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

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-39162
ARCONIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-2745636
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
     
201 Isabella Street,Suite 400,Pittsburgh,Pennsylvania 15212-5872
(Address of principal executive offices) (Zip Code)
(412)-992-2500
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareARNCNew York Stock Exchange
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 (or for such shorter period that the registrant was required to file such reports), 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, a smaller reporting company, or an emerging growth 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
Accelerated filer
Non-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 May 2, 2022, there were 105,784,425 shares of common stock, par value $0.01 per share, of the registrant outstanding.


TABLE OF CONTENTS

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,” “would,” or other words of similar meaning. All statements that reflect Arconic’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements relating to the condition of, or trends or developments in, the ground transportation, aerospace, building and construction, industrial, packaging and other end markets; Arconic’s future financial results, operating performance, working capital, cash flows, liquidity and financial position; cost savings and restructuring programs; Arconic’s strategies, outlook, business and financial prospects; share repurchases; costs associated with pension and other postretirement benefit plans; projected sources of cash flow; and potential legal liability. These statements reflect beliefs and assumptions that are based on Arconic’s perception of historical trends, current conditions and expected future developments, as well as other factors Arconic believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and changes in circumstances, many of which are beyond Arconic’s control. Such risks and uncertainties include, but are not limited to:
continuing uncertainty regarding the duration and impact of the COVID-19 pandemic on our business and the businesses of our customers and suppliers, including labor shortages and increased quarantine rates;
deterioration in global economic and financial market conditions generally;
unfavorable changes in the end markets we serve;
the inability to achieve the level of revenue growth, cash generation, cost savings, benefits of our management of legacy liabilities, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted;
adverse changes in discount rates or investment returns on pension assets;
competition from new product offerings, disruptive technologies, industry consolidation or other developments;
the loss of significant customers or adverse changes in customers’ business or financial condition;
manufacturing difficulties or other issues that impact product performance, quality or safety;


the impact of pricing volatility in raw materials and inflationary pressures on our costs of production;
a significant downturn in the business or financial condition of a key supplier or other supply chain disruptions;
challenges to or infringements on our intellectual property rights;
the inability to successfully implement our re-entry into the U.S. packaging market or to realize the expected benefits of other strategic initiatives or projects;
the inability to identify or successfully respond to changing trends in our end markets;
the impact of potential cyber attacks and information technology or data security breaches;
geopolitical, economic, and regulatory risks relating to our global operations, including compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations;
the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation and compliance matters;
restrictions imposed by authorities on the operation of our Samara, Russia facility;
the impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations; and
the other risk factors summarized in Arconic’s Form 10-K for the year ended December 31, 2021 and other reports filed with the U.S. Securities and Exchange Commission.
The above list of factors is not exhaustive or necessarily in order of importance. Market projections are subject to the risks discussed above and in this report, and other risks in the market. For additional information concerning factors that could cause actual results to differ materially from the information contained in this report, reference is made to the information in Part II Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and Part I Item 1A, “Risk Factors” in Arconic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Arconic disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.



PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Arconic Corporation and subsidiaries
Statement of Consolidated Operations (unaudited)
(in millions, except per-share amounts)
First quarter ended March 31,20222021
Sales (C and D)
$2,191 $1,675 
Cost of goods sold (exclusive of expenses below)
1,956 1,431 
Selling, general administrative, and other expenses65 59 
Research and development expenses9 8 
Provision for depreciation and amortization60 63 
Restructuring and other charges (E)
5 1 
Operating income 96 113 
Interest expense
25 23 
Other expenses, net (F)
17 22 
Income before income taxes54 68 
Provision for income taxes (H)
12 16 
Net income 42 52 
Less: Net income attributable to noncontrolling interest  
Net income attributable to Arconic Corporation$42 $52 
Earnings Per Share Attributable to Arconic Corporation Common Stockholders (I):
Basic$0.40 $0.48 
Diluted$0.39 $0.46 
The accompanying notes are an integral part of the consolidated financial statements.
1

Arconic Corporation and subsidiaries
Statement of Consolidated Comprehensive Income (unaudited)
(in millions)
Arconic CorporationNoncontrolling interestTotal
First quarter ended March 31,202220212022202120222021
Net income$42 $52 $ $ $42 $52 
Other comprehensive loss, net of tax (K):
Change in unrecognized net actuarial loss and prior service cost/benefit related to pension and other postretirement benefits58 25   58 25 
Foreign currency translation adjustments(7)(7)  (7)(7)
Net change in unrecognized losses on cash flow hedges(70)(22)  (70)(22)
Total Other comprehensive loss, net of tax(19)(4)  (19)(4)
Comprehensive income$23 $48 $ $ $23 $48 


The accompanying notes are an integral part of the consolidated financial statements.
2

Arconic Corporation and subsidiaries
Consolidated Balance Sheet (unaudited)
(in millions)
March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$210 $335 
Receivables from customers, less allowances of $1 in both 2022 and 2021 (Q)
1,038 922 
Other receivables216 226 
Inventories (L)
1,833 1,630 
Prepaid expenses and other current assets72 55 
Total current assets3,369 3,168 
Properties, plants, and equipment7,552 7,529 
Less: accumulated depreciation and amortization4,918 4,878 
Properties, plants, and equipment, net2,634 2,651 
Goodwill319 322 
Operating lease right-of-use assets (M)
122 122 
Deferred income taxes236 229 
Other noncurrent assets88 88 
Total assets$6,768 $6,580 
Liabilities
Current liabilities:
Short-term debt (N)
$100 $ 
Accounts payable, trade1,7811,718
Accrued compensation and retirement costs115 116 
Taxes, including income taxes62 61 
Environmental remediation (O)
16 15 
Operating lease liabilities (M)
34 35 
Fair value of hedging instruments and derivatives (P)
117 23 
Other current liabilities99 95 
Total current liabilities2,324 2,063 
Long-term debt
1,595 1,594 
Accrued pension benefits
663 717 
Accrued other postretirement benefits400 411 
Environmental remediation (O)
45 49 
Operating lease liabilities (M)
90 90 
Deferred income taxes11 12 
Other noncurrent liabilities79 85 
Total liabilities5,207 5,021 
Contingencies and commitments (O)
Equity
Arconic Corporation stockholders equity:
Common stock1 1 
Additional capital3,363 3,368 
Accumulated deficit (510)(552)
Treasury stock (J)
(177)(161)
Accumulated other comprehensive loss (K)
(1,130)(1,111)
Total Arconic Corporation stockholders’ equity1,547 1,545 
Noncontrolling interest14 14 
Total equity1,561 1,559 
Total liabilities and equity$6,768 $6,580 
The accompanying notes are an integral part of the consolidated financial statements.
3

Arconic Corporation and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in millions)
Three months ended March 31,20222021
Operating Activities
Net income$42 $52 
Adjustments to reconcile net income to cash used for operations:
Depreciation and amortization60 63 
Deferred income taxes(4)4 
Restructuring and other charges (E)
5 1 
Net periodic pension benefit cost (G)
16 22 
Stock-based compensation5 2 
Amortization of debt issuance costs
1 2 
Other11 12 
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:
   (Increase) in receivables (Q)
(110)(186)
(Increase) in inventories(206)(161)
(Increase) Decrease in prepaid expenses and other current assets(10)3 
Increase in accounts payable, trade
116 117 
(Decrease) in accrued expenses(28)(33)
Increase in taxes, including income taxes1 9 
Pension contributions (G)
(4)(201)
Decrease in noncurrent assets1  
Increase in noncurrent liabilities1  
Cash used for operations(103)(294)
Financing Activities
Net change in short term borrowings (original maturities of three months or less) (N)
100 (9)
Additions to debt (original maturities greater than three months) (N)
 319 
Debt issuance costs (N)
(1)(4)
Repurchases of common stock (J)
(16) 
Other(11)(9)
Cash provided from financing activities72 297 
Investing Activities
Capital expenditures
(95)(28)
Other1 1 
Cash used for investing activities(94)(27)
Effect of exchange rate changes on cash and cash equivalents and restricted cash  
Net change in cash and cash equivalents and restricted cash(125)(24)
Cash and cash equivalents and restricted cash at beginning of year335 787 
Cash and cash equivalents and restricted cash at end of period$210 $763 

The accompanying notes are an integral part of the consolidated financial statements.
4

Arconic Corporation and subsidiaries
Statement of Changes in Consolidated Equity (unaudited)
(dollars in millions)
Common shares outstandingCommon stockAdditional capitalAccumulated deficitTreasury stockAccumulated
other
comprehensive loss
Noncontrolling
interest
Total
equity
Balance at December 31, 2020109,205,226$1 $3,348 $(155)$ $(1,761)$14 $1,447 
Net income— — — 52 — — — 52 
Other comprehensive loss (K)
— — — — — (4)— (4)
Stock-based compensation818,918 — 2 — — — — 2 
Other— — (7)— — — — (7)
Balance at March 31, 2021110,024,144$1 $3,343 $(103)$ $(1,765)$14 $1,490 
Balance at December 31, 2021105,326,885$1 $3,368 $(552)$(161)$(1,111)$14 $1,559 
Net income— — — 42 — — — 42 
Other comprehensive loss (K)
— — — — — (19)— (19)
Repurchases of common stock (J)
(505,982)— — — (16)— — (16)
Stock-based compensation963,522 — 5 — — — — 5 
Other— — (10)— — — — (10)
Balance at March 31, 2022105,784,425$1 $3,363 $(510)$(177)$(1,130)$14 $1,561 
The accompanying notes are an integral part of the consolidated financial statements.
5

Arconic Corporation and subsidiaries
Notes to the Consolidated Financial Statements (unaudited)
(dollars in millions, except per-share amounts)
A.    Basis of Presentation
The interim Consolidated Financial Statements of Arconic Corporation and its subsidiaries (“Arconic” or the “Company”) are unaudited. These Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments, considered necessary by management to fairly state the Company’s results of operations, financial position, and cash flows. The results reported in these Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the entire year. The 2021 year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). This Form 10-Q report should be read in conjunction with Arconic’s Annual Report on Form 10-K for the year ended December 31, 2021, which includes all disclosures required by 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 the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates upon subsequent resolution of identified matters.
References in these Notes to “ParentCo” refer to Arconic Inc., a Delaware corporation, and its consolidated subsidiaries (through March 31, 2020, at which time it was renamed Howmet Aerospace Inc. (“Howmet”)). On April 1, 2020 (the “Separation Date”), ParentCo separated into two standalone, publicly-traded companies, Arconic Corporation and Howmet (the “Separation”). In connection with the Separation, as of March 31, 2020, the Company and Howmet entered into several agreements to effect the Separation, including a Separation and Distribution Agreement and a Tax Matters Agreement. See Note A to the Consolidated Financial Statements in Part II Item 8 of Arconic Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. Also, references in these Notes to “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.
In the 2022 first quarter, the Company recorded a net gain of $3 in Cost of goods sold related to the unrealized impact associated with the change in the estimated fair value of natural gas supply contracts now determined to be derivatives (see Note P). This amount was comprised of an unrealized loss of $5 for the 2022 first quarter, an unrealized gain of $6 for the 2021 annual period, and an unrealized gain of $2 for the 2020 fourth quarter. The out-of-period amounts were not material to any interim or annual period.


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B.    Recently Adopted and Recently Issued Accounting Guidance
Issued
In March 2020, the FASB issued guidance that provides optional expedients and exceptions for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. These expedients and exceptions may be used when applying GAAP, if certain criteria are met, to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of such reform. The purpose of this guidance is to provide relief to entities from experiencing unintended accounting and/or financial reporting outcomes or consequences due to reference rate reform. This guidance became effective immediately on March 12, 2020 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022, after which time the expedients and exceptions expire. In January 2021, the FASB issued clarifying guidance to specify that certain of the optional expedients and exceptions apply to derivatives that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. This additional guidance may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively in the manner previously described for the guidance issued on March 12, 2020. As of March 31, 2022, Arconic has not experienced any unintended outcomes or consequences of reference rate reform that would necessitate the adoption of this guidance. Additionally, the Company’s credit agreement, which previously provided a credit facility that was referenced to LIBOR in certain borrowing situations, was amended in February 2022 to replace LIBOR with the Secured Overnight Financing Rate (SOFR) (see Note N). Accordingly, the Company does not need to consider application of this guidance related to its credit agreement. Management will continue to closely monitor all potential instances of reference rate reform to determine if adoption of this guidance becomes necessary in the future.




7

C.    Revenue from Contracts with Customers
The following table disaggregates revenue by major end market served. Differences between segment totals and consolidated Arconic are in Corporate.
First quarter ended March 31,Rolled
Products
Building and
Construction
Systems
ExtrusionsTotal
2022
Ground Transportation$726 $ $29 $755 
Packaging397   397 
Building and Construction84 291  375 
Aerospace167  43 210 
Industrial Products and Other430  25 455 
Total end-market revenue$1,804 $291 $97 $2,192 
2021
Ground Transportation$637 $ $25 $662 
Packaging219   219 
Building and Construction51 236  287 
Aerospace109  29 138 
Industrial Products and Other348  21 369 
Total end-market revenue$1,364 $236 $75 $1,675 

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D.    Segment and Related Information
Arconic’s profit or loss measure for its reportable segments is Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization). The Company calculates Segment Adjusted EBITDA as Total sales (third-party and intersegment) minus each of (i) Cost of goods sold, (ii) Selling, general administrative, and other expenses, and (iii) Research and development expenses, plus each of (i) Stock-based compensation expense, (ii) Metal price lag, and (iii) Unrealized (gains) losses on mark-to-market hedging instruments and derivatives (see below). Arconic’s Segment Adjusted EBITDA may not be comparable to similarly titled measures of other companies’ reportable segments.
Effective in the first quarter of 2022, management modified the Company’s definition of Segment Adjusted EBITDA to exclude the impact of unrealized gains and losses on mark-to-market hedging instruments and derivatives. This modification was deemed appropriate as Arconic is considering entering into additional hedging instruments in future reporting periods if favorable conditions exist to mitigate cost inflation. Certain of these instruments may not qualify for hedge accounting resulting in unrealized gains and losses being recorded directly to Sales or Cost of goods sold, as appropriate (i.e., mark-to-market). Additionally, this change was also applied to derivatives that do not qualify for hedge accounting for consistency purposes. The Company does not have a regular practice of entering into contracts that are treated as derivatives for accounting purposes. Ultimately, this change was made to maintain the transparency and visibility of the underlying operating performance of Arconic’s reportable segments. Prior to this change, the Company had a limited number of hedging instruments and derivatives that did not qualify for hedge accounting, the unrealized impact of which was not material to Arconic’s Segment Adjusted EBITDA performance measure. Accordingly, prior period information presented was not recast to reflect this change.
The operating results of Arconic’s reportable segments were as follows (differences between segment totals and the Company’s consolidated totals for line items not reconciled are in Corporate):
First quarter ended March 31,Rolled
Products
Building and
Construction
Systems
ExtrusionsTotal
2022
Sales:
Third-party sales$1,804 $291 $97 $2,192 
Intersegment sales12  1 13 
Total sales$1,816 $291 $98 $2,205 
Segment Adjusted EBITDA
$176 $44 $(5)$215 
Provision for depreciation and amortization$48 $4 $4 $56 
2021
Sales:
Third-party sales$1,364 $236 $75 $1,675 
Intersegment sales7   7 
Total sales$1,371 $236 $75 $1,682 
Segment Adjusted EBITDA
$165 $28 $(4)$189 
Provision for depreciation and amortization$48 $4 $6 $58 









9

The following table reconciles total Segment Adjusted EBITDA to consolidated net income attributable to Arconic Corporation:
First quarter ended March 31,20222021
Total Segment Adjusted EBITDA
$215 $189 
Unallocated amounts:
Corporate expenses(1)
(9)(9)
Stock-based compensation expense(5)(2)
Metal price lag(2)
(36)5 
Unrealized gains on mark-to-market hedging instruments and derivatives (P)
2  
Provision for depreciation and amortization(60)(63)
Restructuring and other charges (E)
(5)(1)
Other(3)
(6)(6)
Operating income
96 113 
Interest expense(25)(23)
Other expenses, net (F)
(17)(22)
Provision for income taxes (H)
(12)(16)
Net income attributable to noncontrolling interest  
Consolidated net income attributable to Arconic Corporation
$42 $52 
________________
(1)Corporate expenses are composed of general administrative and other expenses of operating the corporate headquarters and other global administrative facilities.
(2)Metal price lag represents the financial impact of the timing difference between when aluminum prices included in Sales are recognized and when aluminum purchase prices included in Cost of goods sold are realized. This adjustment aims to remove the effect of the volatility in metal prices and the calculation of this impact considers applicable metal hedging transactions.
(3)Other includes certain items that impact Cost of goods sold and Selling, general administrative, and other expenses on the Company’s Statement of Consolidated Operations that are not included in Segment Adjusted EBITDA.

10

E.    Restructuring and Other Charges
In the 2022 first quarter, Arconic recorded Restructuring and other charges of $5, which were comprised of the following components: a $4 charge related to several legacy non-U.S. matters, including $1 for an environmental remediation obligation related to Italy (see Environmental Matters in Note O) and $1 for the full settlement of certain employee retirement benefits related to Brazil (see Note G); and a $1 charge related to idling certain operations in the Extrusions segment (actions initiated in 2021).
In the 2021 first quarter, Arconic recorded Restructuring and other charges of $1, which were comprised of the following components: a $1 additional loss on the sale of an aluminum rolling mill in Brazil; a $1 credit for the reversal of reserves established in prior periods; and a $1 net charge for other items.
The Company does not include Restructuring and other charges in the results of its reportable segments. The impact of allocating such charges to segment results would have been as follows:
First quarter ended March 31,20222021
Rolled Products$ $1 
Building and Construction Systems (1)
Extrusions1 1 
Segment total1 1 
Corporate4  
$5 $1 
Activity and reserve balances for restructuring charges were as follows:
Layoff costsOther costsTotal
Reserve balances at December 31, 2020$13 $1 $14 
Cash payments(10)(5)(15)
Restructuring charges3 6 9 
Other(1)
(4)(1)(5)
Reserve balances at December 31, 20212 1 3 
Cash payments(1)(1)(2)
Restructuring charges 1 1 
Other(1)
 (1)(1)
Reserve balances at March 31, 2022(2)
$1 $ $1 
_____________________
(1)Other includes reversals of previously recorded restructuring charges and the effects of foreign currency translation.
(2)The remaining reserves are expected to be paid in cash during the remainder of 2022.

11

F.    Other Expenses, Net
First quarter ended March 31,20222021
Non-service costs — Pension and OPEB (G)
$14 $20 
Foreign currency losses, net6 2 
Other, net(3) 
$17 $22 

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G.    Pension and Other Postretirement Benefits
The components of net periodic benefit cost for defined benefit plans were as follows:
First quarter ended March 31,20222021
Pension benefits
Service cost$5 $6 
Interest cost16 17 
Expected return on plan assets(24)(33)
Recognized net actuarial loss19 32 
Settlements
1  
Net periodic benefit cost(1)
$17 $22 
Other postretirement benefits
Service cost$1 $1 
Interest cost3 3 
Recognized net actuarial loss2 2 
Amortization of prior service benefit(2)(1)
Net periodic benefit cost(1)
$4 $5 
__________________
(1)    Service cost was included within Cost of goods sold, Settlements were included within Restructuring and other charges, and all other components were included in Other expenses, net on the accompanying Statement of Consolidated Operations.
Pension Funding— In January 2021, the Company contributed a total of $200 to its two funded U.S. defined benefit pension plans, comprised of the estimated minimum required funding for 2021 of $183 and an additional $17. Arconic had no minimum required funding due in the 2022 first quarter for these two plans. The Company expects to contribute a total of $22 to these two plans in the remainder of 2022.

13

H.    Income Taxes
Arconic’s year-to-date tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date pretax ordinary income or loss. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. In addition, the tax provision is adjusted for the interim period impact of non-benefited pretax losses.
For the 2022 first quarter, the estimated annual effective tax rate, before discrete items, applied to ordinary income was 27.8%. This rate differs by 6.8 percentage points from the U.S. federal statutory rate of 21.0% primarily due to estimated U.S. tax on global intangible low-taxed income, non-deductible costs, the state tax impact of domestic taxable income, foreign losses in jurisdictions subject to existing valuation allowances, and U.S. tax on foreign earnings, partially offset by foreign income taxed in lower rate jurisdictions.
For the 2021 first quarter, the estimated annual effective tax rate, before discrete items, applied to ordinary income was 27.9%. This rate differs by 6.9 percentage points from the U.S. federal statutory rate of 21.0% primarily due to estimated U.S. tax on global intangible low-taxed income, the state tax impact of domestic taxable income, and U.S. tax on foreign earnings.
The effective tax rate including discrete items was 22.2% in the 2022 first quarter and 23.5% in the 2021 first quarter.
The following table details the components of Provision for income taxes:
First quarter ended March 31,20222021
Pretax ordinary income at estimated annual effective tax rate$15 $19 
Interim period treatment of operational losses in foreign jurisdictions for which no tax benefit is recognized*1  
Discrete items(4)(3)
Provision for income taxes$12 $16 
__________________
*    The interim period impact related to operational losses in foreign jurisdictions for which no tax benefit is recognized will reverse by the end of the calendar year.

14

I.    Earnings Per Share
Basic earnings per share (EPS) amounts are computed by dividing Net income attributable to Arconic by the weighted-average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. Specific to Arconic, such share equivalents consist of outstanding employee stock awards (excluding out-of-the-money stock options – see below). For periods in which the Company generates net income, the diluted weighted-average number of shares include common share equivalents associated with outstanding employee stock awards. For periods in which the Company generates a net loss, common share equivalents are excluded from the diluted weighted-average number of shares as their effect is anti-dilutive.
The share information used to compute basic and diluted EPS attributable to Arconic common stockholders was as follows (shares in millions):
First quarter ended March 31,20222021
Weighted-average shares outstanding – basic105.4 109.8 
Effect of dilutive share equivalents:
Stock units3.0 3.3 
Stock options0.1 0.1 
Weighted-average shares outstanding – diluted108.5 113.2 
Anti-dilutive share equivalents:
Stock units  
Stock options*:
In-the-money  
Out-of-the-money  
  
________________
*     Stock options are in-the-money when the respective exercise price of each such option is less than the average market price of the Company’s common stock during the applicable period presented. Conversely, stock options are out-of-the-money when the respective exercise price of each such option is more than the average market price of the Company’s common stock during the applicable period presented. Out-of-the-money stock options never result in common share equivalents for purposes of diluted EPS regardless of whether a company generates net income or a net loss. As of March 31, 2022 and March 31, 2021, there were 0.3 million and 0.4 million, respectively, out-of-the-money stock options outstanding with a weighted-average exercise price of $31.48 and $31.41, respectively.


15

J.     Preferred and Common Stock
On May 4, 2021, Arconic announced that its Board of Directors approved a share repurchase program authorizing the Company to repurchase shares of its outstanding common stock up to an aggregate transactional value of $300 over a two-year period expiring April 28, 2023. Repurchases under the program may be made from time to time, as the Company deems appropriate, solely through open market repurchases effected through a broker dealer, based on a variety of factors such as price, capital position, liquidity, financial performance, alternative uses of capital, and overall market conditions. There can be no assurance as to the number of shares the Company will repurchase. The share repurchase program may be increased or otherwise modified, renewed, suspended or terminated by the Company at any time, without prior notice. This program is intended to comply with Rule 10b5-1 and all purchases shall be made in compliance with Rule 10b-18, including without limitation the timing, price, and volume restrictions thereof. In the 2022 first quarter, Arconic repurchased 505,982 shares of the Company's common stock for $16 under this program. Cumulatively, the Arconic has repurchased 5,418,487 shares of the Company's common stock for $177 since the program’s inception.

16

K.    Accumulated Other Comprehensive Loss
The following table details the activity of the three components that comprise Accumulated other comprehensive loss for Arconic (such activity for Noncontrolling interest was immaterial for all periods presented):
First quarter ended March 31,20222021
Pension and other postretirement benefits (G)
Balance at beginning of period$(1,121)$(1,791)
Other comprehensive income:
Unrecognized net actuarial loss and prior service cost/benefit55 (1)
Tax expense(12) 
Total Other comprehensive income (loss) before reclassifications, net of tax43 (1)
Amortization of net actuarial loss and prior service cost/benefit(1)
20 33 
Tax expense(2)
(5)(7)
Total amount reclassified from Accumulated other comprehensive loss, net of tax(5)
15 26 
Total Other comprehensive income58 25 
Balance at end of period$(1,063)$(1,766)
Foreign currency translation
Balance at beginning of period$25 $29 
Other comprehensive loss(3)
(7)(7)
Balance at end of period$18 $22 
Cash flow hedges (P)
Balance at beginning of period$(15)$1 
Other comprehensive loss:
Net change from periodic revaluations(143)(35)
Tax benefit 33 8 
Total Other comprehensive loss before reclassifications, net of tax(110)(27)
Net amount reclassified to earnings(4)
53 7 
Tax expense(2)
(13)