Business Segments

6 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).

The SAO segment is comprised of the Company’s major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe and surrounding areas in Pennsylvania, South Carolina and Alabama. The combined assets of the SAO operations are being managed in an integrated manner to optimize efficiency and profitability across the total system.

The PEP segment is comprised of the Company’s differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business, and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. 

The Company’s executive management evaluates the performance of these operating segments based on sales, operating income and cash flow generation. Segment operating profit excludes general corporate costs, which include executive and director compensation, and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that management considers not representative of ongoing operations, such as restructuring related charges and other specifically-identified income or expense items.

The service cost component of the Company’s net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating income of the business segments. The residual net pension expense, which is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs, is included under the heading “Pension earnings, interest and deferrals”.

On a consolidated basis, one customer, Alcoa Inc., accounted for approximately 14 percent of the net sales for the three months ended December 31, 2015 and no single customer accounted for 10 percent or more of the Company's net sales for the three months ended December 31, 2014. On a consolidated basis, one customer, Alcoa Inc., accounted for approximately 14 percent of the net sales for the six months ended December 31, 2015, and no single customer accounted for 10 percent or more of the Company's net sales for the six months ended December 31, 2014. Approximately 15 percent and 17 percent of the accounts receivable outstanding at December 31, 2015 and June 30, 2015, respectively, are due from one customer, Alcoa Inc.

Segment Data	Three Months Ended December 31,						Six Months Ended December 31,
($ in millions)	2015			2014			2015			2014
Net Sales:
Specialty Alloys Operations	$	363.6		$	438.3		$	736.2		$	874.2
Performance Engineered Products	85.4			133.7			177.0			263.7
Intersegment	(5.2		)	(23.6		)	(13.8		)	(39.7		)
Consolidated net sales	$	443.8		$	548.4		$	899.4		$	1,098.2

Segment Data	Three Months Ended December 31,						Six Months Ended December 31,
($ in millions)	2015			2014			2015			2014
Operating Income:
Specialty Alloys Operations	$	41.5		$	43.4		$	82.7		$	68.0
Performance Engineered Products	(2.9		)	12.6			(3.3		)	22.2
Corporate costs (including restructuring charges)	(12.7		)	(7.0		)	(24.8		)	(17.3		)
Pension earnings, interest and deferrals	(4.8		)	(2.4		)	(9.6		)	(4.7		)
Intersegment	0.7			(1.6		)	1.7			(1.0		)
Consolidated operating income	$	21.8		$	45.0		$	46.7		$	67.2

Segment Data	Three Months Ended December 31,						Six Months Ended December 31,
($ in millions)	2015			2014			2015			2014
Depreciation and Amortization:
Specialty Alloys Operations	$	23.9		$	23.2		$	47.4		$	46.8
Performance Engineered Products	5.7			5.9			11.4			12.0
Corporate	0.9			1.2			1.9			2.3
Intersegment	(0.2		)	(0.2		)	(0.4		)	(0.5		)
Consolidated depreciation and amortization	$	30.3		$	30.1		$	60.3		$	60.6

Segment Data	Three Months Ended December 31,						Six Months Ended December 31,
($ in millions)	2015			2014			2015			2014
Capital Expenditures:
Specialty Alloys Operations	$	17.0		$	52.7		$	36.7		$	104.3
Performance Engineered Products	2.2			16.1			11.3			22.9
Corporate	0.5			0.3			1.6			1.3
Intersegment	(0.1		)	(0.7		)	(0.1		)	(1.1		)
Consolidated capital expenditures	$	19.6		$	68.4		$	49.5		$	127.4

Segment Data	December 31, 2015			June 30, 2015
($ in millions)
Total Assets:
Specialty Alloys Operations	$	2,309.7		$	2,323.0
Performance Engineered Products	475.8			499.2
Corporate	92.8			125.0
Intersegment	(37.7		)	(41.3		)
Consolidated total assets	$	2,840.6		$	2,905.9