decline. Upon completion
of the separation, we expect that we will have an aggregate of approximately 109,021,376 shares of our common stock issued
and outstanding (based on 436,085,504 shares of ParentCo common stock outstanding as of March 19, 2020). Shares
distributed to ParentCo stockholders in the separation will generally be freely tradeable without restriction or further
registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), except for shares owned by one of our
“affiliates,” as that term is defined in Rule 405 under the Securities Act.

We are unable to predict whether large amounts of our common stock will be sold in the open market following the
separation. We are also unable to predict whether a sufficient number of buyers of our common stock to meet the demand to
sell shares of our common stock at attractive prices would exist at that time.

Your percentage of ownership in us may be diluted in the future.

In the future, your percentage ownership in us may be diluted because of equity issuances for acquisitions, capital market

transactions or otherwise, including any equity awards that we will grant to our directors, officers and employees. Our
employees will have stock-based awards that correspond to shares of our common stock after the separation as a result of
conversion of their ParentCo stock-based awards. We anticipate that the compensation committee of our Board of Directors
will grant additional stock-based awards to our employees after the separation. Such awards will have a dilutive effect on the
number of our shares outstanding, and therefore on our earnings per share, which could adversely affect the market price of our
common stock. From time to time, we will issue additional stock-based awards to our employees under our employee benefits
plans.

We cannot guarantee the timing, amount or payment of dividends on our common stock.

We anticipate paying cash dividends in the first year following the separation. However, the timing, declaration, amount

and payment of future dividends to our stockholders will fall within the discretion of our Board of Directors. The Board of
Directors’ decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings,
capital requirements, debt service obligations, covenants associated with certain of our debt service obligations, industry
practice, legal requirements, regulatory constraints and other factors that our Board of Directors deems relevant. For example,
the ability for us to issue dividends may be impacted or delayed due to the impacts of the coronavirus (COVID-19). For more
information, see Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.

Anti-takeover provisions could enable us to resist a takeover attempt by a third party and limit the power of our
stockholders.

Our amended and restated certificate of incorporation and amended and restated bylaws will contain, and Delaware law

contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such

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practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our Board of
Directors rather than to attempt a hostile takeover. These provisions are expected to include, among others:

•

the ability of our remaining directors to fill vacancies on our Board of Directors that do not arise as a result of removal
by stockholders;

limitations on stockholders’ ability to call a special stockholder meeting;

rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
and

•

the right of our Board of Directors to issue preferred stock without stockholder approval.

In addition, we expect to be subject to Section 203 of the Delaware General Corporate Law (the “DGCL”), which could
have the effect of delaying or preventing a change of control that you may favor. Section 203 provides that, subject to limited
exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a
Delaware corporation may not engage in a business combination with that corporation, including by merger, consolidation or
acquisitions of additional shares, for a three-year period following the date on which that person or any of its affiliates becomes
the holder of more than 15% of the corporation’s outstanding voting stock.

We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring
potential acquirers to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess
any acquisition proposal. These provisions are not intended to make us immune from takeovers; however, these provisions will
apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our
Board of Directors determines is not in our best interests and our stockholders best interests. These provisions may also prevent
or discourage attempts to remove and replace incumbent directors.

In addition, an acquisition or further issuance of our stock could trigger the application of Section 355(e) of the Code,

causing the distribution to be taxable to ParentCo. Under the tax matters agreement, we would be required to indemnify
ParentCo for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that our
stockholders may consider favorable.

Our amended and restated certificate of incorporation will designate the state courts within the State of Delaware as the sole
and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could
discourage lawsuits against us and our directors and officers.

Our amended and restated certificate of incorporation will provide that unless the Board of Directors otherwise

determines, the state courts within the State of Delaware (or, if no state court located within the State of Delaware has
jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action
or proceeding brought on behalf of us, any action asserting a claim for or based on a breach of a fiduciary duty owed by any of
our current or former directors or officers to us or our stockholders, including a claim alleging the aiding and abetting of such a
breach of fiduciary duty, any action asserting a claim against us or any of our current or former directors or officers arising
under any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws, any
action asserting a claim relating to or involving us governed by the internal affairs doctrine, or any action asserting an “internal
corporate claim” as that term is defined in Section 115 of the DGCL.

To the fullest extent permitted by law, this exclusive forum provision will apply to state and federal law claims, including
claims under the federal securities laws, including the Securities Act and the Exchange Act, although our stockholders will not
be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. The
enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in
legal proceedings, and it is possible that, in connection with claims arising under federal securities laws or otherwise, a court
could find the exclusive forum provision contained in the amended and restated certificate of incorporation to be inapplicable
or unenforceable.

This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that our
stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against
Arconic Corporation and our directors and officers. Alternatively, if a court were to find this exclusive forum provision
inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we
may incur additional costs associated with resolving such matters in other jurisdictions, which could negatively affect our
business, results of operations and financial condition.

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Item 1B. Unresolved Staff Comments.

None.

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Item 2. Properties.

We maintain 46 manufacturing, sales and service facilities located across North America, Europe, the United Kingdom,
Russia and Asia. Our principal office and corporate center is located at 201 Isabella Street, Suite 400, Pittsburgh, Pennsylvania
15212-5858. The Arconic Technology Center which serves as the headquarters for our research and development efforts is
located at 100 Technical Drive, New Kensington, Pennsylvania 15069-0001.

Arconic believes that its facilities are suitable and adequate for its operations. Although no title examination of properties
owned by Arconic has been made for the purpose of this report, the Company knows of no material defects in title to any such
properties. Arconic leases some of its facilities; however, it is the opinion of management that the leases do not materially
affect the continued use of the properties or the properties’ values. See Notes B and M to the Combined Financial Statements
in Part II, Item 8. Financial Statements and Supplementary Data.

Arconic has active plants and holdings in each of its segments that are described in the Rolled Products Principal
Facilities section (see page 12), Extrusion Principal Facilities section (see page 14), and Building and Construction Principal
Facilities section (see page 15).

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Item 3. Legal Proceedings.

In connection with the separation, Arconic Corporation will agree to assume and indemnify ParentCo against certain

liabilities relating to Arconic Corporation’s businesses, including potential liabilities associated with the following legal
proceedings, as discussed further in Part III, Item 13. Certain Relationships and Related Transactions, and Director
Independence.” The information set forth in Note T to the Combined Financial Statements in Part II, Item 8. Financial
Statements and Supplementary Data under the caption “Contingencies and Commitments - Contingencies” is incorporated
herein by reference.

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Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.

On February 5, 2020, ParentCo's Board of Directors approved the completion of the separation, which is scheduled to

become effective on April 1, 2020 at 12:01 a.m. Eastern Daylight Time. The separation will occur by means of a pro rata
distribution by ParentCo of all of the outstanding shares of common stock of Arconic Corporation to ParentCo common
stockholders of record as of the close of business on March 19, 2020 (the “Record Date”). Specifically, ParentCo common
stockholders are expected to receive one share of Arconic Corporation common stock for every four shares of ParentCo
common stock (the “Separation Ratio”) held as of the Record Date (ParentCo common stockholders will receive cash in lieu of
fractional shares). In connection with the consummation of the separation, ParentCo will change its name to Howmet
Aerospace Inc. and Arconic Rolled Products Corporation will change its name to Arconic Corporation. “When-issued” trading
of Arconic Corporation common stock began on March 18, 2020 under the ticker symbol “ARNC WI” and will continue until
the distribution date. “Regular-way” trading of Arconic Corporation common stock is expected to begin with the opening of the
New York Stock Exchange on April 1, 2020 under the ticker symbol “ARNC.”

The number of holders of record of common stock was one (ParentCo, as sole stockholder) as of March 19, 2020.

We anticipate paying cash dividends in the first year following the distribution. However the timing, declaration, amount
of, and payment of any dividends following the separation will be within the discretion of the Company's Board of Directors
and will depend upon many factors, including Arconic Corporation's financial condition, earnings, capital requirements of
Arconic Corporation’s operating subsidiaries, covenants associated with certain of Arconic Corporation's debt service
obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors
deemed relevant by the Company's Board of Directors. Moreover, if Arconic Corporation determines to pay any dividend in the
future, there can be no assurance that Arconic Corporation will continue to pay such dividends or the amount of such dividends.

Unregistered Sales of Equity Securities

On August 14, 2019, Arconic Corporation issued 1,000 shares of its common stock to ParentCo pursuant to Section 4(a)(2)

of the Securities Act. The Company did not register the issuance of the issued shares under the Securities Act, because such
issuance did not constitute a public offering.

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Item 6. Selected Financial Data.

(dollars in millions, except per-share amounts)

For the year ended and as of December 31,

2019

2018

2017

2016

2015

Sales

Restructuring and other charges

Net income (loss)

Net income (loss) attributable to Arconic Corporation

Unaudited pro forma earnings per share attributable
to Arconic Corporation common shareholders(1):

Basic

Diluted

Cash dividends declared per common share

Total assets

Total debt

Cash provided from operations

Capital expenditures

7,277 $
87
225
225

2.07 $
2.07
*
4,741 $
250
457
201

7,442 $
(104 )
170
170

1.56 $
1.56
*
4,795 $
250
503
317

6,824 $
133
209
209

1.92 $
1.92
*
4,902 $
255
182
241

6,661 $
67
155
155

1.42 $
1.42
*
4,705 $
256
618
350

7,046
171
(60 )

(60 )

(0.55 )

*
4,627
253
**

_________________
(1) For all periods presented, earnings per share was calculated based on the 109,021,376 shares of Arconic Corporation
common stock estimated to be distributed on April 1, 2020 in connection with the completion of the Separation and is
considered pro forma in nature. This estimate was determined by applying the Separation Ratio to the 436,085,504 shares
of ParentCo’s outstanding common stock as of the Record Date. The same number of shares was used to calculate both
basic and diluted pro forma earnings per share as Arconic Corporation does not have any common share equivalents.

* For all periods presented, Arconic Corporation was not a standalone publicly-traded company with issued and outstanding

common stock.

** This information is not available and it is impracticable to obtain.

For all periods presented, Arconic Corporation did not operate as a separate, standalone entity. Arconic Corporation’s

operations were included in ParentCo’s financial results. Accordingly, for all periods presented, Arconic Corporation’s
Combined Financial Statements were prepared from ParentCo’s historical accounting records and were presented on a
standalone basis as if Arconic Corporation’s operations had been conducted independently from ParentCo. Such Combined
Financial Statements include the historical operations that were considered to comprise Arconic Corporation’s businesses, as
well as certain assets and liabilities that were historically held at ParentCo’s corporate level but were specifically identifiable or
otherwise attributable to Arconic Corporation.

The selected Statement of Combined Operations and Combined Balance Sheet information in the table above for all
periods except 2015 was derived from Arconic Corporation’s audited Combined Financial Statements. The information for
2015 was derived from Arconic Corporation’s unaudited underlying financial records, which were derived from ParentCo’s
financial records.

The data presented in the Selected Financial Data table should be read in conjunction with the information provided in
Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 and the Combined
Financial Statements in Part II Item 8. Financial Statements and Supplementary Data.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(dollars in millions; shipments in thousands of metric tons [kmt])

References in this Management's Discussion and Analysis of Financial Condition and Results of Operations to (i)
“ParentCo” refer to Arconic Inc., a Delaware corporation, and its consolidated subsidiaries, and (ii) “2016 Separation
Transaction” refer to the November 1, 2016 separation of Alcoa Inc., a Pennsylvania corporation, into two standalone, publicly-
traded companies, Arconic Inc. and Alcoa Corporation.

Overview

The Separation

The Proposed Separation. On February 8, 2019, ParentCo announced that its Board of Directors approved a plan to
separate into two standalone, publicly-traded companies (the “Separation”). The spin-off company, Arconic Rolled Products
Corporation (“Arconic Corporation” or the “Company”), will include the rolled aluminum products, aluminum extrusions, and
architectural products operations of ParentCo, as well as the Latin America extrusions operations sold in April 2018
(collectively, the “Arconic Corporation Businesses”). The existing publicly-traded company, ParentCo, will continue to own the
engine products, engineered structures, fastening systems, and forged wheels operations (collectively, the “Howmet Aerospace
Businesses”).

The Separation is subject to a number of conditions, including, but not limited to: final approval by ParentCo’s Board of
Directors (see below); receipt of an opinion of legal counsel regarding the qualification of the distribution, together with certain
related transactions, as a “reorganization” within the meaning of Sections 355 and 368(a)(1)(D) of the U.S. Internal Revenue
Code (i.e., a transaction that is generally tax-free for U.S. federal income tax purposes); and the U.S. Securities and Exchange
Commission (the “SEC”) declaring effective a Registration Statement on Form 10, as amended, filed with the SEC on February
13, 2020 (effectiveness was declared by the SEC on February 13, 2020).

Arconic Corporation and Howmet Aerospace have entered into and will enter into several agreements to implement the

legal and structural separation between the two companies; govern the relationship between Arconic Corporation and Howmet
Aerospace after the completion of the Separation; and allocate between Arconic Corporation and Howmet Aerospace various
assets, liabilities, and obligations, including, among other things, employee benefits, environmental liabilities, intellectual
property, and tax-related assets and liabilities. One agreement in particular, the Separation and Distribution agreement, will
identify the assets to be transferred, the liabilities to be assumed, and the contracts to be transferred to each of Arconic
Corporation and Howmet Aerospace as part of the Separation, and will provide for when and how these transfers and
assumptions will occur.

ParentCo may, at any time and for any reason until the Separation is complete, abandon the separation plan or modify its

terms.

ParentCo is incurring costs to evaluate, plan, and execute the Separation, and Arconic Corporation is allocated a pro rata

portion of these costs based on segment revenue (see Cost Allocations below). In 2019, ParentCo recognized $78 for such
costs, of which $40 was allocated to Arconic Corporation. The allocated amounts were included in Selling, general
administrative, and other expenses on Arconic Corporation’s Statement of Combined Operations.

On February 5, 2020, ParentCo's Board of Directors approved the completion of the Separation, which is scheduled to

become effective on April 1, 2020 (the “Separation Date”) at 12:01 a.m. Eastern Daylight Time. The Separation will occur by
means of a pro rata distribution by ParentCo of all of the outstanding shares of common stock of Arconic Corporation to
ParentCo common shareholders of record as of the close of business on March 19, 2020 (the “Record Date”). Specifically,
ParentCo common shareholders are expected to receive one share of Arconic Corporation common stock for every four shares
of ParentCo common stock held as of the Record Date (ParentCo common shareholders will receive cash in lieu of fractional
shares). In connection with the consummation of the Separation, ParentCo will change its name to Howmet Aerospace Inc.
(“Howmet Aerospace”) and Arconic Rolled Products Corporation will change its name to Arconic Corporation. “When-issued”
trading of Arconic Corporation common stock began on March 18, 2020 under the ticker symbol “ARNC WI” and will
continue until the distribution date. “Regular-way” trading of Arconic Corporation common stock is expected to begin with the
opening of the New York Stock Exchange on April 1, 2020 under the ticker symbol “ARNC.”

Basis of Presentation. The Combined Financial Statements of Arconic Corporation are prepared in conformity with
accounting principles generally accepted in the United States of America (GAAP). In accordance with GAAP, certain situations
require management to make estimates based on judgments and assumptions, which may affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They also may affect

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the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates
upon subsequent resolution of identified matters.

The Combined Financial Statements of Arconic Corporation are prepared from ParentCo’s historical accounting records

and are presented on a standalone basis as if the Arconic Corporation Businesses have been conducted independently from
ParentCo. Such Combined Financial Statements include the historical operations that are considered to comprise the Arconic
Corporation Businesses, as well as certain assets and liabilities that have been historically held at ParentCo’s corporate level but
are specifically identifiable or otherwise attributable to Arconic Corporation.

Cost Allocations. The Combined Financial Statements of Arconic Corporation include general corporate expenses of

ParentCo that were not historically charged to the Arconic Corporation Businesses for certain support functions that are
provided on a centralized basis, such as expenses related to finance, audit, legal, information technology, human resources,
communications, compliance, facilities, employee benefits and compensation, and research and development activities. These
general corporate expenses are included on Arconic Corporation’s Statement of Combined Operations within Cost of goods
sold, Selling, general administrative and other expenses, and Research and development expenses. These expenses have been
allocated to Arconic Corporation on the basis of direct usage when identifiable, with the remainder allocated based on the
Arconic Corporation Businesses’ segment revenue as a percentage of ParentCo’s total segment revenue, as reported in the
respective periods.

All external debt not directly attributable to Arconic Corporation has been excluded from the Company’s Combined
Balance Sheet. Financing costs related to these debt obligations have been allocated to Arconic Corporation based on the ratio
of capital invested by ParentCo in the Arconic Corporation Businesses to the total capital invested by ParentCo in both the
Arconic Corporation Businesses and the Howmet Aerospace Businesses, are included on the Company’s Statement of
Combined Operations within Interest expense.

The following table reflects the allocations described above:

Cost of goods sold(1)
Selling, general administrative, and other expenses(2)
Research and development expenses

Provision for depreciation and amortization
Restructuring and other charges(3)
Interest expense
Other expenses (income), net(4)
__________________

2019

2018

2017

14 $
115
11
10
7
115
(6 )

11 $
56
24
10
50
125
(12 )

35
120
28
10
6
162
(285 )

(1) For all periods presented, amount principally relates to an allocation of expenses for ParentCo’s retained pension and other

postretirement benefit obligations associated with closed and sold operations.

(2) In 2019, amount includes an allocation of $40 for costs incurred by ParentCo associated with the proposed separation
transaction (see The Proposed Separation above). In 2017, amount includes an allocation of $30 in costs related to
ParentCo’s proxy, advisory, and governance-related matters.

(3) In 2018, amount includes an allocation of settlement and curtailment charges and benefits related to several actions taken
(lump sum payments and benefit reductions) by ParentCo associated with pension and other postretirement benefit plans.

(4) In 2017, amount includes an allocation of two gains related to ParentCo’s investing and financing activities. Specifically,
an allocation of $182 associated with the sale of a portion of ParentCo’s investment in Alcoa Corporation common stock
and an allocation of $87 related to an exchange of cash and the remaining portion of ParentCo’s investment in Alcoa
Corporation common stock to acquire a portion of ParentCo’s outstanding debt. These amounts were allocated to Arconic
Corporation in preparing the accompanying Combined Financial Statements as the Company participates in ParentCo’s
centralized treasury function, which includes cash and debt management. As a result, Arconic Corporation benefited from
the cash received by ParentCo and/or the reduction of ParentCo debt, including the reduction in related interest cost, in the
respective transactions.

Management believes the assumptions regarding the allocation of ParentCo’s general corporate expenses and financing

costs are reasonable.

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Nevertheless, the Combined Financial Statements of Arconic Corporation may not include all of the actual expenses that

would have been incurred and may not reflect Arconic Corporation’s combined results of operations, financial position, and
cash flows had it been a standalone company during the periods presented. Actual costs that would have been incurred if
Arconic Corporation had been a standalone company would depend on multiple factors, including organizational structure,
capital structure, and strategic decisions made in various areas, including information technology and infrastructure.
Transactions between Arconic Corporation and ParentCo, including sales to the Howmet Aerospace Businesses, have been
presented as related party transactions on Arconic Corporation’s Combined Financial Statements and are considered to be
effectively settled for cash at the time the transaction is recorded. The total net effect of the settlement of these transactions is
reflected on Arconic Corporation’s Statement of Combined Cash Flows as a financing activity and on the Company’s
Combined Balance Sheet as Parent Company net investment.

Results of Operations

Earnings Summary

Net Income. Net income was $225 in 2019 compared to $170 in 2018. The improvement in results of $55 was

principally caused by favorable product pricing and mix and a favorable change in LIFO inventory accounting. These negative
impacts were mostly offset by the absence of a 2018 gain on the sale of a rolling mill, 2019 asset impairment charges and layoff
costs, and an allocation of costs related to the proposed separation.

Net income was $170 in 2018 compared with $209 in 2017. The decrease in results of $39 was principally caused by the

non-recurring nature of an allocation of two gains related to ParentCo’s 2017 investing and financing activities, an allocation of
a net charge associated with several actions taken by ParentCo related to employee retirement benefit plans, and unfavorable
pricing and product mix. These negative impacts were mostly offset by a gain on the sale of the Texarkana (Texas) rolling mill,
lower allocations of ParentCo’s corporate overhead and financing costs, the absence of charges related to the divestiture of the
Fusina (Italy) rolling mill and Latin America extrusions business, and higher volumes in the Rolled Products and Building and
Construction Systems segments.

Sales. Sales in 2019 were $7,277 compared with $7,442 in 2018, a decrease of $165, or 2%. The decrease was largely

attributable to lower aluminum prices, the absence of sales ($169 combined) as a result of both the ramp down of Arconic
Corporation’s North American packaging operations (completed in December 2018) and the divestiture of the Latin America
Extrusions business (April 2018), and unfavorable foreign currency movements. These negative impacts were mostly offset by
favorable product mix and pricing in the Rolled Products segment and volume growth related to the packaging (excluding
North America), aerospace, and industrial end markets.

Sales in 2018, were $7,442 compared with $6,824 in 2017, an increase of $618, or 9%. The improvement was largely

attributable to volume growth in the Rolled Products and Building and Construction Systems segments and both higher
aluminum prices and favorable product mix in the Rolled Products segment. These positive impacts were somewhat offset by
lower sales of $190 as a result of each of the following: the divestitures of both the Latin America Extrusions business
(April 2018) and the rolling mill in Fusina, Italy (March 2017) and the ramp down of the North American packaging operations
(completed in December 2018).

Cost of Goods Sold. COGS was $6,270, or 86.2% of Sales, in 2019 compared with $6,549, or 88.0% of Sales, in 2018.

The percentage was positively impacted by favorable product pricing and mix in the Rolled Products segment, a favorable
change in LIFO inventory accounting ($89 - see below), and the absence of a charge for a physical inventory adjustment at an
Extrusions plant ($14). These positive impacts were partially offset by costs associated with the transition of Arconic
Corporation’s Tennessee plant to industrial products from packaging, a charge to increase an environmental reserve related to a
U.S. Extrusions plant ($25), and a charge, primarily for a one-time employee signing bonus, related to a collective bargaining
agreement negotiation ($9 - see below).

The positive change in LIFO inventory accounting was mostly related to a decrease in the price of aluminum at December

31, 2019 indexed to December 31, 2018 compared to an increase in the price of aluminum at December 31, 2018 indexed to
December 31, 2017.

In June of 2019, Arconic Corporation and the United Steelworkers (USW) reached a tentative three-year labor agreement

covering approximately 3,400 employees at four U.S. locations; the previous labor agreement expired on May 15, 2019. The
tentative agreement was ratified on July 11, 2019.

COGS was $6,549, or 88.0% of Sales, in 2018 compared with $5,866, or 86.0% of Sales, in 2017. The percentage was
negatively impacted by higher aluminum prices, unfavorable aerospace product mix, and higher transportation costs. These

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negative impacts were partially offset by higher volumes in the Rolled Products and Building and Construction Systems
segments and a favorable LIFO inventory adjustment (difference of $59).

In preparation for the Separation, effective January 1, 2020, certain U.S. pension and other postretirement defined benefit
plans previously sponsored by ParentCo were separated into standalone plans for both Arconic Corporation (the “U.S. Shared
Plans”) and Howmet Aerospace (see Obligations for Operating Activities in Contractual Obligations below). Accordingly, in
2020, the Company will recognize the related expense of the U.S. Shared Plans in accordance with defined benefit plan
accounting, under which expense is split between operating income (service cost) and nonoperating income (nonservice cost).
Total combined net periodic benefit cost of the U.S. Shared Plans in 2020 is estimated to be approximately $100, of which
approximately $20 is service cost. The nonservice cost will be recognized in Other expenses (income), net and the service cost
will be recognized in COGS.

In the Company’s historical Combined Financial Statements prior to January 1, 2020, Arconic Corporation recognized its

portion of the expense of these ParentCo-sponsored U.S. benefit plans in accordance with multiemployer plan accounting,
under which expense is recorded entirely in operating income. In 2019, the Company’s Statement of Combined Operations
reflects the following expense amounts for these ParentCo-sponsored U.S. benefit plans: $95 in Cost of goods sold, $13 in
Selling, general administrative, and other expenses, and $2 in Research and development expenses.

Selling, General Administrative, and Other Expenses. SG&A expenses were $346, or 4.8% of Sales, in 2019
compared with $288, or 3.9% of Sales, in 2018. The increase of $58, or 20%, was primarily the result of a higher allocation
(increase of $59) of ParentCo’s corporate overhead, which was mostly driven by the following: costs incurred for the planned
Separation ($78, of which $40 was allocated to Arconic Corporation) and higher expenses for both executive compensation and
estimated annual employee incentive compensation, all of which was somewhat offset by reductions in several other overhead
costs.

SG&A expenses were $288, or 3.9% of Sales, in 2018 compared with $361, or 5.3% of Sales, in 2017. The decrease of

$73, or 20%, was primarily the result of a lower allocation (decrease of $64) of ParentCo’s corporate overhead, which was
mostly driven by overall cost reductions and the non-recurring nature of certain ParentCo costs in 2017 for proxy, advisory, and
governance-related matters.

In 2020, the Company expects to recognize no expense in SG&A related to U.S. pension and other postretirement

employee defined benefit plans compared to $13 recognized in 2019 (see Cost of Goods Sold above for additional
information).

Research and Development Expenses. R&D expenses were $45 in 2019 compared with $63 in 2018 and $66 in 2017.

The decrease in both periods was principally related to a lower allocation of ParentCo’s expenses, which was driven by
decreased spending.

In 2020, the Company expects to recognize no expense in R&D related to U.S. pension and other postretirement employee

defined benefit plans compared to $2 recognized in 2019 (see Cost of Goods Sold above for additional information).

Provision for Depreciation and Amortization. The provision for D&A was $252 in 2019 compared with $272 in 2018.

The decrease of $20, or 7%, was primarily due to the divestiture of the Texarkana (Texas) rolling mill and cast house.

The provision for D&A was $272 in 2018 compared with $266 in 2017. The increase of $6, or 2%, was primarily due to

capital projects placed into service related to Arconic Corporation’s Davenport (Iowa) (very thick plate stretcher related to
aerospace expansion) and Tennessee (equipment upgrades and conversions to transition to automotive sheet and industrial
applications from can sheet) rolling mills.

Restructuring and Other Charges. In 2019, Restructuring and other charges were $87, which were comprised of the

following components: a $53 impairment charge for the assets associated with an aluminum rolling mill in Brazil as a result of
signing a definitive sale agreement; a $30 charge for layoff costs, including the separation of approximately 480 employees
(240 in the Rolled Products segment, 190 in the Building and Construction Systems segment, and 50 in the Extrusions
segment); a $20 benefit for contingent consideration received related to the sale of the Texarkana (Texas) cast house; a $10
charge for the impairment of the carrying value of a trade name intangible asset; a $7 charge for an allocation of ParentCo’s
corporate restructuring charges (see Cost Allocations in Overview above); and a $7 net charge for other items.

In 2018, Restructuring and other charges were a net benefit of $104, which were comprised of the following components:

a $154 gain on the sale of the Texarkana (Texas) rolling mill and cast house; a $50 charge for an allocation of ParentCo’s
corporate restructuring charges (see Cost Allocations in Overview above); a $2 charge for a post-closing adjustment related to

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the divestiture of the Latin America extrusions business; an $8 net charge for other items; and a $10 benefit for the reversal of
several layoff reserves related to prior periods.

In 2017, Restructuring and other charges were $133, which were comprised of the following components: a $60 loss
related to the divestiture of the Fusina (Italy) rolling mill; a $41 impairment charge for the assets associated with the Latin
America extrusions business as a result of signing a definitive sale agreement (completed sale in April 2018); a $31 charge for
layoff costs related to cost reduction initiatives, including the separation of approximately 400 employees (the majority of
which related to the Rolled Products and Building and Construction Systems segments); a $6 charge for an allocation of
ParentCo’s corporate restructuring charges (see Cost Allocation in Overview above); a $2 net benefit for other items; and a $3
benefit for the reversal of several layoff reserves related to prior periods.

See Note E to the Combined Financial Statements in Part II Item 8 Financial Statements and Supplementary Data.

Interest Expense. Interest expense was $115 in 2019 compared with $129 in 2018. The decrease of $14, or 11%, was

mostly the result of a lower allocation (decrease of $10) of ParentCo’s financing costs due to a lower average amount of
ParentCo’s outstanding debt in 2019 compared to 2018 and an increase ($3) in the amount of interest capitalized due to
expansion projects at the Company's Davenport (Iowa) and Tennessee facilities (see Investing Activities in Liquidity and
Capital Resources below).

Interest expense was $129 in 2018 compared with $168 in 2017. The decrease of $39, or 23%, was mostly the result of a

lower allocation (decrease of $37) of ParentCo’s financing costs due to a lower average amount of ParentCo’s outstanding debt
in 2018 compared to 2017.

The Company’s 2020 Combined Financial Statements will continue to be prepared on a “carve-out" basis (see Basis of
Presentation in Overview above) for the first three months of 2020. Accordingly, Arconic Corporation’s interest expense for
these three months will include an allocation of ParentCo's financing costs consistent with the Company’s historical Combined
Financial Statements ($115 in 2019 - see Cost Allocations in Overview above). Additionally, Arconic Corporation’s interest
expense for these three months will also include an amount ($12 in 2019) related to indebtedness associated with the Davenport
(Iowa) rolling mill, an obligation which will be retained by ParentCo effective on the Separation Date (see Obligations for
Financing Activities in Contractual Obligations below). Beginning on the Separation Date, Arconic Corporation’s gross interest
expense (i.e. prior to capitalization) is expected to be approximately $80 on an annual run rate basis related to $1,200 of
indebtedness incurred in connection with the capital structure to be established at the time of the Separation (see Financing
Activities under Liquidity and Capital Resources).

Other (Income) Expenses, Net. Other income, net was $15 in 2019 compared with Other expenses, net of $4 in 2018.

The change of $19 was largely attributable to net favorable foreign currency movements.

Other expenses, net was $4 in 2018 compared with Other income, net of $287 in 2017. The change of $291 was largely

attributable to the non-recurring nature of an allocation ($269) of two gains related to ParentCo’s 2017 investing and financing
activities. Specifically, an allocation of $182 associated with the sale of a portion of ParentCo’s investment in Alcoa
Corporation common stock and an allocation of $87 related to an exchange of cash and the remaining portion of ParentCo’s
investment in Alcoa Corporation common stock to acquire a portion of ParentCo’s outstanding debt. See Cost Allocations in
Overview above for an explanation of the allocation methodology of ParentCo activities for purposes of Arconic Corporation’s
Combined Financial Statements.

In 2020, the Company expects to recognize approximately $80 of nonservice cost related to U.S. pension and other

postretirement employee defined benefit plans (see Cost of Goods Sold above for additional information).

Income Taxes. Arconic Corporation’s effective tax rate was 27.1% (benefit on income) in 2019 compared with the U.S.

federal statutory rate of 21%. The effective tax rate differs from the U.S. federal statutory rate by 48.1 percentage points
primarily as a result of a $118 benefit related to a worthless stock deduction, a $35 charge related to GILTI inclusion (see
Income Taxes in Critical Accounting Policies and Estimates below), a $28 charge related to an increase in valuation allowance
attributable to non-U.S. jurisdictions primarily for Brazil and China, and a $22 net benefit related to a U.S. tax election which
caused the deemed liquidation of a foreign subsidiary’s assets into its U.S. tax parent.

Arconic Corporation’s effective tax rate was 29.5% (provision on income) in 2018 compared with the U.S. federal
statutory rate of 21%. The effective tax rate differs from the U.S. federal statutory rate by 8.5 percentage points primarily as a
result of a $15 charge related to an increase in valuation allowance attributable to non-U.S. jurisdictions, primarily in Brazil and
China, and a $6 charge for U.S. state taxes.

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Arconic Corporation’s effective tax rate was 16.7% (provision on income) in 2017 compared with the U.S. federal

statutory rate of 35%. The effective tax rate differs from the U.S. federal statutory rate by 18.3 percentage points primarily as a
result of a $50 benefit related to the remeasurement of U.S. net deferred tax assets as a result of the federal tax rate reduction
from 35% to 21% pursuant to the provision of the U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Act”). In addition, the
effective tax rate differs from the U.S. federal statutory rate as a result of a $37 tax benefit related to the tax impact of corporate
allocations, a $37 charge related to an increase in valuation allowance attributable to non-U.S. jurisdictions, primarily in Brazil
and China, an $18 charge for an increase in unrecognized tax benefits recorded in Germany, a $16 benefit for foreign income
taxed in lower rate jurisdictions, a $7 charge for U.S. state taxes, and a $7 benefit related to intercompany transactions within
Arconic Corporation and between Arconic Corporation and ParentCo.

The Company anticipates that the effective tax rate in 2020 will be between 20% and 25%. However, the Separation,
changes in the current economic environment, tax legislation or rate changes, currency fluctuations, ability to realize deferred
tax assets, and the results of operations in certain taxing jurisdictions may cause this estimated rate to fluctuate.

Segment Information

Arconic Corporation’s operations consist of three reportable segments: Rolled Products, Extrusions, and Building and
Construction Systems. Segment performance under Arconic Corporation’s management reporting system is evaluated based on
several factors; however, the primary measure of performance is Segment operating profit. Arconic Corporation calculates
Segment operating profit as Total sales (third-party and intersegment) minus the following items: Cost of goods sold; Selling,
general administrative, and other expenses; Research and development expenses; and Provision for depreciation and
amortization. Segment operating profit may not be comparable to similarly titled measures of other companies.

Segment operating profit for all reportable segments totaled $531 in 2019, $420 in 2018, and $500 in 2017. The following

information provides Sales and Segment operating profit for each reportable segment for each of the three years in the period
ended December 31, 2019. See Note D to the Combined Financial Statements in Part II Item 8 Financial Statements and
Supplementary Data.

Rolled Products

Third-party sales*

Intersegment sales

Total sales

Segment operating profit

Third-party aluminum shipments (kmt)*
__________________

2019

2018

2017

5,609 $
25
5,634 $
455 $

1,390

5,731 $
15
5,746 $
328 $

1,309

5,125
15
5,140
384
1,257

In 2019, 2018, and 2017, third-party sales included $131, $145, and $133, respectively, and third-party aluminum
shipments included 64 kmt, 60 kmt, and 60 kmt, respectively, related to sales to ParentCo’s Howmet Aerospace
Businesses. These sales are deemed to be related-party sales and are presented as such on Arconic Corporation’s Statement
of Combined Operations.

Overview. The Rolled Products segment produces aluminum sheet and plate for a variety of end markets. Sheet and plate

are sold directly to customers and through distributors related to the aerospace, automotive, commercial transportation,
packaging, building and construction, and industrial products (mainly used in the production of machinery and equipment and
consumer durables) end markets. A small portion of this segment also produces aseptic foil for the packaging end market (see
below). While the customer base for flat-rolled products is large, a significant amount of sales of sheet and plate is to a
relatively small number of customers. Prices for these products are generally based on the price of metal plus a premium for
adding value to the aluminum to produce a semi-finished product, resulting in a business model in which the underlying price
of metal is contractually passed-through to customers. Generally, the sales and costs and expenses of this segment are
transacted in the local currency of the respective operations, which are the U.S. dollar and, to a lesser extent, each of the
following: the Russian ruble, Chinese yuan, the euro, the British pound, and the Brazilian real.

In August 2019, Arconic Corporation reached an agreement to sell its aluminum rolling mill in Itapissuma, Brazil to
Companhia Brasileira de Alumínio (this transaction was completed on February 1, 2020). This rolling mill produces specialty
foil and sheet products. The rolling mill generated third-party sales of $143, $179, and $162 in 2019, 2018, and 2017,
respectively, and, at the time of divestiture, had approximately 500 employees. See Restructuring and other charges in Earnings
Summary above for additional information.

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In March 2017, Arconic Corporation completed the divestiture of its Fusina, Italy rolling mill. The rolling mill generated

third-party sales of $54 in 2017 (through the date of divestiture) and had 312 employees at the time of the divestiture. See
Restructuring and Other charges in Earnings Summary above for additional information.

On November 1, 2016, Arconic Corporation entered into a toll processing agreement with Alcoa Corporation for the

tolling of metal for the Warrick, IN rolling mill which became a part of Alcoa Corporation upon the completion of the 2016
Separation Transaction. As part of this arrangement, Arconic Corporation provided a toll processing service to Alcoa
Corporation to produce can sheet products at its facility in Tennessee through the end date of the contract, December 31, 2018.
Alcoa Corporation supplied all required raw materials to Arconic Corporation, which processed the raw materials into finished
can sheet coils ready for shipment to the end customer. Tolling revenue for 2018 and 2017 was $144 and $190, respectively.

Sales. Third-party sales for the Rolled Products segment decreased $122, or 2%, in 2019 compared with 2018, primarily

attributable to lower aluminum prices (see below), the absence of sales ($144) as a result of the ramp down of Arconic
Corporation’s North American packaging operations (completed in December 2018), and unfavorable foreign currency
movements. These negative impacts were partially offset by favorable product pricing and mix and higher volumes in the
packaging (excluding North America), aerospace, and industrial products end markets.

Third-party sales for this segment increased $606, or 12%, in 2018 compared with 2017, primarily attributable to higher

aluminum prices; higher volumes in the automotive, commercial transportation, and industrial end markets; and favorable
product mix; partially offset by the absence of sales of $54 from the rolling mill in Fusina, Italy (see above) and the ramp down
of the North American packaging operations (completed in December 2018).

Segment Operating Profit. Segment operating profit for the Rolled Products segment increased $127, or 39%, in 2019
compared with 2018, primarily driven by favorable pricing adjustments on industrial products and commercial transportation
products, favorable aluminum price impacts, net cost savings, and favorable product mix. These positive impacts were
somewhat offset by Arconic Corporation’s Tennessee plant’s transition to industrial production from packaging production.

Segment operating profit for this segment declined $56, or 15%, in 2018 compared with 2017, primarily driven by
unfavorable aerospace wide-body production mix, higher aluminum prices, and higher transportation costs and scrap spreads,
partially offset by higher automotive, commercial transportation, and industrial volumes.

Changes in aluminum prices in 2019 compared to 2018 negatively impacted Third-party sales by approximately $335 and
positively impacted Segment operating profit by approximately $20. Metal price is a pass-through to this segment's customers
with limited exception (e.g., fixed-priced contracts, certain regional premiums). On average, the price of aluminum on the
London Metal Exchange declined approximately 15% in 2019 compared with 2018.

Extrusions

Third-party sales*

Segment operating profit

Third-party aluminum shipments (kmt)*
__________________

2019

2018

2017

550 $
(36 ) $
60

546 $
1 $
59

518
34
59

In 2019, 2018, and 2017, third-party sales included $52, $61, and $49, respectively, and third-party aluminum shipments
included 7 kmt, 7 kmt, and 6 kmt, respectively, related to sales to ParentCo’s Howmet Aerospace Businesses. These sales
are deemed to be related-party sales and are presented as such on Arconic Corporation’s Statement of Combined
Operations.

Overview. The Extrusions segment produces a range of extruded and machined parts for the aerospace, automotive,
commercial transportation, and industrial products end markets. These products are sold directly to customers and through
distributors. Prices for these products are generally based on the price of metal plus a premium for adding value to the
aluminum to produce a semi-finished product, resulting in a business model in which the underlying price of metal is
contractually passed-through to customers. Generally, the sales and costs and expenses of this segment are transacted in the
local currency of the respective operations, which are the U.S. dollar and, to a lesser extent, the euro.

In October 2019, Arconic Corporation reached an agreement to sell its hard alloy extrusions plant in South Korea (this

transaction was completed on March 1, 2020). The extrusions plant generated third-party sales of $51, $53, and $50 in 2019,
2018, and 2017, respectively, and, at the time of divestiture, had approximately 160 employees.

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Sales. Third-party sales for the Extrusions segment increased $4, or 1%, in 2019 compared with 2018, primarily driven

by favorable product mix (mainly related to the automotive end market).

Third-party sales for this segment increased $28, or 5%, in 2018 compared with 2017, primarily driven by higher
aluminum prices and higher volumes in the automotive end market, partially offset by lower volumes in the aerospace and
industrial end markets.

Segment Operating Profit. Segment operating profit for the Extrusions segment declined $37 in 2019 compared with
2018, principally driven by higher operating costs, including labor, maintenance, and transportation. These negative impacts
were partially offset by the absence of a charge for a physical inventory adjustment at one plant ($14) and a favorable change in
LIFO inventory accounting ($13).

Segment operating profit for this segment declined $33 in 2018 compared with 2017, principally driven by operational
challenges at one plant, higher aluminum prices, and lower volumes for aerospace and industrial products, partially offset by
higher volumes for automotive products.

Building and Construction Systems

Third-party sales

Segment operating profit

2019

2018

2017

1,118 $
112 $

1,140 $
91 $

1,066
82

Overview. The Building and Construction Systems segment manufactures products that are used in the non-residential

building and construction end market. These products include integrated aluminum architectural systems and architectural
extrusions, which are sold directly to customers and through distributors. Generally, the sales and costs and expenses of this
segment are transacted in the local currency of the respective operations, which are the U.S. dollar and, to a lesser extent, each
of the following: the euro, the British pound, and Canadian dollar.

Sales. Third-party sales for the Building and Construction Systems segment decreased $22, or 2%, in 2019 compared
with 2018, primarily driven by unfavorable foreign currency movements, principally driven by a weaker euro, and unfavorable
aluminum pricing (see below). These negative impacts were somewhat offset by higher volume.

Third-party sales for this segment increased $74, or 7%, in 2018 compared with 2017, primarily driven by higher volume
related to the building and construction end market, increased product pricing, and favorable foreign currency movements due
to a stronger euro and British pound.

Segment Operating Profit. Segment operating profit for the Building and Construction Systems segment increased $21,

or 23%, in 2019 compared with 2018, principally driven by net cost savings.

Segment operating profit for this segment increased $9, or 11%, in 2018 compared with 2017, principally driven by
favorable product pricing and higher volume related to the building and construction end market, mostly offset by higher costs.
The improved pricing was mainly the result of price increases partially offset by absorption of a portion of a higher LME
aluminum price.

Changes in aluminum prices in 2019 compared to 2018 negatively impacted Third-party sales by approximately $15 and

positively impacted Segment operating profit by approximately $15. A limited amount of this segment’s product sales is
directly impacted by metal pricing, which is a pass-through to the related customers. On average, the price of aluminum on the
London Metal Exchange declined approximately 15% in 2019 compared with 2018.

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Reconciliation of Total Segment Operating Profit to Combined Income before Income Taxes

Total segment operating profit

Unallocated amounts:
Cost allocations(1)
Restructuring and other charges(2)
Other

Combined operating income
Interest expense(2)
Other income (expenses), net(2)

Combined income before income taxes

__________________

2019

2018

2017

531 $

420 $

500

(150 )

(87 )

(17 )
277 $
(115 )
15
177 $

(101 )
104
(49 )
374 $
(129 )

(4 )
241 $

(193 )

(133 )

(42 )
132
(168 )
287
251

(1) Cost allocations are composed of an allocation of ParentCo’s general administrative and other expenses related to

operating its corporate headquarters and other global administrative facilities, as well as an allocation of ParentCo’s
research and development expenses associated with its corporate technical center (see Cost Allocations in Overview
above).

(2) See same titled sections under Earnings Summary in Results of Operations above for a description of notable changes.

Forward-Look

As a result of the escalating COVID-19 (coronavirus) pandemic and the uncertainty regarding its duration and impact on
the Company's customers, suppliers, and operations, Arconic Corporation is not currently able to estimate the specific future
impact on its operations or financial results. Several of the Company's automotive and aerospace customers have temporarily
suspended operations, including Arconic Corporation's largest customer, Ford, which suspended its North American operations
beginning on March 19, 2020 and have announced they are targeting to restart at least a portion of these operations on April 14,
2020. In addition, Arconic Corporation cannot predict the impact of any governmental regulations that might be imposed in
response to the pandemic, including required temporary facility shutdowns. At this time, the Company’s material
manufacturing facilities continue to operate. While the situation is fluid, the Company, like many companies around the world,
anticipates temporary reductions in operating levels at many of its material manufacturing facilities due to the COVID-19
pandemic, although we do not currently know the extent, duration or impact of such reductions. Arconic Corporation is
continuing to evaluate the impact this global event may have on its future results of operations, cash flows, financial position,
and availability under the Company's revolving credit facility (see Financing Activities in Liquidity and Capital Resources
below).

Environmental Matters

See the Environmental Matters section of Note T to the Combined Financial Statements in Part II Item 8 Financial

Statements and Supplementary Data.

Liquidity and Capital Resources

Historically, ParentCo has provided capital, cash management, and other treasury services to Arconic Corporation.
ParentCo will continue to provide these services to Arconic Corporation until the Separation is consummated. Only cash
amounts specifically attributable to Arconic Corporation were reflected in the Company’s Combined Financial Statements.
Transfers of cash, both to and from ParentCo’s centralized cash management system, were reflected as a component of Parent
Company net investment in the Combined Financial Statements of Arconic Corporation.

Arconic Corporation’s primary future cash needs will be centered on operating activities, including working capital, as

well as recurring and strategic capital expenditures. Following the Separation, Arconic Corporation’s capital structure and
sources of liquidity will change significantly from its historical capital structure. Arconic Corporation will no longer participate
in capital management with ParentCo; rather Arconic Corporation’s ability to fund its cash needs will depend on its ongoing
ability to generate and raise cash in the future. Although Arconic Corporation believes that its future cash from operations,
together with its access to capital markets, will provide adequate resources to fund its operating and investing needs, the
Company's access to, and the availability of, financing on acceptable terms in the future will be affected by many factors,
including: (i) Arconic Corporation’s credit rating; (ii) the liquidity of the overall capital markets; and (iii) the current state of

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the economy. There can be no assurances that Arconic Corporation will continue to have access to capital markets on terms
acceptable to it.

ParentCo has an arrangement with several financial institutions to sell certain customer receivables without recourse on a

revolving basis. The sale of such receivables is completed through the use of a bankruptcy-remote special-purpose entity, which
is a consolidated subsidiary of ParentCo. In connection with this arrangement, certain of Arconic Corporation’s customer
receivables are sold on a revolving basis to this bankruptcy-remote subsidiary of ParentCo; these sales were reflected as a
component of Parent Company net investment in Arconic Corporation’s Combined Financial Statements. Effective January 2,
2020, in preparation for the Separation, ParentCo's arrangement was amended to no longer include customer receivables
associated with the Arconic Corporation Businesses in this program, as well as to remove previously included customer
receivables related to the Arconic Corporation Businesses not yet collected as of January 2, 2020. Accordingly, uncollected
customer receivables of $281 related to the Arconic Corporation Businesses were removed from the program and the right to
collect and receive the cash from the customer was returned to Arconic Corporation. The Company is evaluating whether to
enter into a similar arrangement of its own subsequent to the Separation Date.

In addition, ParentCo participates in several account payable settlement arrangements with certain vendors and third-party

intermediaries. These arrangements provide that, at the vendor’s request, the third-party intermediary advances the amount of
the scheduled payment to the vendor, less an appropriate discount, before the scheduled payment date and ParentCo makes
payment to the third-party intermediary on the date stipulated in accordance with the commercial terms negotiated with its
vendors. In connection with these arrangements, certain of Arconic Corporation’s accounts payable are settled, at the vendor’s
request, before the scheduled payment date; these settlements were reflected as a component of Parent Company net investment
in Arconic Corporation’s Combined Financial Statements. Arconic Corporation expects to maintain a similar standalone
arrangement subsequent to the Separation.

Operating Activities

Cash provided from operations was $457 in 2019 compared with $503 in 2018 and $182 in 2017.

In 2019, cash provided from operations was comprised primarily of a positive add-back for non-cash transactions in

earnings of $327 and net income of $225, slightly offset by an unfavorable change in working capital of $119.

In 2018, cash provided from operations was comprised primarily of a positive add-back for non-cash transactions in

earnings of $196, net income of $170, and a favorable change in working capital of $159.

In 2017, cash provided from operations was comprised principally of net income of $209 and a positive add-back for non-

cash transactions in earnings of $194, partially offset by an unfavorable change in working capital of $185.

Financing Activities

Cash used for financing activities was $295 in 2019 compared with cash used for financing activities of $536 in 2018 and
cash provided from financing activities of $136 in 2017. The amount in each period primarily reflects net cash activity between
Arconic Corporation and ParentCo.

In connection with the capital structure to be established at the time of the Separation, Arconic Corporation secured $1,200
in third-party indebtedness. On February 7, 2020, Arconic Corporation completed a Rule 144A (U.S. Securities Act of 1933, as
amended) debt offering for $600 of 6.125% (fixed rate) Senior Secured Second-Lien Notes due 2028 (the “2028 Notes”).
Additionally, on March 25, 2020, Arconic Corporation entered into a credit agreement, which provides a $600 Senior Secured
First-Lien Term B Loan Facility (variable rate and seven-year term) (the “Term Loan”) and a $1,000 Senior Secured First-Lien
Revolving Credit Facility (variable rate and five-year term) (the “Credit Facility”), with a syndicate of lenders and issuers
named therein (the “Credit Agreement”). Arconic Corporation intends to use a portion of the net proceeds from the aggregate
indebtedness to make a payment to ParentCo to fund the transfer of certain net assets from ParentCo to Arconic Corporation in
connection with the completion of the Separation. The payment to ParentCo will be calculated as the difference between (i) the
approximately $1,165 of net proceeds from the aggregate indebtedness and (ii) the difference between a beginning cash balance
at the Separation Date of $500 and the amount of cash held by Arconic Corporation Businesses at March 31, 2020 ($72 as of
December 31, 2019).

The net proceeds from the 2028 Notes offering will be held in escrow until the satisfaction of the escrow release

conditions, including the substantially concurrent completion of the Separation. Prior to the escrow release, the 2028 Notes will
not be guaranteed. Following the escrow release, the 2028 Notes will be guaranteed by certain of Arconic Corporation’s
wholly-owned domestic subsidiaries. Each of the 2028 Notes and the related guarantees will be secured on a second-priority
basis by liens on certain assets of Arconic Corporation and the guarantors, as defined therein.

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The variable interest rate with respect to the Term Loan is currently based on LIBOR for the relevant interest period plus

an applicable margin of 2.75% and the variable commitment fee for undrawn capacity related to the Credit Facility is
0.35%. The provisions of the Term Loan require a mandatory 1% repayment of the initial $600 borrowing each annual period
during the seven-year term. The Term Loan and the Credit Facility are guaranteed by certain of Arconic Corporation’s wholly-
owned domestic subsidiaries. Each of the Term Loan, the Credit Facility, and the related guarantees are secured on a first-
priority basis by liens on certain assets of Arconic Corporation and the guarantors.

The Credit Agreement includes financial covenants requiring the maintenance of a Consolidated Total Leverage Ratio and
a Consolidated Interest Coverage Ratio, as defined in the Credit Agreement. The Consolidated Total Leverage Ratio is the ratio
of Consolidated Debt to Consolidated EBITDA for the trailing four fiscal quarters, as defined in the Credit Agreement, and may
not exceed a ratio of 2.50 to 1.00 for each fiscal quarter commencing with the fiscal quarter ending on June 30, 2020 through
and including the fiscal quarter ending on March 31, 2021, and 2.25 to 1.00 for each fiscal quarter thereafter. The Consolidated
Interest Coverage Ratio is the ratio of Consolidated EBITDA to Consolidated Interest Expense for the trailing four fiscal
quarters, as defined in the Credit Agreement, and may not fall below a ratio of 3.00 to 1.00 for any fiscal quarter during the
term of the Credit Agreement, commencing with the fiscal quarter ending on June 30, 2020. In addition, the Credit Agreement
requires pro forma compliance with these financial covenants at each instance of borrowing under the Credit Facility, which
may limit the Company's ability to draw the full amount. The gross availability of $1,000 under the Credit Facility is subject to
compliance with certain financial covenants based on the trailing twelve months of financial performance. For illustrative
purposes, assuming the Separation had previously occurred and the capital structure had been in place on December 31, 2019,
the availability under the Credit Facility would have been approximately $760 based on fourth quarter actual results and the
Company's deemed Consolidated EBITDA set forth in the Credit Agreement. The illustrative availability is based upon a
variety of assumptions and, though considered reasonable by the Company, may not be indicative of future availability.

Investing Activities

Cash used for investing activities was $170 in 2019 compared with $10 in 2018 and $250 in 2017.

The use of cash in 2019 reflects capital expenditures of $201, including for an approximately $140 project at the

Davenport (Iowa) plant and an approximately $100 project at the Tennessee plant, slightly offset by additional proceeds of $27
(contingent consideration) from the sale of the Texarkana, Texas cast house. At Davenport, Arconic Corporation installed a new
horizontal heat treat furnace to capture growth in the aerospace and industrial products markets. This project began near the end
of 2017 and was completed in 2019 (furnace was in customer qualification stage as of December 31, 2019). At Tennessee,
Arconic Corporation is expanding its hot mill capability and adding downstream equipment capabilities to capture growth in
the automotive and industrial products markets. This project began in early 2019 and is expected to be completed by the end of
2020.

The use of cash in 2018 reflects capital expenditures of $317, including for a horizontal heat treat furnace at the
Davenport, Iowa plant, mostly offset by proceeds of $302 from the sale of the Texarkana, Texas rolling mill and cast house.

The use of cash in 2017 reflects capital expenditures of $241, including for the aerospace expansion (very thick plate

stretcher and horizontal heat treat furnace) at the Davenport, Iowa plant.

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Contractual Obligations and Off-Balance Sheet Arrangements

Following the Separation, Arconic Corporation’s capital structure and sources of liquidity will differ from its historical

capital structure. Also, Arconic Corporation will no longer participate in cash management and intercompany funding
arrangements with ParentCo. Arconic Corporation’s ability to fund its operating and capital needs will depend on the
Company’s ability to generate cash from operations and access capital markets.

Contractual Obligations. Arconic Corporation is required to make future payments under various contracts, including

long-term purchase obligations, lease agreements, and financing arrangements. The Company also has commitments to fund its
pension plans, provide payments for other postretirement benefit plans, and fund capital projects. As of December 31, 2019, a
summary of Arconic Corporation’s outstanding contractual obligations is as follows (these contractual obligations are grouped
in the same manner as they are classified in the Statement of Combined Cash Flows in order to provide a better understanding
of the nature of the obligations and to provide a basis for comparison to historical information) (see the information below the
contractual obligations table that describes the Company’s future employee benefit plan and debt obligations incurred
subsequent to December 31, 2019):

Total

2020

2021-2022

2023-2024

Thereafter

Operating activities:

Raw material purchase obligations

Energy-related purchase obligations

Other purchase obligations

Operating leases
Interest related to debt(1)
Estimated minimum required pension
funding(2)
Other postretirement benefit payments(2)
Layoff and other restructuring payments

Deferred revenue arrangements

Uncertain tax positions

Financing activities:

Debt(1)

Investing activities:

Capital projects

Totals

__________________

213 $
51
22
158
273
11
1
21
6
21

250

111
1,138 $

200 $
24
5
38
12
3
—
21
6
—

—

99
408 $

13
24
11
51
24
5
—

—

—
3
4
31
24
3
—

—

12
140 $

—
65 $

—

—
2
38
213
—
1
—

—
21

250

—
525

(1) Subsequent to December 31, 2019, Arconic Corporation incurred $1,200 in indebtedness. See Obligations for Financing
Activities below for scheduled annual repayments and Obligations for Operating Activities below for the related interest
obligations.

(2) Effective January 1, 2020, Arconic Corporation assumed approximately $1,900 in employee benefit plan obligations. See
Obligations for Operating Activities below for estimated annual pension contributions and other postretirement benefit
payments.

Obligations for Operating Activities

Raw material purchase obligations consist mostly of aluminum with expiration dates ranging from less than one year to

three years. Energy-related purchase obligations consist primarily of electricity and natural gas contracts with expiration dates
ranging from one year to nine years. Many of these purchase obligations contain variable pricing components, and, as a result,
actual cash payments may differ from the estimates provided in the preceding table.

Operating leases represent multi-year obligations for certain land and buildings, plant equipment, vehicles, and computer

equipment.

Interest related to debt is based on a stated rate of 4.75% calculated on the principal amount of the financing used to
acquire, construct, reconstruct, and renovate certain facilities at Arconic Corporation’s rolling mill plant in Davenport, IA. This

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debt matures in 2042. At Separation, ParentCo is expected to retain all obligations associated with this debt. Accordingly, this
debt will be removed from Arconic Corporation's Combined Balance Sheet in connection with the Separation.

The interest obligations of the 2028 Notes and Term Loan (see Financing Activities in Liquidity and Capital Resources

above) are not included in the preceding table as these financing arrangements closed subsequent to December 31, 2019. The
annual interest rate associated with the 2028 Notes is 6.125% and the Term Loan is 1-month LIBOR plus an applicable margin
of 275 basis points.

Estimated minimum required pension funding and other postretirement benefit payments are based on actuarial estimates

using current assumptions for, among others, discount rates, long-term rate of return on plan assets, rate of compensation
increases, and/or health care cost trend rates. It is Arconic Corporation’s policy to fund amounts for pension plans sufficient to
meet the minimum requirements set forth in applicable country benefits laws and tax laws. Arconic Corporation has determined
that it is not practicable to present pension funding and other postretirement benefit payments beyond 2024 and 2029,
respectively.

In preparation for the Separation, effective January 1, 2020, certain U.S. pension and other postretirement benefit plans
previously sponsored by ParentCo were separated into standalone plans for both Arconic Corporation (the “U.S. Shared Plans”)
and Howmet Aerospace. Accordingly, on January 1, 2020, Arconic Corporation recognized an aggregate liability of $1,920
reflecting the combined net unfunded status, comprised of a benefit obligation of $4,255 and plan assets of $2,335, of the U.S.
Shared Plans, and $1,752 (net of tax impact) in Accumulated other comprehensive loss. During the next five years, estimated
minimum required pension funding related to the U.S. Shared Plans is $250 in 2020, $180 in 2021, $180 in 2022, $170 in 2023,
and $160 in 2024. Also, during the next ten years, estimated other postretirement benefit payments are $53 in 2020, $54 in
2021, $54 in 2022, $53 in 2023, $53 in 2024, and a combined $171 in 2025 through 2029.

Layoff and other restructuring payments to be paid within one year relate virtually all to severance costs.

Deferred revenue arrangements require Arconic Corporation to deliver sheet and plate to a certain customer over the
specified contract period (through 2020). While this obligation is not expected to result in cash payments, it is included in the
preceding table as Arconic Corporation would have such an obligation if the specified product deliveries could not be made.

Uncertain tax positions taken or expected to be taken on an income tax return may result in additional payments to tax
authorities. As of December 31, 2019, no interest and penalties were accrued related to such positions. The total amount of
uncertain tax positions is included in the “Thereafter” column as Arconic Corporation is not able to reasonably estimate the
timing of potential future payments. If a tax authority agrees with the tax position taken or expected to be taken or the
applicable statute of limitations expires, then additional payments will not be necessary.

Obligations for Financing Activities

The debt amount in the preceding table matures in 2042 and represents the principal amount of the financing used to
acquire, construct, reconstruct, and renovate certain facilities at Arconic Corporation’s rolling mill plant in Davenport, IA. At
Separation, ParentCo is expected to retain all obligations associated with this debt. Accordingly, this debt will be removed from
Arconic Corporation's Combined Balance Sheet in connection with the Separation.

The 2028 Notes and Term Loan (see Financing Activities in Liquidity and Capital Resources above) are not included in

the preceding table as these financing arrangements closed subsequent to December 31, 2019. The scheduled repayment of the
2028 Notes and Term Loan is $5 in 2020, $6 in each of 2021, 2022, 2023, and 2024, and a combined $1,171 in 2025 through
2028.

Obligations for Investing Activities

Capital projects in the preceding table only include amounts approved by management as of December 31, 2019. Funding

levels may vary in future years based on anticipated construction schedules of the projects. It is expected that significant
expansion projects will be funded through various sources, including cash provided from operations. Total capital expenditures
are anticipated to be in the range of $150 to $190 in 2020.

Off-Balance Sheet Arrangements. ParentCo has outstanding bank guarantees, on behalf of Arconic Corporation, related

to, among others, tax matters and customs duties. The total amount committed under these guarantees, which expire at various
dates between 2020 and 2026 was $3 at December 31, 2019.

ParentCo has outstanding letters of credit, on behalf of Arconic Corporation, primarily related to environmental and lease

obligations. The total amount committed under these letters of credit, which automatically renew or expire at various dates,
mostly in 2020, was $57 at December 31, 2019.

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ParentCo has outstanding surety bonds, on behalf of Arconic Corporation, primarily related to customs duties and
environmental-related matters. The total amount committed under these surety bonds, which expire at various dates, primarily
in 2020, was $8 at December 31, 2019.

Critical Accounting Policies and Estimates

The Combined Financial Statements of Arconic Corporation are prepared from ParentCo’s historical accounting records

The preparation of Arconic Corporation’s Combined Financial Statements in accordance with accounting principles
generally accepted in the United States of America requires management to make certain estimates based on judgments and
assumptions regarding uncertainties that may affect the amounts reported in the Combined Financial Statements and disclosed
in the Notes to the Combined Financial Statements. Areas that require such estimates include cost allocations (see Cost
Allocations in Overview above), the review of properties, plants, and equipment and goodwill for impairment, and accounting
for each of the following: environmental and litigation matters; pension and other postretirement employee benefit obligations;
stock-based compensation; and income taxes.

Management uses historical experience and all available information to make these estimates, and actual results may differ

from those used to prepare Arconic Corporation’s Combined Financial Statements at any given time. Despite these inherent
limitations, management believes that Management’s Discussion and Analysis of Financial Condition and Results of
Operations and the Combined Financial Statements, including the Notes to the Combined Financial Statements, provide a
meaningful and fair perspective of the Company.

A summary of Arconic Corporation’s significant accounting policies is included in Note B to the Combined Financial
Statements in Part II Item 8 Financial Statements and Supplementary Data. Management believes that the application of these
policies on a consistent basis enables Arconic Corporation to provide the users of the Combined Financial Statements with
useful and reliable information about Arconic Corporation’s operating results and financial condition.

Properties, Plants, and Equipment. Properties, plants, and equipment are reviewed for impairment whenever events or

changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of assets is
determined by comparing the estimated undiscounted net cash flows of the related operations (asset group) to the carrying
value of the associated assets. An impairment loss would be recognized when the carrying value of the assets exceeds the
estimated undiscounted net cash flows of the asset group. The amount of the impairment loss to be recorded is calculated as the
excess of the carrying value of the assets over their fair value, with fair value determined using the best information available,
which generally is a discounted cash flow (DCF) model. The determination of what constitutes an asset group, the associated
estimated undiscounted net cash flows, and the estimated useful lives of the assets also require significant judgments.

Goodwill. Goodwill is not amortized; instead, it is reviewed for impairment annually (in the fourth quarter) or more
frequently if indicators of impairment exist or if a decision is made to sell, exit, or realign a business. A significant amount of
judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others,
deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the
markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows, or a trend of
negative or declining cash flows over multiple periods. The fair value that could be realized in an actual transaction may differ
from that used to evaluate goodwill for impairment.

Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating

segment or one level below an operating segment. Arconic Corporation has three reporting units—the Rolled Products
segment, the Extrusions segment, and the Building and Construction Systems segment—all of which contain goodwill. As of
December 31, 2019, the carrying value of the goodwill for Rolled Products, Extrusions, and Building and Construction Systems
was $246, $71, and $69, respectively.

In reviewing goodwill for impairment, an entity has the option to first assess qualitative factors to determine whether the

existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the
estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment
and determines that an impairment is more likely than not, the entity is then required to perform a quantitative impairment test
(described below), otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment
and, instead, proceed directly to the quantitative impairment test. The ultimate outcome of the goodwill impairment review for

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a reporting unit should be the same whether an entity chooses to perform the qualitative assessment or proceeds directly to the
quantitative impairment test.

Arconic Corporation determines annually, based on facts and circumstances, which of its reporting units will be subject to

the qualitative assessment. For those reporting units where a qualitative assessment is either not performed or for which the
conclusion is that an impairment is more likely than not, a quantitative impairment test will be performed. Arconic
Corporation’s policy is that a quantitative impairment test be performed for each reporting unit at least once during every three-
year period.

Under the qualitative assessment, various events and circumstances (or factors) that would affect the estimated fair value

of a reporting unit are identified (similar to impairment indicators above). These factors are then classified by the type of
impact they would have on the estimated fair value using positive, neutral, and adverse categories based on current business
conditions. Additionally, an assessment of the level of impact that a particular factor would have on the estimated fair value is
determined using high, medium, and low weighting. Furthermore, management considers the results of the most recent
quantitative impairment test completed for a reporting unit and compares the weighted average cost of capital (WACC)
between the current and prior years for each reporting unit.

Under the quantitative impairment test, the evaluation of impairment involves comparing the current fair value of each

reporting unit to its carrying value, including goodwill. Arconic Corporation uses a DCF model to estimate the current fair
value of its reporting units when testing for impairment, as management believes forecasted cash flows are the best indicator of
such fair value. Several significant assumptions and estimates are involved in the application of the DCF model to forecast
operating cash flows, including sales growth (volumes and pricing), production costs, capital spending, and discount rate.
Certain of these assumptions may vary significantly among the reporting units. Cash flow forecasts are generally based on
approved business unit operating plans for the early years and historical relationships in later years. The WACC rate for the
individual reporting units is estimated by management with the assistance of valuation experts. In the event the estimated fair
value of a reporting unit per the DCF model is less than the carrying value, Arconic Corporation would recognize an
impairment charge equal to the excess of the reporting unit’s carrying value over its fair value without exceeding the total
amount of goodwill applicable to that reporting unit.

During the 2019 annual review of goodwill, management proceeded directly to the quantitative impairment test for all
three of the Company's reporting units. The estimated fair value for each of the three reporting units was substantially in excess
of the respective carrying value, resulting in no impairment.

The annual review in 2018 and 2017 indicated that goodwill was not impaired for any of Arconic Corporation’s
reporting units and there were no triggering events that necessitated an impairment test for any of the reporting units.

Environmental Matters. Expenditures for current operations are expensed or capitalized, as appropriate. Expenditures
relating to existing conditions caused by past operations, which will not contribute to future revenues, are expensed. Liabilities
are recorded when remediation costs are probable and can be reasonably estimated. The liability may include costs such as site
investigations, consultant fees, feasibility studies, outside contractors, and monitoring expenses. Estimates are generally not
discounted or reduced by potential claims for recovery, which are recognized when probable and as agreements are reached
with third parties. The estimates also include costs related to other potentially responsible parties to the extent that Arconic
Corporation has reason to believe such parties will not fully pay their proportionate share. The liability is continuously
reviewed and adjusted to reflect current remediation progress, prospective estimates of required activity, and other factors that
may be relevant, including changes in technology or regulations.

Litigation Matters. For asserted claims and assessments, liabilities are recorded when an unfavorable outcome of a
matter is deemed to be probable and the loss is reasonably estimable. Management determines the likelihood of an unfavorable
outcome based on many factors such as, among others, the nature of the matter, available defenses and case strategy, progress
of the matter, views and opinions of legal counsel and other advisors, applicability and success of appeals processes, and the
outcome of similar historical matters. Once an unfavorable outcome is deemed probable, management weighs the probability of
estimated losses, and the most reasonable loss estimate is recorded. If an unfavorable outcome of a matter is deemed to be
reasonably possible, the matter is disclosed and no liability is recorded. With respect to unasserted claims or assessments,
management must first determine the probability an assertion will be made is likely, then, a determination as to the likelihood
of an unfavorable outcome and the ability to reasonably estimate the potential loss is made. Legal matters are reviewed on a
continuous basis to determine if there has been a change in management’s judgment regarding the likelihood of an unfavorable
outcome or the estimate of a potential loss.

Pension and Other Postretirement Benefits. Certain employees attributable to Arconic Corporation operations
participate in defined benefit pension and other postretirement benefit plans (“Shared Plans”) sponsored by ParentCo, which
also includes ParentCo participants. For purposes of the Company's Combined Financial Statements, Arconic Corporation

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accounts for the portion of the Shared Plans related to its employees as multiemployer benefit plans. Accordingly, Arconic
Corporation does not record an asset or liability to recognize the funded status of the Shared Plans. However, the related
expense recorded by Arconic Corporation is based primarily on pensionable compensation and estimated interest costs related
to participants attributable to Arconic Corporation operations.

Certain ParentCo plans that are entirely attributable to employees of Arconic Corporation-related operations (“Direct
Plans”) are accounted for as defined benefit pension and other postretirement benefit plans for purposes of the Combined
Financial Statements. Accordingly, the funded and unfunded position of each Direct Plan is recorded in the Combined Balance
Sheet. Actuarial gains and losses that have not yet been recognized in earnings are recorded in accumulated other
comprehensive income net of taxes, until they are amortized as a component of net periodic benefit cost. The determination of
benefit obligations and recognition of expenses related to the Direct Plans are dependent on various assumptions, including
discount rates, long-term expected rates of return on plan assets, and future compensation increases. ParentCo’s management
develops each assumption using relevant company experience in conjunction with market-related data for each individual
location in which such plans exist.

The following table summarizes the total expenses recognized by Arconic Corporation related to the pension and other

postretirement benefits described above:

Pension benefits

For the year ended
December 31,

Other postretirement benefits

For the year ended December 31,

2019

2018

2017

2019

2018

2017

5 $
61
20
86 $

5 $
67
20
92 $

5
82
39
126 $

—
21
4
25 $

—
21
5
26 $

—
20
4
24

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The funded status of Arconic Corporation’s Direct Plans, all of which are non-U.S. plans, are measured as of December 31
each calendar year. All the information that follows is applicable only to the pension benefit plans classified as Direct Plans (as
of December 31, 2019 and 2018, the accumulated benefit obligation for other postretirement benefit plans classified as Direct
Plans was $1 and $2, respectively, which was presented as a noncurrent liability on the accompanying Combined Balance
Sheet):

Obligations and Funded Status

December 31,
Change in benefit obligation

Benefit obligation at beginning of year

Service cost

Interest cost

Actuarial losses (gains)

Benefits paid

Foreign currency translation impact

Benefit obligation at end of year

Change in plan assets

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contributions

Benefits paid

Foreign currency translation impact

Fair value of plan assets at end of year

Funded status

Amounts recognized in the Combined Balance Sheet consist of:

Noncurrent assets

Current liabilities

Noncurrent liabilities

Net amount recognized

Amounts recognized in Accumulated Other Comprehensive Income consist of:

Net actuarial loss, before tax effect

Other changes in plan assets and benefit obligations recognized in Other
Comprehensive Income consist of:

Net actuarial loss (gain)

Amortization of accumulated net actuarial loss

Total, before tax effect

Pension benefits

2019

2018

122 $
3
4
17
(5 )
1
142 $

70 $
7
3
(4 )
3
79 $
(63 ) $

2 $
(2 )

(63 )

(63 ) $

58 $

16 $
(3 )
13 $

134
3
4
(5 )

(7 )

(7 )
122

79
(3 )
4
(5 )

(5 )
70
(52 )

2
(1 )

(53 )

(52 )

(3 )

(6 )

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Pension Plan Benefit Obligations

The projected benefit obligation and accumulated benefit obligation for all defined benefit
pension plans was as follows:

Projected benefit obligation

Accumulated benefit obligation

The aggregate projected benefit obligation and fair value of plan assets for pension plans
with projected benefit obligations in excess of plan assets was as follows:

Projected benefit obligation

Fair value of plan assets

The aggregate accumulated benefit obligation and fair value of plan assets for pension
plans with accumulated benefit obligations in excess of plan assets was as follows:

Accumulated benefit obligation

Fair value of plan assets

Components of Net Periodic Benefit Cost

For the year ended December 31,
Service cost

Interest cost

Expected return on plan assets
Recognized net actuarial loss(1)
Net periodic benefit cost(2)

Pension benefits

2019

2018

142 $
133

123
57

113
57

122
115

104
50

98
50

3
4
(5 )
3
5

Pension benefits

2019

2018

2017

3 $
4
(5 )
3
5 $

_____________________
(1) In 2020, the Company expects to recognize $4 in net periodic benefit cost for the amortization of the accumulated net

actuarial loss (see Note U).

(2) Service cost was included within Cost of goods sold and all other cost components were included in Other (income)

expenses, net on the accompanying Statement of Combined Operations.

Assumptions

Weighted average assumptions used to determine benefit obligations and net periodic benefit cost for pension benefit plans

were as follows:

Discount rate

Rate of compensation increase

Expected long-term rate of return on plan assets

Benefit obligations

December 31,

Net periodic benefit cost

For the year ended December 31,

2019

2018

2019

2018

2017

2.29 %
3.20
—

3.12 %
3.42
—

3.12 %
3.42
6.73

2.94 %
3.33
6.72

3.26 %
3.31
6.76

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Plan Assets

Arconic Corporation’s pension plan investment policy and weighted average asset allocations at December 31, 2019 and

2018, by asset class, were as follows:

Asset class
Equities

Fixed income

Other investments

Total

Plan assets
at
December 31,

Policy range

2019

2018

20 – 50%

15 – 30%

42 %
38
20
100 %

40 %
40
20
100 %

The principal objectives underlying the investment of the pension plan assets are to ensure that Arconic Corporation can

properly fund benefit obligations as they become due under a broad range of potential economic and financial scenarios,
maximize the long-term investment return with an acceptable level of risk based on such obligations, and broadly diversify
investments across and within various asset classes to protect asset values against adverse movements. The use of derivative
instruments is permitted where appropriate and necessary for achieving diversification across the balance of the asset portfolio
(no such instruments were included in plan assets as of December 31, 2019 and 2018). Investment practices comply with the
requirements of applicable country laws and regulations.

Except for $4 as of both December 31, 2019 and 2018, all pension plan assets are valued at their net asset value, which
refers to the net asset value of an investment on a per share basis (or its equivalent) as a practical expedient. The following table
presents the value of pension plan assets by major investment category:

December 31,
Equity securities(1)
Fixed income:

Intermediate and long duration government/credit(2)
Other

Other investments(3):

Real estate

Other

Net asset value sub-total

Other fixed income

Total

2019

2018

33 $

26 $
—
26 $

8 $
8
16 $
75 $
4
79 $

23
1
24

7
7
14
66
4
70

______________________
(1) Equity securities consist of the plans’ share of commingled funds that are invested in the stock of publicly-traded

companies.

(2) Intermediate and long duration government/credit securities consist of institutional funds that are invested in provincial

bonds.

(3) Other investments consist of both institutional funds that are invested in global real estate and a relative value multi-

strategy hedge fund.

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Funding and Cash Flows

It is Arconic Corporation’s policy to fund amounts for pension plans sufficient to meet the minimum requirements set forth

in applicable country employee benefit and tax regulations. From time to time, Arconic Corporation (through ParentCo) may
contribute additional amounts as deemed appropriate. In 2019 and 2018, cash contributions to Arconic Corporation’s pension
plans were $3 and $4, respectively. The minimum required contribution to Arconic Corporation’s pension plans in 2020 is
estimated to be $3 (see Note U). Annual benefit payments expected to be paid to pension plan participants are $6 in 2020, $5 in
both 2021 and 2022, $6 in 2023; $5 in 2024; and a combined $30 in 2025 through 2029.

Defined Contribution Plans

Arconic Corporation employees participate in ParentCo-sponsored savings and investment plans in the United States and
certain other countries. In the United States, Arconic Corporation employees may contribute a portion of their compensation to
the plans, and ParentCo matches a specified percentage of these contributions in equivalent form of the investments elected by
the employee. Also, ParentCo makes contributions to a retirement savings account based on a percentage of eligible
compensation for certain U.S. employees hired after March 1, 2006 that are not able to participate in ParentCo’s defined benefit
pension plans. Arconic Corporation’s expenses (contributions) related to all defined contribution plans were $38 in 2019, $37 in
2018, and $28 in 2017. The increase in such expenses related to certain employees who no longer are accruing benefits (as of
April 1, 2018) under ParentCo’s U.S. defined benefit pension plans (see Defined Benefit Plans above).

I. Income Taxes

The components of income from continuing operations before income taxes were as follows:

For the year ended December 31,

United States

Foreign

The (benefit) provision for income taxes consisted of the following:

For the year ended December 31,

2019

2018

2017

126 $
51
177 $

171 $
70
241 $

264
(13 )
251

2019

2018

2017

Current:
Federal

Foreign

State and local

Deferred:

Federal

Foreign

State and local

Total

— $
16
3
19

(70 )
11
(8 )

(67 )

47 $
20
8
75

(13 )
9
—
(4 )
71 $

(7 )
17
3
13

(1 )
28
2
29
42

(48 ) $

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A reconciliation of the U.S. federal statutory rate to Arconic Corporation’s effective tax rate was as follows (the effective

tax rate was a benefit on income in 2019 and a provision on income in 2018 and 2017):

For the year ended December 31,

U.S. federal statutory rate

Foreign tax rate differential

U.S. and residual tax on foreign earnings

U.S. state and local taxes
Permanent differences on restructuring and other charges and asset
disposals(1)
Statutory tax rate and law changes(2)
Changes in valuation allowances

Changes in uncertain tax positions

Non-deductible acquisition costs

Other

Effective tax rate

_____________________

2019

2018

2017

21.0 %

(3.9 )
15.1
(1.6 )

(78.8 )
—
19.8
—
2.5
(1.2 )

(27.1 )%

21.0 %
0.4
0.8
2.1
—
—
6.3
—
—
(1.1 )

29.5 %

35.0 %

(9.4 )
0.3
1.9
(12.1 )

(19.9 )
14.7
7.0
0.1
(0.9 )

16.7 %

(1) In 2019, a net tax benefit was recognized related to a U.S. tax election which caused the deemed liquidation of a foreign

subsidiary's assets into its U.S. tax parent.

(2) In December 2017, a $50 tax benefit was recorded with respect to the enactment of the Tax Cuts and Jobs Act of 2017 (the

“2017 Act”).

On December 22, 2017, the 2017 Act was signed into law, making significant changes to the Internal Revenue Code.

Changes included, but were not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning
after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a
one-time transition tax on the previously non-taxed post-1986 foreign earnings and profits of certain U.S.-owned foreign
corporations as of December 31, 2017. The full impact of the 2017 Act was accounted for in the tax provision and related
income tax account balances for the year ended and as of December 31, 2017, as described below.

Arconic Corporation calculated the impact of the 2017 Act’s tax rate reduction and one-time transition tax in the
Company’s 2017 year-end income tax provision in accordance with the Company’s understanding of the 2017 Act and
guidance available and, as a result, recorded a $50 benefit in December 2017, the period in which the legislation was enacted.

As a result of the 2017 Act, the previously non-taxed post-1986 foreign earnings and profits (calculated based on U.S. tax

principles) of certain U.S.-owned foreign corporations was subjected to U.S. tax under the one-time transition tax provisions.
The 2017 Act also created a new requirement that certain income earned by foreign subsidiaries, GILTI, must be included in the
gross income of the U.S. shareholder. The 2017 Act also established the Base Erosion and Anti-Abuse Tax (BEAT) and foreign-
derived intangible income (FDII).

Arconic Corporation did not have a GILTI inclusion for 2018 as it had been determined that foreign operations attributable

to the Company were generating losses subject to GILTI, and therefore, did not expect additional tax expense to be incurred
associated with GILTI. Arconic Corporation has estimated a GILTI inclusion for 2019 and recorded tax expense accordingly. In
addition, for 2019, Arconic Corporation does not anticipate there to be an impact for BEAT and FDII. In December 2017,
Arconic Corporation made a final, accounting policy election to treat taxes due from future inclusions in U.S. taxable income
related to GILTI as a current period expense when incurred.

Arconic Corporation considered the impact of the 2017 Act’s one-time transition tax in the Company’s 2017 year-end

income tax provision in accordance with the Company’s understanding of the 2017 Act and guidance available as of
December 31, 2017. Based on calculations pursuant to the 2017 Act, Arconic Corporation recorded no tax expense in
connection with the one-time transition tax during the year ended December 31, 2017 as the Company is in an overall deficit
with respect to accumulated post-1986 earnings and profits. The full impact of the 2017 Act was accounted for in the tax
provision and related income tax account balances for the year ended December 31, 2017.

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The components of net deferred tax assets and liabilities were as follows:

December 31,

Depreciation

Employee benefits

Loss provisions

Deferred income/expense

Tax loss carryforwards

Operating lease right-of-use asset and liabilities

Other

Valuation allowance

2019

2018

Deferred
tax
assets

Deferred
tax
liabilities

Deferred
tax
assets

Deferred
tax
liabilities

15 $
43
53
8
115
33
32
299 $
(113 )
186 $

213 $
—
—
3
—
33
10
259 $
—
259 $

23 $
33
61
7
109
—
6
239 $
(107 )
132 $

185
—
—
3
—
—
11
199
—
199

The following table details the expiration periods of the deferred tax assets presented above:

December 31, 2019

Tax loss carryforwards

Other

Valuation allowance

Expires
within
10 years

Expires
within
11-12 years

No
Expiration(1)

55 $
—
(51 )

4 $

4 $
—
(1 )
3 $

56 $
19
(61 )
14 $

Other(2)

Total

— $
165
—
165 $

115
184
(113 )
186

____________________
(1) Deferred tax assets with no expiration may still have annual limitations on utilization.

(2) Other represents deferred tax assets whose expiration is dependent upon the reversal of the underlying temporary

difference. A substantial amount of Other relates to (i) employee benefits that will become deductible for tax purposes over
an extended period of time as contributions are made to employee benefit plans and payments are made to retirees, (ii)
fixed assets which are deductible for tax purposes according to tax depreciation methodologies, (iii) and accruals and
reserves, which are typically deductible for tax purposes during the period payments are made, which can vary depending
on the nature of the item.

The total deferred tax asset (net of valuation allowance) is supported by projections of future taxable income exclusive of

reversing temporary differences (91%) and taxable temporary differences that reverse within the carryforward period (9%).

The following table details the changes in the valuation allowance:

December 31,
Balance at beginning of year
Establishment of new allowances(1)
Net change to existing allowances(2)
Release of allowances

Foreign currency translation

Balance at end of year

2019

2018

2017

107 $
—
18
(11 )

(1 )
113 $

103 $
—
7
—
(3 )
107 $

88
3
7
—
5
103

____________________
(1) This line item reflects valuation allowances initially established as a result of a change in management’s judgment

regarding the realizability of deferred tax assets.

(2) This line item reflects movements in previously established valuation allowances, which increase or decrease as the related

deferred tax assets increase or decrease. Such movements occur as a result of remeasurement due to a tax rate change and

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changes in the underlying attributes of the deferred tax assets, including expiration of the attribute and reversal of the
temporary difference that gave rise to the deferred tax assets.

Foreign U.S. GAAP earnings that have not otherwise been subject to U.S. tax will generally be exempt from future U.S.
tax under the 2017 Act when distributed. Such distributions, as well as distributions of previously taxed foreign earnings, could
potentially be subject to U.S. state tax in certain states, and foreign withholding taxes. Foreign currency gains/losses related to
the translation of previously taxed earnings from functional currency to U.S. dollars could also be subject to U.S. tax when
distributed. At this time, Arconic Corporation has no plans to distribute such earnings in the foreseeable future. If such earnings
were to be distributed, Arconic Corporation would expect the potential U.S. state tax and withholding tax impacts to be
immaterial and the potential deferred tax liability associated with future foreign currency gains to be impracticable to
determine.

A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) was as

follows:

December 31,
Balance at beginning of year

Additions for tax positions of the current year

Additions for tax positions of prior years

Reductions for tax positions of prior years

Foreign currency translation

Balance at end of year

2019

2018

2017

18 $
—
4
—
(1 )
21 $

23 $
—
—
(4 )

(1 )
18 $

—
23
—
—
—
23

The effect of unrecognized tax benefits, if recorded, that would impact the annual effective tax rate for 2019, 2018, and
2017 would be 9%, 12%, and 7%, respectively, of pretax book income. Arconic Corporation does not anticipate that changes in
its unrecognized tax benefits will have a material impact on the Statement of Combined Operations during 2020.

It is Arconic Corporation’s policy to recognize interest and penalties related to income taxes as a component of the
(Benefit) provision for income taxes on the accompanying Statement of Combined Operations. Arconic Corporation did not
recognize any interest or penalties in 2019, 2018, and 2017. As of December 31, 2019 and 2018, no interest and penalties were
accrued.

J. Stock-Based Compensation

ParentCo has a stock-based compensation plan under which stock options and stock units are generally granted in January

each calendar year to eligible employees. Until consummation of the Separation, employees of the Arconic Corporation
Businesses will continue to participate in ParentCo’s stock-based compensation plan. Stock options are granted at the closing
market price of ParentCo’s common stock on the date of grant and typically grade-vest over a three-year service period (1/3
each year) with a ten-year contractual term. In 2018, there were stock options granted that cliff-vest over a four-year service
period. Stock units typically cliff-vest on the third anniversary of the award grant date. As part of ParentCo’s stock-based
compensation plan design, individuals who are retirement-eligible have a six-month requisite service period in the year of
grant.

Certain of the stock unit grants also include performance and market conditions. Performance stock awards granted in the

first quarter of 2019 were converted to restricted stock unit awards (at target), in order to address the planned Separation. For
performance stock units granted in 2018 and 2017, the final number of such stock units earned is dependent on ParentCo’s
achievement of certain targets over a three-year measurement period. The performance condition for the applicable stock units
is based on ParentCo’s achievement of sales and profitability targets calculated from January 1 of the grant year through
December 31 of the third year in the service period. For those stock unit grants that also contain a market condition, the number
of units earned will be scaled by a total shareholder return (“TSR”) multiplier, which depends upon ParentCo’s relative three-
year (January 1 of the grant year through December 31 of the third year in the service period) performance against the TSRs of
a group of peer companies.

In 2019, 2018, and 2017, Arconic Corporation recognized stock-based compensation expense of $38 (30 after-tax), $22
($17 after-tax), and $23 ($15 after-tax), respectively, of which a minimum of approximately 85% was related to stock units in
each period. No stock-based compensation expense was capitalized in 2019, 2018, or 2017. The stock-based compensation
expense recorded by Arconic Corporation was comprised of two components: (i) the expense associated with employees of the
Arconic Corporation Businesses, and (ii) an allocation of expense related to ParentCo corporate employees (see Cost

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Allocations in Note A). In 2019, 2018, and 2017, this allocation was $30, $12, and $19, respectively, of Arconic Corporation’s
recognized stock-based compensation expense. Also, Arconic Corporation’s recognized stock-based compensation expense
includes a benefit of $2 (through allocation) and $7 ($6 through allocation) in 2019 and 2017, respectively, for certain
executive pre-vest stock award cancellations. These benefits were recorded in the respective periods in Restructuring and other
charges (see Note E) on the accompanying Statement of Combined Operations.

Stock-based compensation expense is based on the grant date fair value of the applicable equity grant. For stock units with
no market condition, the fair value was equivalent to the closing market price of ParentCo’s common stock on the date of grant.
For stock units with a market condition, the fair value was estimated on the date of grant using a Monte Carlo simulation
model, which generated a result of $11.93, $20.25, and $21.99 per unit in 2019, 2018, and 2017 respectively. To estimate the
fair value of a stock unit, the Monte Carlo simulation model uses certain assumptions, including a risk-free interest rate and
volatility, to estimate the probability of satisfying market conditions. The risk-free interest rate (1.6% in 2019, 2.7% in 2018,
and 1.5% in 2017) was based on a yield curve of interest rates at the time of the grant based on the remaining performance
period. Volatility was estimated using implied and historical volatility (33.4%) in 2019. Because of limited historical
information due to the 2016 Separation Transaction, in 2018 and 2017 volatility (32.0% and 38.0%, respectively) was estimated
using implied volatility and the representative price return approach, which uses price returns of comparable companies to
develop a correlation assumption. For stock options, the fair value was estimated on the date of grant using a lattice-pricing
model, which generated a result of $9.79 ($10.99 for four-year cliff options) and $6.26 per option in 2018 and 2017,
respectively (there were no stock options issued in 2019). The lattice-pricing model uses several assumptions to estimate the
fair value of a stock option, including a risk-free interest rate, dividend yield, volatility, annual forfeiture rate, exercise
behavior, and contractual life.

The following describes in detail the assumptions ParentCo used to estimate the fair value of stock options granted in 2018
(the assumptions used to estimate the fair value of stock options granted in 2017 were not materially different, except as noted).
The risk-free interest rate (2.5%) was based on a yield curve of interest rates at the time of the grant over the contractual life of
the option. The dividend yield (0.9%) was based on a one-year average. Volatility (34.0% for 2018 and 38.1% in 2017) was
based on comparable companies and implied volatilities over the term of the option. ParentCo utilized historical option
forfeiture data to estimate annual pre- and post-vesting forfeitures (6%). Exercise behavior (61%) was based on a weighted
average exercise ratio (exercise patterns for grants issued over the number of years in the contractual option term) of an
option’s intrinsic value resulting from historical employee exercise behavior. Based upon the other assumptions used in the
determination of the fair value, the life of an option (6.0 years (7.3 years for four-year cliff options)) was an output of the
lattice-pricing model.

The activity for stock options and stock units related to employees of the Arconic Corporation Businesses (i.e. does not

include awards related to ParentCo corporate employees) during 2019 was as follows:

Outstanding, January 1, 2019

Granted

Exercised

Converted

Expired or forfeited

Performance share adjustment

Other

Outstanding, December 31, 2019

Stock options

Stock units

Number of
options
1,614,320 $

—
(583,126 )
—
(91,585 )
—
129,686
1,069,295

Weighted
average
exercise price

24.93
—
21.38
—
25.56
—
26.94
27.05

Number of
units
1,379,722 $
590,000
—
(482,847 )

(124,148 )

(3,320 )
59,390
1,418,797

Weighted
average FMV
per unit

21.18
20.95
—
15.48
22.00
27.34
21.07
22.91

As of December 31, 2019, the 1,069,295 outstanding options had a weighted average remaining contractual life of 3.9

years and a total intrinsic value of $5. Additionally, 916,734 of the total outstanding stock options were fully vested and
exercisable and had a weighted average remaining contractual life of 3.4 years, a weighted average exercise price of $27.45,
and a total intrinsic value of $4 as of December 31, 2019. In 2019, 2018, and 2017, cash received from stock option exercises
was $14, $3, and $8, respectively. The total intrinsic value of stock options exercised during 2019, 2018, and 2017 was $5, $1,
and $2, respectively.

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At December 31, 2019, there was $10 (pre-tax) of combined unrecognized compensation expense related to non-vested
grants of both stock options and stock units. This expense is expected to be recognized over a weighted average period of 1.6
years.

Arconic Corporation’s stock-based compensation plan is expected to become effective on the effective date of the
Separation (see Note U). At that time, all outstanding stock options (vested and nonvested) and non-vested stock units
originally granted under ParentCo’s stock-based compensation plan related to employees of the Arconic Corporation
Businesses, as well as any ParentCo corporate employees who will become Arconic Corporation employees effective with the
Separation, are expected to be replaced with similar stock options and stock units under Arconic Corporation’s stock-based
compensation plan. In order to preserve the intrinsic value of these stock options and stock units, the number of outstanding
stock options and stock units will be adjusted by a pre-determined ratio and the grant date fair value of these stock options and
stock units will be adjusted accordingly. The ratio will be calculated by dividing the closing market price of ParentCo’s
common stock on the trading date immediately preceding the effective date of the Separation by the closing market price of
Arconic Corporation’s “when issued” common stock (see Note U) on the trading date immediately preceding the effective date
of the Separation. As a result, Arconic Corporation does not expect to recognize any immediate incremental stock-based
compensation expense due to this adjustment.

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K. Accumulated Other Comprehensive Income

The following table details the activity of the two components that comprise Accumulated other comprehensive income

for Arconic Corporation (such activity for noncontrolling interests was immaterial for all periods presented):

Pension and other postretirement benefits (H)

Balance at beginning of period

Other comprehensive (loss) income:

Unrecognized net actuarial loss and prior service cost

Tax benefit

Total Other comprehensive (loss) income before reclassifications, net

of tax

Amortization of net actuarial loss and prior service cost(1)
Tax expense(2)

Total amount reclassified from Accumulated other comprehensive

loss, net of tax(4)

Total Other comprehensive (loss) income

Balance at end of period

Foreign currency translation
Balance at beginning of period
Other comprehensive income (loss)(3)
Balance at end of period

Accumulated other comprehensive income

2019

2018

2017

(32 ) $

(36 ) $

(32 )

(16 )
3

(13 )
3
(1 )

(11 )

(43 ) $

282 $
56
338 $
295 $

1
1

2
3
(1 )

2
4
(32 ) $

446 $
(164 )
282 $
250 $

(8 )
2

(6 )
3
(1 )

(4 )

(36 )

660
(214 )
446
410

_____________________
(1) These amounts were included in the non-service component of net periodic benefit cost for pension and other

postretirement benefits (see Note H).

(2) These amounts were included in Provision for income taxes on the accompanying Statement of Combined Operations.

(3) In all periods presented, there were no tax impacts related to rate changes and no amounts were reclassified to earnings.

(4) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to

earnings. These amounts were reflected on the accompanying Statement of Combined Operations in the line items
indicated in footnotes 1 through 3.

L. Inventories

December 31,
Finished goods

Work-in-process

Purchased raw materials

Operating supplies

LIFO reserve

2019

2018

237 $
738
85
69
1,129
(309 )
820 $

235
812
79
65
1,191
(373 )
818

At December 31, 2019 and 2018, the portion of Inventories subject to the LIFO inventory accounting method was $753, or

67%, and $800, or 67%, respectively, of total inventories before LIFO adjustments. Reductions in LIFO inventory quantities
caused partial liquidations of the lower cost LIFO inventory base resulting in the recognition of immaterial income amounts in
2019, 2018, and 2017.

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M. Properties, Plants, and Equipment, Net

December 31,

Land and land rights

Structures:

Rolled Products

Extrusions

Building and Construction Systems

Other

Machinery and equipment:

Rolled Products

Extrusions

Building and Construction Systems

Other

Less: accumulated depreciation and amortization

Construction work-in-progress

2019

2018

27 $

1,057
153
95
15
1,320

4,661
539
201
147
5,548
6,895
4,466
2,429
315
2,744 $

1,068
152
96
24
1,340

4,629
537
191
164
5,521
6,888
4,341
2,547
314
2,861

N. Goodwill and Other Intangible Assets

The following table details the changes in the carrying amount of goodwill:

Balances at December 31, 2017

Goodwill

Accumulated impairment losses

Goodwill, net

Translation

Balances at December 31, 2018

Goodwill

Accumulated impairment losses

Goodwill, net

Translation

Balances at December 31, 2019

Goodwill

Accumulated impairment losses

Goodwill, net

__________________

Rolled
Products

Extrusions

Building and
Construction
Systems

Other*

Total

252 $
—
252
(7 )

245
—
245
1

246
—
246 $

71 $
—
71
—

71
—
71
—

71
—
71 $

99 $
(28 )
71
(2 )

97
(28 )
69
—

97
(28 )
69 $

25 $
(25 )
—
—

—
—
—
—

—
—
— $

447
(53 )
394
(9 )

413
(28 )
385
1

414
(28 )
386

* Other represents activity related to Arconic Corporation’s Latin America extrusions business, which is reflected in

Corporate. Arconic Corporation sold this business in April 2018 (see Note S).

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Other intangible assets, which are included in Other noncurrent assets on the accompanying Combined Balance Sheet,

were as follows:

December 31, 2019
Computer software

Patents and licenses

Other

Total other intangible assets

December 31, 2018

Computer software

Patents and licenses

Other

Total other intangible assets

Gross
carrying
amount

Accumulated
amortization

Net carrying
amount

193 $
28
21
242 $

(177 ) $

(28 )

(12 )

(217 ) $

16
—
9
25

Gross
carrying
amount

Accumulated
amortization

Net carrying
amount

194 $
28
34
256 $

(172 ) $

(28 )

(14 )

(214 ) $

22
—
20
42

Computer software consists primarily of software costs associated with an enterprise business solution within Arconic

Corporation to drive common systems among all businesses.

Amortization expense related to the intangible assets in the tables above for the years ended December 31, 2019, 2018,
and 2017 was $10, $18, and $16, respectively, and is expected to be in the range of approximately $10 to $15 annually from
2020 to 2024.
O. Leases

Arconic Corporation leases certain land and buildings, plant and equipment, vehicles, and computer equipment, which
have been classified as operating leases. Operating lease cost, which includes short-term leases and variable lease payments and
approximates cash paid, was $63, $52, and $48 in 2019, 2018, and 2017, respectively.

Right-of-use assets obtained in exchange for operating lease obligations in 2019 were $15.

Future minimum contractual operating lease obligations were as follows:

2019

2020

2021

2022

2023

2024

Thereafter

Total lease payments

Less: imputed interest
Present value of lease liabilities

December 31, 2019

December 31, 2018

— $
38
29
22
17
14
38
158 $
29
129

34
28
22
17
14
13
30
158

The weighted-average remaining lease term and weighted-average discount rate for Arconic Corporation's operating leases

at December 31, 2019 was 6.7 years and 6.0%, respectively.

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P. Debt

Subsequent to December 31, 2019, Arconic Corporation incurred $1,200 in indebtedness and secured a $1,000 revolving

credit facility. See Note U for additional information on these financing arrangements.

In August 2012, ParentCo and the Iowa Finance Authority entered into a loan agreement for the proceeds from the

issuance of $250 in Midwestern Disaster Area Revenue Bonds Series 2012 due 2042 (the “Bonds”). The Bonds were issued by
the Iowa Finance Authority pursuant to the Heartland Disaster Tax Relief Act of 2008 for the purpose of financing all or part of
the cost of acquiring, constructing, reconstructing, and renovating certain facilities at Arconic Corporation’s rolling mill plant in
Davenport, IA. The loan proceeds could only be used for this purpose and, therefore, were initially classified as restricted cash,
which was released as funds were expended on the project (completed in 2014). Interest on the Bonds is at a rate of 4.75% per
annum and is paid semi-annually in February and August, which commenced February 2013. ParentCo has the option through
the loan agreement to redeem the Bonds, as a whole or in part, on or after August 1, 2022, on at least 30 days, but not more
than 60 days, prior notice to the holders of the Bonds at a redemption price equal to 100% of the principal amount thereof,
without premium, plus accrued interest, if any, to the redemption date.

Q. Other Noncurrent Liabilities and Deferred Credits

December 31,

Sale-leaseback financing obligation

Accrued compensation and retirement costs

Other

2019

2018

— $
45
5
50 $

119
38
11
168

The sale-leaseback financing obligation represents the cash received from the sale of the Texarkana, Texas cast house and

was accounted for as a deferred gain due to continuing involvement (see 2018 Divestitures in Note S).

R. Cash Flow Information

Cash paid for interest and income taxes was as follows:

Interest, net of amount capitalized*

Income taxes, net of amount refunded

2019

2018

2017

107 $
29

120 $
24

146
37

* Amount includes cash paid by ParentCo related to interest expense allocated to Arconic Corporation (see Cost Allocations

in Note A).

S. Acquisitions and Divestitures

2019 Divestitures. In August 2019, Arconic Corporation reached an agreement to sell its aluminum rolling mill in
Itapissuma, Brazil to Companhia Brasileira de Alumínio for $50 in cash, subject to working capital and other adjustments (this
transaction was completed on February 1, 2020 - see Note U). This rolling mill produces specialty foil and sheet products and
its operating results and assets and liabilities are included in the Rolled Products segment. As a result of the agreement, Arconic
Corporation recognized a charge of $53 (pretax) in Restructuring and other charges (see Note E) on the accompanying
Statement of Combined Operations for the non-cash impairment of the carrying value of the rolling mill’s net assets, primarily
properties, plants, and equipment.

In October 2019, Arconic Corporation reached an agreement to sell its hard alloy extrusions plant in South Korea for $61

in cash, subject to working capital and other adjustments (this transaction was completed on March 1, 2020 - see Note U).
Arconic Corporation expects to recognize a gain of approximately $25 (pretax) upon completion of the sale. The gain will be
recorded in Restructuring and other charges on the Company’s Statement of Combined Operations.

2018 Divestitures. In April 2018, Arconic Corporation completed the sale of its Latin America extrusions business to a

subsidiary of Hydro Extruded Solutions AS for $2, following the settlement of post-closing and other adjustments in
December 2018. As a result of entering into the agreement to sell the Latin America extrusions business in December 2017, a
charge of $41 was recognized in Restructuring and other charges (see Note E) on the accompanying Statement of Combined
Operations related to the non-cash impairment of the net book value of the business. Additionally, in 2018, a charge of $2

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related to a post-closing adjustment was recognized in Restructuring and other charges (see Note E) on the accompanying
Statement of Combined Operations. This transaction is no longer subject to any post-closing adjustments. The Latin America
extrusions business generated third-party sales of $25 and $115 in 2018 (through the date of divestiture) and 2017, respectively,
and had 612 employees at the time of the divestiture.

In October 2018, Arconic Corporation sold its Texarkana, Texas rolling mill and cast house, which had a combined net

book value of $63, to Ta Chen International, Inc. for $302 in cash, subject to post-closing adjustments, plus additional
contingent consideration of up to $50. The contingent consideration relates to the achievement of various milestones associated
with operationalizing the rolling mill equipment within 36 months of the transaction closing date. The Texarkana rolling mill
facility had previously been idle since late 2009. In early 2016, Arconic Corporation restarted the Texarkana cast house to meet
demand for aluminum slab. While owned by Arconic Corporation, the operating results and assets and liabilities of the business
were included in the Rolled Products segment. As part of the sale agreement, Arconic Corporation will continue to produce
aluminum slab at the facility for a period of 18 months through a lease back of the cast house building and equipment, after
which time Ta Chen will perform toll processing of metal for Arconic Corporation for a period of six months. Arconic
Corporation will supply Ta Chen with cold-rolled aluminum coil during this 24-month period.

The sale of the rolling mill and cast house was accounted for separately. In 2018, a gain on the sale of the rolling mill of
$154, including the fair value of contingent consideration of $5, was recorded in Restructuring and other charges (see Note E)
on the accompanying Statement of Combined Operations. In 2019, the Company received additional contingent consideration
of $20, which was recorded as a gain in Restructuring and other charges (see Note E) on the accompanying Statement of
Combined Operations. At the end of each future reporting period, Arconic Corporation will continue to reevaluate its estimate
of the amount of additional contingent consideration to which it may be entitled, up to $25, and recognize any changes thereto
in the Statement of Combined Operations.

Arconic Corporation has continuing involvement related to the lease back of the cast house. As a result, the Company

continued to recognize as assets, as well as depreciate, the cast house building and equipment that it sold to Ta Chen, and
recorded the portion of the cash proceeds associated with the sale of the cast house assets as a noncurrent liability, including a
deferred gain of $95. As of December 31, 2018, Arconic Corporation's Combined Balance Sheet includes $24 in Properties,
plants, and equipment, net, $22 in Deferred income taxes (noncurrent asset), and $119 in Other noncurrent liabilities and
deferred credits. On January 1, 2019, Arconic Corporation adopted the new lease accounting standard (see Recently Issued
Accounting Guidance in Note B), under which Arconic Corporation’s continuing involvement no longer required deferral of the
recognition of the sale of the cast house. Accordingly, the carrying value of these assets and liabilities were reclassified to
equity reflecting a cumulative effect of an accounting change on the date of adoption.

2017 Divestitures. In March 2017, Arconic Corporation completed the divestiture of its Fusina, Italy rolling mill to Slim

Aluminum. This transaction resulted in a $60 loss, which was recorded in Restructuring and other charges (see Note E) on the
accompanying Statement of Combined Operations. As part of the transaction, Arconic Corporation injected $10 of cash into the
business and provided a third-party guarantee with a fair value of $5 related to Slim Aluminum’s environmental remediation.
This transaction is no longer subject to any post-closing adjustments. While owned by Arconic Corporation, the operating
results and assets and liabilities of the Fusina rolling mill were included in the Rolled Products segment. The rolling mill
generated third-party sales of $54 in 2017 (through the date of divestiture) and had 312 employees at the time of the divestiture.

T. Contingencies and Commitments

The matters described within this section are those of ParentCo that are associated directly or indirectly with the Arconic

Corporation Businesses. For those matters where the outcome remains uncertain, the ultimate allocation of any potential future
costs between Arconic Corporation and Howmet Aerospace will be addressed in the Separation and Distribution Agreement.

Contingencies

Environmental Matters. ParentCo participates in environmental assessments and cleanups at several locations. These

include owned or operating facilities and adjoining properties, previously owned or operating facilities and adjoining
properties, and waste sites, including Superfund (Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA)) sites.

A liability is recorded for environmental remediation when a cleanup program becomes probable and the costs can be
reasonably estimated. As assessments and cleanups proceed, the liability is adjusted based on progress made in determining the
extent of remedial actions and related costs. The liability can change substantially due to factors such as, among others, the
nature and extent of contamination, changes in remedial requirements, and technological changes.

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Arconic Corporation’s remediation reserve balance was $208 and $239 (of which $83 and $69, respectively, was classified
as a current liability) at December 31, 2019 and 2018, respectively, and reflects the most probable costs to remediate identified
environmental conditions for which costs can be reasonably estimated for current and certain former Arconic Corporation
operating locations. In 2019, the remediation reserve was increased by $25 related to the Grasse River project (see Massena
West, NY below). This charge was recorded in Cost of goods sold on the accompanying Statement of Combined Operations.
Payments related to remediation expenses applied against the reserve were $56 in 2019 and $27 in 2018, which include
expenditures currently mandated, as well as those not required by any regulatory authority or third party.

The following description provides details regarding the current status of one reserve, which represents the majority of the

Company’s total remediation reserve balance, related to a current Arconic Corporation site.

Massena West, NY — Arconic Corporation has an ongoing remediation project related to the Grasse River, which is

adjacent to Arconic Corporation’s Massena plant site. Many years ago, it was determined that sediments and fish in the river
contain varying levels of polychlorinated biphenyls (PCBs). The project, which was selected by the U.S. Environmental
Protection Agency (EPA) in a Record of Decision issued in April 2013, is aimed at capping PCB contaminated sediments with
concentration in excess of one part per million in the main channel of the river and dredging PCB contaminated sediments in
the near-shore areas where total PCBs exceed one part per million. At December 31, 2019 and 2018, the reserve balance
associated with this matter was $171 and $198, respectively. Arconic Corporation completed the final design phase of the
project, which was approved by the EPA in March 2019. Following the EPA’s approval, the actual remediation fieldwork
commenced. The majority of the expenditures related to the project are expected to occur between 2019 and 2022.

In June 2019, Arconic Corporation increased the reserve balance by $25 due to changes required in the EPA-approved

remedial design and post-construction monitoring. These changes were necessary due to several items, the majority of which
relate to navigation issues identified by a local seaway development company. Accordingly, the EPA requested an addendum to
the final remedial design be submitted to address these issues. The proposed remedy is to dredge certain of the sediments
originally identified for capping in the affected areas of the Grasse River, resulting in incremental project costs. As the project
progresses, further changes to the reserve may be required due to factors such as, among others, additional changes in remedial
requirements, increased site restoration costs, and incremental ongoing operation and maintenance costs.

Litigation.

All references to ParentCo in the matters described under this section Litigation refer to Arconic Inc. only and do not

include its subsidiaries, except as otherwise stated.

Reynobond PE — On June 13, 2017, the Grenfell Tower in London, U.K. caught fire resulting in fatalities, injuries, and

damage. A French subsidiary of ParentCo, Arconic Architectural Products SAS (AAP SAS), supplied a product, Reynobond
PE, to its customer, a cladding system fabricator, which used the product as one component of the overall cladding system on
Grenfell Tower. The fabricator supplied its portion of the cladding system to the facade installer, who then completed and
installed the system under the direction of the general contractor. Neither ParentCo nor AAP SAS was involved in the design or
installation of the system used at the Grenfell Tower, nor did it have a role in any other aspect of the building’s refurbishment or
original design. Regulatory investigations into the overall Grenfell Tower matter are being conducted, including a criminal
investigation by the London Metropolitan Police Service (the “Police”), a Public Inquiry by the British government, and a
consumer protection inquiry by a French public authority. The Public Inquiry was announced by the U.K. Prime Minister on
June 15, 2017 and subsequently was authorized to examine the circumstances leading up to and surrounding the Grenfell Tower
fire in order to make findings of fact and recommendations to the U.K. Government on matters such as the design,
construction, and modification of the building, the role of relevant public authorities and contractors, the implications of the fire
for the adequacy and enforcement of relevant regulations, arrangements in place for handling emergencies, and the handling of
concerns from residents, among other things. Hearings for Phase 1 of the Public Inquiry began on May 21, 2018 and concluded
on December 12, 2018. Phase 2 hearings of the Public Inquiry began in early 2020, following which a final report will be
written and subsequently published. AAP SAS is participating as a Core Participant in the Public Inquiry and is also
cooperating with the ongoing parallel investigation by the Police. ParentCo no longer sells the PE product for architectural use
on buildings. Given the preliminary nature of these investigations and the uncertainty of potential future litigation, ParentCo
cannot reasonably estimate at this time the likelihood of an unfavorable outcome or the possible loss or range of losses in the
event of an unfavorable outcome.

Behrens et al. v. Arconic Inc. et al. On June 6, 2019, 247 plaintiffs comprised of survivors and estates of decedents of the
Grenfell Tower fire filed a complaint against “Arconic Inc., Alcoa Inc., and Arconic Architectural Products, LLC” (collectively,
for purposes of the description of such proceeding, the “ParentCo Defendants”), as well as Saint-Gobain Corporation, d/b/a
Celotex and Whirlpool Corporation, in the Court of Common Pleas of Philadelphia County. The complaint alleges claims under
Pennsylvania state law for products liability and wrongful death related to the fire. In particular, the plaintiffs allege that the

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ParentCo Defendants knowingly supplied a dangerous product (Reynobond PE) for installation on the Grenfell Tower despite
knowing that Reynobond PE was unfit for use above a certain height. The ParentCo Defendants removed the case to the United
States District Court for the Eastern District of Pennsylvania on June 19, 2019. On August 29, 2019, the ParentCo Defendants
moved to dismiss the complaint on the bases, among other things, that: (i) the case should be heard in the United Kingdom, not
the United States; (ii) there is no jurisdiction over necessary parties; and (iii) Pennsylvania product liability law does not apply
to manufacture and sale of product overseas. On December 23, 2019, the Court issued an order denying the motion to dismiss
the complaint on bases (ii) and (iii) suggesting a procedure for limited discovery followed by further briefing on those subjects.
Discovery is ongoing on defendants’ motion to have the case dismissed in favor of a U.K. forum (forum non conveniens). On
January 23, 2020, the Court ordered that the parties complete discovery relating to forum non conveniens by March 16, 2020,
but has since permitted discovery to extend past that deadline and invited the parties to agree to an extended briefing schedule
on that issue. The Court will hold oral argument on this motion on May 7, 2020. Given the preliminary nature of this matter and
the uncertainty of litigation, the ParentCo Defendants cannot reasonably estimate at this time the likelihood of an unfavorable
outcome or the possible loss or range of losses in the event of an unfavorable outcome.

Howard v. Arconic Inc. et al. A purported class action complaint related to the Grenfell Tower fire was filed on
August 11, 2017 in the United States District Court for the Western District of Pennsylvania against ParentCo and Klaus
Kleinfeld. A related purported class action complaint was filed in the United States District Court for the Western District of
Pennsylvania on September 15, 2017, under the caption Sullivan v. Arconic Inc. et al., against ParentCo, three former ParentCo
executives, several current and former ParentCo directors, and banks that acted as underwriters for ParentCo’s September 18,
2014 preferred stock offering (the “Preferred Offering”). The plaintiff in Sullivan had previously filed a purported class action
against the same defendants on July 18, 2017 in the Southern District of New York and, on August 25, 2017, voluntarily
dismissed that action without prejudice. On February 7, 2018, on motion from certain putative class members, the court
consolidated Howard and Sullivan, closed Sullivan, and appointed lead plaintiffs in the consolidated case. On April 9, 2018, the
lead plaintiffs in the consolidated purported class action filed a consolidated amended complaint. The consolidated amended
complaint alleged that the registration statement for the Preferred Offering contained false and misleading statements and
omitted to state material information, including by allegedly failing to disclose material uncertainties and trends resulting from
sales of Reynobond PE for unsafe uses and by allegedly expressing a belief that appropriate risk management and compliance
programs had been adopted while concealing the risks posed by Reynobond PE sales. The consolidated amended complaint
also alleged that between November 4, 2013 and June 23, 2017 ParentCo and Kleinfeld made false and misleading statements
and failed to disclose material information about ParentCo’s commitment to safety, business and financial prospects, and the
risks of the Reynobond PE product, including in ParentCo’s Form 10-Ks for the fiscal years ended December 31, 2013, 2014,
2015, and 2016, its Form 10-Qs and quarterly financial press releases from the fourth quarter of 2013 through the first quarter
of 2017, its 2013, 2014, 2015, and 2016 Annual Reports, its 2016 Annual Highlights Report, and on its official website. The
consolidated amended complaint sought, among other things, unspecified compensatory damages and an award of attorney and
expert fees and expenses. On June 8, 2018, all defendants moved to dismiss the consolidated amended complaint for failure to
state a claim. On June 21, 2019, the Court granted the defendants’ motion to dismiss in full, dismissing the consolidated
amended complaint in its entirety without prejudice. On July 23, 2019, the lead plaintiffs filed a second amended complaint.
The second amended complaint alleges generally the same claims as the consolidated amended complaint with certain
additional allegations, as well as claims that the risk factors set forth in the registration statement for the Preferred Offering
were inadequate and that certain additional statements in the sources identified above were misleading. The second amended
complaint seeks, among other things, unspecified compensatory damages and an award of attorney and expert fees and
expenses. On September 11, 2019, all defendants moved to dismiss the second amended complaint. Plaintiffs' opposition to that
motion was filed on November 1, 2019 and all defendants filed a reply brief on November 26, 2019. Given the preliminary
nature of this matter and the uncertainty of litigation, ParentCo cannot reasonably estimate at this time the likelihood of an
unfavorable outcome or the possible loss or range of losses in the event of an unfavorable outcome.

Raul v. Albaugh, et al. On June 22, 2018, a derivative complaint was filed nominally on behalf of ParentCo by a
purported ParentCo stockholder against the then members of ParentCo’s Board of Directors and Klaus Kleinfeld and Ken
Giacobbe, naming ParentCo as a nominal defendant, in the United States District Court for the District of Delaware. The
complaint raises similar allegations as the consolidated amended complaint and second amended complaint in Howard, as well
as allegations that the defendants improperly authorized the sale of Reynobond PE for unsafe uses, and asserts claims under
Section 14(a) of the Securities Exchange Act of 1934, as amended, and Delaware state law. On July 13, 2018, the parties filed a
stipulation agreeing to stay this case until the final resolution of the Howard case, the Grenfell Tower Public Inquiry in London,
and the investigation by the Police and on July 23, 2018, the Court approved the stay. Given the preliminary nature of this
matter and the uncertainty of litigation, ParentCo cannot reasonably estimate at this time the likelihood of an unfavorable
outcome or the possible loss or range of losses in the event of an unfavorable outcome.

While ParentCo believes that these cases are without merit and intends to challenge them vigorously, there can be no

assurances regarding the ultimate resolution of these matters.

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Stockholder Demands. The ParentCo Board of Directors also received letters, purportedly sent on behalf of stockholders,

reciting allegations similar to those made in the federal court lawsuits and demanding that the ParentCo Board authorize
ParentCo to initiate litigation against members of management, the ParentCo Board, and others. The ParentCo Board of
Directors appointed a Special Litigation Committee of the ParentCo Board to review, investigate, and make recommendations
to the ParentCo Board regarding the appropriate course of action with respect to these stockholder demand letters. On May 22,
2019, the Special Litigation Committee, following completion of its investigation into the claims demanded in the demand
letters, recommended to the ParentCo Board that it reject the demands to authorize commencement of litigation. On May 28,
2019, the ParentCo Board adopted the Special Litigation Committee’s findings and recommendations and rejected the demands
that it authorize commencement of actions to assert the claims set forth in the demand letters.

General. In addition to the matters described above, various other lawsuits, claims, and proceedings have been or may be

instituted or asserted against ParentCo or Arconic Corporation, including those pertaining to environmental, product liability,
safety and health, employment, tax, and antitrust matters. While the amounts claimed in these other matters may be substantial,
the ultimate liability is not readily determinable because of the considerable uncertainties that exist. Accordingly, it is possible
that Arconic Corporation’s liquidity or results of operations in a reporting period could be materially affected by one or more of
these other matters. However, based on facts currently available, management believes that the disposition of these other
matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the results of
operations, financial position or cash flows of Arconic Corporation.

Commitments

Purchase Obligations. ParentCo has entered into purchase commitments, on behalf of Arconic Corporation, for raw
materials, energy, and other goods and services, which total $229 in 2020, $24 in 2021, $24 in 2022, $5 in 2023, $2 in 2024,
and $2 thereafter as of December 31, 2019.

Operating Leases. See Note O for future minimum contractual obligations under long-term operating leases.

Guarantees. ParentCo has outstanding bank guarantees, on behalf of Arconic Corporation, related to, among others, tax

matters and customs duties. The total amount committed under these guarantees, which expire at various dates between 2020
and 2026 was $3 at December 31, 2019.

Letters of Credit. ParentCo has outstanding letters of credit, on behalf of Arconic Corporation, primarily related to
environmental and lease obligations. The total amount committed under these letters of credit, which automatically renew or
expire at various dates, mostly in 2020, was $57 at December 31, 2019.

Surety Bonds. ParentCo has outstanding surety bonds, on behalf of Arconic Corporation, primarily related to customs

duties and environmental-related matters. The total amount committed under these surety bonds, which expire at various dates,
primarily in 2020, was $8 at December 31, 2019.

U. Subsequent Events

Management evaluated all activity of Arconic Corporation and concluded that no subsequent events have occurred that

would require recognition in the Combined Financial Statements or disclosure in the Notes to the Combined Financial
Statements, except as described below.

Separation Update

On February 5, 2020, ParentCo's Board of Directors approved the completion of the Separation (see The Proposed
Separation in Note A), which is scheduled to become effective on April 1, 2020 (the “Separation Date”) at 12:01 a.m. Eastern
Daylight Time. Also, on February 13, 2020, the SEC declared effective Arconic Corporation’s Registration Statement on Form
10, as amended. The Separation will occur by means of a pro rata distribution by ParentCo of all of the outstanding shares of
common stock of Arconic Corporation to ParentCo common shareholders of record as of the close of business on March 19,
2020 (the “Record Date”). Specifically, ParentCo common shareholders are expected to receive one share of Arconic
Corporation common stock for every four shares of ParentCo common stock (the “Separation Ratio”) held as of the Record
Date (ParentCo common shareholders will receive cash in lieu of fractional shares). In connection with the consummation of
the Separation, ParentCo will change its name to Howmet Aerospace Inc. (“Howmet Aerospace”) and Arconic Rolled Products
Corporation will change its name to Arconic Corporation. “When-issued” trading of Arconic Corporation common stock began
on March 18, 2020 under the ticker symbol “ARNC WI” and will continue the distribution date. “Regular-way” trading of
Arconic Corporation common stock is expected to begin with the opening of the New York Stock Exchange on April 1, 2020
under the ticker symbol “ARNC.”

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Financing Arrangements. In connection with the capital structure to be established at the time of the Separation,
Arconic Corporation secured $1,200 in third-party indebtedness. On February 7, 2020, Arconic Corporation completed a Rule
144A (U.S. Securities Act of 1933, as amended) debt offering for $600 of 6.125% (fixed rate) Senior Secured Second-Lien
Notes due 2028 (the “2028 Notes”). Additionally, on March 25, 2020, Arconic Corporation entered into a credit agreement,
which provides a $600 Senior Secured First-Lien Term B Loan Facility (variable rate and seven-year term) (the “Term Loan”)
and a $1,000 Senior Secured First-Lien Revolving Credit Facility (variable rate and five-year term) (the “Credit Facility”), with
a syndicate of lenders and issuers named therein (the “Credit Agreement”). Arconic Corporation intends to use a portion of the
net proceeds from the aggregate indebtedness to make a payment to ParentCo to fund the transfer of certain net assets from
ParentCo to Arconic Corporation in connection with the completion of the Separation. The payment to ParentCo will be
calculated as the difference between (i) the approximately $1,165 of net proceeds from the aggregate indebtedness and (ii) the
difference between a beginning cash balance at the Separation Date of $500 and the amount of cash held by Arconic
Corporation Businesses at March 31, 2020 ($72 as of December 31, 2019).

The net proceeds from the 2028 Notes offering will be held in escrow until the satisfaction of the escrow release

The variable interest rate with respect to the Term Loan is currently based on LIBOR for the relevant interest period plus

Also, at Separation, ParentCo is expected to remain the borrower associated with the Bonds (see Note P), the net proceeds
of which were used to acquire, construct, reconstruct, and renovate certain facilities at Arconic Corporation’s rolling mill plant
in Davenport, IA. Accordingly, the $250 carrying value of the Bonds, as well as any related accrued interest, will be removed
from Arconic Corporation's Combined Balance Sheet in connection with the Separation.

Defined Benefit Plans - Shared Plans. In preparation for the Separation, effective January 1, 2020, certain U.S. pension
and other postretirement benefit plans previously sponsored by ParentCo were separated into standalone plans for both Arconic
Corporation (the “U.S. Shared Plans”) and Howmet Aerospace. Accordingly, on January 1, 2020, Arconic Corporation
recognized an aggregate liability of $1,920 reflecting the combined net unfunded status, comprised of a benefit obligation of
$4,255 and plan assets of $2,335, of the U.S. Shared Plans, and $1,752 (net of tax impact) in Accumulated other comprehensive
loss. In 2020, Arconic Corporation expects to recognize approximately $100 in combined net periodic benefit cost, of which
approximately $20 is service cost, as well as make approximately $250 in pension contributions and $55 in other postretirement
benefit payments, related to the U.S. Shared Plans.

Customer Receivables. Certain of Arconic Corporation’s customer receivables are sold on a revolving basis to a
bankruptcy-remote subsidiary of ParentCo for purposes of ParentCo's accounts receivable securitization program (see Cash
Management in Note A). Effective January 2, 2020, in preparation for the Separation, ParentCo's arrangement was amended to
no longer include customer receivables associated with the Arconic Corporation Businesses in this program, as well as to
remove previously included customer receivables related to the Arconic Corporation Businesses not yet collected as of January
2, 2020. Accordingly, uncollected customer receivables of $281 related to the Arconic Corporation Businesses were removed
from the program and the right to collect and receive the cash from the customer was returned to Arconic Corporation. The
Company is evaluating whether to enter into a similar arrangement of its own subsequent to the Separation Date.

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Unaudited Pro Forma Earnings per Share. In 2019, 2018, and 2017, basic and diluted earnings per share on a pro

forma basis was $2.07, $1.56, and $1.92, respectively. For all periods presented, the pro forma earnings per share was
calculated based on the 109,021,376 shares of Arconic Corporation common stock estimated to be distributed on April 1, 2020
in connection with the completion of the Separation. This estimate was determined by applying the Separation Ratio to the
436,085,504 shares of ParentCo’s outstanding common stock as of the Record Date. The same number of shares was used to
calculate both basic and diluted pro forma earnings per share as Arconic Corporation does not have any common share
equivalents.

Divestitures Update

On February 1, 2020, Arconic Corporation completed the sale of its aluminum rolling mill in Itapissuma, Brazil (see Note
S). The rolling mill generated third-party sales of $143, $179, and $162 in 2019, 2018, and 2017, respectively, and, at the time
of divestiture, had approximately 500 employees.

On March 1, 2020, Arconic Corporation completed the sale of its hard alloy extrusions plant in South Korea (see Note S).
The extrusions plant generated third-party sales of $51, $53, and $50 in 2019, 2018, and 2017, respectively, and, at the time of
divestiture, had approximately 160 employees.

COVID-19

As a result of the escalating COVID-19 (coronavirus) pandemic and the uncertainty regarding its duration and impact on
the Company's customers, suppliers, and operations, Arconic Corporation is not currently able to estimate the specific future
impact on its operations or financial results. Several of the Company's automotive and aerospace customers have temporarily
suspended operations, including Arconic Corporation's largest customer, Ford, which suspended its North American operations
beginning on March 19, 2020 and have announced they are targeting to restart at least a portion of these operations on April 14,
2020. In addition, Arconic Corporation cannot predict the impact of any governmental regulations that might be imposed in
response to the pandemic, including required temporary facility shutdowns. At this time, the Company’s material
manufacturing facilities continue to operate. While the situation is fluid, the Company, like many companies around the world,
anticipates temporary reductions in operating levels at many of its material manufacturing facilities due to the COVID-19
pandemic, although we do not currently know the extent, duration or impact of such reductions. Arconic Corporation is
continuing to evaluate the impact this global event may have on its future results of operations, cash flows, financial position,
and availability under the Company's Credit Facility (see Financing Arrangements above).

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Supplemental Financial Information (unaudited)
Quarterly Data
(in millions, except per-share amounts)

2019

Sales

Net income (loss)
Net income (loss) attributable to Arconic
Corporation

Pro forma earnings per share attributable to
Arconic Corporation common shareholders(2):

Basic

Diluted

2018
Sales

Net income

Net income attributable to Arconic Corporation $

Pro forma earnings per share attributable to
Arconic Corporation common shareholders(2):

First

Second

Third

Fourth(1)

Year

1,841 $
41 $

1,923 $
5 $

1,805 $
(7 ) $

1,708 $
186 $

7,277
225

(7 ) $

186

225

0.38 $
0.38 $

1,836 $
31 $
31 $

0.04 $
0.04 $

1,915 $
10 $
10 $

(0.07 ) $

1,882 $
30 $
30 $

1.71 $
1.71 $

1,809 $
99 $
99 $

2.07
2.07

7,442
170
170

1.56
1.56

Basic

Diluted

0.29 $
0.29 $

0.09 $
0.09 $

0.28 $
0.28 $

0.91 $
0.91 $

In the fourth quarter of 2019, Arconic Corporation recorded the following items in pretax income: a $24 benefit for

(1)
LIFO inventory accounting; a $20 gain for contingent consideration received related to the 2018 sale of the Texarkana (Texas)
rolling mill (see Notes E and T); and $17 for costs to evaluate, plan, and execute the Separation (see Note A).

In the fourth quarter of 2018, Arconic Corporation recorded a $154 gain (pretax) on the sale of the Texarkana (Texas)

rolling mill (see Notes E and T).

(2)
amounts may not equal the per share amounts for the year.

Per share amounts are calculated independently for each period presented; therefore, the sum of the quarterly per share

For all periods presented, earnings per share was calculated based on the 109,021,376 shares of Arconic Corporation

common stock estimated to be distributed on April 1, 2020 in connection with the completion of the Separation and is
considered pro forma in nature. This estimate was determined by applying the Separation Ratio to the 436,085,504 shares of
ParentCo’s outstanding common stock as of the Record Date. The same number of shares was used to calculate both basic and
diluted pro forma earnings per share as Arconic Corporation does not have any common share equivalents.

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Arconic Corporation’s Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of the end of
the period covered by this report, and they have concluded that these controls and procedures are effective.

(b) Management’s Annual Report on Internal Control over Financial Reporting, and

This annual report does not include a report of management's assessment regarding internal control over financial reporting
or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the
U.S. Securities and Exchange Commission for new public companies.

(d) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the fourth quarter of 2019, that have
materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

None.

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Item 10. Directors, Executive Officers and Corporate Governance.

PART III

Current Executive Officers

The following table sets forth information, as of March 30, 2020, regarding the individuals who are currently serving as,

and are expected to continue to serve following the distribution as, executive officers of Arconic Corporation.

Name
Timothy D. Myers
Erick R. Asmussen
Mary E. Zik

Age
54
53
48

Position
President (Chief Executive Officer designate)
Executive Vice President and Chief Financial Officer
Vice President, Controller

Timothy D. Myers became the President of Arconic Corporation as of February 11, 2020, and will become Chief Executive
Officer as of the separation. From October 2017 until the separation, Mr. Myers served as Executive Vice President and Group
President, Global Rolled Products, which now includes the Extrusions and Building and Construction Systems businesses of
ParentCo. From May 2016 to June 2019, he served as Executive Vice President and Group President of ParentCo’s
Transportation and Construction Solutions segment, which then comprised Arconic Wheel and Transportation Products and
Building and Construction Systems and which segment was eliminated in the third quarter of 2019, with the Building and
Construction Systems business then moved to the Global Rolled Products segment. 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 ParentCo 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 ParentCo since that time.

Erick R. Asmussen became the Executive Vice President and Chief Financial Officer of Arconic Corporation as of February
11, 2020. Mr. Asmussen previously served as Senior Vice President and Chief Financial Officer of Momentive Performance
Materials Inc. from May 2015 to July 2019. Prior to joining Momentive, Mr. Asmussen served as Vice President and Chief
Financial Officer of GrafTech International, Ltd. from September 2013 to May 2015. Mr. Asmussen joined GrafTech in 1999
and served in multiple leadership roles, including Vice President of Strategy, Planning and Corporate Development, Worldwide
Controller, Tax Director and Treasurer. Prior to GrafTech, Mr. Asmussen worked in various financial positions with Corning
Incorporated, AT&T Corporation, and Arthur Andersen LLP.

Mary E. Zik became the Vice President, Controller of Arconic Corporation as of February 11, 2020. Ms. Zik has served as
Assistant Controller for ParentCo since February 2017, responsible for establishing and maintaining financial accounting
policies, overseeing the consolidation of ParentCo’s financial results and financial reporting and compliance with the SEC.
Previously, Ms. Zik was Director of Financial Transactions and Policy for ParentCo. Ms. Zik joined ParentCo in 2000, prior to
the 2016 Separation Transaction, and has held several positions of increasing responsibility across various Controllership
functions including corporate consolidations, external reporting, financial policy and reporting, and financial planning and
analysis. Prior to joining ParentCo, she worked at PricewaterhouseCoopers LLP.

Additional Executive Officers Following the Distribution

The following table sets forth information as of March 30, 2020 regarding the additional individuals who are expected to

serve as executive officers of Arconic Corporation following the distribution.

Name
Melissa M. Miller
Diana C. Toman
Mark J. Vrablec

Age
48
41
59

Position

Executive Vice President and Chief Human Resources Officer
Executive Vice President, Chief Legal Officer and Secretary
Executive Vice President and Chief Commercial Officer

Melissa M. Miller will be Executive Vice President and Chief Human Resources Officer of Arconic Corporation. From
October 2017 until the separation, Ms. Miller is Vice President of Human Resources for ParentCo’s Global Rolled Products
business, which now includes the Extrusions and Building and Construction Systems (BCS) businesses of ParentCo. From May
2016 until October 2017, Ms. Miller served as Vice President of Human Resources for the business segment that comprised the
BCS business and Arconic Wheel & Transportation Products. From June 2011 until February 2016, Ms. Miller served as Global

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Human Resources Director of the BCS business. Ms. Miller joined ParentCo in 2005 and has held multiple leadership roles
with a broad spectrum of progressive HR responsibilities, including HR strategy and delivery, talent management, workforce
planning, succession planning, employee engagement, campus partnerships, HR technology, growth in emerging markets,
merger integrations, turnarounds and employee/labor relations. Prior to joining ParentCo, Ms. Miller served in several HR-
related roles at Marconi (formerly known as FORE Systems) for more than seven years.

Diana C. Toman will be Executive Vice President, Chief Legal Officer and Secretary of Arconic Corporation. From November
2015 to July 2019, Ms. Toman served as Senior Vice President, General Counsel and Corporate Secretary for Compass
Minerals International, Inc. From March 2010 to October 2015, Ms. Toman served in multiple leadership roles at General
Cable Corporation, including as Vice President, Strategy and General Counsel, Asia Pacific & Africa, and Vice President,
Assistant General Counsel and Assistant Secretary. Prior to joining General Cable, Ms. Toman held legal positions at Gardner
Denver, Inc. from October 2006 to February 2010 and Waddell & Reed Financial, Inc. from August 2003 to October 2006. She
began her career as an attorney with the law firm of Levy & Craig, P.C.

Mark J. Vrablec will be Executive Vice President and Chief Commercial Officer of Arconic Corporation. From February
2019 until the separation, Mr. Vrablec is Vice President for ParentCo’s Global Rolled Products business, which now includes
the Extrusions and Building and Construction Systems businesses of ParentCo. From July 2017 to February 2019, Mr. Vrablec
served as Vice President, Global Rolled Products Commercial and Business Development. From November 2016 to July 2017,
Mr. Vrablec served as President of the Aerospace and Automotive Products business, holding the same role for Alcoa from
October 2015 until November 2016. From September 2011 until October 2015, Mr. Vrablec served as President of Alcoa’s
Aerospace, Transportation and Industrial Rolled Products business. Mr. Vrablec joined ParentCo in 1982 as a metallurgist, and
has held a series of quality assurance, operations, and management positions with ParentCo since that time.

Current Board of Directors

The following table sets forth information as of March 30, 2020 regarding those persons who are expected to serve on
Arconic Corporation’s Board of Directors following completion of the distribution and until their respective successors are duly
elected and qualified. Arconic Corporation’s amended and restated certificate of incorporation provides that directors will be
elected annually.

Name

Timothy D. Myers
Christopher L. Ayers

Timothy D. Myers

Age: 54

Age

54
53

Position

Director and Chief Executive Officer
Director

Career Highlights and Qualifications: Mr. Myers is the President and Chief Executive Officer designate of Arconic
Corporation. From October 2017 until February 11, 2020, Mr. Myers was Executive Vice President and Group President,
Global Rolled Products, which now includes the Extrusions and Building and Construction Systems businesses, of ParentCo.
From May 2016 to June 2019, he served as Executive Vice President and Group President of ParentCo’s Transportation and
Construction Solutions segment, which then comprised Arconic Wheel and Transportation Products and Building and
Construction Systems and which segment was eliminated in the third quarter of 2019, with the Building and Construction
Systems business then moved to the Global Rolled Products segment. 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
ParentCo 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 ParentCo since that time.

Attributes and Skills: As the only current management representative on the Board, Mr. Myers’ leadership of, and extensive
experience and familiarity with, Arconic Corporation’s business provides the Board with invaluable insight into the Company’s
operations and strategic direction. His range of operational and other roles at ParentCo has given him an in-depth and well-
rounded understanding of the Company and its customers.

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Christopher L. Ayers

Age: 53

Other Current Public Directorships: Universal Stainless & Alloy Products, Inc. and ParentCo until March 31, 2020

Career Highlights and Qualifications: Mr. Ayers served as the President and Chief Executive Officer of WireCo
WorldGroup, Inc., a leading producer of specialty steel wire ropes and high-performance synthetic ropes from July 2013
through January 2017. Prior to WireCo, from May 2011 to May 2013, Mr. Ayers served as Executive Vice President of Alcoa
Inc. and President of Alcoa’s Global Primary Products Group. Mr. Ayers joined Alcoa in February 2010 as the Chief Operating
Officer of the Company’s Cast, Forged and Extruded Products businesses. From 1999 to 2008, Mr. Ayers held several executive
positions at Precision Castparts Corporation (PCC), a manufacturer of metal components and products. In 2006, he was
appointed PCC Executive Vice President and President of the PCC Forging Division. Mr. Ayers began his career at Pratt &
Whitney, the aircraft engine division of United Technologies Corporation.

Other Current Affiliations: Mr. Ayers has served as a director of privately-held Samuel, Son & Co., Limited since 2018.

Attributes and Skills: Mr. Ayers’ management and executive experience in the specialty materials industry, with a strong
focus on aerospace markets, offers valuable strategic and operational insights.

Board of Directors Following the Distribution

The following table sets forth information as of March 30, 2020 regarding those additional persons who are expected to

serve on Arconic Corporation’s Board of Directors following completion of the distribution and until their respective
successors are duly elected and qualified. Arconic Corporation’s amended and restated certificate of incorporation provides that
directors will be elected annually.

Name
Frederick “Fritz” A. Henderson
William F. Austen
Margaret “Peg” S. Billson
Austin G. Camporin
Jacques Croisetiere
Elmer L. Doty
Carol S. Eicher
E. Stanley O’Neal
Jeffrey Stafeil

Frederick “Fritz” A. Henderson

Age: 61

Position

Age
61
61
58
37
65
65
61
68
50

Chairman
Director
Director
Director
Director
Director
Director
Director
Director

Other Current Public Directorships: Adient plc; Horizon Global Corporation; Marriott International Inc.

Career Highlights and Qualifications: Mr. Henderson served as the Interim Chief Executive Officer of Adient plc from
June 2018 to September 2018. Previously, Mr. Henderson served as Chairman and Chief Executive Officer of Suncoke Energy,
Inc. from December 2010 to December 2017 and as Chairman and Chief Executive Officer of Suncoke Energy Partners GP
LLC from January 2013 to December 2017. Mr. Henderson served as Senior Vice President of Sunoco, Inc. from
September 2010 until the completion of Suncoke Energy, Inc.’s initial public offering and separation from Sunoco in July 2011.
Prior to joining the leadership of Suncoke and Sunoco, Mr. Henderson held a number of senior management positions at
General Motors from 1984 to 2009, including President and Chief Executive Officer from March 2009 to December 2009.

Other Current Affiliations: Mr. Henderson is a Trustee of the Alfred P. Sloan Foundation and a Principal at the Hawksbill
Group, a business advisory and consulting firm.

Previous Directorships: Mr. Henderson served as a director of Compuware Corporation.

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Attributes and Skills: Mr. Henderson has proven business acumen, having served as the chief executive officer for both a
large, publicly-traded global automotive company as well as a key supplier of manufactured product and energy to the steel
industry. His expertise in these industries and management experience brings valuable insight to the Board.

William F. Austen

Age: 61

Other Current Public Directorships: Tennant Company.

Career Highlights and Qualifications: Mr. Austen retired in June 2019 as the President, Chief Executive Officer and
member of the Board of Directors for Bemis Company, Inc., a global flexible packaging company, where he had served since
August 2014. From 2004 to August 2014, Mr. Austen served in various leadership roles at Bemis Company, including as
Executive Vice President and Chief Operating Officer, Group President and Vice President, Operations. Mr. Austen also served
as President and Chief Executive Officer of Morgan Adhesive Company from 2000 to 2004. From 1980 to 2000, Mr. Austen
held various positions with General Electric Company, culminating in General Manager of the Switch Gear Business.

Other Current Affiliations: Mr. Austen is a director of the SUNY Maritime Foundation, Inc.

Previous Directorships: Mr. Austen served as a director of Bemis Company, Inc.

Attributes and Skills: Mr. Austen brings a broad strategic perspective with experience in business strategy, mergers,
acquisitions and business integration. He is a talented leader in global manufacturing and operations and his experience will
assist Arconic Corporation in pursuing its strategic plans as an independent publicly-traded company.

Margaret “Peg” S. Billson

Age: 58

Other Current Public Directorships: CAE, Inc.

Career Highlights and Qualifications: Ms. Billson served as President and CEO of BBA Aviation, plc’s Global Engine
Services Division from 2013 to 2016. Ms. Billson joined BBA Aviation in 2009 as President of BBA Aviation Legacy Support.
During her seven-year tenure with BBA Aviation, Ms. Billson’s responsibilities included running a portfolio of internationally
based companies delivering new production, spare and repaired parts to the aviation industry. Prior to BBA Aviation,
Ms. Billson was the President/ General Manager of the Airplane Division and Chief Operation Officer of Eclipse Aviation.
Ms. Billson previously held a number of leadership roles at Honeywell International Inc., including as Vice President and
General Manager of Airframe Systems and Aircraft Landing Systems, and in various key leadership positions in engineering,
product support and program management at McDonnell Douglas Corporation. Ms. Billson has also served as a consultant for
the Gerson Lehman Group and for the Carlyle Group.

Other Current Affiliations: Ms. Billson serves on advisory boards for Global Aviation and Basin Holdings.

Previous Directorships: Ms. Billson served as a director of Skywest, Inc.

Attributes and Skills: Ms. Billson is a seasoned executive with 35 years of experience leading technology-rich multi-national
companies and organizations and also has direct experience with aviation applications. She brings a strong set of cross-
functional experiences and valuable perspective to the Board.

Austin G. Camporin

Age: 37

Career Highlights and Qualifications: Mr. Camporin is a Portfolio Manager at Elliott Management Corporation, a New
York-based investment fund with $40 billion in assets under management. He joined Elliott in 2009, focusing primarily upon
public equity and credit opportunities. Prior to joining Elliott, Mr. Camporin began his career at J.P. Morgan in 2004, first as a
high-yield credit analyst and then in 2007 moving to the proprietary trading group.

Other Current Affiliations: Mr. Camporin is a member of the board of directors of Acosta, Inc. and cxLoyalty Group
Holdings, co-president and founder of the Good Shepherd of Darien Foundation and co-founder of A Second Chance for Ziva
dog rescue.

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Attributes and Skills: Mr. Camporin’s experience in financial markets analyzing private and public companies, with a strong
focus on the rolled products and aluminum markets as well as the automotive sector, offers valuable industry-specific
knowledge to the Board.

Jacques Croisetiere

Age: 65

Career Highlights and Qualifications: Mr. Croisetiere was the Senior Executive Vice President and Chief Financial Officer
of Bacardi Limited from August 2009 until his retirement in December 2012. From 2007 until April 2009 he was Executive
Vice-President, Chief Financial Officer and Chief Strategy Officer of Rohm and Haas Company and had additional operating
responsibilities for the Salt and Powder Coatings businesses, as well as the Procurement, Corporate Business Development and
Strategic Planning groups. Mr. Croisetiere was elected Chief Financial Officer of Rohm and Haas in April 2003. Before that he
was Rohm and Haas’s European Region Director and responsible for the worldwide activities of its Ion Exchange Resins and
Inorganic and Specialty Solutions businesses.

Previous Directorships: Mr. Croisetiere served as a director at Versum Materials, Inc.

Attributes and Skills: Mr. Croisetiere brings to the Board significant operating and financial expertise with a deep
understanding of financial markets, corporate finance, accounting and controls, and investor relations. As a former Chief
Financial Officer and Chief Strategy Officer of multinational corporations, he has extensive experience in international
operations and strategy.

Elmer L. Doty

Age: 65

Career Highlights and Qualifications: Mr. Doty served as President and Chief Operating Officer of ParentCo from
February 2019 to August 2019. Previously, Mr. Doty was an Operating Executive at The Carlyle Group LP, a multinational
private equity, alternative asset management and financial services corporation, where he previously held a similar position in
2012. From December 2012 to February 2016, Mr. Doty was President and Chief Executive Officer of Accudyne Industries
LLC, a provider of precision-engineered flow control systems and industrial compressors. Mr. Doty also was the President and
Chief Executive Officer of Vought Aircraft Industries, Inc. from 2006 until its acquisition in 2010 by Triumph Group, a leader
in manufacturing and overhauling aerospace structures, systems and components. He then served as the President of Triumph
Aerostructures—Vought Aircraft Division. Prior to Vought, Mr. Doty was Executive Vice President and General Manager of the
Land Systems Division of United Defense Industries, Inc. (now BAE Systems). Earlier in his career, Mr. Doty held executive
positions at both General Electric Company and FMC Corporation.

Previous Directorships: Mr. Doty was a director of Vought Aircraft Industries, Inc. and Triumph Group, Inc.

Attributes and Skills: Building on his broad aerospace experience, including serving as a CEO and business executive with
several industry leaders, Mr. Doty has a deep knowledge of the aerospace and defense markets and strong relationships with
key customers. This experience enables him to make a valuable contribution to the Board’s considerations of investments and
other portfolio matters.

Carol S. Eicher

Age: 61

Other Current Public Directorships: Tennant Company; Advanced Emissions Solutions.

Career Highlights and Qualifications: Ms. Eicher’s career spans thirty years of manufacturing, commercial and executive
leadership in the chemicals industry. Ms. Eicher served as the President and Chief Executive Officer of Innocor, Inc. from
May 2014 to July 2017 and as a non-executive board chairman of Innocor, Inc. from August 2017 to April 2018. Prior to
Innocor, Inc., Ms. Eicher held various positions at The Dow Chemical Company, including Business President for Coatings and
Construction at Dow Chemical from 2009 to 2013, was an executive officer and business leader at Rohm and Haas Company
from 2000 to 2009, held various senior management positions with Ashland Chemical Company, a division of Ashland Inc.,
from 1992 to 1999, and held numerous manufacturing and technology leadership roles at E.I. DuPont de Nemours and
Company from 1979 to 1992.

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Other Current Affiliations: In addition to her public company board memberships, Ms. Eicher serves on the boards of
Aurora Plastics, Hexion Holdings Corporation and Opera Philadelphia. She also serves as Treasurer of the Board of Directors
of the Fairmount Park Conservancy and Secretary of the Board of Trustees of York College of Pennsylvania.

Previous Directorships: Ms. Eicher was a director of A Schulman Company.

Attributes and Skills: Ms. Eicher’s leadership experience at complex manufacturing companies brings to the Board proven
business acumen, management experience and industry expertise.

E. Stanley O’Neal

Age: 68

Other Current Public Directorships: Clearway Energy, Inc.; Element Solutions Inc. (formerly Platform Specialty Products
Corporation).

Career Highlights and Qualifications: Mr. O’Neal served as Chairman of the Board and Chief Executive Officer of Merrill
Lynch & Co., Inc. until October 2007. He became Chief Executive Officer of Merrill Lynch in 2002 and was elected Chairman
of the Board in 2003. Mr. O’Neal was employed with Merrill Lynch for 21 years, serving as President and Chief Operating
Officer from July 2001 to December 2002; President of U.S. Private Client from February 2000 to July 2001; Chief Financial
Officer from 1998 to 2000; and Executive Vice President and Co-head of Global Markets and Investment Banking from 1997
to 1998. Before joining Merrill Lynch, Mr. O’Neal was employed at General Motors Corporation where he held a number of
financial positions of increasing responsibility.

Previous Directorships: Mr. O’Neal was a director of General Motors Corporation from 2001 to 2006, chairman of the board
of Merrill Lynch & Co., Inc. from 2003 to 2007, and a director of American Beacon Advisors, Inc. (investment advisor
registered with the Securities and Exchange Commission) from 2009 to September 2012. In addition to his prior public
company board memberships, Mr. O’Neal previously served on the board of the Memorial Sloan-Kettering Cancer Center, and
was a member of the Council on Foreign Relations, the Center for Strategic and International Studies and the Economic Club
of New York.

Attributes and Skills: Mr. O’Neal’s extensive leadership, executive and investment banking experience and financial
expertise provide the Board with valuable insight and perspective.

Jeffrey Stafeil

Age: 50

Career Highlights and Qualifications: Mr. Stafeil has been Executive Vice President and Chief Financial Officer of Adient
plc, leading all of Adient’s financial activities including treasury, tax and audit as well as information technology, since
April 2016. Prior to Adient, Mr. Stafeil served as Executive Vice President and Chief Financial Officer at Visteon Corporation
from 2012 to March 2016 and has additionally held a series of domestic and international executive finance roles within the
automotive sector. Mr. Stafeil also held management positions at Booz Allen Hamilton, Peterson Consulting and Ernst &
Young.

Other Current Affiliations: Mr. Stafeil is a member of the board of trustees for the Autism Alliance of Michigan.

Previous Directorships: Mr. Stafeil was a director of Mentor Graphics and Metaldyne Performance Group, where he was
chairman of the audit committee.

Attributes and Skills: Over the course of his career, Mr. Stafeil has developed extensive operational leadership and financial
management experience within publicly-traded automotive supplier companies. His experience in the automotive industry and
his background in risk management through his board service is an important asset to Arconic Corporation.

Director Independence

Our Corporate Governance Guidelines will provide that the Board recognize that independence depends not only on
directors’ individual relationships, but also on the directors’ overall attitude. Providing objective, independent judgment will be
at the core of the Board’s oversight function. Under Arconic Corporation’s Director Independence Standards, which will
conform to the corporate governance listing standards of the NYSE, a director will not be considered “independent” unless the
Board affirmatively determines that the director has no material relationship with Arconic Corporation or any subsidiary in the
consolidated group. The Director Independence Standards will comprise a list of all categories of material relationships
affecting the determination of a director’s independence. Any relationship that falls below a threshold set forth in the Director

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Independence Standards, or is not otherwise listed in the Director Independence Standards, and is not required to be disclosed
under Item 404(a) of SEC Regulation S-K, will be deemed to be an immaterial relationship.

The Board is expected to affirmatively determine that all the directors are independent except Elmer L. Doty and Timothy

D. Myers. In the course of its determination regarding independence, the Board is expected not to find any material
relationships between Arconic Corporation and any of the directors, other than Elmer L. Doty’s past employment as President
and Chief Operating Officer of ParentCo and Timothy D. Myers’ employment as Chief Executive Officer of Arconic
Corporation.

Committees of the Board

There will be four standing committees of the Board. The Board is expected to adopt written charters for each committee,

which will be available on our website.

Each of the Audit, Compensation and Benefits, Finance and Governance and Nominating Committees are expected to be
composed solely of directors who have been determined by the Board of Directors to be independent in accordance with SEC
regulations, NYSE listing standards and the Company’s Director Independence Standards (including the heightened
independence standards for members of the Audit and Compensation and Benefits Committees).

As of March 30, 2020, the Board is comprised of Timothy D. Myers and Christopher L. Ayers. Mr. Ayers serves on the

Board's Audit Committee.

The following table sets forth the committees of the Board of Directors and the expected membership and chairpersons of

the committees as of the completion of the distribution:

William F. Austen*

Christopher L. Ayers*

Margaret “Peg” S. Billson*

Austin G. Camporin*

Jacques Croisetiere*

Elmer L. Doty

Carol S. Eicher*

Frederick “Fritz” A. Henderson*

Timothy D. Myers

E. Stanley O’Neal*

Jeffrey Stafeil*

______________________

Independent Director

Audit

✓

Chair

Compensation
and Benefits

Chair

✓

Finance

✓

Chair

✓

Governance
and
Nominating

✓

Chair

The following table sets forth the expected responsibilities of the committees of the Board:

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COMMITTEE

Audit Committee

• Oversees the integrity of the financial statements and internal controls, including review of the
scope and the results of the audits of the internal and independent auditors

RESPONSIBILITIES

• Appoints the independent auditors and evaluates their independence and performance

• Reviews the organization, performance and adequacy of the internal audit function

• Pre-approves all audit, audit-related, tax and other services to be provided by the independent
auditors

• Oversees Arconic Corporation’s compliance with legal, ethical and regulatory requirements

• Reviews employee retirement plan assets and liabilities

• Discusses with management and the auditors the policies with respect to risk assessment and risk
management, including major financial risk exposures

Each member of the Audit Committee is expected to be financially literate, and the Board of Directors is expected to

determine that at least one member qualifies as an “audit committee financial expert” under applicable SEC rules.

Compensation and
Benefits Committee

• Establishes the Chief Executive Officer’s compensation for Board ratification, based upon an
evaluation of performance in light of approved goals and objectives

• Reviews and approves the compensation of Arconic Corporation’s officers

• Oversees the implementation and administration of Arconic Corporation’s compensation and
benefits plans, including pension, savings, incentive compensation and equity-based plans

• Reviews and approves general compensation and benefit policies

• Approves the Compensation Discussion and Analysis for inclusion in the proxy statement

• Has the sole authority to retain and terminate a compensation consultant, as well as to approve the
consultant’s fees and other terms of engagement

The Compensation and Benefits Committee will be able to form and delegate its authority to subcommittees, including
subcommittees of management when appropriate. Executive officers will not determine the amount or form of executive or
director compensation, although the Chief Executive Officer will provide recommendations to the Compensation and Benefits
Committee regarding compensation changes and incentive compensation for executive officers other than himself or herself.
For more information on the responsibilities and activities of the committee, including its processes for determining executive
compensation, see the Part III, Item 11. Executive Compensation.

Finance Committee

Reviews and provides advice and counsel to the Board regarding Arconic Corporation’s:

• capital structure;

• financing transactions;

• capital expenditures and capital plan;

• acquisitions and divestitures;

• share repurchase and dividend programs;

• policies relating to interest rate, commodity and currency hedging; and

• employee retirement plan performance and funding.

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Governance and
Nominating
Committee

• Identifies individuals qualified to become Board members and recommends them to
the full Board for consideration, including evaluating all potential candidates, whether
initially recommended by management, other Board members or stockholders

• Reviews and makes recommendations to the Board regarding the appropriate structure
and operations of the Board and Board committees

• Makes recommendations to the Board regarding Board committee assignments

• Develops and annually reviews corporate governance guidelines for the Company, and
oversees other corporate governance matters

• Reviews related person transactions

• Oversees an annual performance review of the Board, Board committees and
individual director nominees

• Periodically reviews and makes recommendations to the Board regarding director
compensation

How We Make Pay Decisions and Assess Our Programs

During our fiscal year ended December 31, 2019, Arconic Corporation was not an independent company, and did not have

a compensation committee or any other committee serving a similar function. Decisions as to the compensation of those who
currently serve as our executive officers were made by ParentCo, as described in Part III, Item 11. Executive Compensation.

Corporate Governance

Corporate Governance Materials Available on Arconic Corporation’s Website

The following documents, as well as additional corporate governance information and materials, will be available on our

website at www.arconic.com/investors:

• Amended and Restated Certificate of Incorporation

• Amended and Restated Bylaws

• Board Confidentiality Policy

• Corporate Governance Guidelines

• Director Independence Standards

• Anti-Corruption Policy

• Business Conduct Policies

• Code of Ethics for the CEO, CFO and Other Financial Professionals

• Hiring Members (or Former Members) of Independent Public Auditors

• Human Rights Policy

•

Insider Trading Policy

• Political Contributions

• Related Person Transaction Approval Policy

In addition, the following documents will be available on our website at www.arconic.com/investors:

• Charters of each of our Board committees

Copies of these documents will also available in print form at no charge by sending a request to Arconic Corporation,

Corporate Secretary’s Office, 201 Isabella Street, Pittsburgh, PA 15212.

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The Arconic Corporation website and the information contained therein or connected thereto are not incorporated into
this Form 10-K or in any other filings with, or any information furnished or submitted to, the SEC.

Board Leadership Structure

Upon the completion of the separation, the Board’s leadership structure is expected to be comprised of a separate

Chairman of the Board and Chief Executive Officer; the Board is expected to conclude that the separation of the roles of
Chairman and Chief Executive Officer best serves the interests of stockholders and Arconic Corporation because it allows our
Chief Executive Officer to focus on operating and managing the Company, while our Chairman can focus on the leadership of
the Board. Thereafter, the Board will exercise its judgment under the circumstances at the time to evaluate the leadership
structure that the Board believes will provide effective leadership, oversight and direction, while optimizing the functioning of
both the Board and management and facilitating effective communication between the two.

Board, Committee and Director Evaluations

The Board of Directors will annually assess the effectiveness of the full Board, the operations of its committees and the

contributions of director nominees. The Governance and Nominating Committee will oversee the evaluation of the Board as a
whole and its committees, as well as individual evaluations of those directors who are being considered for possible re-
nomination to the Board.

Nominating Board Candidates—Procedures and Director Qualifications

Stockholder Recommendations for Director Nominees

Any stockholder wishing to recommend a candidate for director should submit the recommendation in writing to our
principal executive offices: Arconic Corporation, Governance and Nominating Committee, c/o Corporate Secretary’s Office,
201 Isabella Street, Pittsburgh, PA 15212. The written submission should comply with all requirements set forth in Arconic
Corporation’s amended and restated certificate of incorporation and amended and restated bylaws. The committee will consider
all candidates recommended by stockholders in compliance with the foregoing procedures and who satisfy the minimum
qualifications for director nominees and Board member attributes.

Stockholder Nominations

Arconic Corporation’s amended and restated certificate of incorporation and amended and restated bylaws will provide
that any stockholder entitled to vote at an annual meeting of stockholders may nominate one or more director candidates for
election at that annual meeting by following certain prescribed procedures. The stockholder must provide to Arconic
Corporation’s Corporate Secretary timely written notice of the stockholder’s intent to make such a nomination or nominations.
In order to be timely, the stockholder must provide such written notice not earlier than the 120th day and not later than the 90th
day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of
the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder
must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not
later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public
announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day
following the day on which public announcement of the date of such meeting is first made. The notice must contain all of the
information required in Arconic Corporation’s amended and restated certificate of incorporation and amended and restated
bylaws. Any such notice must be sent to our principal executive offices: Arconic Corporation, Corporate Secretary’s Office,
201 Isabella Street, Pittsburgh, PA 15212.

Minimum Qualifications for Director Nominees and Board Member Attributes

The Governance and Nominating Committee is expected to adopt the following Criteria for Identification, Evaluation and

Selection of Directors:

1. Directors must have demonstrated the highest ethical behavior and must be committed to Arconic Corporation’s

values.

2. Directors must be committed to seeking and balancing the legitimate long-term interests of all of Arconic

Corporation’s stockholders, as well as its other stakeholders, including its customers, employees and the communities
where Arconic Corporation has an impact. Directors must not be beholden primarily to any special interest group or
constituency.

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It is the objective of the Board that all non-management directors be independent. In addition, no director should have,
or appear to have, a conflict of interest that would impair that director’s ability to make decisions consistently in a fair
and balanced manner.

4. Directors must be independent in thought and judgment. They must each have the ability to speak out on difficult

subjects; to ask tough questions and demand accurate, honest answers; to constructively challenge management; and at
the same time, act as an effective member of the team, engendering by his or her attitude an atmosphere of collegiality
and trust.

5. Each director must have demonstrated excellence in his or her area and must be able to deal effectively with crises and

to provide advice and counsel to the Chief Executive Officer and his or her peers.

6. Directors should have proven business acumen, serving or having served as a chief executive officer, or other senior
leadership role, in a significant, complex organization; or serving or having served in a significant policy-making or
leadership position in a well-respected, nationally or internationally recognized educational institution, not-for-profit
organization or governmental entity; or having achieved a widely recognized position of leadership in the director’s
field of endeavor which adds substantial value to the oversight of material issues related to Arconic Corporation’s
business.

7. Directors must be committed to understanding Arconic Corporation and its industry; to regularly preparing for,

attending and actively participating in meetings of the Board and its committees; and to ensuring that existing and
future individual commitments will not materially interfere with the director’s obligations to Arconic Corporation. The
number of other board memberships, in light of the demands of a director nominee’s principal occupation, should be
considered, as well as travel demands for meeting attendance.

8. Directors must understand the legal responsibilities of board service and fiduciary obligations. All members of the
Board should be financially literate and have a sound understanding of business strategy, business environment,
corporate governance and board operations. At least one member of the Board must satisfy the requirements of an
“audit committee financial expert.”

9. Directors must be self-confident and willing and able to assume leadership and collaborative roles as needed. They

need to demonstrate maturity, valuing Board and team performance over individual performance and respect for others
and their views.

10. New director nominees should be able and committed to serve as a member of the Board for an extended period of

time.

11. While the diversity, the variety of experiences and viewpoints represented on the Board should always be considered,
a director nominee should not be chosen nor excluded solely or largely because of race, color, gender, national origin
or sexual orientation or identity. In selecting a director nominee, the committee will focus on any special skills,
expertise or background that would complement the existing Board, recognizing that Arconic Corporation’s businesses
and operations are diverse and global in nature.

12. Directors should have reputations, both personal and professional, consistent with Arconic Corporation’s image and

reputation.

Minimum Qualifications for Director Nominees and Board Member Attributes

The Governance and Nominating Committee will make a preliminary review of a prospective director candidate’s
background, career experience and qualifications based on available information or information provided by an independent
search firm, which will identify or provide an assessment of a candidate, or by a stockholder nominating or suggesting a
candidate. If a consensus is reached by the committee that a particular candidate would likely contribute positively to the
Board’s mix of skills and experiences, and a Board vacancy exists or is likely to occur, the candidate will be contacted to
confirm his or her interest and willingness to serve. The committee will conduct interviews and may invite other Board
members or senior Arconic Corporation executives to interview the candidate to assess the candidate’s overall qualifications.
The committee will consider the candidate against the criteria it has adopted in the context of the Board’s then current
composition and the needs of the Board and its committees.

At the conclusion of this process, the committee will report the results of its review to the full Board. The report will
include a recommendation as to whether the candidate should be nominated for election to the Board. This procedure will be
the same for all candidates, including director candidates identified by stockholders.

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The Governance and Nominating Committee may retain from time to time the services of a search firm that specializes in
identifying and evaluating director candidates. Services provided by the search firm may include identifying potential director
candidates meeting criteria established by the committee, verifying information about the prospective candidate’s credentials,
and obtaining a preliminary indication of interest and willingness to serve as a Board member.

The Board’s Role in Risk Oversight

The Board of Directors will be actively engaged in overseeing and reviewing Arconic Corporation’s strategic direction and

objectives, taking into account, among other considerations, Arconic Corporation’s risk profile and exposures. It will be
management’s responsibility to manage risk and bring to the Board’s attention the most material risks to Arconic Corporation.
The Board will have oversight responsibility of the processes established to report and monitor material risks applicable to
Arconic Corporation. The Board will annually review Arconic Corporation’s enterprise risk management and receive regular
updates on risk exposures.

The Board as a whole will have responsibility for risk oversight, including succession planning relating to the Chief
Executive Officer and risks relating to the competitive landscape, strategy, economic conditions, capital requirements, and
operations of Arconic Corporation. The committees of the Board will also oversee Arconic Corporation’s risk profile and
exposures relating to matters within the scope of their authority. The Board will regularly receive detailed reports from the
committees regarding risk oversight in their areas of responsibility.

The Audit Committee will regularly review treasury risks (including those relating to cash generation, liquidity,
insurance, credit, debt, interest rates and foreign currency exchange rates), financial accounting and reporting risks, legal and
compliance risks, pension asset and liability risks, and risks relating to information technology including cybersecurity, tax
matters, asset impairments, contingencies, and internal controls.

The Compensation and Benefits Committee will consider risks related to the attraction and retention of talent, and the

design of compensation programs and incentive arrangements.

The Finance Committee will review and provide advice to the Board regarding financial matters, including Arconic
Corporation’s capital structure, capital allocation, financial exposures, capital plan, significant transactions such as acquisitions
and divestitures, and the investment performance and funding of Arconic Corporation’s retirement plans, and the risks relating
to such matters.

The Governance and Nominating Committee will consider risks related to corporate governance, and oversee
succession planning for the Board of Directors, the structure and function of the Board, and the appropriate assignment of
directors to the Board committees for risk oversight and other areas of responsibilities.

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Communications with Directors and Business Conduct Policies and Code of Ethics

The Board of Directors will be committed to meaningful engagement with Arconic Corporation stockholders and will
welcome input and suggestions. Stockholders and other interested parties wishing to contact the Chairman will be able to do so
by sending a written communication to the attention of the Chairman c/o Arconic Corporation, Corporate Secretary’s Office,
201 Isabella Street, Pittsburgh, PA 15212. To communicate issues or complaints regarding questionable accounting, internal
accounting controls or auditing matters, stockholders will be able to send a written communication to the Audit Committee
c/o Arconic Corporation, Corporate Secretary’s Office, 201 Isabella Street, Pittsburgh, PA 15212. Alternatively, you will be
able to place an anonymous, confidential, toll free call in the United States to Arconic Corporation’s Integrity Line at (844)
916-1280. For a listing of Integrity Line telephone numbers outside the United States, you will be able to go to our website at
www.arconic.com.

Communications addressed to the Board or to a Board member will be distributed to the Board or to any individual

director or directors as appropriate, depending upon the facts and circumstances outlined in the communication.

The Board of Directors is expected to ask the Corporate Secretary’s Office to submit to the Board all communications

received, excluding only those items that are not related to Board duties and responsibilities, such as junk mail and mass
mailings; product complaints and product inquiries; new product or technology suggestions; job inquiries and resumes;
advertisements or solicitations; and surveys.

Arconic Corporation’s Business Conduct Policies will apply equally to the directors and to all officers and employees of
Arconic Corporation, as well as those of our controlled subsidiaries, affiliates and joint ventures. The directors and employees
in positions to make discretionary decisions will be surveyed annually regarding their compliance with the policies.

Arconic Corporation will also have a Code of Ethics applicable to the CEO, CFO and other financial professionals,
including the principal accounting officer, and those subject to it will be surveyed annually for compliance with it. Only the

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Audit Committee will be able to amend or grant waivers from the provisions of Arconic Corporation’s Code of Ethics, and any
such amendments or waivers will be posted promptly at www.arconic.com/investors.

Procedures for Approval of Related Persons Transactions

Arconic Corporation will have a written Related Person Transaction Approval Policy regarding the review, approval and

ratification of transactions between Arconic Corporation and related persons. The policy will apply to any transaction in which
Arconic Corporation or an Arconic Corporation subsidiary is a participant, the amount involved exceeds $120,000 and a related
person has a direct or indirect material interest. A related person will mean any director or executive officer of Arconic
Corporation, any nominee for director, any stockholder known to Arconic Corporation to be the beneficial owner of more than
5% of any class of Arconic Corporation’s voting securities, and any immediate family member of any such person.

Under this policy, reviews will be conducted by management to determine which transactions or relationships should be
referred to the Governance and Nominating Committee for consideration. The Governance and Nominating Committee will
then review the material facts and circumstances regarding a transaction and determine whether to approve, ratify, revise or
reject a related person transaction, or to refer it to the full Board or another committee of the Board for consideration. Arconic
Corporation’s Related Person Transaction Approval Policy will operate in conjunction with other aspects of Arconic
Corporation’s compliance program, including its Business Conduct Policies, which will require that all directors, officers and
employees have a duty to be free from the influence of any conflict of interest when they represent Arconic Corporation in
negotiations or make recommendations with respect to dealings with third parties, or otherwise carry out their duties with
respect to Arconic Corporation.

The Board is expected to consider the following types of potential related person transactions and pre-approve them under

Arconic Corporation’s Related Person Transaction Approval Policy as not presenting material conflicts of interest:

(i) employment of Arconic Corporation executive officers (except employment of an Arconic Corporation executive

officer that is an immediate family member of another Arconic Corporation executive officer, director, or nominee for
director) as long as the Compensation and Benefits Committee has approved the executive officers’ compensation;

(ii) director compensation that the Board has approved;

(iii) any transaction with another entity in which the aggregate amount involved does not exceed the greater of $1,000,000

or 2% of the other entity’s total annual revenues, if a related person’s interest arises only from:

(a) such person’s position as an employee or executive officer of the other entity; or

(b) such person’s position as a director of the other entity; or

interest in the aggregate in the other entity (other than a partnership); or

(d) both such position as a director and ownership as described in (b) and (c) above; or

(e) such person’s position as a limited partner in a partnership in which the person, together with his or her

immediate family members, have an interest of less than 10%;

(iv) charitable contributions in which a related person’s only relationship is as an employee (other than an executive

officer), or a director or trustee, if the aggregate amount involved does not exceed the greater of $250,000 or 2% of the
charitable organization’s total annual receipts;

(v) transactions, such as the receipt of dividends, in which all stockholders receive proportional benefits;

(vi) transactions involving competitive bids;

(vii) transactions involving the rendering of services as a common or contract carrier, or public utility, at rates or charges

fixed in conformity with law or governmental authority; and

(viii) transactions with a related person involving services as a bank depositary of funds, transfer agent, registrar, trustee

under a trust indenture, or similar services.

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Item 11. Executive Compensation.

Compensation Discussion and Analysis

Introduction

As discussed above, Arconic Corporation is currently part of ParentCo and not an independent company, and its

compensation committee has not yet been formed. This Compensation Discussion and Analysis describes the historical
compensation practices of ParentCo and outlines certain aspects of Arconic Corporation’s anticipated compensation structure
for its executive officers following the separation. After the separation, Arconic Corporation’s executive compensation
programs, policies, and practices for its executive officers will be subject to the review and approval of Arconic Corporation’s
Compensation and Benefits Committee.

The individuals who have been selected prior to March 30, 2020 to serve as Arconic Corporation’s executive officers are

listed below.

1. Timothy D. Myers was appointed as Arconic Corporation’s President on February 11, 2020 and will serve as Chief

Executive Officer following separation.

2. Erick R. Asmussen was appointed as Arconic Corporation's Executive Vice President and Chief Financial Officer and

is expected to serve in this position following separation.

3. Melissa M. Miller is expected to serve as Executive Vice President and Chief Human Resources Officer of Arconic

Corporation commencing upon the separation.

4. Diana C. Toman is expected to serve as Executive Vice President, Chief Legal Officer and Secretary of Arconic

Corporation commencing upon the separation.

5. Mark J. Vrablec is expected to serve as Executive Vice President and Chief Commercial Officer of Arconic

Corporation commencing upon the separation.

6. Mary E. Zik was appointed as Arconic Corporation’s Vice President and Controller, on February 11, 2020 and is

expected to serve in this position following separation.

Of this group of executive officers, only Mr. Myers was a “named executive officer” (a term that refers to the group of
executive officers including the principal executive officer, principal financial officer and three other most highly compensated
executive officers) of the Arconic Corporation Businesses in 2019. In 2020, Mr. Myers and Mr. Asmussen will each be named
executive officers of Arconic Corporation by virtue of their positions. The remaining named executive officers of Arconic
Corporation for 2020 will be determined at a future date in accordance with applicable SEC rules.

Key Compensation Practices

ParentCo is committed to executive compensation practices that drive performance, mitigate risk and align the interests of

its leadership team with the interests of its stockholders. Below is a summary of ParentCo’s best practices in 2019.

What ParentCo Does

1. Pay for Performance: ParentCo links compensation to measured performance in key areas. ParentCo’s strategic

priorities are reflected in its metrics at the corporate, group and individual levels.

2. Cancellation of Unvested Equity Awards Upon Termination of Employment: Unvested ParentCo equity awards
are generally forfeited upon termination of employment, other than in connection with disability, death or change in
control, or if retirement-eligible.

3. Robust Stock Ownership Guidelines: ParentCo officers and directors are subject to stock ownership guidelines to

align their interests with stockholder interests.

4. Double-Trigger Change in Control Provisions: ParentCo equity awards for ParentCo named executive officers
generally require a “double-trigger” of both a change in control and termination of employment for vesting
acceleration benefits to apply.

5. Active Engagement with Investors: ParentCo engages with investors throughout the year to obtain insights that

guide ParentCo’s executive compensation programs.

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6. Independent Compensation Consultant: The ParentCo Compensation and Benefits Committee retains a

compensation consultant, who is independent and without conflicts of interest with ParentCo.

7. Conservative Risk Profile: ParentCo generally applies varied performance measures in incentive programs to

mitigate risk that executives will be motivated to pursue results with respect to any one performance measure to the
detriment of ParentCo as a whole.

8. Claw-Back Policy: Both ParentCo’s annual cash incentive compensation plan and its stock incentive plan contain
“claw-back” provisions providing for reimbursement of incentive compensation from ParentCo named executive
officers in certain circumstances.

What ParentCo Does Not Do

1. No Guaranteed Bonuses: ParentCo’s annual incentive compensation plan is performance-based and does not include

any minimum payment levels.

2. No Parachute Tax Gross-Ups: ParentCo’s Change in Control Severance Plan provides that no excise or other tax

gross-ups will be paid.

3. No Short Sales, Derivative Transactions or Hedging: ParentCo does not allow short sales or derivative or

speculative transactions in, or hedging of, ParentCo securities by its directors, officers or employees. Directors and
certain officers are also prohibited from pledging ParentCo securities as collateral.

4. No Dividends on Unvested Equity Awards: ParentCo does not pay dividends on unvested equity awards but accrues

dividend equivalents that only vest when and if the award vests.

5. No Share Recycling or Option Repricing: ParentCo equity plans prohibit share recycling, the adding back of shares

tendered in payment of the exercise price of a stock option award or withheld to pay taxes, and repricing underwater
stock options.

6. No Significant Perquisites: ParentCo limits the perquisites it pays to its named executive officers to those that serve

reasonable business purposes.

Compensation Philosophy and Design

ParentCo’s executive compensation philosophy to provide pay for performance and stockholder alignment underlies its

2019 compensation structure, which is designed based on four guiding principles. We expect that these principles will initially
guide Arconic Corporation’s executive compensation structure following the separation.

1. Make equity long-term incentive (“LTI”) compensation the most significant portion of total compensation for senior

executives and managers.

2. Choose annual incentive compensation (“IC”) metrics and LTI metrics that focus management’s actions on achieving
the greatest positive impact on ParentCo’s financial performance and that include a means to assess and motivate
performance relative to peers.

3. Set annual IC and LTI targets that challenge management to achieve continuous improvement in performance and

deliver long-term growth.

4. Target total compensation at median of market, while using annual IC and LTI compensation to motivate performance

and to attract and retain exceptional talent.

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ParentCo’s 2019 Executive Compensation Design Relies on a Diversified Mix of Pay Elements

Compensation Type

Guiding Principle

Base Salary

Short-Term Annual Incentive
Compensation

Target total direct compensation, including salary, at median of market to provide
competitive pay

Choose annual IC weighted metrics that focus management’s actions on achieving
greatest positive impact on ParentCo’s financial performance and that include a
means to assess and motivate performance relative to peers

Long-Term Incentive Compensation

Set annual IC targets that challenge management to achieve continuous
improvement as part of an overall strategy to deliver long-term growth
Take into account individual performance that may include non-financial
measures of the success of ParentCo

Make LTI equity the most significant portion of total compensation for senior
executives and managers

Set LTI target grant levels in line with median among industry peers that are
competitive to attract, retain and motivate executives and factor in individual
performance and future potential for long-term retention

In prior years, ParentCo has granted a portion of each ParentCo named executive
officer’s LTI awards as performance-based restricted share units, choosing
performance metrics that focus management’s actions on achieving the greatest
positive impact on ParentCo’s financial performance and that include a means to
assess and motivate performance relative to peers and setting targets that
challenge management to achieve continuous improvement in performance and
deliver long-term growth. However, in anticipation of the separation and given the
difficulty of continuing to measure multi-year performance goals after the
separation, 100% of the full value LTI awards granted to ParentCo named
executive officers in 2019 (other than the ParentCo chief executive officer, who
received certain performance-based restricted share units in connection with the
extension of his employment agreement) are in the form of time-based vesting
restricted share units.

Executive Compensation Decision-Making Process in 2019

Included below is a description of the ParentCo Compensation and Benefits Committee’s executive compensation

decision-making process in 2019. We expect that the Arconic Corporation Compensation and Benefits Committee will initially
follow a similar process following the separation.

Use of Independent Compensation Consultant

The ParentCo Compensation and Benefits Committee has authority under its charter to retain its own advisors, including

compensation consultants. In 2019, the ParentCo Compensation and Benefits Committee directly retained Pay Governance
LLC, which is independent and without conflicts of interest with ParentCo. Pay Governance provided advice, as requested by
the ParentCo Compensation and Benefits Committee, on the amount and form of certain executive compensation components,
including, among other things, executive compensation best practices, insights concerning SEC and say-on-pay policies,
analysis and review of ParentCo’s compensation plans for executives and advice on setting the ParentCo chief executive
officer’s compensation. ParentCo uses survey data from Willis Towers Watson to help evaluate whether ParentCo’s
compensation programs are competitive with the market. This data is not customized based on parameters developed by Willis
Towers Watson. Willis Towers Watson does not provide any advice or recommendations to the ParentCo Compensation and
Benefits Committee on the amount or form of executive or director compensation.

Use of Peer Groups and Tally Sheets

The ParentCo Compensation and Benefits Committee generally uses peer group data to determine the target compensation

levels of ParentCo’s named executive officers. ParentCo aims, subject to certain exceptions, to set target annual direct
compensation of each of its named executive officers at the median of the applicable peer group. In making annual
compensation decisions, the ParentCo Compensation and Benefits Committee also reviews tally sheets that summarize various
elements of historic and current compensation for each ParentCo named executive officer. This information includes
compensation opportunity, actual compensation realized, and wealth accumulation. ParentCo has found that the tally sheets
help to synthesize the various components of ParentCo’s compensation programs in making decisions.

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In anticipation of the separation, the ParentCo Compensation and Benefits Committee has approved an initial chief
executive officer compensation peer group for Arconic Corporation consisting of the following companies from the capital
goods and auto parts industries with median 2018 revenue of $7.2 billion.

Alcoa Corp.

U.S. Steel

Reliance Steel & Aluminum

AK Steel Holding

Commercial Metals

Allegheny Technologies

Olin Corp.

The Chemours Co.

Ball Corp.

Spirit AeroSystems

TransDigm Group

Triumph Group

Oshkosh

Terex Corp.

AGCO Corp.

Stanley Black & Decker

Dover Corp.

Flowserve Corp.

The ParentCo Compensation and Benefits Committee has also approved an initial compensation peer group for named

executive officers of Arconic Corporation other than the chief executive officer of the companies listed below, which are
heavily weighted towards industrials with revenues between $3 billion and $15 billion.

Harris

L3 Technologies

Rockwell Collins

SAIC

Spirit AeroSystems

Textron

Triumph Group

AMETEK

General Cable

TE Connectivity

Ameren

AVANGRID

CMS Energy

Eversource Energy

Air Products and Chemicals

Axalta Coating Systems

PPL

UGI

Chemours Company

Eastman Chemical

Ecolab

Mosaic

Praxair

Westlake Chemical

EMCOR Group

Jacobs Engineering

Vistra Energy

WEC Energy Group

Williams Companies

Ball

Crown Holdings

Fortive Corporation

Goodyear Tire & Rubber

Greif

Fortune Brands Home & Security

Ingersoll Rand

Worthington Industries

Xylem

CSX

Norfolk Southern

Agilent Technologies

Boston Scientific

Zimmer Biomet

Alcoa

Allegheny Technologies

Commercial Metals

Newmont Mining

Peabody Energy

United States Steel

CVR Energy

DCP Midstream

EnLink Midstream

Occidental Petroleum

ONEOK

BorgWarner

Cooper Standard Automotive

Masco

Newell Brands

Polaris Industries

Sonoco Products

Avery Dennison

Berry Plastics

Clorox

PVH Corp.

Owens Corning

Parker Hannifin

Rockwell Automation

Dana

Snap-on Inc.

Stanley Black & Decker

Terex

Timken

Vulcan Materials

Harley-Davidson

Oshkosh

Tenneco

Trinity Industries

It is intended that the data from these peer groups will be considered in establishing executive compensation targets and to

ensure that Arconic Corporation provides and maintains compensation levels in line with the market, including similar
companies, and to attract, retain and motivate employees.

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Compensation Risk Profile

ParentCo evaluates the risk profile of its compensation programs when establishing policies and approving plan design.
These evaluations have noted numerous factors that effectively manage or mitigate compensation risk, including the following:

1. A balance of corporate and business unit weighting in incentive compensation programs;

2. A balanced mix between short-term and long-term incentives;

3. Caps on incentives;

4. Use of multiple performance measures in the annual cash incentive compensation plan and the equity LTI plan;

5. Discretion retained by the ParentCo Compensation and Benefits Committee to adjust awards;

6. Stock ownership guidelines requiring holding substantial equity in ParentCo until retirement;

7. Claw-back policies applicable to all forms of incentive compensation;

8. Anti-hedging provisions in ParentCo’s Insider Trading Policy; and

9. Restricting stock options to 20% of the value of equity awards to senior officers.

In addition, (i) no business unit has a compensation structure significantly different from that of other units or that deviates

significantly from ParentCo’s overall risk and reward structure; (ii) unlike financial institutions involved in the financial crisis,
where leverage exceeded capital by many multiples, ParentCo has a conservative leverage policy; and (iii) compensation
incentives are not based on the results of speculative trading. In 1994, the ParentCo Board of Directors adopted resolutions
creating the Strategic Risk Management Committee with oversight of hedging and derivative risks and a mandate to use such
instruments to manage risk and not for speculative purposes. As a result of these evaluations, ParentCo has determined that it is
not reasonably likely that risks arising from its compensation and benefit plans would have a material adverse effect on
ParentCo.

Tax Deductibility and our Incentive Compensation Plans

Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, restricts deductibility for
federal income tax purposes of annual individual compensation in excess of $1 million paid to covered executive officers. Prior
to the enactment of the Tax Cuts and Jobs Act of 2017, Section 162(m)’s deductibility limitation was subject to an exception for
compensation that meets the requirements of “qualified performance-based compensation.” However, effective for tax years
beginning after 2017, this exception has been eliminated, subject to limited transition relief that applies to certain written
binding contracts which were in effect on November 2, 2017. Accordingly, for 2018 and later years, compensation in excess of
$1 million paid to ParentCo’s named executive officers generally will not be deductible and no assurances can be given that
compensation payable under certain of ParentCo’s compensation programs which were intended to qualify for the performance-
based exception will in fact be deductible.

As a general matter, while the ParentCo Compensation and Benefits Committee considers tax deductibility as one of

several relevant factors in determining executive compensation, it retains the flexibility to approve compensation that is not
deductible by ParentCo for federal income tax purposes. Further, the ParentCo Compensation and Benefits Committee believes
that a significant portion of the ParentCo’s named executive officer compensation should continue to be tied to ParentCo’s
performance, notwithstanding the elimination of the qualified performance-based compensation exception under
Section 162(m).

Arconic Corporation Executive Compensation Program

We expect that the Arconic Corporation Compensation and Benefits Committee will annually review the compensation of

the Arconic Corporation executive officers. The Arconic Corporation Compensation and Benefits Committee will use its
business judgment and may take into account numerous factors in determining the compensation of Arconic Corporation
executive officers, including:

1. Market positioning based on peer group data;

Individual, group, and corporate performance;

3. Complexity and importance of the role and responsibilities;

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4. Aggressiveness of targets;

5. Contributions that positively impact Arconic Corporation’s future performance;

6. Unanticipated events impacting target achievement;

7. Retention of key individuals in a competitive talent market; and

8. Leadership and growth potential.

Base Salary

The table below sets forth the annual base salary expected to be in effect for each Arconic Corporation named executive

officer as of the separation.

Arconic Corporation Named Executive Officer
Timothy D. Myers, Chief Executive Officer

Annual Cash Incentive Compensation

Base Salary

850,000

Arconic Corporation is expected to establish an annual cash incentive program, which, similar to that of ParentCo, will be

designed to reward the achievement of operational and financial performance goals established by the Arconic Corporation
Compensation and Benefits Committee. Each Arconic Corporation named executive officer will be assigned an annual
incentive compensation opportunity expressed as a percentage of base salary. The table below sets forth the annual incentive
compensation opportunity expected to be in effect for each Arconic Corporation named executive officer as of the separation.

Arconic Corporation Named Executive Officer

Annual Incentive Compensation Opportunity

Timothy D. Myers, Chief Executive Officer

125% of base salary

To encourage Arconic Corporation named executive officers to focus on achievement of annual operational and financial
performance, annual incentive compensation awards for 2020 are expected to be based on Arconic Corporation’s performance
with respect to specified measures and an individual performance evaluation, each as determined by the Arconic Corporation
Compensation and Benefits Committee.

Performance targets are expected to be established by the Arconic Corporation Compensation and Benefits Committee in

the first quarter of each year (or, in the case of 2020, by the ParentCo Compensation and Benefits Committee) and will be
based on expected performance in accordance with Arconic Corporation’s approved business plan for the year. The components
and weightings of the performance measures will be reviewed and determined annually by the Arconic Corporation
Compensation and Benefits Committee to reflect Arconic Corporation strategy. The Arconic Corporation Compensation and
Benefits Committee may also consider an evaluation of the individual performance for each executive officer and may adjust
the formulaic bonus calculation based on its evaluation. The performance goals and relative weightings are expected to reflect
the Arconic Corporation Compensation and Benefits Committee’s objective of ensuring that a substantial amount of each
Arconic Corporation named executive officer’s total compensation is tied to applicable overall performance.

In 2019, Mr. Myers participated in ParentCo’s annual cash incentive compensation program, with a target bonus
opportunity equal to 100% of his base salary. The actual bonus payable to Mr. Myers in respect of 2019 is $861,500,
representing a payout level of 150% of target based on the actual level of achievement of business performance goals relating
to Adjusted Operating Income and Controllable Free Cash Flow and Mr. Myers’ individual performance, each as determined by
the ParentCo Compensation and Benefits Committee.

Annual LTI Awards

We expect that Arconic Corporation’s long-term equity incentive plan will be designed to retain key executives and align

the interests of its executives with the achievement of sustainable long-term growth and performance. For 2020, annual LTI
awards for the Arconic Corporation named executive officers will be approved by the ParentCo Compensation and Benefits
Committee prior to the separation. Such awards will initially be denominated by reference to ParentCo shares but will convert
upon the separation into awards denominated by reference to Arconic Corporation shares. The 2020 LTI awards will be a
mixture of time-based and performance-based awards, as described in the table below. It is expected that 2020 performance-
based restricted share units granted to Arconic Corporation named executive officers will have performance-based vesting

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conditions measured over a three-year performance period based on Arconic Corporation’s revenue, EBITDA margin, and
return on net assets, with TSR multiplier based on Arconic Corporation’s TSR percentile ranking relative to its peer group.

Arconic Corporation Named
Executive Officer

Grant Date Value of
2020 Time-Based
Annual LTI Award

Grant Date Value of
2020 Performance-Based
Annual LTI Award
(at Target)

Timothy D. Myers, Chief Executive Officer

1,720,000 (1)

2,580,000 (2)

______________________

(1)

(2)

Consists of restricted share units vesting in equal annual installments over three years.

Consists of performance-based restricted share units vesting over a three-year performance period as described above.

In 2019, Mr. Myers received an annual ParentCo equity award consisting entirely of RSUs with a target grant date value of

$1,200,000. The RSUs cliff vest on the third anniversary of the grant date. The award of performance-based RSUs previously
granted to Mr. Myers in respect of the performance period 2017-2019 was earned at 78.3% of target based on the actual level of
achievement of the applicable performance goals relating to revenue, EBITDA margin, and return on net assets and the
application of the TSR modifier.

In light of the separation, the ParentCo Compensation and Benefits Committee shortened the performance period for the

performance-based RSUs previously granted to Mr. Myers in 2018 from three years (covering 2018-2020) to two years
(covering 2018-2019). This award was earned at 97.5% of target based on the actual level of achievement of the applicable
performance goals relating to revenue, EBITDA margin, and return on assets and the application of the TSR modifier, but
remains subject to the original service-based vesting requirements.

Certain Executive Compensation Policies

Included below is a description of certain executive compensation policies that applied to ParentCo named executive

officers in 2019. We expect that Arconic Corporation named executive officers will initially be subject to the same policies.

Compliance with Stock Ownership Guidelines

ParentCo’s stock ownership requirements further align the interests of management with those of its stockholders by
requiring executives to hold substantial equity in ParentCo until retirement. ParentCo’s stock ownership guidelines require that
the ParentCo chief executive officer retain equity equal in value to six times his base salary and that each of the other
continuing ParentCo named executive officers retain equity equal in value to three times salary. Unlike many of its peers,
ParentCo does not count any unvested or unexercised options, restricted share units, performance-based restricted share units or
any stock appreciation rights towards compliance. Its guidelines reinforce management’s focus on long-term stockholder value
and commitment to ParentCo. Until the stock ownership requirements are met, each named executive officer is required to
retain until retirement 50% of shares acquired upon vesting of restricted share units (including performance-based restricted
shares units) or upon exercise of stock options, after deducting shares used to pay for the option exercise price and taxes.

No Short Sales, Derivative or Speculative Transactions, Hedging, or Pledging of ParentCo Securities

Short sales of ParentCo securities (a sale of securities which are not then owned) and derivative or speculative transactions
in ParentCo securities by our directors, officers and employees are prohibited. No director, officer or employee or any designee
of such director, officer or employee is permitted to purchase or use financial instruments (including prepaid variable forward
contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of
ParentCo securities. Directors and officers subject to Section 16 of the Exchange Act are prohibited from holding ParentCo
securities in margin accounts, pledging ParentCo securities as collateral, or maintaining an automatic rebalance feature in
savings plans, deferred compensation plans or deferred fee plans.

Arconic Corporation Compensation Plans and Agreements

Overview

In connection with the separation, Arconic Corporation generally expects to adopt compensation and benefit plans,

including deferred compensation, retirement plans and supplemental retirement plans, that are similar to those in effect at
Arconic Corporation before the separation. It is expected that Arconic Corporation will also adopt an annual bonus plan,

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executive severance plan, and change in control severance plan, each as described below, and an equity-based compensation
plan.

Offer Letters with Arconic Corporation Named Executive Officers

Employment Letter Agreement with Chief Executive Officer. ParentCo entered into an employment letter agreement on

January 13, 2020 with Mr. Myers, in connection with his appointment as the Chief Executive Officer of Arconic Corporation
effective upon the separation. The effectiveness of the letter agreement is contingent upon the occurrence of the separation no
later than July 31, 2020 (as such date may be extended by mutual agreement of Mr. Myers and ParentCo).

The letter agreement provides for an annual compensation package consisting of a base salary of $850,000, a target annual

bonus award of 125% of base salary, and eligibility for annual equity compensation awards. Pursuant to the letter agreement,
Mr. Myers’ 2020 annual equity award grants will consist of (i) a restricted share unit award with a grant date value of
$1,720,000, which will vest on the third anniversary of the grant date, subject to Mr. Myers’ continued employment through
such date, and (ii) a performance-based restricted share unit award with a grant date value (at target) of $2,580,000, which will
be subject to performance goals applicable to Arconic Corporation, as well as Mr. Myers’ continued employment through the
third anniversary of the grant date. The letter agreement also provides for certain relocation benefits in connection with
Mr. Myers’ required relocation to the Pittsburgh, Pennsylvania metropolitan area no later than September 30, 2020.

Pursuant to the letter agreement, Mr. Myers will be designated as a Tier I participant in our Executive Severance Plan and

the Change in Control Severance Plan.

Concurrently with signing the employment letter agreement, Mr. Myers agreed to execute a confidentiality, developments,
non-competition and non-solicitation agreement with ParentCo, which includes, among other things, a perpetual confidentiality
covenant and one-year post-termination non-competition and employee and customer non-solicitation covenants.

The employment letter agreement and confidentiality, developments, non-competition and non-solicitation agreement with

Mr. Myers will be assigned to Arconic Corporation effective upon the separation.

Employment Letter Agreement with Chief Financial Officer. ParentCo entered into an employment letter agreement on

January 29, 2020 with Mr. Asmussen, in connection with his appointment as Executive Vice President and Chief Financial
Officer of Arconic Corporation effective upon the separation. Mr. Asmussen was elected to serve as Executive Vice President
and Chief Financial Officer of Arconic Corporation on February 11, 2020.

The letter agreement provides for an annual compensation package consisting of a base salary of $530,000, a target annual
bonus award of 85% of base salary, and eligibility for annual equity compensation awards. Pursuant to the letter agreement, Mr.
Asmussen’s 2020 annual equity award grants will consist of (i) a restricted share unit award with a grant date value of
$380,000, which will vest on the third anniversary of the grant date, subject to Mr. Asmussen’s continued employment through
such date and (ii) a performance-based restricted share unit award with a grant date value (at target) of $570,000, which will be
subject to performance goals applicable to Arconic Corporation, as well as Mr. Asmussen’s continued employment through the
third anniversary of the grant date. The letter agreement also provides for certain relocation benefits in connection with Mr.
Asmussen’s required relocation to the Pittsburgh, Pennsylvania metropolitan area no later than September 30, 2020.

Pursuant to the letter agreement, Mr. Asmussen will be designated as a Tier II participant in our Executive Severance Plan
and the Change in Control Severance Plan. In the event the separation has not occurred by July 31, 2020, either Mr. Asmussen
or ParentCo may terminate Mr. Asmussen’s employment without notice at any time during the 30-day period commencing on
August 1, 2020, in which case he will receive a severance payment equal to the sum of his annual base salary and target bonus
in lieu of benefits under a severance plan.

Concurrently with signing the employment letter agreement, Mr. Asmussen agreed to execute a confidentiality,

developments, non-competition and non-solicitation agreement with ParentCo, which includes, among other things, a perpetual
confidentiality covenant and one-year post-termination non-competition and employee and customer non-solicitation
covenants.

The employment letter agreement and confidentiality, developments, non-competition and non-solicitation agreement with

Mr. Asmussen will be assigned to Arconic Corporation effective upon the separation.

Arconic Corporation Annual Bonus Plan

Arconic Corporation maintains the Arconic Corporation 2020 Annual Cash Incentive Plan (the “Cash Incentive Plan”).
The first performance period under the Cash Incentive Plan commenced on January 1, 2020 and the Cash Incentive Plan will

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remain in effect for successive fiscal years until terminated by the Arconic Corporation Compensation and Benefits Committee
in its sole discretion.

Pursuant to the Cash Incentive Plan, each Arconic Corporation named executive officer will be eligible for a discretionary
annual cash incentive award payable based on the achievement of pre-established performance goals determined by the Arconic
Corporation Compensation and Benefits Committee, including company and/or individual performance goals. in each case,
based on one or more performance measures specified in the Cash Incentive Plan.

Payment of annual cash incentive awards under the Cash Incentive Plan is generally contingent on the named executive
officer’s continued employment with Arconic Corporation through the applicable payment date, subject to certain exceptions,
including that the named executive officer will remain eligible for an award under the Cash Incentive Plan following an
involuntary termination of employment that occurs after the officer has been employed by Arconic Corporation for a
continuous period of not less than six months in a plan year.

Arconic Corporation Executive Severance Plan

It is expected that Arconic Corporation will adopt an Arconic Corporation Executive Severance Plan, and that all of the
Arconic Corporation named executive officers will be eligible to participate in the Arconic Corporation Executive Severance
Plan. The plan will provide that, upon a termination of employment without cause and subject to execution and non-revocation
of a general release of legal claims against Arconic Corporation, the applicable named executive officer will receive a cash
severance payment equal to one year of base salary and one year of target annual cash incentive (one and one half years for the
Arconic Corporation chief executive officer), continued health care benefits for a twelve-month period (eighteen months for the
Arconic Corporation chief executive officer), and twelve additional months (eighteen months for the Arconic Corporation chief
executive officer) of retirement plan accrual calculated as described in the plan.

Arconic Corporation Change in Control Severance Plan

It is expected that Arconic Corporation will adopt an Arconic Corporation Change in Control Severance Plan, and that all

of the Arconic Corporation named executive officers will be eligible to participate in the Arconic Corporation Change in
Control Severance Plan. The plan will be designed to serve stockholders by assuring that Arconic Corporation will have the
continued dedication of the covered executives, notwithstanding the possibility, threat or occurrence of a change in control. The
protections provided by the plan will be intended to encourage the executives to provide their full attention and dedication to
Arconic Corporation in the event of any threatened or pending change in control, which can result in significant distraction by
virtue of the personal uncertainties and risks that executives frequently face under such circumstances. Severance benefits
under the Change in Control Severance Plan will be provided upon a termination of employment without cause or resignation
by the executive for good reason, in either case within two years after a change in control of Arconic Corporation.

Upon a qualifying termination, the severance benefits under the Change in Control Severance Plan will include: (i) a cash

payment equal to two times annual salary plus target annual cash incentive compensation (two and one half times for the
Arconic Corporation chief executive officer), (ii) a cash payment equal to the target annual cash incentive compensation
amount prorated through the severance date, (iii) continuation of health care benefits for two years (or thirty months for the
Arconic Corporation chief executive officer), (iv) two additional years of applicable pension credit and company savings plan
contributions, and (v) six months of outplacement benefits. There will be no excise tax gross-up provision under the plan.

2019 Summary Compensation Table

Executive Compensation Tables

Name and Principal
Position

(a)

Salary
($)

Bonus
($)

Year
(b)
2019 $ 574,333 $ — $ 1,200,001 $

(d)

(c)

(e)

Stock
Awards
($)

Option
Awards
($)

(f)

— $
Timothy D. Myers(1)
Chief Executive Officer 2018 $ 542,500 $ — $ 1,056,189 $ 264,036 $
2017 $ 436,250 $ — $ 949,308 $ 228,052 $

Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
($)

Non-Equity
Incentive Plan
Compensation
($)

All Other
Compensation
($)

Total
($)

(j)

(g)
861,500 $
233,818 $
396,356 $

(h)

(i)

657,119 $
— $
516,994 $

58,705 $ 3,351,658
57,120 $ 2,153,663
19,333 $ 2,546,293

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NOTES:

1. Mr. Myers served as Executive Vice President and Group President, Global Rolled Products, Extrusions and Building
and Construction Systems. Summary Compensation Table data reflects compensation for the positions in which
Mr. Myers served at ParentCo in 2019. Mr. Myers became President of Arconic Corporation as of February 11, 2020
and will become Chief Executive Officer following separation.

Column (i)—All Other Compensation.

Company Contributions to Savings Plans.

Name
Timothy D. Myers

Company Matching Contribution

3% Retirement Contribution

Savings Plan

Def. Comp. Plan

Savings Plan1

Def. Comp. Plan

Total Company
Contribution

16,800 $

17,660 $

8,400 $

15,844 $

58,705

2019 Grants of Plan-Based Awards

Name

(a)

Grant Dates
(b)

Timothy D. Myers

Threshold ($)

Target ($)

Maximum ($)

(d)
574,333 $

(e)
1,723,000

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)

2/28/2019

_________________

All Other
Stock Awards:
Number of
Shares
of Stock
or Units(2)
(#)

2019 Grant
Date Fair
Value of
Stock and
Option
Awards
($)

(i)

(l)

64,900 $

1,200,001

The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards columns represent

(1)
the potential amounts for annual cash incentive compensation for 2019. Actual amounts earned by our named executive officers
are reflected in the 2019 Summary Compensation Table.

(2)
Restated.

Time-vested restricted share unit awards granted under the 2013 ParentCo Stock Incentive Plan, as Amended and

2019 Outstanding Equity Awards at Fiscal Year-End

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
(Exercisable)
(#)

Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)
(#)

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)

Option
Exercise
Price ($)

Option
Expiration
Date

Equity
Incentive
Plan Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested (#)

Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)

Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)

Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

132,780

4,085,641

—

12,144
8,990

12,143
17,980

$
—
— $

21.13
30.22

1/13/2027
1/19/2028

124

Name

(a)

Timothy D.
Myers

Stock
Awards1

Time-Vested
Options໿2

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_________________

Stock awards in column (g) include time-vested restricted share unit awards. Stock awards in column (i) include

(1)
unearned performance-based restricted share unit awards at the target level. Stock awards are in the form of restricted
share units that ordinarily vest three years from the date of grant, generally subject to continued employment and are paid in
common stock when they vest.

Time-vested options include stock options granted on the annual grant date when the ParentCo’s Compensation and

(2)
Benefits Committee met in January. Options have a term of ten years and vest ratably over three years (1/3 each year),
generally subject to continued employment.

2019 Option Exercises and Stock Vested

Option Awards

Stock Awards

Name

Number of Shares
Acquired on Exercise
(#)

(a)

(b)

Value Realized
on Exercise
($)

(c)

Number of Shares
Acquired on Vesting
(#)

(d)

Value Realized
on Vesting
($)

(e)

Timothy D. Myers

31,502 $

192,134

18,487 $

315,943

2019 Pension Benefits

Name(1)

Plan Name(s)

Timothy D. Myers

ParentCo Retirement Plan

Excess Benefits Plan C

Total

Years of
Credited
Service

Present Value of
Accumulated
Benefits

Payments During
Last Fiscal Year

26.52 $
$

1,213,338
1,661,316
2,874,654

N/A

Valuation and Assumptions: For a discussion of the valuation method and assumptions applied in quantifying the present

value of the accumulated benefit, please refer to the following sections in ParentCo’s Annual Report on Form 10-K for the year
ended December 31, 2019: “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Critical Accounting Policies and Estimates—Pension and Other Postretirement Benefits” and Note F to the Consolidated
Financial Statements.

Qualified Defined Benefit Plan. In 2019, Mr. Myers participated in the ParentCo Retirement Plan. The ParentCo

Retirement Plan is a funded, tax-qualified, non-contributory defined benefit pension plan that covers a majority of U.S. salaried
employees. Benefits under the plan are based upon years of service and final average earnings as of March 31, 2018. Final
average earnings include salary plus 100% of annual cash incentive compensation, and are calculated using the average of the
highest five of the last ten years of earnings. The amount of annual compensation that may be taken into account under the
ParentCo Retirement Plan is subject to a limit imposed by the U.S. tax code, which was $275,000 for 2018 when pension
accruals were frozen (see “ParentCo Retirement Savings Plan” section below). The base benefit payable at age 65 is 1.1% of
final average earnings up to the Social Security covered compensation limit plus 1.475% of final average earnings above the
Social Security covered compensation limit, times years of service. Final average earnings and service after April 1, 2018 are
no longer reflected as the company has moved all future benefits to the ParentCo Retirement Savings Plan. Benefits are payable
as a single life annuity, a reduced 50% joint and survivor annuity, a reduced 75% joint and survivor annuity, or a single lump
sum payment after termination of employment.

Nonqualified Defined Benefit Plans. Mr. Myers participates in ParentCo’s Excess Benefits Plan C. This plan is a
nonqualified plan which provides for benefits taking into account compensation that exceeds the limits on compensation
imposed by the U.S. tax code. The benefit formula is identical to the ParentCo Retirement Plan formula. Benefits under the
nonqualified plan are payable as a reduced 50% joint and survivor annuity if the executive is married. Otherwise, the benefit is
payable as a single life annuity.

ParentCo Retirement Savings Plan. For U.S. salaried employees, ParentCo makes an Employer Retirement Income

Contribution (ERIC) in an amount equal to 3% of salary and annual incentive eligible for contribution to the ParentCo
Retirement Savings Plan. This benefit was previously provided to employees hired after March 1, 2006 as a pension
contribution in lieu of a defined benefit pension plan. However, following the freeze of pension accruals effective April 1,
2018, all salaried employees are now eligible. In addition to the 3% ERIC contributions, Mr. Myers was eligible for 3%
transition contribution to the ParentCo Retirement Savings Plan from April 1, 2018 through December 31, 2018, as were all

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other employees impacted by the freeze of pension accruals. In addition, all U.S. salaried employees, including named
executive officers, are eligible to receive a company matching contribution of 100% up to the first 6% of deferred salary. In
2019, ParentCo matching contribution amount was $16,800 for Mr. Myers. This amount is included in the column “All Other
Compensation” in the “2019 Summary Compensation Table” above.

2019 Nonqualified Deferred Compensation

Name

Executive
Contributions
in 2019
($)

Registrant
Contributions
in 2019
($)

Aggregate
Earnings in
2019
($)

(a)

(b)

(c)

Timothy D. Myers

17,660 $

33,505

E—Earnings

D—Dividends on ParentCo common stock or share equivalents

(d)
272,235E

2,169D

Aggregate
Withdrawals
Distributions
($)

(e)

Aggregate
Balance at
12/31/2019
FYE
($)

(f)

— $

680,629

The investment options under ParentCo’s nonqualified Deferred Compensation Plan are the same choices available to all
salaried employees under the ParentCo Retirement Savings Plan and the named executive officers do not receive preferential
earnings on their investments. Named executive officers may defer up to 25% of their salaries in total to the ParentCo
Retirement Savings Plan and Deferred Compensation Plan and up to 100% of their annual cash incentive compensation to the
Deferred Compensation Plan.

ParentCo contributes matching contributions on employee base salary deferrals that exceed the limits on compensation

imposed by the U.S. tax code. In 2019, ParentCo matching contribution amount was $17,660 for Mr. Myers.

In addition, when the U.S. tax code limits Employer Retirement Income Contributions (“ERIC”) are reached, the ERIC
and transition contributions are made into the ParentCo Deferred Compensation Plan. In 2019, ParentCo contributed $15,845
for Mr. Myers.

These amounts are included in the column “All Other Compensation” in the “2019 Summary Compensation Table”

included above.

All nonqualified pension and deferred compensation obligations are general unsecured liabilities of ParentCo until paid.
Upon termination of employment, deferred compensation will be paid in cash as a lump sum or in up to ten annual installments,
depending on the individual’s election, account balance and retirement eligibility.

Potential Payments upon Termination or Change in Control

Executive Severance Plan. Mr. Myers was eligible for ParentCo’s Executive Severance Plan during 2019. The plan
provides that, upon a termination of employment without cause and subject to execution and non-revocation of a general
release of legal claims against ParentCo, Mr. Myers would receive a cash severance payment equal to one year of base salary
and one year of target annual cash incentive , continued health care benefits for a period of twelve months, and twelve
additional months of retirement accrual calculated as described in the plan.

The following table shows the severance payments and benefits that would have been payable to Mr. Myers under the

ParentCo Executive Severance Plan upon a termination without cause on December 31, 2019.

Estimated Net
Present Value of
Cash Severance
Payments

Estimated Net
Present Value of
Two Years
Additional
Retirement Accrual

Estimated net
present value of
continued active
health care benefits

Total

Name

Timothy D. Myers

1,138,237 $

1,377,103 $

41,664 $

2,557,004

Change in Control Severance Plan. Mr. Myers was eligible for ParentCo’s Change in Control Severance Plan during

2019. The plan is designed to serve stockholders by assuring that ParentCo will have the continued dedication of the covered
executives, notwithstanding the possibility, threat or occurrence of a change in control. These protections are intended to

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encourage the executives’ full attention and dedication to ParentCo in the event of any threatened or pending change in control,
which can result in significant distraction by virtue of the personal uncertainties and risks that executives frequently face under
such circumstances. Severance benefits under the Change in Control Severance Plan are provided upon a termination of
employment without cause or resignation by the executive for good reason, in either case within two years after a change in
control of ParentCo.

Upon a qualifying termination, the severance benefits under the Change in Control Severance Plan for Mr. Myers are: (i) a
cash payment equal to two times annual salary plus target annual cash incentive compensation, (ii) a cash payment equal to the
target annual cash incentive compensation amount prorated through the severance date, (iii) continuation of health care benefits
for two years, (iv) two additional years of applicable pension credit and company savings plan contributions, and
(v) six months of outplacement benefits. There is no excise tax gross-up provision under the Plan.

The terms of the 2013 ParentCo Stock Incentive Plan, as Amended and Restated, provide that unvested equity awards,

including awards held by the continuing named executive officers, do not immediately vest upon a change in control if a
replacement award is provided. However, the replacement award will vest immediately if, within a two-year period following a
change in control, a plan participant is terminated without cause or leaves for good reason. Performance-based stock awards
will be converted to time-vested stock awards upon a change in control under the following terms: (i) if 50% or more of the
performance period has been completed as of the date on which the change in control has occurred, then the number of shares
or the value of the award will be based on actual performance completed as of the date of the change in control; or (ii) if less
than 50% of the performance period has been completed as of the date on which the change in control has occurred, then the
number of shares or the value of the award will be based on the target number or value.

The following table shows the severance payments and benefits that would have been payable under the ParentCo Change

in Control Severance Plan if both a change in control and a termination without cause or resignation for good reason occurred
on December 31, 2019, under the terms of the plan as in effect on

such date, as well as the estimated net present value of unvested equity awards that would have become vested upon such
termination or resignation. Equity award values are estimated using ParentCo’s closing stock price on December 30, 2019,
which was $30.77 per share.

Change in Control Severance Benefits

Name

Timothy D. Myers

Estimated net present value of change
in control severance and benefits

6,092,905

Retirement Benefits. If Mr. Myers had voluntarily terminated employment as of December 31, 2019, it is estimated that

his pension would have paid an annual annuity of $207,407 starting at age 62.

Director Compensation

The Arconic Corporation director compensation program will be subject to the review and approval of the Arconic
Corporation Board of Directors or a committee thereof after the separation. Director compensation for the period prior to any
change approved by the Arconic Corporation Board of Directors or a committee thereof will be as described below.

Compensation for non-employee directors of Arconic Corporation will be a mix of cash and equity-based compensation.
Mr. Myers, who will serve as an employee director following the separation, will not receive any additional compensation for
his service as a member of the Board of Directors of Arconic Corporation.

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Annual Compensation

The table below describes the components of compensation for non-employee directors:

Compensation Element

Annual Cash Retainer
Annual Equity Award (Restricted Share Units Granted Following Each Annual Meeting of
Stockholders)
Other Annual Fees
Chairman of the Board Fee

Lead Director Fee

Audit Committee Chair Fee (includes Audit Committee Member Fee)

Compensation and Benefits Committee Chair Fee

Other Committee Chair Fee

Per Meeting Fee for Meetings in Excess of Regularly Scheduled Meetings

Amount

$ 120,000

$ 150,000

$ 130,000

30,000

20,000

15,000

15,000
1,200

(1) A fee of $1,200 is paid to a non-employee director for each Board of Director or committee meeting attended by the director
in excess of five special Board of Director or committee meetings during the applicable calendar year and applies only to non-
regularly scheduled meetings in excess of a two-hour duration.

Stock Ownership Guideline

Within a period of six years from the date of a non-employee director’s initial appointment as a member of the Board of
Directors of Arconic Corporation, such non-employee director is required to attain ownership of at least $750,000 in Arconic
Corporation’s common stock and must maintain such ownership until retirement from the Arconic Corporation Board of
Directors.

Director Compensation Limit

Under Arconic Corporation’s Non-Employee Director Compensation Policy, the sum of the grant date value of all equity

awards granted and all cash compensation paid by Arconic Corporation to each non-employee director as compensation for
services as a non-employee director shall not exceed $750,000 in any calendar year.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Before the separation and distribution, all of the outstanding shares of Arconic Corporation common stock will be owned

beneficially and of record by ParentCo. Following the separation and distribution, Arconic Corporation expects to have
outstanding an aggregate of approximately 109,021,376 shares of common stock based upon approximately 436,085,504 shares
of ParentCo common stock issued and outstanding on the record date of March 19, 2020, excluding treasury shares, assuming
no exercise of ParentCo options and applying the distribution ratio.

Stock Ownership of Certain Beneficial Owners

The following table shows all holders known to Arconic Corporation that are expected to be beneficial owners of more

than 5% of the outstanding shares of Arconic Corporation common stock immediately following the completion of the
distribution, based on information available as of March 19, 2020 and based upon the assumption that, for every four shares of
ParentCo common stock held by such persons, they will receive one share of Arconic Corporation common stock.

Name and Address of Beneficial Owner
The Vanguard Group
100 Vanguard Blvd
Malvern, PA 19355

Elliott Investment Management L.P.
40 West 57th Street
New York, NY 10019

BlackRock, Inc.
55 East 52nd Street
New York, NY 10055

First Pacific Advisors, LP
J. Richard Atwood
Steven T. Romick
11601 Wilshire Blvd., Suite 1200
Los Angeles, CA 90025

______________________

Amount and Nature of Beneficial
Ownership

Percent of Class

10,712,362

(1 )

10,391,414

(2 )

8,479,035

(3 )

5,678,986

(4 )

9.83 %

9.53 %

7.78 %

5.21 %

(1)
As of December 31, 2019, as reported in a Schedule 13G amendment dated February 12, 2020, The Vanguard Group,
an investment adviser, reported that it had sole power to vote 579,017 shares of ParentCo common stock, shared power to vote
117,367 shares of ParentCo common stock, sole power to dispose of 42,189,007 shares of ParentCo common stock, and shared
power to dispose of 660,439 shares of ParentCo common stock.

(2)
As of January 1, 2020, as reported in a Schedule 13D amendment dated January 13, 2020, Elliott Investment
Management L.P. had shared power to vote and dispose of 41,565,658 shares of ParentCo common stock. In addition, Elliott
International, L.P. and Elliott Associates L.P. collectively had economic exposure comparable to approximately 4.1% of the
shares of ParentCo common stock outstanding pursuant to certain derivative agreements disclosed in the Schedule 13D
amendment.

As of December 31, 2019, as reported in a Schedule 13G amendment dated February 5, 2020, BlackRock, Inc., a

(3)
parent holding company, reported that it had sole power to vote 29,896,429 shares of ParentCo common stock and sole power
to dispose of 33,916,141 shares of ParentCo common stock, and no shared voting or dispositive power.

As of December 31, 2019, as reported in a Schedule 13G amendment dated February 14, 2020, First Pacific Advisors,

(4)
LP (“FPA”), an investment adviser, and J. Richard Atwood and Steven T. Romick, each a controlling person of FPA, reported
that they had shared power to vote 22,715,945 shares of ParentCo common stock, shared power to dispose of 22,715,945 shares
of ParentCo common stock, and no sole voting or dispositive power.

Stock Ownership of Directors and Executive Officers

The following table shows the ownership of Arconic Corporation common stock, deferred share units and deferred
restricted share units expected to be beneficially owned by our current and expected directors, named executive officers, and
our directors and current executive officers as a group immediately following the completion of the distribution, based on
information available as of March 19, 2020 and based on the assumption that, for every four shares of ParentCo common stock
held by such persons, they will receive one share of Arconic Corporation common stock. None of these individuals, or the

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group as a whole, would be expected to beneficially own more than 1% of our common stock immediately following the
completion of the distribution. Each person listed in the following table had sole voting and investment power of the shares
shown, except as noted in the footnotes below.

Name of Beneficial Owner
Directors

William F. Austen

Christopher L. Ayers

Margaret “Peg” S. Billson

Austin G. Camporin

Jacques Croisetiere

Elmer L. Doty(4)
Carol S. Eicher

Frederick “Fritz” A. Henderson

E. Stanley O’Neal

Jeffrey Stafeil
Executive Officers

Erick R. Asmussen

Timothy D. Myers*

Melissa M. Miller

Diana C. Toman

Mark J. Vrablec

Mary E. Zik

Shares of
Common Stock(1)

Deferred Share
Units(2)

Deferred
Restricted Share
Units(3)

—
1,875
—
—
—
17,670
—
—
—
—

—
28,198
3,787
—
3,792
1,624

—
—
—
—
—
—
—
—
11,717
—

—
5,285
—
—
799
—

—
7,310
—
—
—
4,321
—
—
10,418
—

—
24,744
7,987
—
14,372
2,820

Total

—
9,185
—
—
—
21,991
—
—
22,135
—

—
58,227
11,774
—
18,963
4,444

All directors and executive officers as a group
(16 persons)

Also serves as a director.

56,946

17,801

71,972

146,719

This column shows beneficial ownership of Arconic Corporation common stock as calculated under SEC rules. Unless

(1)
otherwise noted, each director and named executive officer has sole voting and investment power over the shares of Arconic
Corporation common stock reported. None of the shares are subject to pledge. This column includes shares held of record,
shares held by a bank, broker or nominee for the person’s account, shares held through family trust arrangements, and for
executive officers, share equivalent units held in the Arconic Corporation Retirement Savings Plan, which confer voting rights
through the plan trustee with respect to shares of Arconic Corporation common stock. This column also includes shares of
Arconic Corporation common stock that may be acquired under employee stock options that are exercisable as of March 20,
2020 or will become exercisable within 60 days after March 20, 2020 as follows: Mr. Myers (10,566); Ms. Miller (3,448); and
Ms. Zik (1,624); and all executive officers as a group (15,638). No awards of stock options have been made to non-employee
directors.

This column lists (i) for executive officers, deferred share equivalent units held under the Arconic Corporation
(2)
Deferred Compensation Plan, and (ii) for directors, deferred share equivalent units held under the Arconic Corporation
Deferred Fee Plan for Directors. Each deferred share equivalent unit tracks the economic performance of one share of Arconic
Corporation common stock and is fully vested upon grant, but does not have voting rights. Upon a holder’s separation from
Arconic Corporation, the deferred share units are settled in cash at a value equivalent to the then-prevailing market value of our
common stock.

This column lists deferred restricted share units issued under the Arconic Corporation 2020 Stock Incentive Plan. Each

(3)
deferred restricted share unit is an undertaking by Arconic Corporation to issue to the recipient one share of Arconic
Corporation common stock upon settlement. The annual deferred restricted share units to directors vest on the first anniversary
of the grant date, or, if earlier, the date of the next subsequent annual meeting of stockholders following the grant date, subject
to continued service through the vesting date (however, accelerated vesting provisions apply for certain termination scenarios,
such as death and change in control, and pro rata vesting provisions apply in the event of a director’s termination of service for

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any other reason). Deferred restricted share units granted in lieu of cash compensation pursuant to a director’s deferral election
are fully vested at grant.

(4)

Includes 1,500 shares held by a revocable trust of which Mr. Doty and his spouse are trustees and beneficiaries.

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Item 13. Certain Relationships and Related Transactions, and Director Independence.

Agreements with ParentCo

Following the separation and distribution, Arconic Corporation and Howmet Aerospace will each operate separately, each
as an independent public company. In connection with the separation, Arconic Corporation has entered into and will enter into a
separation agreement with ParentCo to effect the separation and to provide a framework for Arconic Corporation’s relationship
with Howmet Aerospace after the separation and will enter into certain other agreements, including a tax matters agreement, an
employee matters agreement, intellectual property license agreements, an agreement relating to the Davenport plant, metal
supply agreements and real estate and office leases. These agreements will provide for the allocation between Arconic
Corporation and Howmet Aerospace of the assets, employees, liabilities and obligations (including, among others, investments,
property and employee benefits and tax-related assets and liabilities) of ParentCo and its subsidiaries attributable to periods
prior to, at and after the separation and will govern the relationship between Arconic Corporation and Howmet Aerospace
subsequent to the completion of the separation.

The summaries of each of these agreements set forth below are qualified in their entireties by reference to the full text of

the applicable agreements, which are incorporated by reference into this Form 10-K.

Separation Agreement

Transfer of Assets and Assumption of Liabilities

The separation agreement will identify the assets to be transferred, the liabilities to be assumed and the contracts to be
transferred to each of Arconic Corporation and Howmet Aerospace as part of the separation of ParentCo into two independent
companies, and will provide for when and how these transfers and assumptions will occur. In particular, the separation
agreement will provide that, among other things, subject to the terms and conditions contained therein:

•

certain assets related to the Arconic Corporation Businesses, which we refer to as the “Arconic Corporation Assets,”
will be retained by or transferred to Arconic Corporation or one of its subsidiaries, including:

equity interests in certain ParentCo subsidiaries that hold assets relating to the Arconic Corporation Businesses;

the Arconic Corporation brands, certain other trade names and trademarks, and certain other intellectual property
(including patents, know-how and trade secrets), software, information and technology used in the Arconic
Corporation Businesses or related to the Arconic Corporation Assets, the Arconic Corporation Liabilities (as defined
below) or the Arconic Corporation Businesses;

facilities related to the Arconic Corporation Businesses;

contracts (or portions thereof) that relate to the Arconic Corporation Businesses;

rights and assets expressly allocated to Arconic Corporation pursuant to the terms of the separation agreement or
certain other agreements entered into in connection with the separation;

• permits that primarily relate to the Arconic Corporation Businesses; and

•

certain liabilities related to the Arconic Corporation Businesses or the Arconic Corporation Assets, which we refer to
as the “Arconic Corporation Liabilities,” will be retained by or transferred to Arconic Corporation. Subject to limited
exceptions, liabilities that relate primarily to the Arconic Corporation Businesses, including liabilities of various legal
entities that will be subsidiaries of Arconic Corporation following the separation, will be Arconic Corporation
Liabilities; and

all of the assets and liabilities (including whether accrued, contingent or otherwise) other than the Arconic Corporation
Assets and the Arconic Corporation Liabilities (such assets and liabilities, other than the Arconic Corporation Assets
and the Arconic Corporation Liabilities, we refer to as the “Howmet Aerospace Assets” and “Howmet Aerospace
Liabilities,” respectively) will be retained by or transferred to Howmet Aerospace.

Except as expressly set forth in the separation agreement or any ancillary agreement, neither of Arconic Corporation nor
ParentCo will make any representation or warranty as to the assets, business or liabilities transferred or assumed as part of the
separation, as to any approvals or notifications required in connection with the transfers, as to the value of or the freedom from
any security interests of any of the assets transferred, as to the absence or presence of any defenses or right of setoff or freedom
from counterclaim with respect to any claim or other asset of either of Arconic Corporation or ParentCo, or as to the legal
sufficiency of any document or instrument delivered to convey title to any asset or thing of value to be transferred in

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connection with the separation. All assets will be transferred on an “as is,” “where is” basis, and the respective transferees will
bear the economic and legal risks that any conveyance will prove to be insufficient to vest in the transferee good and
marketable title, free and clear of all security interests, that any necessary consents or governmental approvals are not obtained,
or that any requirements of law, agreements, security interests or judgments are not complied with.

Information in this Form 10-K with respect to the assets and liabilities of the parties following the distribution is presented
based on the allocation of such assets and liabilities pursuant to the separation agreement, unless the context otherwise requires.
The separation agreement will provide that in the event that the transfer of certain assets and liabilities (or a portion thereof) to
Arconic Corporation or Howmet Aerospace, as applicable, does not occur prior to the separation, then until such assets or
liabilities (or a portion thereof) are able to be transferred, Arconic Corporation or Howmet Aerospace, as applicable, will hold
such assets on behalf and for the benefit of the transferee and will pay, perform and discharge such liabilities, for which the
transferee will reimburse Arconic Corporation or Howmet Aerospace, as applicable, for all commercially reasonable payments
made in connection with the performance and discharge of such liabilities.

The Distribution

The separation agreement will also govern the rights and obligations of the parties regarding the distribution following the
completion of the separation. On the distribution date, ParentCo will distribute to its stockholders that hold ParentCo common
stock as of the record date for the distribution all of the issued and outstanding shares of Arconic Corporation common stock on
a pro rata basis. Stockholders will receive cash in lieu of any fractional shares.

Conditions to the Distribution

The separation agreement will provide that the distribution is subject to satisfaction (or waiver by ParentCo in its sole and

absolute discretion) of the following conditions:

•

the SEC declaring effective the registration statement on Form 10; there being no order suspending the
effectiveness of the registration statement in effect; and no proceedings for such purposes having been
instituted or threatened by the SEC;

the information statement included in the Form 10 having been made available to ParentCo stockholders;

the receipt by ParentCo and continuing validity of an opinion of its outside counsel, satisfactory to the
ParentCo Board of Directors, regarding the qualification of the distribution, together with certain related
transactions, as a “reorganization” within the meaning of Sections 355 and 368(a)(1)(D) of the Code;

the internal reorganization having been completed and the transfer of assets and liabilities of the Arconic
Corporation Businesses from ParentCo to Arconic Corporation, and the transfer of assets and liabilities of the
Howmet Aerospace Businesses from Arconic Corporation to ParentCo, having been completed in accordance
with the separation agreement;

the receipt of one or more opinions from an independent appraisal firm to the ParentCo Board of Directors as
to the solvency of Howmet Aerospace and Arconic Corporation after the completion of the distribution, in
each case in a form and substance acceptable to the ParentCo Board of Directors in its sole and absolute
discretion;

all actions necessary or appropriate under applicable U.S. federal, state or other securities or blue sky laws
and the rules and regulations thereunder having been taken or made and, where applicable, having become
effective or been accepted; and

•

the execution of certain agreements contemplated by the separation agreement;

• no order, injunction or decree issued by any government authority of competent jurisdiction or other legal

restraint or prohibition preventing the consummation of the separation, the distribution or any of the related
transactions being in effect;

•

the shares of Arconic Corporation common stock to be distributed having been accepted for listing on the
NYSE, subject to official notice of distribution;

• ParentCo having received certain proceeds from financing arrangements and being satisfied in its sole and

absolute discretion that, as of the effective time of the distribution, it will have no further liability under such
arrangements; and

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• no other event or development existing or having occurred that, in the judgment of ParentCo’s Board of

Directors, in its sole and absolute discretion, makes it inadvisable to effect the separation, the distribution and
the other related transactions.

ParentCo will have the sole and absolute discretion to determine (and change) the terms of, and to determine whether to

proceed with, the distribution and, to the extent that it determines to so proceed, to determine the record date for the
distribution, the distribution date and the distribution ratio.

Claims

In general, each party to the separation agreement will assume liability for all pending, threatened and unasserted legal
matters related to its own business or its assumed or retained liabilities and will indemnify the other party for any liability to the
extent arising out of or resulting from such assumed or retained legal matters.

Releases

The separation agreement will provide that Arconic Corporation and its affiliates will release and discharge Howmet
Aerospace and its affiliates from all liabilities assumed by Arconic Corporation as part of the separation, from all acts and
events occurring or failing to occur, and all conditions existing, on or before the distribution date relating to the Arconic
Corporation Businesses, except as expressly set forth in the separation agreement. Howmet Aerospace and its affiliates will
release and discharge Arconic Corporation and its affiliates from all liabilities retained by Howmet Aerospace and its affiliates
as part of the separation, from all acts and events occurring or failing to occur, and all conditions existing, on or before the
distribution date relating to the Arconic Corporation Businesses, and from all liabilities existing or arising in connection with
the implementation of the separation, except as expressly set forth in the separation agreement.

These releases will not extend to obligations or liabilities under any agreements between the parties that remain in effect

following the separation, which agreements include the separation agreement and the other agreements described under this
Item 13 in this Part III in this Form 10-K.

Indemnification

In the separation agreement, Arconic Corporation will agree to indemnify, defend and hold harmless Howmet Aerospace,

each of Howmet Aerospace’s affiliates, and each of Howmet Aerospace’s affiliates’ directors, officers and employees, from and
against all liabilities relating to, arising out of or resulting from:

•

the Arconic Corporation Liabilities;

• Arconic Corporation’s failure or the failure of any other person to pay, perform or otherwise promptly discharge any of

the Arconic Corporation Liabilities, in accordance with their respective terms, whether prior to, at or after the
distribution;

•

except to the extent relating to a Howmet Aerospace Liability, any guarantee, indemnification or contribution
obligation for the benefit of Arconic Corporation by Howmet Aerospace that survives the distribution;

any breach by Arconic Corporation of the separation agreement or any of the ancillary agreements; and

any untrue statement or alleged untrue statement or omission or alleged omission of material fact in the Form 10 or in
the information statement included in the Form 10 (as amended or supplemented), except for any such statements or
omissions made explicitly in Howmet Aerospace’s name.

• Howmet Aerospace will agree to indemnify, defend and hold harmless Arconic Corporation, each of Arconic

Corporation’s affiliates and each of Arconic Corporation’s affiliates’ directors, officers and employees from and
against all liabilities relating to, arising out of or resulting from:

•

the Howmet Aerospace Liabilities;

the failure of Howmet Aerospace or any other person to pay, perform or otherwise promptly discharge any of the
Howmet Aerospace Liabilities in accordance with their respective terms whether prior to, at or after the distribution;

except to the extent relating to an Arconic Corporation Liability, any guarantee, indemnification or contribution
obligation for the benefit of Howmet Aerospace by Arconic Corporation that survives the distribution;

•

any breach by Howmet Aerospace of the separation agreement or any of the ancillary agreements; and

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•

any untrue statement or alleged untrue statement or omission or alleged omission of a material fact made explicitly in
Howmet Aerospace’s name in the Form 10 or in the information statement included in the Form 10 (as amended or
supplemented).

The separation agreement will also establish procedures with respect to claims subject to indemnification and related

matters.

Indemnification with respect to taxes, and the procedures related thereto, will be governed by the tax matters agreement.

Insurance

The separation agreement will provide for the allocation between the parties of rights and obligations under existing
insurance policies with respect to occurrences prior to the distribution and set forth procedures for the administration of insured
claims and related matters.

Further Assurances

In addition to the actions specifically provided for in the separation agreement, except as otherwise set forth therein or in

any ancillary agreement, Arconic Corporation and ParentCo will agree in the separation agreement to use reasonable best
efforts, prior to, on and after the distribution date, to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws, regulations and agreements to consummate and make effective the
transactions contemplated by the separation agreement and the ancillary agreements.

Dispute Resolution

The separation agreement will contain provisions that govern, except as otherwise provided in any ancillary agreement,

the resolution of disputes, controversies or claims that may arise between Arconic Corporation and Howmet Aerospace related
to the separation or distribution and that are unable to be resolved through good faith discussions between Arconic Corporation
and Howmet Aerospace. These provisions will contemplate that efforts will be made to resolve disputes, controversies and
claims by escalation of the matter to executives of the parties in dispute. If such efforts are not successful, one of the parties in
dispute may submit the dispute, controversy or claim to nonbinding mediation or, if such nonbinding mediation is not
successful, binding alternative dispute resolution, subject to the provisions of the separation agreement.

Expenses

Except as expressly set forth in the separation agreement or in any ancillary agreement, ParentCo will be responsible for

all costs and expenses incurred in connection with the separation incurred prior to the distribution date, including costs and
expenses relating to legal and tax counsel, financial advisors and accounting advisory work related to the separation. Except as
expressly set forth in the separation agreement or in any ancillary agreement, or as otherwise agreed in writing by Arconic
Corporation and Howmet Aerospace, all costs and expenses incurred in connection with the separation after the distribution
will also be paid by the party incurring such cost and expense.

Other Matters

Other matters governed by the separation agreement will include ParentCo’s name change to “Howmet Aerospace Inc.”,

Howmet Aerospace’s right to continue to use the “Arconic” name and related trademark for limited purposes for a limited
period following the distribution, licenses for Arconic Corporation and Howmet Aerospace to certain patents and trade secrets
owned by the other company at the separation, access to financial and other information, confidentiality, access to and
provision of records and treatment of outstanding guarantees and similar credit support.

Amendment and Termination

The separation agreement will provide that it may be terminated, and the separation and distribution may be modified or

abandoned, at any time prior to the distribution date in the sole and absolute discretion of the ParentCo Board of Directors
without the approval of any person, including Arconic Corporation or ParentCo stockholders. In the event of a termination of
the separation agreement, no party, nor any of its directors, officers or employees, will have any liability of any kind to the
other parties or any other person. After the distribution date, the separation agreement may not be amended or terminated,
except by an agreement in writing signed by both Arconic Corporation and Howmet Aerospace.

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Tax Matters Agreement

In connection with the separation, Arconic Corporation and ParentCo will enter into a tax matters agreement that will

govern the parties’ respective rights, responsibilities and obligations with respect to taxes (including responsibility for taxes,
entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other tax matters).

The tax matters agreement will provide special rules that allocate tax liabilities in the event the distribution, together with
certain related transactions, fails to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under
Sections 355 and 368(a)(1)(D) of the Code. Under the tax matters agreement, each party will be responsible for any taxes and
related amounts imposed on Howmet Aerospace or Arconic Corporation as a result of the failure to so qualify, to the extent that
the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or
business, or a breach of the relevant representations or covenants made by that party in the tax matters agreement.

In addition, the tax matters agreement will impose certain restrictions on Arconic Corporation and its subsidiaries during

the two-year period following the distribution that will be intended to prevent the distribution, together with certain related
transactions, from failing to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under
Sections 355 and 368(a)(1)(D) of the Code. Specifically, during such period, except in specific circumstances, Arconic
Corporation and its subsidiaries will be prohibited from: (1) ceasing to conduct certain businesses; (2) entering into certain
transactions or series of transactions pursuant to which all or a portion of the shares of Arconic Corporation common stock (or
stock of certain of its subsidiaries) would be acquired or all or a portion of certain assets of Arconic Corporation and its
subsidiaries would be acquired; (3) liquidating, merging or consolidating with any other person; (4) issuing equity securities
beyond certain thresholds; (5) repurchasing Arconic Corporation stock (or stock of certain of its subsidiaries) other than in
certain open-market transactions; (6) amending its certificate of incorporation to affect its stockholders’ voting rights or
(7) taking or failing to take any other action that would cause the distribution, together with certain related transactions, to fail
to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D)
of the Code.

Employee Matters Agreement

Arconic Corporation and ParentCo will enter into an employee matters agreement in connection with the separation to

allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and
programs, and other related matters. The employee matters agreement will govern certain compensation and employee benefit
obligations with respect to the current and former employees and non-employee directors of each company.

The employee matters agreement will provide that, unless otherwise specified, each party will be responsible for liabilities

associated with current and former employees of such party and its subsidiaries and certain other former employees classified
as former employees of such party for purposes of post-separation compensation and benefit matters.

The employee matters agreement will also govern the terms of equity-based awards granted by ParentCo prior to the

separation.

Intellectual Property License Agreements

In connection with the separation, Arconic Corporation and ParentCo will enter into an Arconic Corporation to Howmet

Aerospace Patent, Know-How, and Trade Secret License Agreement, a Howmet Aerospace to Arconic Corporation Patent,
Know-How, and Trade Secret License Agreement, an Arconic Corporation to Howmet Aerospace Trademark License
Agreement, and a Howmet Aerospace to Arconic Corporation Trademark License Agreement, which we refer to, collectively,
as the “intellectual property license agreements.”

Under the intellectual property license agreements, certain Arconic Corporation businesses will have ongoing rights to use

a name and mark of ParentCo for a 10-year period following the separation, and certain Howmet Aerospace businesses will
have rights to use the “Arconic” name and mark for a one-year (or less) period following the separation, in each case for
limited purposes.

The intellectual property license agreements will also govern patents that were developed jointly and will continue to be

used by both Howmet Aerospace and Arconic Corporation, as well as shared know-how. The intellectual property license
agreements will provide for a license of these patents and know-how from Howmet Aerospace or Arconic Corporation, as
applicable, to the other on a perpetual, royalty-free, non-exclusive basis, subject to certain limitations primarily directed to the
technology areas of each company.

Either party may terminate the license with respect to any trademark under the intellectual property license agreements
upon an uncured material breach of the other party with respect to such trademark that remains uncured, after at least 120 days.

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Davenport Plant Agreement

In connection with the separation, Arconic Corporation and its subsidiary, Arconic Davenport LLC, and ParentCo will
enter into a Second Supplemental Tax and Project Certificate and Agreement (the “Davenport Plant Agreement”) in connection
with the transfer to Arconic Davenport LLC of ParentCo’s aluminum rolled products plant located in Davenport, Iowa (the
“Davenport Plant”).

Following the separation, ParentCo will continue as the borrower under the Loan Agreement, dated as of August 14, 2012,

between ParentCo and Iowa Finance Authority (together with certain related agreements, the “Davenport Loan Documents”)
relating to the Midwestern Disaster Area Revenue Bonds (Alcoa Inc. Project) Series 2012 in the aggregate principal amount of
$250,000,000 (the “Davenport Bonds”). Certain obligations under the terms of the Davenport Loan Documents relate to the
Davenport Plant, and pursuant to the Davenport Plant Agreement, ParentCo will delegate to Arconic Corporation and Arconic
Davenport LLC responsibility for operating a project located at the Davenport Plant involving the acquisition, construction,
reconstruction and/or renovation of nonresidential real property (and related improvements) to be used to produce aluminum
for the automotive market (the “Project”) in a manner and location consistent with the terms of the Davenport Loan
Documents. The Davenport Plant Agreement will further provide that Arconic Corporation and Arconic Davenport LLC will
(i) undertake certain notification, recordkeeping and cooperation obligations relating to the Project, and (ii) indemnify ParentCo
against losses arising from, among other things, their actions or omissions with respect to the Project or their violation of any
Davenport Loan Documents.

Metal Supply Agreements

In connection with the separation, Arconic Corporation and ParentCo will enter into two agreements for the supply of
billet, plate, extruded aluminum, and related tolling and cutting services (the “metal supply agreements”) pursuant to which
Arconic Corporation or certain of its subsidiaries will supply Howmet Aerospace or certain of its subsidiaries with aluminum
for use in its businesses in the United States and Hungary. Each metal supply agreement will set forth the general terms and
conditions of the overall supply arrangement, with an initial term of five years, as well as pricing, quantity, quality, delivery,
liability and other terms with respect to the supply of a particular item. Each agreement will be generally based on the form of
agreement currently used by the Arconic Corporation Businesses with third-party customers for metal supply arrangements or
the purchase of such materials by ParentCo from third-party suppliers. Notwithstanding the metal supply agreements, Howmet
Aerospace will have the right to purchase metal from other suppliers.

Real Estate/Site Arrangements

In connection with the separation, Arconic Corporation and ParentCo will have joint ownership of the real estate at the
manufacturing facilities located in Székesfehérvár, Hungary (the “Kofem site”), pursuant to a legal demerger and a land use
agreement. The site is currently shared with other third party tenants. Arconic Corporation and ParentCo will enter into
agreements for shared common facilities (the “site services agreements”) pursuant to which Howmet Aerospace or certain of its
subsidiaries will provide engineering, maintenance, utilities, security, lab and other services at the Kofem site to Arconic
Corporation or certain of its subsidiaries. Each service agreement will have an initial term of one to five years, with automatic
renewals provided certain conditions are met, except that utility services will have an indefinite period in accordance with
Hungarian law. Each site services agreement will be generally based on the form of agreement currently used by ParentCo with
other third parties at the Kofem site.

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Item 14. Principal Accounting Fees and Services.

The following table shows fees for professional services rendered by PricewaterhouseCoopers LLP for the fiscal year

ended December 31, 2019 (in millions) (no fees are presented for the fiscal year ended December 31, 2018 as Arconic
Corporation was not in existence at that time):

Audit Fees

Audit-Related Fees

Tax Fees

All Other Fees

Total

2019

4.7
—
—
—
4.7

Audit Fees include the base audit fee, effects of foreign currency exchange rates on the base audit fee, and scope

adjustments to the base audit requirements. The fees presented in the table above were paid by ParentCo on behalf of Arconic
Corporation.

All audit and non-audit services provided by our independent registered public accounting firm set forth in the table above

were pre-approved by the audit committee of ParentCo. ParentCo’s audit committee has adopted policies and procedures for
pre-approval of audit, audit-related, tax and other services, and for pre-approval of fee levels for such services. Following the
separation, our audit committee will pre-approve all audit and non-audit services provided by our independent registered public
accounting firm.

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Item 15. Exhibits, Financial Statements Schedules.

PART IV

(a) The combined financial statements and exhibits listed below are filed as part of this Annual Report on Form 10-K.

(1) The Company’s combined financial statements, the notes thereto and the report of the Independent Registered

Public Accounting Firm are included in Part II Item 8 Financial Statements and Supplementary Data.

(2) Financial statement schedules have been omitted because they are not applicable, not required, or the required

information is included in the Combined Financial Statements or Notes thereto.

(3) Exhibits.
Reference is made to Item 15(b) below.

(b) Exhibits. The Exhibit Index, which immediately precedes the signature page, is incorporated by reference into this Annual
Report on Form 10-K.

Exhibit
Number
2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

2.11

2.12

2.13

Exhibit Description

Form of Separation and Distribution Agreement by and between Arconic Inc. and Arconic Rolled Products
Corporation (incorporated by reference to Exhibit 2.1 to the registrant’s registration statement on Form 10 filed
on December 17, 2019)

Form of Tax Matters Agreement by and between Arconic Inc. and Arconic Rolled Products Corporation
(incorporated by reference to Exhibit 2.2 to the registrant’s registration statement on Form 10 filed on December
17, 2019)

Form of Employee Matters Agreement by and between Arconic Inc. and Arconic Rolled Products Corporation
(incorporated by reference to Exhibit 2.3 to Amendment No. 2 to the registrant’s registration statement on Form
10 filed on February 7, 2020)

Form of Patent Know-How and Trade Secret License Agreement by and between Arconic Inc. and Arconic
Rolled Products Corporation (incorporated by reference to Exhibit 2.4 to the registrant’s registration statement on
Form 10 filed on December 17, 2019)

Form of Patent Know-How and Trade Secret License Agreement by and between Arconic Rolled Products
Corporation and Arconic Inc. (incorporated by reference to Exhibit 2.5 to the registrant’s registration statement
on Form 10 filed on December 17, 2019)

Form of Trademark License Agreement by and between Arconic Rolled Products Corporation and Arconic Inc.
(incorporated by reference to Exhibit 2.6 to the registrant’s registration statement on Form 10 filed on December
17, 2019)

Form of Trademark License Agreement by and between Arconic Inc. and Arconic Rolled Products Corporation
(incorporated by reference to Exhibit 2.7 to the registrant’s registration statement on Form 10 filed on December
17, 2019)

Form of Master Agreement for Product Supply by and between Arconic Massena LLC, Arconic Lafayette LLC,
Arconic Davenport LLC and Arconic Inc. (incorporated by reference to Exhibit 2.8 to the registrant’s registration
statement on Form 10 filed on December 17, 2019)

Metal Supply & Tolling Agreement by and between Arconic-Köfém Mill Products Hungary Kft and Arconic-
Köfém Kft, dated January 1, 2020

Use Agreement by and between Arconic-Köfém Székesfehérvári Könnyűfémmű Korlátolt Felelősségű Társaság
and Arconic-Köfém Mill Products Hungary Korlátolt Felelősségű Társaság, dated January 6, 2020.

Land Use Right Agreement by and between Arconic-Köfém Mill Products Hungary Korlátolt Felelősségű
Társaság and Arconic-Köfém Székesfehérvári Könnyűfémmű Korlátolt Felelősségű Társaság, dated January 6,
2020
Service Level Agreement for Central Engineering and Maintenance by and between Arconic-Köfém Kft and
Arconic-Köfém Mill Products Hungary Kft, dated January 1, 2020

Service Level Agreement for Energy, Steam and Water by and between Arconic-Köfém Kft and Arconic-Köfém
Mill Products Hungary Kft, dated January 31, 2020

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Exhibit
Number

2.14

2.15

2.16

3.1(a)

3.1(b)

3.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

Exhibit Description

Land Use Right Agreement by and between Arconic-Köfém Székesfehérvári Könnyűfémmű Korlátolt
Felelősségű Társaság and Arconic-Köfém Mill Products Hungary Korlátolt Felelősségű Társaság, dated January
6, 2020
Form of Second Supplemental Tax and Project Certificate and Agreement by and among Arconic Inc., Arconic
Davenport LLC and Arconic Rolled Products Corporation (incorporated by reference to Exhibit 2.15 to the
registrant’s registration statement on Form 10 filed on December 17, 2019)

Form of Lease and Property Management Agreement by and between Arconic Inc. and Arconic Massena LLC
(incorporated by reference to Exhibit 2.16 to the registrant’s registration statement on Form 10 filed on December
17, 2019)

Certificate of Incorporation of Arconic Rolled Products Corporation, effective August 14, 2019

Amendment to Certificate of Incorporation of Arconic Rolled Products Corporation, effective March 18, 2020

Form of Amended and Restated Bylaws of Arconic Corporation (incorporated by reference to Exhibit 3.2 to the
registrant’s registration statement on Form 10 filed on December 17, 2019)

Form of Arconic Corporation 2020 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to
Amendment No. 2 to the registrant’s registration statement on Form 10 filed on February 7, 2020)

Form of Indemnification Agreement by and between Arconic Corporation and individual directors or officers
(incorporated by reference to Exhibit 10.2 to the registrant’s registration statement on Form 10 filed on December
17, 2019)

United Company RUSAL – Trading House Agreement for the Supply of Aluminum Products by and between
United Company RUSAL — Trading House and Arconic SMZ, dated December 27, 2016 (incorporated by
reference to Exhibit 10.3 to the registrant’s registration statement on Form 10 filed on December 17, 2019)*

Form of Arconic Corporation Deferred Fee Plan for Directors (incorporated by reference to Exhibit 10.4 to
Amendment No. 1 to the registrant’s registration statement on Form 10 filed on January 22, 2020)

Form of Arconic Corporation Annual Cash Incentive Plan (incorporated by reference to Exhibit 10.5 to
Amendment No. 1 to the registrant’s registration statement on Form 10 filed on January 22, 2020)

Form of Arconic Corporation Non-Employee Director Compensation Policy (incorporated by reference to Exhibit
10.6 to Amendment No. 1 to the registrant’s registration statement on Form 10 filed on January 22, 2020)

Employment Letter Agreement between Arconic Inc. and Timothy D. Myers, dated as of January 13, 2020
(incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the registrant’s registration statement on Form
10 filed on January 22, 2020)

Employment Letter Agreement between Arconic Inc. and Erick R. Asmussen, dated as of January 29, 2020
(incorporated by reference to Exhibit 10.8 to Amendment No. 2 to the registrant’s registration statement on Form
10 filed on February 7, 2020)

Employment Letter Agreement between Arconic Inc. and Diana C. Toman, dated as of January 28, 2020
(incorporated by reference to Exhibit 10.9 to Amendment No. 2 to the registrant’s registration statement on Form
10 filed on February 7, 2020)

Form of Arconic Corporation Change in Control Severance Plan (incorporated by reference to Exhibit 10.10 to
Amendment No. 2 to the registrant’s registration statement on Form 10 filed on February 7, 2020)

Form of Arconic Corporation Executive Severance Plan (incorporated by reference to Exhibit 10.11 to
Amendment No. 2 to the registrant’s registration statement on Form 10 filed on February 7, 2020)

Arconic Corporation Deferred Compensation Plan (incorporated by reference to Exhibit 10.12 to Amendment
No. 2 to the registrant’s registration statement on Form 10 filed on February 7, 2020)

Arconic Corporation Excess Plan C (incorporated by reference to Exhibit 10.13 to Amendment No. 2 to the
registrant’s registration statement on Form 10 filed on February 7, 2020)

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Exhibit
Number

10.14

10.15

Exhibit Description

Indenture, among Arconic Rolled Products Corporation, the guarantors from time to time party thereto, U.S.
Bank National Association, as trustee, U.S. Bank National Association, as collateral agent, and U.S. Bank
National Association, as registrar, paying agent and authenticating agent, dated February 7, 2020 (incorporated by
reference to Exhibit 10.14 to Amendment No. 2 to the registrant’s registration statement on Form 10 filed on
February 7, 2020)

Credit Agreement, dated as of March 25, 2020, by and among the Company, the designated borrowers from time
to time party thereto, the lenders and issuing banks party thereto, and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed on March 26, 2020)

Subsidiaries of the Registrant
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

____________________

Portions of the exhibit have been omitted to preserve confidentiality.

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Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARCONIC ROLLED PRODUCTS CORPORATION

March 30, 2020

/s/ Mary E. Zik

Mary E. Zik
Vice President and Controller (Also signing as Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/s/ Timothy D. Myers

Timothy D. Myers

/s/ Erick R. Asmussen

Erick R. Asmussen

Title

Chief Executive Officer and Director
(Principal Executive Officer)

Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

Date

March 30, 2020

Christopher L. Ayers, as a Director, on March 30, 2020.

*By /s/ Christopher L. Ayers

Christopher L. Ayers

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