Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment and Geographical Area Information

Segment and Geographical Area Information

Our primary line of business is the production of semi-fabricated specialty aluminum products, such as aluminum plate and sheet and extruded and drawn products, primarily used in aerospace/high strength ("Aero/HS products"), automotive ("Automotive Extrusions"), general engineering ("GE products") and other industrial end market applications ("Other products"). We operate 11 focused production facilities in the United States and one in Canada. Consistent with the manner in which our chief operating decision maker reviews and evaluates our business, the Fabricated Products business is treated as a single operating segment. At March 31, 2016, approximately 63% of our employees were covered by collective bargaining agreements and approximately 6% of our employees were covered by collective bargaining agreements with expiration dates occurring within one year from March 31, 2016.

In addition to the Fabricated Products segment, we have a business unit, All Other, which provides general and administrative support for our operations. For purposes of segment reporting under GAAP, we treat the Fabricated Products segment as a reportable segment. 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 net operating charges.

The following tables provide financial information by reporting segment and business unit for each period or as of each period-end, as applicable (in millions of dollars):

	Quarter Ended
	March 31,
	2016			2015
Net sales:
Fabricated Products	$	343.2		$	371.7
Segment operating income (loss):
Fabricated Products1	$	57.9		$	44.9
All Other2	(13.1		)	(503.5		)
Total operating income (loss)	$	44.8		$	(458.6	)
Interest expense	(3.7		)	(9.8		)
Other income, net	0.3			0.4
Income (loss) before income taxes	$	41.4		$	(468.0	)
Depreciation and amortization:
Fabricated Products	$	8.6		$	7.9
All Other	0.1			0.1
Total depreciation and amortization	$	8.7		$	8.0
Capital expenditures:
Fabricated Products	$	25.8		$	11.2
All Other	0.1			0.1
Total capital expenditures	$	25.9		$	11.3

_____________________

¹  Fabricated Products segment operating income included non-cash mark-to-market gain (loss) on primary aluminum, natural gas, electricity and foreign currency hedging activities, which totaled $4.0 million and $(4.5) million for the quarters ended March 31, 2016 and March 31, 2015, respectively. For further discussion regarding mark-to-market matters, see Note 8.

²  Operating loss in All Other included Net periodic postretirement benefit cost of $0.8 million and $0.6 million for the quarters ended March 31, 2016 and March 31, 2015, respectively. Additionally, operating loss in All Other included (gain) loss on removal of Union VEBA net assets of $(0.1) million and $492.2 million for the quarters ended March 31, 2016 and March 31, 2015, respectively. See Note 5 for further details.

	March 31, 2016		December 31, 2015
Assets:
Fabricated Products	$	932.5	$	904.7
All Other1	304.1		342.9
Total assets	$	1,236.6	$	1,247.6

_____________________

¹  Assets in All Other represent primarily all of our cash and cash equivalents, short-term investments, financial derivative assets (see Note 9) and net deferred income tax assets.

Net sales by product categories based on end market applications for the Fabricated Products segment were as follows (in millions of dollars):

	Quarter Ended
	March 31,
	2016		2015
Net sales:
Aero/HS products	$	176.9	$	180.3
Automotive Extrusions	48.4		50.1
GE products	105.4		119.1
Other products	12.5		22.2
Total net sales	$	343.2	$	371.7

Geographic information for income taxes paid were as follows (in millions of dollars):

	Quarter Ended
	March 31,
	2016		2015
Income taxes paid:
Fabricated Products –
United States	$	0.1	$	0.1
Canada	0.2		0.9
Total income taxes paid	$	0.3	$	1.0

The aggregate foreign currency transaction gain (loss) included in determining net income were immaterial for the quarters ended March 31, 2016 and March 31, 2015.

For the quarter ended March 31, 2016, one customer represented 25% and another represented 10% of Fabricated Products Net sales. For the quarter ended March 31, 2015, one customer represented 23% and another represented 10% of Fabricated Products Net Sales.

At March 31, 2016, one customer represented 19% and one other individual customer represented 12% of the trade receivables balance. Two individual customers accounted for 17% of the trade receivables balance at December 31, 2015. 

Information for delivery of our primary aluminum supply from our major suppliers were as follows:

	Quarter Ended
	March 31,
	2016		2015
Percentage of total primary aluminum supply (lbs):
Supply from the Company's top five major suppliers	83	%	75	%
Supply from the Company's largest supplier	30	%	29	%
Supply from the Company's second and third largest suppliers	35	%	29	%