Segment and Geographical Area Information

6 Months Ended

Jun. 30, 2017

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 Aero/HS products, Automotive Extrusions, GE products and 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 June 30, 2017, approximately 63% of our employees were covered by collective bargaining agreements and approximately 16% of our employees were covered by collective bargaining agreements with expiration dates occurring within one year from June 30, 2017.

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						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Net sales:
Fabricated Products	$	356.3		$	334.9		$	711.6		$	678.1
Segment operating income (loss):
Fabricated Products	$	25.6		$	72.1		$	96.2		$	130.0
All Other	(14.2		)	(14.2		)	(25.3		)	(27.3		)
Total operating income	$	11.4		$	57.9		$	70.9		$	102.7
Interest expense	(5.5		)	(5.5		)	(11.1		)	(9.2		)
Other income (expense), net	1.0			(10.7		)	1.6			(10.4		)
Income before income taxes	$	6.9		$	41.7		$	61.4		$	83.1
Depreciation and amortization:
Fabricated Products	$	9.4		$	8.8		$	18.8		$	17.4
All Other	0.1			0.2			0.3			0.3
Total depreciation and amortization	$	9.5		$	9.0		$	19.1		$	17.7
Capital expenditures:
Fabricated Products	$	24.8		$	16.3		$	39.4		$	42.1
All Other	0.1			0.1			0.3			0.2
Total capital expenditures	$	24.9		$	16.4		$	39.7		$	42.3

	June 30, 2017		December 31, 2016
Assets:
Fabricated Products	$	991.5	$	969.4
All Other1	395.2		474.1
Total assets	$	1,386.7	$	1,443.5

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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 for the Fabricated Products segment by end market applications were as follows (in millions of dollars):

	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Net sales:
Aero/HS products	$	165.5	$	167.7	$	333.0	$	344.6
Automotive Extrusions	55.9		48.8		108.9		97.1
GE products	122.0		107.3		245.2		212.7
Other products	12.9		11.1		24.5		23.7
Total net sales	$	356.3	$	334.9	$	711.6	$	678.1

All income taxes are paid by the Fabricated Products reporting segment. Geographic information for income taxes paid was as follows (in millions of dollars):

	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Income taxes paid:
Domestic	$	0.3	$	0.2	$	0.4	$	0.3
Foreign	—		0.3		0.1		0.5
Total income taxes paid	$	0.3	$	0.5	$	0.5	$	0.8

Concentrations. For the quarter ended June 30, 2017, one customer represented 28% and another represented 12% of Fabricated Products Net sales. For the quarter endedJune 30, 2016, one customer represented 27% and another represented 10% of Fabricated Products Net Sales. For the six months endedJune 30, 2017, one customer represented 29% and another represented 11% of Fabricated Products Net sales. For the six months endedJune 30, 2016, one customer represented 26% and another represented 10% of Fabricated Products Net Sales.

At June 30, 2017, one customer represented 18% and a second customer represented 16% of Trade receivables, net. One individual customer accounted for 18% and two individual customers each accounted for 12% of Trade receivables, net at December 31, 2016.

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

	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Percentage of total primary aluminum supply (lbs):
Supply from our top five major suppliers	80	%	86	%	80	%	84	%
Supply from our largest supplier	24	%	36	%	25	%	33	%
Supply from our second and third largest suppliers	35	%	30	%	33	%	32	%