Segment and Geographical Area Information

12 Months Ended

Dec. 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, such as aluminum plate and sheet and extruded and drawn products, primarily used in aerospace/high strength, automotive, general engineering and other industrial end market applications. 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. At December 31, 2015, approximately 63% of our employees were covered by collective bargaining agreements and approximately 10% of our employees were covered by collective bargaining agreements with expiration dates occurring within one year from December 31, 2015.

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):

	Year Ended December 31,
	2015			2014			2013
Net sales:
Fabricated Products	$	1,391.9		$	1,356.1		$	1,297.5
Segment operating (loss) income:
Fabricated Products 1,2	$	190.8		$	151.4		$	188.6
All Other3	(536.7		)	(13.5		)	(15.3		)
Total operating (loss) income	$	(345.9	)	$	137.9		$	173.3
Interest expense	(24.1		)	(37.5		)	(35.7		)
Other (expense) income, net	(1.8		)	6.7			5.6
(Loss) income before income taxes	$	(371.8	)	$	107.1		$	143.2
Depreciation and amortization:
Fabricated Products	$	31.9		$	30.6		$	27.6
All Other	0.5			0.5			0.5
Total depreciation and amortization	$	32.4		$	31.1		$	28.1
Capital expenditures:
Fabricated Products	$	62.4		$	58.5		$	69.8
All Other	0.7			0.9			0.6
Total capital expenditures	$	63.1		$	59.4		$	70.4

	December 31, 2015		December 31, 2014
Assets:
Fabricated Products	$	904.8	$	878.9
All Other4	345.3		864.8
Total assets	$	1,250.1	$	1,743.7

__________________

^1.  Operating income in the Fabricated Products segment for 2015, 2014 and 2013 included $1.7 million, $1.2 million and $4.0 million, respectively, of environmental expense. Fabricated Products segment operating income included $0.1 million and $1.5 million of asset impairment charge relating to certain property, plant and equipment for 2015 and 2014, respectively, and none for 2013. Also included in the Fabricated Products segment operating income for 2015 was a $2.6 million lower of cost or market inventory write-down.

^2.  Fabricated Products segment results for 2015, 2014 and 2013 included a non-cash mark-to-market (loss) gain on primary aluminum, natural gas, electricity and foreign currency hedging activities totaling $(3.4) million, $(10.4) million and $0.7 million, respectively. For further discussion regarding mark-to-market matters, see Note 10.

^3.  Operating loss of All Other included net periodic postretirement benefit cost (income) of $2.4 million, $(23.7) million and $(22.5) million for 2015, 2014 and 2013, respectively. Additionally, operating loss in All Other included Loss on removal of Union VEBA net assets of $493.4 million during the year ended December 31, 2015. See Note 6 for further details.

^4.  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 6 and Note 11) 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):

	Year Ended December 31,
	2015		2014		2013
Net sales:
Aero/HS products	$	695.5	$	686.3	$	677.0
Automotive Extrusions	199.2		173.5		129.5
GE products	426.1		419.5		411.0
Other products	71.1		76.8		80.0
Total net sales	$	1,391.9	$	1,356.1	$	1,297.5

Geographic information for net sales based on country of origin, income taxes paid and long-lived assets were as follows (in millions of dollars):

	Year Ended December 31,
	2015		2014		2013
Net sales to unaffiliated customers:
Fabricated Products –
United States	$	1,321.3	$	1,254.0	$	1,204.7
Canada	70.6		102.1		92.8
Total net sales	$	1,391.9	$	1,356.1	$	1,297.5
Income taxes paid:
Fabricated Products –
United States	$	0.6	$	2.1	$	1.2
Canada	1.7		1.4		0.9
Total income taxes paid	$	2.3	$	3.5	$	2.1

	Year Ended December 31,
	2015		2014
Long-lived assets:1
Fabricated Products –
United States	$	459.6	$	432.6
Canada	30.9		17.4
Total Fabricated Products long-lived assets	490.5		450.0
All Other –
United States	4.9		4.9
Total All Other long-lived assets	4.9		4.9
Total long-lived assets	$	495.4	$	454.9

__________________

^1.  Long-lived assets represent Property, plant and equipment – net.

The aggregate foreign currency transaction gains (losses) included in determining net (loss) income were immaterial for 2015, 2014 and 2013.

For the years ended December 31, 2015, December 31, 2014 and December 31, 2013, one customer represented 25%, 22% and 23%, respectively, of Fabricated Products Net sales. For the years ended December 31, 2015 and December 31, 2014, a second customer represented 10% for both periods of Fabricated Products Net sales.

Two individual customers each accounted for 17% of the trade receivables balance at December 31, 2015. Two individual customers accounted for 12% and 10% of the trade receivables balance at December 31, 2014. 

Information for export sales and primary aluminum supply from our major suppliers were as follows:

	Year Ended December 31,
	2015		2014		2013
Percentage of Net sales:
Export sales	19	%	19	%	17	%
Percentage of total annual primary aluminum supply (lbs):
Supply from the Company's five largest suppliers	86	%	71	%	86	%
Supply from the Company's largest supplier	28	%	30	%	25	%
Supply from the Company's second and third largest suppliers	36	%	25	%	35	%