Business Segments

The Company has two reportable segments, SAO and 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, Pennsylvania and surrounding areas as well as 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 CalRAM business, the LPW 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 is comprised of executive and director compensation and other corporate facilities and administrative expenses not allocated to the segments.

On a consolidated basis, one customer, Arconic Inc., accounted for approximately 11 percent of net sales for the three months ended March 31, 2019. On a consolidated basis, no single customer accounted for 10 percent or more of net sales for the three months ended March 31, 2018. On a consolidated basis, one customer, Arconic Inc., accounted for approximately 11 percent and 10 percent of net sales for each of the nine months ended March 31, 2019 and 2018, respectively. Approximately 13 percent of the accounts receivable outstanding at March 31, 2019 is due from one customer, Arconic Inc. No single customer accounted for 10 percent or more of the accounts receivable outstanding at June 30, 2018.



	Three Months Ended March 31,						Nine Months Ended March 31,
($ in millions)	2019			2018			2019			2018
Net Sales:
Specialty Alloys Operations	$	498.3		$	482.4		$	1,435.4		$	1,285.6
Performance Engineered Products	128.7			107.9			353.4			313.4
Intersegment	(17.1		)	(18.1		)	(50.0		)	(59.3		)
Consolidated net sales	$	609.9		$	572.2		$	1,738.8		$	1,539.7



	Three Months Ended March 31,						Nine Months Ended March 31,
($ in millions)	2019			2018			2019			2018
Operating Income:
Specialty Alloys Operations	$	73.6		$	58.0		$	195.3		$	158.3
Performance Engineered Products	16.6			5.4			28.3			18.1
Corporate	(17.3		)	(18.0		)	(51.5		)	(44.9		)
Intersegment	0.3			0.3			1.5			(2.2		)
Consolidated operating income	$	73.2		$	45.7		$	173.6		$	129.3



	Three Months Ended March 31,						Nine Months Ended March 31,
($ in millions)	2019			2018			2019			2018
Depreciation and Amortization:
Specialty Alloys Operations	$	23.8		$	23.3		$	71.3		$	69.9
Performance Engineered Products	6.0			5.0			16.5			15.1
Corporate	1.2			1.0			3.6			2.8
Intersegment	(0.2		)	(0.1		)	(0.5		)	(0.6		)
Consolidated depreciation and amortization	$	30.8		$	29.2		$	90.9		$	87.2



	Three Months Ended March 31,						Nine Months Ended March 31,
($ in millions)	2019			2018			2019			2018
Capital Expenditures:
Specialty Alloys Operations	$	24.6		$	12.1		$	66.0		$	40.6
Performance Engineered Products	15.3			5.9			42.2			17.0
Corporate	9.4			7.6			23.6			24.2
Intersegment	(0.3		)	(0.4		)	(1.1		)	(0.9		)
Consolidated capital expenditures	$	49.0		$	25.2		$	130.7		$	80.9



	March 31, 2019			June 30, 2018
($ in millions)	March 31, 2019			June 30, 2018
Total Assets:
Specialty Alloys Operations	$	2,405.3		$	2,312.1
Performance Engineered Products	673.0			513.6
Corporate	176.6			193.2
Intersegment	(14.7		)	(11.9		)
Consolidated total assets	$	3,240.2		$	3,007.0