SEGMENT, GEOGRAPHICAL AREA, 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 Küsnacht, 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 four plants, including three facilities with recycling operations, in three countries.

South America. Headquartered in Sao Paulo, Brazil, this segment comprises power generation operations, and operates two plants, including a facility with recycling operations, in Brazil. Our remaining smelting operations facilities ceased operations in December 2014. The majority of our power generation operations were sold during the fourth quarter of fiscal 2015.

Net sales and expenses are measured in accordance with the policies and procedures described in Note 1 — Business and Summary of Significant Accounting Policies.

We measure the profitability and financial performance of our operating segments based on “Segment income.” “Segment income” provides a measure of our underlying segment results that is in line with our approach to risk management. 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 change, 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 that are managed directly from our corporate office that have not been allocated to our operating segments, as well as the 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 party, 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 8 — Consolidation and Note 9 — 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




Selected Operating Results Year Ended March 31, 2017	North America		Europe		Asia		South America		Eliminations and Other			Total
Net sales - third party	$	3,226	$	2,930	$	1,771	$	1,448	$	216		$	9,591
Net sales - intersegment	2		38		20		62		(122		)	—
Net sales	$	3,228	$	2,968	$	1,791	$	1,510	$	94		$	9,591

Depreciation and amortization	$	149	$	106	$	59	$	63	$	(17	)	$	360
Income tax provision	$	18	$	12	$	20	$	88	$	13		$	151
Capital expenditures	$	80	$	65	$	38	$	39	$	2		$	224

March 31, 2017
Investment in and advances to non–consolidated affiliates	$	—	$	451	$	—	$	—	$	—		$	451
Total assets	$	2,359	$	2,679	$	1,576	$	1,637	$	93		$	8,344




Selected Operating Results Year Ended March 31, 2016	North America			Europe				Asia			South America		Eliminations and Other			Total
Net sales - third party	$	3,262		$	3,055			$	1,879		$	1,482	$	194		$	9,872
Net sales - intersegment	4			168				113			93		(378		)	—
Net sales	$	3,266		$	3,223			$	1,992		$	1,575	$	(184	)	$	9,872

Depreciation and amortization	$	143		$	106			$	61		$	61	$	(18	)	$	353
Income tax (benefit) provision	$	(53	)	$	(11	)		$	12		$	81	$	17		$	46
Capital expenditures	$	143		$	146			$	35		$	39	$	7		$	370

March 31, 2016
Investment in and advances to non–consolidated affiliates	$	—		$	488			$	—		$	—	$	—		$	488
Total assets	$	2,370		$	2,687		—	$	1,516	—	$	1,584	$	123		$	8,280




Selected Operating Results Year Ended March 31, 2015	North America			Europe		Asia		South America			Eliminations and Other			Total
Net sales - third party	$	3,465		$	3,609	$	2,139	$	1,749		$	185		$	11,147
Net sales - intersegment	18			174		201		101			(494		)	—
Net sales	$	3,483		$	3,783	$	2,340	$	1,850		$	(309	)	$	11,147

Depreciation and amortization	$	137		$	103	$	71	$	63		$	(22	)	$	352
Income tax (benefit) provision	$	(27	)	$	12	$	16	$	(1	)	$	14		$	14
Capital expenditures	$	122		$	257	$	85	$	53		$	1		$	518

The following table shows the reconciliation from income from reportable segments to “Net income attributable to our common shareholder” (in millions).



	Year Ended March 31,
	2017			2016			2015
North America	$	384		$	258		$	273
Europe	180			116			250
Asia	153			135			141
South America	340			282			240
Intersegment eliminations and other	(3		)	—			(2		)
Depreciation and amortization	(360		)	(353		)	(352		)
Interest expense and amortization of debt issuance costs	(294		)	(327		)	(326		)
Adjustment to eliminate proportional consolidation	(28		)	(30		)	(33		)
Unrealized gains (losses) on change in fair value of derivative instruments, net	5			(4		)	—
Realized gains (losses) on derivative instruments not included in segment income	5			(1		)	(6		)
Gain on assets held for sale	2			—			22
Loss on extinguishment of debt	(134		)	(13		)	—
Restructuring and impairment, net	(10		)	(48		)	(37		)
Loss on sale of business	(27		)	—			—
Loss on sale of fixed assets	(6		)	(4		)	(5		)
Other costs, net	(10		)	(3		)	(3		)
Income before income taxes	197			8			162
Income tax provision	151			46			14
Net income (loss)	46			(38		)	148
Net income attributable to noncontrolling interests	1			—			—
Net income (loss) attributable to our common shareholder	$	45		$	(38	)	$	148

Geographical Area Information

We had 24 operating facilities in ten countries as of March 31, 2017. The tables below present “Net sales” and “Long-lived assets and other intangible assets” by geographical area (in millions). “Net sales” are attributed to geographical areas based on the origin of the sale. “Long-lived assets and other intangible assets” are attributed to geographical areas based on asset location and exclude investments in and advances to our non-consolidated affiliates and goodwill.



	Year Ended March 31,
	2017		2016		2015
Net sales:
United States	$	3,336	$	3,334	$	3,507
Asia and Other Pacific	1,771		1,879		2,139
Brazil	1,448		1,482		1,750
Canada	106		121		144
Germany	2,428		2,506		2,976
Other Europe	502		550		631
Total Net sales	$	9,591	$	9,872	$	11,147



	March 31,
	2017		2016
Long-lived assets and other intangibles:
United States	$	1,400	$	1,483
Asia and Other Pacific	756		784
Brazil	823		840
Canada	64		70
Germany	260		287
United Kingdom	39		43
Other Europe	472		522
Total long-lived assets	$	3,814	$	4,029

Information about Product Sales, Major Customers and Primary Supplier

Product Sales

The percentage of “Net sales” generated from beverage and food can products were 52%, 55%, and 56% in the years ended March 31, 2017, 2016, and 2015, respectively. The percentage of “Net sales” generated from automotive products increased to 23% in the year ended March 31, 2017, compared to 20% and 13% in the years ended March 31, 2016 and 2015, respectively.

Major Customers

The table below shows our net sales to the Affiliates of Ball Corporation (Ball) and Ford Motor Company (Ford), our two largest customers, as a percentage of total “Net sales.”



	Year Ended March 31,
	2017		2016		2015
Ball (A)	27	%	30	%	28	%
Ford	10	%	4	%	2	%


(A)	In February of 2015, Ball Corporation made an offer to acquire Rexam. On June 30, 2016, Ball completed the acquisition of Rexam and the divestiture of certain assets to the Ardagh Group. We have combined the sales for Ball and Rexam for presentation purposes. Prior period amounts disclosed above for Ball do not include the effects of the divestiture of the assets to the Ardagh Group.

Primary Supplier

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



	Year Ended March 31,
	2017		2016		2015
Purchases from RT as a percentage of total combined metal purchases	10	%	12	%	15	%