Segment, Major Customer and Major Supplier Information

6 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

SEGMENT, MAJOR CUSTOMER AND MAJOR SUPPLIER INFORMATION

SEGMENT, MAJOR CUSTOMER AND MAJOR SUPPLIER INFORMATION

Segment Information

Due in part to the regional nature of supply and demand of aluminum rolled products and to best serve our customers, we manage our activities based on geographical areas and are organized under four operating segments: North America; Europe; Asia and South America. All of our segments manufacture aluminum sheet and light gauge products.

The following is a description of our operating segments:

North America. Headquartered in Atlanta, Georgia, this segment operates eight plants, including two fully dedicated recycling facilities and one facility with recycling operations, in two countries.

Europe. Headquartered in Zurich, Switzerland, this segment operates ten plants, including two fully dedicated recycling facilities and two facilities with recycling operations, in four countries.

Asia. Headquartered in Seoul, South Korea, this segment operates five plants, including two facilities with recycling operations and one fully dedicated recycling facility, in four countries.

South America. Headquartered in Sao Paulo, Brazil, this segment comprises smelting operations and power generation, and operates three plants including a facility with recycling operations, in Brazil.

We measure the profitability and financial performance of our operating segments based on “Segment income.” We define “Segment income” as earnings before (a) “depreciation and amortization”; (b) “interest expense and amortization of debt issuance costs”; (c) “interest income”; (d) unrealized gains (losses) on change in fair value of derivative instruments, net, except for foreign currency remeasurement hedging activities, which are included in segment income; (e) impairment of goodwill; (f) gain or loss on extinguishment of debt; (g) noncontrolling interests' share; (h) adjustments to reconcile our proportional share of “Segment income” from non-consolidated affiliates to income as determined on the equity method of accounting; (i) “restructuring and impairment, net”; (j) gains or losses on disposals of property, plant and equipment and businesses, net; (k) other costs, net; (l) litigation settlement, net of insurance recoveries; (m) sale transaction fees; (n) provision or benefit for taxes on income (loss) and (o) cumulative effect of accounting changes, net of tax.

The tables below show selected segment financial information (in millions). The “Eliminations and Other” column in the table below includes eliminations and functions managed directly from our corporate office and have not been allocated to our operating segments, as well as adjustments for proportional consolidation, and eliminations of intersegment “Net sales.” The financial information for our segments includes the results of our affiliates on a proportionately consolidated basis, which is consistent with the way we manage our business segments. In order to reconcile the financial information for the segments shown in the tables below to the relevant U.S. GAAP-based measures, we must adjust proportional consolidation of each line item. The “Eliminations and Other” in “Net sales – third party” includes the net sales attributable to our joint venture partner, Tri-Arrows, for our Logan affiliate because we consolidate 100% of the Logan joint venture for U.S. GAAP, but we manage our Logan affiliate on a proportionately consolidated basis. See Note 5- Consolidation and Note 6 - Investment in and Advances to Non-Consolidated Affiliates and Related Party Transactions for further information about these affiliates. Additionally, we eliminate intersegment sales and intersegment income for reporting on a consolidated basis.

Selected Segment Financial Information

September 30, 2014	North America		Europe		Asia		South America		Other and Eliminations		Total
Investment in and advances to non–consolidated affiliates	$	—	$	560	$	—	$	—	$	—	$	560
Assets held for sale - Investment in and advances to non-consolidated affiliates	—		—		—		40		—		40
Total assets	$	2,857	$	3,108	$	1,550	$	1,739	$	67	$	9,321

March 31, 2014	North America		Europe		Asia		South America		Other and Eliminations		Total
Investment in and advances to non–consolidated affiliates	$	—	$	612	—		$	—	$	—	612
Assets held for sale - Investment in and advances to non-consolidated affiliates	—		—		—		39		—		39
Total assets	$	2,998	$	3,046	$	1,440	$	1,583	$	47	$	9,114

Selected Operating Results Three Months Ended September 30, 2014	North America		Europe		Asia		South America			Other and Eliminations			Total
Net sales-third party	$	901	$	931	$	531	$	422		$	46		$	2,831
Net sales-intersegment	6		32		37		23			(98		)	—
Net sales	$	907	$	963	$	568	$	445		$	(52	)	$	2,831
Depreciation and amortization	$	34	$	27	$	18	$	16		$	(5	)	$	90
Income tax (benefit) provision	$	4	$	7	$	3	$	(19	)	$	3		$	(2	)
Capital expenditures	$	28	$	61	$	14	$	11		$	12		$	126

Selected Operating Results Three Months Ended September 30, 2013	North America			Europe		Asia		South America		Other and Eliminations			Total
Net sales-third party	$	756		$	770	$	461	$	380	$	47		$	2,414
Net sales-intersegment	1			39		2		11		(53		)	—
Net sales	$	757		$	809	$	463	$	391	$	(6	)	$	2,414
Depreciation and amortization	$	30		$	25	$	14	$	16	$	(6	)	$	79
Income tax (benefit) provision	$	(6	)	$	13	$	7	$	10	$	2		$	26
Capital expenditures	$	30		$	52	$	59	$	37	$	6		$	184

Selected Operating Results Six Months Ended September 30, 2014	North America			Europe		Asia		South America			Other and Eliminations			Total
Net sales	$	1,716		$	1,811	$	1,060	$	825		$	99		$	5,511
Net sales-intersegment	12			66		64		40			(182		)	—
Net sales	$	1,728		$	1,877	$	1,124	$	865		$	(83	)	$	5,511
Depreciation and amortization	$	68		$	52	$	38	$	33		$	(12	)	$	179
Income tax (benefit) provision	$	(5	)	$	19	$	6	$	(7	)	$	9		$	22
Capital expenditures	$	47		$	150	$	34	$	28		$	5		$	264

Selected Operating Results Six Months Ended September 30, 2013	North America			Europe		Asia		South America			Other and Eliminations			Total
Net sales	$	1,532		$	1,548	$	933	$	707		$	95		$	4,815
Net sales-intersegment	5			68		15		18			(106		)	—
Net sales	$	1,537		$	1,616	$	948	$	725		$	(11	)	$	4,815
Depreciation and amortization	$	60		$	49	$	28	$	31		$	(12	)	$	156
Income tax (benefit) provision	$	(7	)	$	24	$	11	$	(5	)	$	6		$	29
Capital expenditures	$	57		$	96	$	124	$	77		$	11		$	365

The following table shows the reconciliation from segment income for each of our regions to “Net income attributable to our common shareholder” (in millions).

	Three Months Ended September 30,						Six Months Ended September 30,
	2014			2013			2014			2013
North America	$	76		$	70		$	140		$	116
Europe	75			61			154			131
Asia	36			41			73			87
South America	41			56			96			98
Intersegment eliminations	2			—			2			—
Depreciation and amortization	(90		)	(79		)	(179		)	(156		)
Interest expense and amortization of debt issuance costs	(82		)	(75		)	(163		)	(151		)
Adjustment to eliminate proportional consolidation	(9		)	(8		)	(17		)	(19		)
Unrealized (losses) gains on change in fair value of derivative instruments, net	(1		)	4			—			(8		)
Realized gains (losses) on derivative instruments not included in segment income	—			2			(1		)	4
Gain on assets held for sale	—			—			11			—
Restructuring and impairment, net	(7		)	(18		)	(13		)	(27		)
Loss on sale of fixed assets	(2		)	(1		)	(3		)	(2		)
Other costs, net	(3		)	(4		)	(5		)	(7		)
Income before income taxes	36			49			95			66
Income tax (benefit) provision	(2		)	26			22			29
Net income	38			23			73			37
Net income attributable to noncontrolling interests	—			—			—			—
Net income attributable to our common shareholder	$	38		$	23		$	73		$	37

Information about Major Customers and Primary Supplier

The table below shows our net sales to Rexam Plc (Rexam), Affiliates of Ball Corporation (Ball) and Anheuser-Busch InBev (Anheuser-Busch), our three largest customers, as a percentage of total “Net sales.”

	Three Months Ended September 30,				Six Months Ended September 30,
	2014		2013		2014		2013
Rexam	18	%	17	%	18	%	17	%
Ball	12	%	9	%	11	%	10	%
Anheuser-Busch	8	%	7	%	8	%	8	%

Rio Tinto Alcan (RTA) is our primary supplier of metal inputs, including prime and sheet ingot. The table below shows our purchases from RTA as a percentage of total combined metal purchases.

	Three Months Ended September 30,				Six Months Ended September 30,
	2014		2013		2014		2013
Purchases from RTA as a percentage of total	16	%	17	%	15	%	18	%