老虎机种类

老虎机种类 Board Issues Letter to Shareholders Highlighting Board and Management鈥檚 Clearly Defined Three-Year Plan to Drive Shareholder Value

Plan Focuses on Continued Customer-Centric Innovation, Continued Cost Effectiveness

Elliott鈥檚 Ideas Would Damage 老虎机种类鈥檚 Customer Relationships, Risk Company鈥檚 Future; Elliott鈥檚 Proposed CEO Not Independent, Wrong for 老虎机种类

老虎机种类 Board Urges Shareholders to Vote 鈥淔翱搁鈥� the Company鈥檚 Nominees on the WHITE Proxy Card 鈥� a Vote 鈥淔翱搁鈥� 老虎机种类鈥檚 Strategic Plan and Customer Relationships

The independent directors of 老虎机种类 (NYSE: ARNC) today issued an open letter to shareholders highlighting why key 老虎机种类 customers, including Airbus Group, The Boeing Company, United Technologies Corp., and GE Aviation support the Company鈥檚 management team and strategy of investing in innovation while continuing to focus on cost effectiveness, why ideas proposed by Elliott Management would put these relationships at risk and how they could damage 老虎机种类鈥檚 future. Additional information, including the letter to shareholders, is available at .

The full text of the letter follows:

Dear Fellow 老虎机种类 Shareholder:

Over the past eight years, your management team, under the leadership of Chief Executive Officer Klaus Kleinfeld, has executed a highly successful transformation and built 老虎机种类 into a global leader in precision engineering and advanced manufacturing. Elliott Management (鈥淓lliott鈥�) agrees: 鈥溊匣⒒�种类 possesses a world class asset base, and in some cases, one of a kind assets.鈥�¹*

老虎机种类 was created through years of deliberate investments developing cutting-edge technology, material science and advanced manufacturing. This, along with management鈥檚 focus on strong cost control, has enabled 老虎机种类 to very successfully develop long-term customer partnerships and profitably grow.

Your Board and management team have a clear plan to continue the progress we have already made: continue to invest in innovative and high-value solutions for our customers and ensure that customers continue turning to 老虎机种类 to help them solve their most critical technological and manufacturing challenges.

ARCONIC CUSTOMERS SUPPORT THE COMPANY鈥橲 MANAGEMENT TEAM AND STRATEGY OF INVESTING IN INNOVATION WHILE ENSURING COST EFFECTIVENESS

老虎机种类 has a best-in-class technology portfolio with more than 2,000 pending and granted patents. This includes game-changing innovations: bonding technology that helps automakers build better-performing, stronger, lighter cars and trucks, like the Ford F-150; high temperature blades for jet engines made by Pratt and Whitney and GE that make airplanes fly more efficiently; and 3D printed parts for aerospace giants like Airbus that push the reaches of current technology.

We have a proven 128-year heritage of innovation born in places like Cleveland, Pittsburgh and Davenport. Our deep understanding of our customers鈥� applications allows us to develop solutions that create substantial value for them. Our innovations drive performance and, paired with our focus on cost effectiveness, have allowed us to successfully build long-term customer relationships.

Today, our hard-working and talented employees make the products that are mission critical to some of the world鈥檚 leading companies, including GE, United Technologies, Boeing, Airbus, Ford and PACCAR; these customers believe in what we are doing.

Don鈥檛 just take our word for it. Here鈥檚 what our customers have to say:

鈥溊匣⒒�种类 has become a key partner to Airbus for new technologies. What I particularly value is Klaus鈥� deep understanding of the critical levers to support OEM goals. As CEO of Airbus, I fully support his continued leadership of 老虎机种类.鈥�
- Tom Enders, CEO, Airbus Group, March 2017

鈥淚n a technology-driven sector like aerospace鈥�we need our top-tier suppliers operating as true business and industry partners. Klaus Kleinfeld and his team have鈥�improved our business relationship by focusing in the right areas, increasing our collective competitiveness and delivering innovation and greater value to the customers we serve together in global markets.鈥�
- Dennis Muilenburg, Chairman, President & CEO, The Boeing Company, March 2017

鈥淜laus Kleinfeld and his team have been among our most valuable partners in the development of some of the most complex parts that make up Pratt & Whitney's Geared Turbofan Engine鈥� [we] support Klaus and the rest of 老虎机种类 management as they remain focused on the investments that will secure sustainable, long-term growth for UTC, for 老虎机种类, and for our entire industry.鈥�
- Greg J. Hayes, Chairman, President & CEO of United Technologies Corp., March 2017

鈥淚nvestments in technology and rate readiness are more important than ever within the supply chains of our growing aviation industry. GE supports Klaus and the 老虎机种类 commitment to those priorities and the long-term future of our industry.鈥�
- David Joyce, GE Vice Chair and GE Aviation President & CEO, February 2017

Shareholders should ask themselves: if Elliott has credible ideas about how to strengthen 老虎机种类鈥檚 business, improve operating performance and build long-term value, why haven鈥檛 any of our key customers endorsed Elliott?

ELLIOTT鈥橲 IDEAS WOULD DAMAGE OUR CUSTOMER RELATIONSHIPS AND RISK OUR FUTURE

Unfortunately, Elliott fails to understand that the success of our business requires close, collaborative partnerships with our customers that have been built over many years and even decades. By successfully shifting to higher-value, less commoditized products, we have doubled the profitability in 老虎机种类鈥檚 businesses over the last eight years. At 老虎机种类, we believe that pricing should reflect the value we bring to our customers 鈥� and the greater value we create for them, the greater profitability for our shareholders. In contrast, rather than maintaining or strengthening our close customer ties and innovation edge, Elliott has proposed that 老虎机种类 cut R&D spending and 鈥渦tilize its pricing power with customers鈥�²* 鈥� otherwise known as price gouging.

These short-sighted ideas might be good for an activist hedge fund investor in the near term. But, they would put our critical customer relationships at significant risk, and potentially lead to the loss of their business altogether 鈥� significantly damaging our future.

老虎机种类鈥檚 Board and management have a strong, clearly defined three-year plan that focuses on delivering value to you, our shareholders. Elliott has no clear plan.

老虎机种类鈥檚 Value-Enhancing Path						Elliott鈥檚 Value-Destroying Ideas
鈥�	Focus on sustained profitable growth in					X	No operational plan presented
	attractive markets					X	Likely near-term plan of cutting R&D, which
鈥�	Deliver value to customers through						would risk losing the innovative edge that
	unique technology and material science						is critical to 老虎机种类鈥檚 customers and future
鈥�	Continuously invest in innovation for						profitable growth
	new products and better processes					X	Indicated plan of price gouging, which
鈥�	Disciplined focus on cost efficiencies in						would alienate customers and potentially
	the businesses as well as in corporate						lead to loss of business
鈥�	Increase capital efficiency with a focus					X	Recommending a CEO candidate who has
	on both short- and long-term returns						reportedly had a difficult relationship with
鈥�	Maintain a high-performance team						valued 老虎机种类 customers; is in breach of
							his non-compete contract; and has financial
							arrangements with Elliott
						X	Removal of critical and necessary skills from
							the Board of Directors

ELLIOTT鈥橲 PROPOSED CEO IS WRONG FOR ARCONIC AND IS NOT INDEPENDENT

Elliott has proposed that Larry Lawson, a former Spirit AeroSystems CEO and currently Elliott鈥檚 consultant, should replace Mr. Kleinfeld, our CEO. In our view, Mr. Lawson is not the right person to lead 老虎机种类. There are significant doubts about his ability to maintain the customer relationships that are an essential element of our future success.

Shareholders should ask themselves: Why did Mr. Lawson depart from both Lockheed Martin and Spirit AeroSystems so abruptly? And what issues did he leave behind?

Here鈥檚 what independent third parties had to say about Mr. Lawson鈥檚 customer relationships:^*

• In relation to Mr. Lawson serving as CEO of Spirit AeroSystems: 鈥淚ndustry executives and government officials who worked with Lawson said he might not be best suited for often tense negotiations with both Boeing and Airbus about large supply agreements鈥︹�� (Reuters, 1/27/16)
• Following Mr. Lawson鈥檚 departure from Lockheed Martin: 鈥溾�楾he change in leadership could pave the way for better relations with the Pentagon鈥�There鈥檚 just been a very bad dynamic established by current [Lockheed] leadership and the customer [the Pentagon]鈥︹�欌�� (Richard Aboulafia, aerospace industry analyst, quoted in Fort Worth Star-Telegram, 3/20/13)

鈥�and Mr. Lawson鈥檚 mysterious exits from Spirit AeroSystems and Lockheed Martin:

• Regarding his departure from Spirit AeroSystems: 鈥溾�楬is sudden decision to go with contract negotiations with Boeing and Airbus unresolved is puzzling.鈥欌�� (Cai von Rumohr, aerospace analyst at Cowen & Co., quoted in the Wall Street Journal, 6/8/16)
• Regarding his departure from Lockheed Martin: 鈥淭he departure of Lawson is especially intriguing, because he took over as head of aeronautics only 12 months ago, and he is leaving to lead a second-tier company that has a fraction of the sales his Lockheed unit did.鈥� (Forbes, 3/19/13)

Shareholders should also ask themselves whether Mr. Lawson is a viable CEO candidate given that he is subject to a non-compete agreement with Spirit AeroSystems; Spirit AeroSystems has said Mr. Lawson is already in violation of that agreement as a result of his involvement with Elliott.

And, finally, shareholders must wonder how Elliott鈥檚 proposed compensation arrangements with Mr. Lawson would influence his actions if he were to become CEO. Elliott has already paid Mr. Lawson approximately $6.6 million in consulting fees and indemnification payments. In total, Elliott has agreed to pay him approximately $28 million over the course of the next two years, so that if Mr. Lawson became 老虎机种类鈥檚 CEO, he would nevertheless continue to be on Elliott鈥檚 payroll.

This compensation arrangement creates conflicts of interest. Mr. Lawson is getting paid by Elliott. How will he be objective and act in the best interests of all our shareholders? Elliott should not be permitted to 鈥渂uy鈥� the next CEO in hopes of influencing him to implement its short-sighted plan.

THE BOARD RECOMMENDS SHAREHOLDERS VOTE 鈥淔翱搁鈥� ARCONIC鈥橲 INDEPENDENT NOMINEES AND GOVERNANCE PROPOSALS

Your Board unanimously recommends that shareholders vote 鈥淔翱搁鈥� 老虎机种类鈥檚 five highly qualified candidates 鈥� Amy E. Alving, David P. Hess, Klaus Kleinfeld, Ulrich Schmidt and Ratan N. Tata 鈥� which is a vote in favor of the Company鈥檚 strategic plan and a Board that is committed to creating value for all shareholders.

Elliott has no experience operating a business like ours, and the election of its nominees would remove critical skills from your Board and jeopardize our future. Elliott has no fiduciary responsibility to 老虎机种类 shareholders. They have misled and manipulated the facts. And they have no plan to deliver value.

After careful study, your Board believes that 老虎机种类 has the right strategy and the right team to drive future value. We ask for your support.

PROTECT YOUR INVESTMENT. KEEP ARCONIC ON A STRONG PATH.
VOTE THE WHITE PROXY CARD TODAY.

Thank you.

The Independent Directors of 老虎机种类 Inc.:
Patricia F. Russo, Lead Independent Director				Amy E. Alving
Arthur D. Collins, Jr.				Rajiv L. Gupta
David P. Hess				Sean O. Mahoney
E. Stanley O鈥橬eal				John C. Plant
L. Rafael Reif				Julie G. Richardson
Ulrich Schmidt				Ratan N. Tata

Please vote today by telephone, via the Internet or by signing, dating and returning the enclosed WHITE proxy card.

If you have questions, need assistance in voting your shares or wish to change a prior vote, please contact:

INNISFREE M&A INCORPORATED

Shareholders Call Toll-Free: (877) 750-5836

Banks and Brokers Call Collect: (212) 750-5833

REMEMBER:

Please simply discard any Blue proxy card that you may receive from Elliott Management.

Submitting a proxy using a Blue proxy card 鈥� even if you 鈥渨ithhold鈥� on Elliott Management鈥檚 nominees 鈥� will revoke any vote you had previously submitted on 老虎机种类鈥檚 WHITE proxy card.

About 老虎机种类

老虎机种类 (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: . Follow @arconic: , , , and .

Forward鈥揕ooking Statements

This communication 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 鈥渁nticipates,鈥� 鈥渂elieves,鈥� 鈥渃ould,鈥� 鈥渆stimates,鈥� 鈥渆xpects,鈥� 鈥渇orecasts,鈥� 鈥済uidance,鈥� 鈥済oal,鈥� 鈥渋ntends,鈥� 鈥渕ay,鈥� 鈥渙utlook,鈥� 鈥減lans,鈥� 鈥減rojects,鈥� 鈥渟eeks,鈥� 鈥渟ees,鈥� 鈥渟hould,鈥� 鈥渢argets,鈥� 鈥渨ill,鈥� 鈥渨ould,鈥� or other words of similar meaning. All statements that reflect 老虎机种类鈥檚 expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, forecasts relating to the growth of end markets and potential share gains; statements and guidance regarding future financial results or operating performance; and statements about 老虎机种类鈥檚 strategies, outlook, business and financial prospects. Forward-looking statements are not guarantees of future performance, 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, including, but not limited to: (a) deterioration in global economic and financial market conditions generally; (b) unfavorable changes in the markets served by 老虎机种类; (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 from restructuring programs and productivity improvement, cash sustainability, technology advancements, and other initiatives; (d) changes in discount rates or investment returns on pension assets; (e) 老虎机种类鈥檚 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) political, economic, and regulatory risks in the countries in which 老虎机种类 operates or sells products; (h) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; and (i) the other risk factors discussed in 老虎机种类鈥檚 Form 10-K for the year ended December 31, 2016, and other reports filed with the U.S. Securities and Exchange Commission (SEC). 老虎机种类 disclaims any 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.

1	Elliott Management letter to shareholders, March 9, 2017
2	Elliott letter to shareholders, March 10, 2017
*	Permission to use quotations neither sought nor obtained

老虎机种类
Investor Contact
Patricia Figueroa, 212-836-2758
Patricia.Figueroa@arconic.com
or
Media Contact
Shona Sabnis, 212-836-2626
Shona.Sabnis@arconic.com