Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment and Geographical Area Information

Segment 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, which the Company categorizes by the following end market applications: aerospace/high strength products (which is referred to as Aero/HS products), general engineering products (which is referred to as GE products), extrusions for automotive applications (which is referred to as Automotive Extrusions), and other industrial products (which referred to as Other products). 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 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, Corporate and Other and Secondary Aluminum. The Corporate and Other business unit provides general and administrative support for the Company's operations. The Secondary Aluminum business unit's activities related to the Company's purchase and resale of secondary aluminum produced by Anglesey Aluminium Limited (“Anglesey”), in which the Company owns a 49% non-controlling interest. During the quarter ended June 30, 2013, Anglesey ceased secondary aluminum operations at its remelt and casting facility in Holyhead, Wales.

See Note 3 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010 for additional details on the Company’s accounting with respect to the Company’s ownership in Anglesey.

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, Corporate and Other and Secondary Aluminum, into one category, which is referred to as All Other. All Other is not considered a reportable segment.

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:

	Quarter Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Net Sales:
Fabricated Products	$	319.9		$	335.5		$	986.2		$	1,046.1
Segment Operating Income (Loss):
Fabricated Products 1,2	$	44.8		$	62.5		$	145.0		$	161.7
All Other3	(3.2		)	(6.3		)	(13.3		)	(19.7		)
Total operating income	$	41.6		$	56.2		$	131.7		$	142.0
Interest expense	(8.8		)	(9.2		)	(27.1		)	(19.8		)
Other income, net	2.9			0.4			3.1			2.2
Income before income taxes	$	35.7		$	47.4		$	107.7		$	124.4
Depreciation and Amortization:
Fabricated Products	$	6.8		$	6.6		$	20.6		$	19.3
All Other	0.1			0.1			0.3			0.3
Total depreciation and amortization	$	6.9		$	6.7		$	20.9		$	19.6
Capital expenditures:
Fabricated Products	$	21.0		$	8.8		$	46.4		$	25.5
All Other	—			—			0.6			0.2
Total capital expenditures	$	21.0		$	8.8		$	47.0		$	25.7
Income Taxes Paid:
Fabricated Products —
United States	$	0.3		$	—		$	0.9		$	0.1
Canada	0.2			0.4			0.9			0.8
Total income taxes paid	$	0.5		$	0.4		$	1.8		$	0.9

______________________

^1.  Operating results in the Fabricated Products segment for the quarters ended September 30, 2013 and September 30, 2012 included net non-cash LIFO benefits of $6.8 and $5.7, respectively. Operating results in the Fabricated Products segment for the nine months ended September 30, 2013 and September 30, 2012 included net non-cash LIFO benefits of $19.7 and $13.5, respectively.

^2.  Fabricated Products segment results include non-cash mark-to-market gains on primary aluminum, natural gas, electricity and foreign currency hedging activities totaling $1.5 and $12.3 for the quarters ended September 30, 2013 and September 30, 2012, respectively. Non-cash mark-to-market (losses) gains on primary aluminum, natural gas, electricity and foreign currency hedging activities totaled $(3.4) and $15.3 for the nine months ended September 30, 2013 and September 30, 2012, respectively. For further discussion regarding mark-to-market matters, see Note 9.

^3.  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 of $5.6 and $2.9 for the quarters ended September 30, 2013 and September 30, 2012, respectively. VEBA net periodic pension benefit income was $16.9 and $8.9 for the nine months ended September 30, 2013 and September 30, 2012, respectively.

	September 30, 2013		December 31, 2012
Assets:
Fabricated Products	$	834.7	$	771.2
All Other1	957.3		981.3
Total assets	$	1,792.0	$	1,752.5

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^1.  Assets in All Other represent primarily all of the Company’s cash and cash equivalents, short-term investments, financial derivative assets, net assets in respect of VEBA(s) (see Note 6) 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:

	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Net Sales:
Aero/HS Products	$	163.9	$	167.9	$	508.6	$	523.5
GE Products	102.7		115.0		318.7		347.7
Automotive Extrusions	33.8		29.8		95.6		97.3
Other Products	19.5		22.8		63.3		77.6
Total Net Sales	$	319.9	$	335.5	$	986.2	$	1,046.1