Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment and Geographical Area Information

Segment and Geographical Area Information

Our primary line of business is the production of semi-fabricated specialty aluminum products for the following end market applications: aerospace and high strength products ("Aero/HS products"); extrusions for automotive applications ("Automotive Extrusions"); general engineering products ("GE products"); and other industrial products ("Other products"). We operate 11 focused production facilities in the United States and one in Canada. Consistent with the manner in which our chief operating decision maker reviews and evaluates our business, the Fabricated Products business is treated as a single operating segment.

In addition to the Fabricated Products segment, we have a business unit, All Other, which provides general and administrative support for our operations. For purposes of segment reporting under GAAP, we treat the Fabricated Products segment as a reportable segment. All Other is not considered a reportable segment.

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 net operating charges.

The following tables provide financial information by reporting segment and business unit for each period or as of each period-end, as applicable (in millions of dollars):

	Quarter Ended
	March 31,
	2015			2014
Net sales:
Fabricated Products	$	371.7		$	335.1
Segment operating (loss) income:
Fabricated Products1	$	44.9		$	35.4
All Other2	(503.5		)	(3.3		)
Total operating (loss) income	$	(458.6	)	$	32.1
Interest expense	(9.8		)	(8.8		)
Other income, net	0.4			1.9
(Loss) income before income taxes	$	(468.0	)	$	25.2
Depreciation and amortization:
Fabricated Products	$	7.9		$	7.2
All Other	0.1			0.2
Total depreciation and amortization	$	8.0		$	7.4
Capital expenditures:
Fabricated Products	$	11.2		$	15.3
All Other	0.1			0.1
Total capital expenditures	$	11.3		$	15.4

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¹  Fabricated Products segment operating income included non-cash mark-to-market (losses) gains on primary aluminum, natural gas, electricity and foreign currency hedging activities totaling $(4.5) million and $2.0 million for the quarters ended March 31, 2015 and March 31, 2014, respectively. For further discussion regarding mark-to-market matters, see Note 8.

²  Operating loss in All Other included Net periodic postretirement benefit cost (income) of $0.6 million and $(5.6) million for the quarters ended March 31, 2015 and March 31, 2014, respectively, and Loss on removal of Union VEBA net assets of $492.2 million for the quarter ended March 31, 2015. See Note 5 for further details.

	March 31, 2015		December 31, 2014
Assets:
Fabricated Products	$	905.9	$	878.9
All Other1	629.0		864.8
Total assets	$	1,534.9	$	1,743.7

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¹  Assets in All Other represent primarily all of our cash and cash equivalents, short-term investments, financial derivative assets, net assets of VEBAs (see Note 5 and Note 9) and net deferred income tax assets.

Net sales by product categories based on end market applications for the Fabricated Products segment were as follows (in millions of dollars):

	Quarter Ended
	March 31,
	2015		2014
Net sales:
Aero/HS products	$	180.3	$	163.6
Automotive Extrusions	50.1		40.8
GE products	119.1		112.2
Other products	22.2		18.5
Total net sales	$	371.7	$	335.1

Geographic information for income taxes paid were as follows (in millions of dollars):

	Quarter Ended
	March 31,
	2015		2014
Income taxes paid:
Fabricated Products —
United States	$	0.1	$	0.1
Canada	0.9		0.6
Total income taxes paid	$	1.0	$	0.7

The aggregate foreign currency transaction gains (losses) included in determining net income were immaterial for the quarters ended March 31, 2015 and March 31, 2014.

We depend on a core group of significant customers and suppliers of primary aluminum. The loss of our largest customers or suppliers would have a material adverse effect on us. However, in our opinion, the relationships between us and our customers and suppliers are good and the risk of loss of our largest customers or suppliers is remote.

For the quarter ended March 31, 2015, one customer represented 23% and another represented 10% of Fabricated Products Net sales. For the quarter ended March 31, 2014, one customer represented 23% and no other individual customer accounted for more than 10% of Fabricated Products Net sales.

At March 31, 2015, one customer represented 15% and no other individual customers accounted for 10% or more of the trade receivables balance. Two individual customers accounted 10% and 12% of the trade receivables balance at December 31, 2014. 

Information for contractual delivery of our primary aluminum supply from our major suppliers were as follows:

	Quarter Ended
	March 31,
	2015		2014
Percentage of Total Annual Primary Aluminum Supply (lbs):
Supply from the Company's top five major suppliers	75	%	74	%
Supply from the Company's largest supplier	29	%	30	%
Supply from the Company's second and third largest suppliers	29	%	25	%