Segment and Geographical Area Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment and Geographical Area Information

Segment and Geographical Area Information

The Company's primary line of business is the production of semi-fabricated specialty aluminum products, such as aluminum sheet and plate and extruded and drawn products, primarily used in aerospace/high strength, general engineering, automotive, and other industrial end market applications. The Company operates 11 focused production facilities in the United States and one in Canada. Consistent with the manner in which the Company's chief operating decision maker reviews and evaluates the Company's business, the Fabricated Products business is treated as a single operating segment.

In addition to the Fabricated Products segment, the Company has two business units, Secondary Aluminum and

Corporate and Other. The Secondary Aluminum business unit sells value added products, such as ingot and billet, produced at

Anglesey, a secondary aluminum remelt and casting facility in Holyhead, Wales in which the Company owns a 49% non-controlling interest. The Corporate and Other business unit provides general and administrative support for the Company's operations.

For purposes of segment reporting under GAAP, the Company treats the Fabricated Products segment as a reportable

segment and combines the two other business units, Secondary Aluminum and Corporate and Other, into one category, which is

referred to as All Other. All Other is not considered a reportable segment.

On January 1, 2012, management began reviewing the results of the primary aluminum hedging activities, which prior to

January 1, 2012 had been reported in All Other, with the results of the Fabricated Products segment because such hedging activities are now conducted solely for the Fabricated Products segment. Accordingly, the results of primary aluminum hedging activities have been included in the Fabricated Products segment for 2012. Prior period results have been conformed to current period presentation, which resulted in a (decrease) increase of $(25.0) and $3.1 in operating income of the Fabricated Products segment for 2011 and 2010, respectively, and an increase of $0.6 in Fabricated Products segment assets as of December 31, 2011.

The accounting policies of the Fabricated Products segment are the same as those described in Note 1. Segment results are evaluated internally by management before any allocation of corporate overhead and without any charge for income taxes, interest expense, or Other operating charges, net.

The following tables provide financial information by reporting segment for each period or as of each period end, as applicable:

	Year Ended December 31,
	2012			2011			2010
Net Sales:
Fabricated Products	$	1,360.1		$	1,301.3		$	1,078.8
All Other1	—			—			0.3
Total net sales	$	1,360.1		$	1,301.3		$	1,079.1
Operating Income (Loss):
Fabricated Products 2,3	$	190.8		$	83.6		$	81.7
All Other4	(24.9		)	(28.6		)	(40.6		)
Total operating income	$	165.9		$	55.0		$	41.1
Interest expense	(29.1		)	(18.0		)	(11.8		)
Other income (expense), net	2.8			4.3			(4.2		)
Income before income taxes	$	139.6		$	41.3		$	25.1
Depreciation and Amortization:
Fabricated Products	$	26.0		$	24.8		$	19.4
All Other	0.5			0.4			0.4
Total depreciation and amortization	$	26.5		$	25.2		$	19.8
Capital expenditures:
Fabricated Products	$	43.8		$	32.1		$	38.0
All Other	0.3			0.4			0.9
Total capital expenditures	$	44.1		$	32.5		$	38.9

	December 31, 2012		December 31, 2011		December 31, 2010
Assets:
Fabricated Products	$	771.2	$	637.0	$	525.3
All Other5	981.3		683.6		793.6
Total assets	$	1,752.5	$	1,320.6	$	1,318.9

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¹  Net sales in All Other in 2010 represent residual activity involving primary aluminum purchased by the Company from Anglesey while it continued its smelting operations, prior to September 30, 2009, and resold by the Company in the first quarter of 2010. In connection with Anglesey’s remelt operations beginning in the fourth quarter of 2009, the Company changed its basis of revenue recognition from gross to a net basis (see Note 1).

²  Operating results in the Fabricated Products segment for 2012, 2011 and 2010 included non-cash LIFO inventory (benefits) charges of $(4.9), $(7.1) and $16.5, respectively. Also included in the Fabricated Products segment operating results for 2012, 2011 and 2010 were $1.1, $1.7 and $13.6, respectively, of environmental expense. Fabricated Products segment operating results for 2012 and 2010 also included $4.4 and $3.9 of asset impairment charge relating to certain Property, plant and equipment, respectively.

³  Fabricated Products segment results for 2012, 2011 and 2010 include non-cash mark-to-market gains (losses) on primary aluminum, natural gas, electricity and foreign currency hedging activities totaling $15.2, $(29.9) and $(0.7), respectively. For further discussion regarding mark-to-market matters, see Note 12.

⁴  Operating results in All Other represent operating expenses in the Corporate and Other business unit. Operating results of All Other include VEBA net periodic pension benefit (income) costs of $(11.9), $(6.0) and $5.1 for 2012, 2011 and 2010, respectively.

⁵  Assets in All Other represent primarily all of the Company’s cash and cash equivalents, short-term investments, metal and financial derivative assets, net assets in respect of VEBA(s) and net deferred income tax assets.

Net sales by product categories, which are based on end market applications, for the Fabricated Products segment are as follows:

	Year Ended December 31,
	2012		2011		2010
Net Sales:
Aero/HS Products	$	695.1	$	596.3	$	467.3
GE Products	441.4		447.0		409.3
Automotive Extrusions	125.5		126.9		103.0
Other Products	98.1		131.1		99.2
Total Net Sales	$	1,360.1	$	1,301.3	$	1,078.8

Geographic information for net sales, based on country of origin, income taxes paid, and long-lived assets are as follows:

	Year Ended December 31,
	2012		2011		2010
Net sales to unaffiliated customers:
Fabricated Products —
United States	$	1,256.5	$	1,195.1	$	991.2
Canada	103.6		106.2		87.6
Total Fabricated Products net sales	1,360.1		1,301.3		1,078.8
All Other —
United Kingdom	—		—		0.3
Total All Other net sales	—		—		0.3
Total net sales	$	1,360.1	$	1,301.3	$	1,079.1
Income Taxes Paid:
Fabricated Products —
United States	$	0.5	$	1.7	$	0.1
Canada	1.3		1.8		0.7
Total income taxes paid	$	1.8	$	3.5	$	0.8

	December 31, 2012		December 31, 2011		December 31, 2010
Long-lived assets:1
Fabricated Products —
United States	$	367.5	$	351.4	$	337.3
Canada	12.5		11.9		11.5
Total Fabricated Products long-lived assets	380.0		363.3		348.8
All Other —
United States	4.3		4.5		5.3
Total All Other long-lived assets	4.3		4.5		5.3
Total long-lived assets	$	384.3	$	367.8	$	354.1

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¹    Long-lived assets represent Property, plant and equipment, net.

The aggregate foreign currency transaction gains (losses) included in determining net income were immaterial for 2012, 2011, and 2010. Sales to the Company’s largest fabricated products customer accounted for sales of approximately 22%, 21% and 23% of total revenue in 2012, 2011, and 2010, respectively. The loss of the Company’s largest customer would have a material adverse effect on the Company taken as a whole. However, in the Company’s opinion, the relationship between the customer and the Company is good, and the risk of loss of the customer is remote. Export sales were approximately 18%, 14% and 13% of total revenue during 2012, 2011 and 2010, respectively. In 2012, 2011 and 2010, the Company secured 78%, 83% and 85%, respectively, of its annual primary aluminum from the top five major suppliers. The largest supplier provided approximately 29%, 32% and 33% of the annual primary aluminum supply in 2012, 2011 and 2010, respectively. The second and third largest suppliers together provided approximately 31%, 34% and 36% of the annual primary aluminum supply in 2012, 2011 and 2010, respectively.