Arconic Inc. (NYSE:ARNC) announced today that it will freeze U.S.
defined benefit pension plans for all U.S.-based salaried and
non-bargained hourly employees, effective April 1, 2018.
As a result, in the first quarter of 2018, the Company expects to record
a liability decrease of approximately $140 million related to the
reduction of future benefits and a curtailment charge of approximately
$5 million pre-tax. For the full year 2018, the Company expects
pension-related expense to be lower by approximately $50 million pre-tax
compared to 2017 full-year expenses.
The pension freeze applies to the accrual of future benefits for
approximately 7,900 affected U.S. employees; benefits already earned by
these employees through March 31, 2018 will be available when they reach
retirement eligibility. Retirees already collecting benefits and former
employees with vested benefits under the pension plans will not be
impacted by this change.
Arconic will continue to support affected employees in preparing for a
financially sound retirement by contributing 3% of their eligible
compensation to the Company’s applicable 401(k) plan and by matching
their contributions of up to 6% of eligible compensation to the
applicable plan—consistent with what most new salaried employees
currently receive. Arconic is also providing an additional transition
contribution of 3% of eligible compensation for the remaining nine
months of 2018 for affected employees.
“This transition balances our need to deliver competitive, equitable
benefits to all employees while maintaining market competitiveness,”
said Vas Nair, Executive Vice President of Human Resources at Arconic.
The lower pension expense expectation is based on preliminary year-end
December 31, 2017 results and is inclusive of the change to the pension
plans described above as well as expected changes in other
pension-related assumptions.
About Arconic
Arconic (NYSE: ARNC) creates breakthrough products that shape
industries. Working in close partnership with our customers, we solve
complex engineering challenges to transform the way we fly, drive, build
and power. Through the ingenuity of our people and cutting-edge advanced
manufacturing techniques, we deliver these products at a quality and
efficiency that ensure customer success and shareholder value. For more
information: www.arconic.com.
Follow @arconic: Twitter,
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Dissemination of Company Information
Arconic intends to make future announcements regarding Company
developments and financial performance through its website on www.arconic.com.
Forward–Looking Statements
This release 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 or projections about the future, other than statements of
historical fact, are forward-looking statements, including, without
limitation, statements and guidance regarding future financial results
or operating performance, and expectations regarding the transaction
closing. 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 management
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 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. Such risks and uncertainties include, but are not limited
to: (a) deterioration in global economic and financial market conditions
generally; (b) unfavorable changes in the markets served by Arconic; (c)
the inability to achieve the level of revenue growth, cash generation,
cost savings, improvement in profitability and margins, fiscal
discipline, or strengthening of competitiveness and operations
anticipated or targeted; (d) changes in discount rates or investment
returns on pension assets; (e) Arconic’s inability to realize expected
benefits, in each case as planned and by targeted completion dates, from
acquisitions, divestitures, facility closures, curtailments, expansions,
or joint ventures; (f) the impact of cyber attacks and potential
information technology or data security breaches; (g) any manufacturing
difficulties or other issues that impact product performance, quality or
safety; (h) political, economic, and regulatory risks in the countries
in which Arconic operates or sells products; (i) material adverse
changes in aluminum industry conditions, including fluctuations in
London Metal Exchange-based aluminum prices; (j) the impact of changes
in foreign currency exchange rates on costs and results; (k) the outcome
of contingencies, including legal proceedings, government or regulatory
investigations, and environmental remediation, which can expose Arconic
to substantial costs and liabilities; and (l) the other risk factors
summarized in Arconic’s Form 10-K for the year ended December 31, 2016,
Arconic’s Form 10-Q for the quarter ended June 30, 2017 and other
reports filed with the U.S. Securities and Exchange Commission (SEC).
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.
Market projections are subject to the risks discussed above and other
risks in the market.
Arconic Inc.
Investor:
Patricia Figueroa, (212) 836-2758
Patricia.Figueroa@arconic.com
or
Media:
Christa Zipf, (212) 836-2605
Christa.Zipf@arconic.com