Segment Information, Geographic and Product Data

12 Months Ended

Jun. 30, 2013

Segment Information, Geographic and Product Data

Segment Information, Geographic and Product Data

18.          Segment Information, Geographic and Product Data

The Company has three reportable segments, Specialty Alloys Operations (“SAO”), Latrobe, and Performance Engineered Products (“PEP”). During the first quarter of fiscal year 2013, the Company moved the Specialty Steel Supply (“SSS”) business acquired in connection with the Latrobe Acquisition from the Latrobe segment to the Performance Engineered Products segment.  All prior year information has been recast to conform to the current year presentation.

The SAO segment is comprised of the Company’s major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading, Pennsylvania and the surrounding area, South Carolina, and the new premium products manufacturing facility being built in Athens, Alabama.  The combined assets of the SAO operations are managed in an integrated manner to optimize efficiency and profitability across the total system.

The Latrobe segment is comprised of the operations of the Latrobe business acquired effective February 29, 2012. The Latrobe segment provides management with the focus and visibility into the business performance of these newly acquired operations. The Latrobe segment also includes the results of Carpenter’s distribution business in Mexico.

The PEP segment is comprised of the Company’s differentiated operations.  This includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business and the Specialty Steel Supply distribution business that was acquired in connection with the Latrobe Acquisition.  The businesses in the PEP segment are managed with an entrepreneurial structure to promote speed and flexibility and drive overall revenue and profit growth.

Our executive management evaluates the performance of these operating segments based on sales, operating income and cash flow generation. Segment operating profit excludes general corporate costs, which include executive and director compensation and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that management considers not representative of ongoing operations, such as restructuring related charges, transaction costs associated with acquisitions, and other specifically-identified income or expense items.  The accounting policies of our reportable segments are the same as those described in the Summary of Significant Accounting Policies.

The service cost component of the Company’s net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating income of the business segments.  The residual net pension expense, which is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, and amortization of actuarial gains and losses and prior service costs, is included under the heading “Pension earnings, interest & deferrals.”

On a consolidated basis, no single customer accounted for 10 percent or more of the Company’s sales for the years ended June 30, 2013 and June 30, 2012. On a consolidated basis one customer, Precision Castparts Corporation, accounted for 10% ($161.7 million) of the Company’s sales for the year ended June 30, 2011.

Segment Data	Years Ended June 30,
($ in millions)	2013			2012			2011
Net Sales:
Specialty Alloys Operations	$	1,547.4		$	1,566.6		$	1,431.3
Latrobe	491.2			200.8			38.7
Performance Engineered Products	378.8			365.7			248.3
Intersegment	(145.7		)	(104.4		)	(43.2		)
Consolidated net sales	$	2,271.7		$	2,028.7		$	1,675.1

Operating Income:	Years Ended June 30,
($ in millions)	2013			2012			2011
Specialty Alloys Operations	$	218.9		$	229.4		$	139.3
Latrobe	58.3			11.0			2.2
Performance Engineered Products	36.5			44.1			35.0
Corporate costs	(47.7		)	(53.2		)	(42.0		)
Pension earnings, interest & deferrals	(31.9		)	(15.3		)	(35.2		)
Intersegment	(1.4		)	(5.9		)	(2.9		)
Consolidated operating income	$	232.7		$	210.1		$	96.4

	Years Ended June 30,
($ in millions)	2013			2012			2011
Depreciation and Amortization:
Specialty Alloys Operations	$	56.7		$	53.2		$	51.1
Latrobe	22.7			7.7			0.4
Performance Engineered Products	19.4			17.7			10.2
Corporate	5.9			5.6			4.9
Intersegment	(0.6		)	(0.4		)	(0.1		)
Consolidated depreciation and amortization	$	104.1		$	83.8		$	66.5

	Years Ended June 30,
($ in millions)	2013			2012			2011
Capital Expenditures:
Specialty Alloys Operations	$	284.8		$	121.1		$	51.6
Latrobe	25.0			7.9			0.4
Performance Engineered Products	24.7			40.0			24.8
Corporate	4.0			5.0			3.9
Intersegment	(1.6		)	(2.1		)	(1.1		)
Consolidated capital expenditures	$	336.9		$	171.9		$	79.6

	June 30,
($ in millions)	2013			2012
Total Assets:
Specialty Alloys Operations	$	1,537.9		$	1,293.4
Latrobe	771.6			807.6
Performance Engineered Products	391.7			394.7
Corporate	233.7			191.4
Intersegment	(52.0		)	(59.3		)
Consolidated total assets	$	2,882.9		$	2,627.8

Geographic Data	Years Ended June 30,
($ in millions)	2013		2012		2011
Net Sales:(a)
United States	$	1,575.3	$	1,364.2	$	1,163.7
Europe	382.1		375.9		277.4
Asia Pacific	153.6		142.1		110.7
Mexico	66.6		68.8		67.1
Canada	59.8		52.1		36.6
Other	34.3		25.6		19.6
Consolidated net sales	$	2,271.7	$	2,028.7	$	1,675.1

(a) Net sales were attributed to countries based on the location of the customer.

Long-lived assets:	June 30,
($ in millions)	2013		2012
United States	$	1,142.5	$	901.7
Canada	9.1		9.8
Europe	6.1		6.9
Mexico	1.6		1.6
Asia Pacific	9.1		4.6
Consolidated long-lived assets	$	1,168.4	$	924.6

Product Data	Year Ended June 30,
($ in millions)	2013		2012		2011
Special alloys	$	989.9	$	931.4	$	831.8
Stainless steel	638.8		637.3		564.9
Titanium products	155.0		156.6		135.3
Powder metals	60.4		64.3		61.4
Alloy and tool steel	255.7		108.6		27.2
Other materials	171.9		130.5		54.5
Total net sales	$	2,271.7	$	2,028.7	$	1,675.1