Business, Product and Geographical Area Information and Concentration of Risk

9 Months Ended

Sep. 30, 2018

Business, Product and Geographical Area Information and Concentration of Risk

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 Aero/HS products, Automotive Extrusions, GE products and Other products. We operate 12 focused production facilities in the United States and one in Canada. Our chief operating decision maker reviews and evaluates our business as a single operating segment. Prior to 2018, we reported our consolidated financial statements based on one reportable segment, Fabricated Products (comprised primarily of our manufacturing operations), and presented the business unit All Other (comprised primarily of corporate general and administrative expenses) as a reconciling item between Fabricated Products and our consolidated financial statements. During the nine months ended September 30, 2018, we determined that the All Other business unit had decreased in materiality and relevance and was therefore immaterial to our consolidated financial statements. Therefore, we no longer separate All Other from Fabricated Products for all periods presented in this Report and on a prospective basis.

At September 30, 2018, approximately 61% of our employees were covered by collective bargaining agreements and none of our employees were covered by collective bargaining agreements with expiration dates occurring within one year from September 30, 2018.

Net sales by end market applications and by timing of control transfer for each period presented were as follows (in millions of dollars):



	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net sales:
Aero/HS products	$	185.7	$	150.2	$	540.9	$	483.2
Automotive Extrusions	56.1		52.7		183.9		161.6
GE products	133.9		115.9		425.1		361.1
Other products	17.4		14.0		46.6		38.5
Total net sales	$	393.1	$	332.8	$	1,196.5	$	1,044.4

Timing of revenue recognition – Note 9:
Products transferred at a point in time	$	127.8	n/a		$	425.2	n/a
Products transferred over time	265.3		n/a		771.3		n/a
Total net sales	$	393.1			$	1,196.5

Geographic information for income taxes paid for each period presented was as follows (in millions of dollars):



	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Income taxes paid:
Domestic	$	0.4	$	0.3	$	1.3	$	0.7
Foreign	—		—		2.0		0.1
Total income taxes paid	$	0.4	$	0.3	$	3.3	$	0.8

Concentrations. For the quarter ended September 30, 2018, one customer represented 26% and another represented 15% of Net sales. For the quarter ended September 30, 2017, one customer represented 27% and another represented 11% of Net sales. For the nine months ended September 30, 2018, one customer represented 26% and another represented 13% of Net sales. For the nine months ended September 30, 2017, one customer represented 28% and another represented 10% of Net sales.

At September 30, 2018, one individual customer accounted for 24% and another individual customer accounted for 15% of Trade receivables, net. One individual customer accounted for 22% and another individual customer accounted for 14% of Trade receivables, net at December 31, 2017.

Information for delivery of our primary aluminum supply from our major suppliers for each period presented was as follows:



	Quarter Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Percentage of total primary aluminum supply (lbs):
Supply from our top five major suppliers	83	%	86	%	82	%	86	%
Supply from our largest supplier	33	%	35	%	36	%	36	%
Supply from our second and third largest suppliers combined	36	%	35	%	32	%	33	%