Segment and Geographical Area Information

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segment and Geographical Area Information

Segment and Geographical Area Information

The Company’s primary line of business is the production of semi-fabricated specialty aluminum products, such as aluminum sheet and plate and extruded and drawn products, primarily used in aerospace/high strength, general engineering, automotive, and other industrial end market applications. The Company operates 11 focused production facilities in the United States and one in Canada. Consistent with the manner in which the Company’s chief operating decision maker reviews and evaluates the Company’s business, the Fabricated Products business is treated as a single operating segment.

In addition to the Fabricated Products segment, the Company has two business units, Secondary Aluminum and Corporate and Other. The Secondary Aluminum business unit sells value added products, such as ingot and billet, produced at Anglesey Aluminium Limited (“Anglesey”), a secondary aluminum remelt and casting facility in Holyhead, Wales in which the Company owns a 49% non-controlling interest. The Corporate and Other business unit provides general and administrative support for the Company’s operations.

For purposes of segment reporting under GAAP, the Company treats the Fabricated Products segment as a reportable segment and combines the two other business units, Secondary Aluminum and Corporate and Other, into one category, which is referred to as All Other. All Other is not considered a reportable segment.

The board of Anglesey recently announced the closure of Anglesey's secondary aluminum remelt and casting operations which the Company expects to be completed by the second quarter of 2013. The Company’s investment in Anglesey is valued at zero on the balance sheet, and the Company has no financial obligation with respect to any liability of Anglesey. Accordingly, the Company does not expect the closure of Anglesey's operations to have any financial impact. See Note 3 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010 for additional details on our investment in Anglesey and the suspension of equity method of accounting with respect to our ownership in Anglesey.

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 operating charges, net.

The following tables provide financial information by reporting segment for each period or as of each period-end, as applicable:

	Quarter Ended
	March 31,
	2013			2012
Net Sales:
Fabricated Products	$	337.4		$	365.4
Segment Operating Income (Loss):
Fabricated Products 1,2	$	55.2		$	54.1
All Other3	(5.2		)	(7.9		)
Total operating income	$	50.0		$	46.2
Interest expense	(9.3		)	(4.1		)
Other income, net	1.0			0.7
Income before income taxes	$	41.7		$	42.8
Depreciation and Amortization:
Fabricated Products	$	6.9		$	6.2
All Other	0.1			0.1
Total depreciation and amortization	$	7.0		$	6.3
Capital expenditures:
Fabricated Products	$	8.9		$	8.8
All Other	0.4			0.2
Total capital expenditures	$	9.3		$	9.0
Income Taxes Paid:
Fabricated Products —
United States	$	0.4		$	—
Canada	0.3			0.2
Total income taxes paid	$	0.7		$	0.2

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^1.  Operating results in the Fabricated Products segment for the quarters ended March 31, 2013 and March 31, 2012 included net non-cash LIFO benefits of $3.7 and $2.9, respectively.

^2.  Fabricated Products segment results include non-cash mark-to-market (losses) gains on primary aluminum, natural gas, electricity and foreign currency hedging activities totaling $(0.7) and $3.1 for the quarters ended March 31, 2013 and March 31, 2012, respectively. For further discussion regarding mark-to-market matters, see Note 8.

^3.  Operating results in All Other represent operating expenses in the Corporate and Other business unit. Operating results of All Other include VEBA net periodic pension benefit income of $5.6 and $3.0 for the quarters ended March 31, 2013 and March 31, 2012, respectively.

	March 31, 2013		December 31, 2012
Assets:
Fabricated Products	$	812.9	$	771.2
All Other1	951.5		981.3
Total assets	$	1,764.4	$	1,752.5

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^1.  Assets in All Other represent primarily all of the Company’s cash and cash equivalents, short-term investments, financial derivative assets, net assets in respect of VEBA(s) and net deferred income tax assets.

Net sales by product categories, which are based on end market applications, for the Fabricated Products segment are as follows:

	Quarter Ended
	March 31,
	2013		2012
Net Sales:
Aero/HS Products	$	179.6	$	184.7
GE Products	105.8		119.2
Automotive Extrusions	30.8		34.4
Other Products	21.2		27.1
Total Net Sales	$	337.4	$	365.4