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Business Segments | 12 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
Business Segments | Business Segments The Company operates in two business segments: High Performance Materials & Components (HPMC) and Flat Rolled Products (FRP). Over 75% of 2017 HPMC business segment sales are to the aerospace and defense markets, and nearly half of HPMC’s total sales are products for commercial jet engines. Other key HPMC end markets include medical, oil & gas, and electrical energy. HPMC produces, converts and distributes a wide range of high performance materials, and components, and advanced metallic powder alloys made from titanium and titanium-based alloys, nickel-based alloys and superalloys, and a variety of other specialty metals. These materials are made in a variety of product forms that include precision forgings, castings, machined parts and others. The FRP segment serves a diverse group of end markets, with the oil & gas market, including chemical and hydrocarbon processing, and the automotive market collectively representing over 40% of 2017 sales. Other major end markets for FRP include food processing equipment and appliances, construction and mining, electronics, communication equipment and computers, and aerospace & defense. FRP produces, converts and distributes nickel-based alloys, specialty alloys, and titanium and titanium-based alloys, and stainless steel in a variety of product forms including plate, sheet, engineered strip, and Precision Rolled Strip products. The business units in this segment include ATI Flat Rolled Products and STAL, in which the Company has a 60% ownership interest. Segment results also include ATI’s 50% interest in Uniti, which is accounted for under the equity method. See Note 5 for further information on the Company’s joint ventures. The measure of segment operating profit excludes all effects of LIFO inventory accounting and any related changes in net realizable value inventory reserves which offset the Company’s aggregate net debit LIFO valuation balance, income taxes, corporate expenses, net interest expense, closed operations and other expenses, charges for goodwill impairment (see Note 4), restructuring charges and other costs (see Note 16) and debt extinguishment charges (see Note 8). Management believes segment operating profit, as defined, provides an appropriate measure of controllable operating results at the business segment level. Intersegment sales are generally recorded at full cost or market. Common services are allocated on the basis of estimated utilization.
(In millions) |  | 2017 |  | 2016 |  | 2015
Total sales: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 2,127.0 |  |  | $ | 1,979.5 |  |  | $ | 2,062.7 |
Flat Rolled Products |  | 1,527.5 |  |  | 1,260.8 |  |  | 1,807.9 |
Total sales |  | 3,654.5 |  |  | 3,240.3 |  |  | 3,870.6 |
Intersegment sales: |  |  |  |  |  |
High Performance Materials & Components |  | 59.6 |  |  | 49.1 |  |  | 76.8 |
Flat Rolled Products |  | 69.8 |  |  | 56.6 |  |  | 74.2 |
Total intersegment sales |  | 129.4 |  |  | 105.7 |  |  | 151.0 |
Sales to external customers: |  |  |  |  |  |
High Performance Materials & Components |  | 2,067.4 |  |  | 1,930.4 |  |  | 1,985.9 |
Flat Rolled Products |  | 1,457.7 |  |  | 1,204.2 |  |  | 1,733.7 |
Total sales to external customers |  | $ | 3,525.1 |  |  | $ | 3,134.6 |  |  | $ | 3,719.6 |
Total international sales were $1,454.5 million in 2017, $1,277.1 million in 2016, and $1,577.0 million in 2015. Of these amounts, sales by operations in the United States to customers in other countries were $1,078.6 million in 2017, $971.4 million in 2016, and $1,215.8 million in 2015.
(In millions) |  | 2017 |  | 2016 |  | 2015
Operating profit (loss): |  |  |  |  |  |
High Performance Materials & Components |  | $ | 246.4 |  |  | $ | 168.7 |  |  | $ | 157.1 |
Flat Rolled Products |  | 37.0 |  |  | (163.0 | ) |  | (241.9 | )
Total operating profit (loss) |  | 283.4 |  |  | 5.7 |  |  | (84.8 | )
LIFO and net realizable value reserves (See Note 2) |  | (0.2 | ) |  | 0.8 |  |  | 0.1 |
Corporate expenses |  | (50.5 | ) |  | (43.4 | ) |  | (44.7 | )
Closed operations and other expenses |  | (34.0 | ) |  | (34.6 | ) |  | (22.1 | )
Restructuring and other charges (See Note 16) |  | — |  |  | (538.5 | ) |  | (89.7 | )
Impairment of goodwill (See Note 4) |  | (114.4 | ) |  | — |  |  | (126.6 | )
Debt extinguishment charge (See Note 8) |  | (37.0 | ) |  | — |  |  | — |
Interest expense, net |  | (133.8 | ) |  | (124.0 | ) |  | (110.2 | )
Loss before income taxes |  | $ | (86.5 | ) |  | $ | (734.0 | ) |  | $ | (478.0 | )
In the third quarter of 2016, the Company announced the indefinite idling of the Rowley, UT titanium sponge facility and the consolidation of certain titanium manufacturing operations. See Note 16 for further explanation. Results for the HPMC segment exclude the Rowley operations beginning with the third quarter of 2016, with such operations being reported in closed operations and other expenses. In October 2016, the Company announced the closure of the Midland, PA commodity stainless operations and the Bagdad, PA grain-oriented electrical steel (GOES) finishing facility. These facilities were indefinitely idled earlier in 2016, and management concluded that the facilities could not be operated at an acceptable rate of return. See Note 16 for further explanation. Results for the FRP segment exclude the ongoing holding costs of these facilities beginning in October 2016, with such costs being reported in closed operations and other expenses. Restructuring and other charges for the year ended December 31, 2016 are comprised of $471.3 million in long-lived asset impairment charges, $31.7 million of facility shutdown and idling costs, $24.2 million of employee benefit costs and $11.3 million of inventory valuation charges for titanium sponge that are classified in cost of sales (see Note 2 for additional information). The shutdown and idling costs primarily relate to the indefinite idling of the Company’s Rowley, UT titanium sponge facility, and the closures of the Midland, PA commodity stainless operations and the Bagdad, PA GOES finishing facility. The employee benefit costs largely relate to FRP severance charges for salaried workforce reductions and costs associated with the previously mentioned facility idlings and closures. Restructuring and other charges for the year ended December 31, 2015 include $54.5 million in long-lived asset impairment charges, $25.4 million of inventory valuation charges for non-PQ titanium sponge (see Note 2 for additional information) and charges for severance and facility idling costs. See Note 16 for additional information on restructuring charges. Closed operations and other expenses, which were $34.0 million in 2017, $34.6 million in 2016 and $22.1 million in 2015, includes charges incurred in connection with closed operations and other non-operating income or expense. These items are primarily presented in selling and administrative expenses in the consolidated statements of operations. In 2017, these items included $22.7 million for costs at closed facilities, including legal matters and real estate and other facility costs, $7.3 million for negative foreign currency remeasurement impacts primarily related to our European Treasury Center operation, $2.9 million for closed operations environmental costs, and $4.8 million for retirement benefit expense. These 2017 costs were offset by a $3.7 million benefit for reductions in liabilities for legacy employee benefit programs. In 2016, the Company recorded $34.6 million in other charges primarily related to closed operations, including $5.8 million for environmental costs, $5.0 million for retirement benefit expense, and $23.8 million for other expenses including legal matters and real estate costs at closed operations, primarily for Rowley following the indefinite idling. In 2015, the Company recorded $22.1 million in other charges primarily related to closed operations, including $2.3 million for retirement benefit expense, $4.5 million for environmental costs, and $15.3 million for other expenses including legal matters and real estate costs at closed operations. Certain additional information regarding the Company’s business segments is presented below:
(In millions) |  | 2017 |  | 2016 |  | 2015
Depreciation and amortization: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 109.3 |  |  | $ | 118.4 |  |  | $ | 131.8 |
Flat Rolled Products |  | 45.6 |  |  | 48.8 |  |  | 55.6 |
Corporate |  | 5.9 |  |  | 3.1 |  |  | 2.5 |
Total depreciation and amortization |  | $ | 160.8 |  |  | $ | 170.3 |  |  | $ | 189.9 |
Capital expenditures: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 62.7 |  |  | $ | 89.9 |  |  | $ | 75.8 |
Flat Rolled Products |  | 59.1 |  |  | 111.8 |  |  | 68.0 |
Corporate |  | 0.9 |  |  | 0.5 |  |  | 0.7 |
Total capital expenditures |  | $ | 122.7 |  |  | $ | 202.2 |  |  | $ | 144.5 |
Identifiable assets: |  | 2017 |  | 2016 |  | 2015
High Performance Materials & Components |  | $ | 2,662.3 |  |  | $ | 2,744.3 |  |  | $ | 3,355.5 |
Flat Rolled Products |  | 2,218.4 |  |  | 2,056.4 |  |  | 2,189.5 |
Discontinued Operations |  | 0.2 |  |  | 0.4 |  |  | 0.9 |
Corporate: |  |  |  |  |  |
Deferred Taxes |  | 7.6 |  |  | 12.1 |  |  | — |
Cash and cash equivalents and other |  | 296.9 |  |  | 356.8 |  |  | 205.8 |
Total assets |  | $ | 5,185.4 |  |  | $ | 5,170.0 |  |  | $ | 5,751.7 |
In 2016, identifiable assets for the HPMC segment decreased by $521 million from December 31, 2015 as a result of the reporting change and the asset impairment charges for Rowley discussed above. In 2016, identifiable assets for the FRP segment decreased by $32 million from December 31, 2015 as a result of the reporting change to closed operations for the Midland and Bagdad facilities as discussed above.
($ in millions) |  | 2017 |  | Percent of total |  | 2016 |  | Percent of total |  | 2015 |  | Percent of total
External sales: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 2,070.6 |  |  | 59 | % |  | $ | 1,857.5 |  |  | 59 | % |  | $ | 2,142.6 |  |  | 58 | %
China |  | 265.6 |  |  | 7 | % |  | 214.1 |  |  | 7 | % |  | 246.9 |  |  | 7 | %
United Kingdom |  | 231.6 |  |  | 6 | % |  | 183.8 |  |  | 6 | % |  | 198.2 |  |  | 5 | %
Germany |  | 217.1 |  |  | 6 | % |  | 177.7 |  |  | 6 | % |  | 193.3 |  |  | 5 | %
France |  | 165.6 |  |  | 5 | % |  | 142.6 |  |  | 4 | % |  | 153.3 |  |  | 4 | %
Japan |  | 131.7 |  |  | 4 | % |  | 151.9 |  |  | 5 | % |  | 202.3 |  |  | 5 | %
Canada |  | 99.8 |  |  | 3 | % |  | 97.6 |  |  | 3 | % |  | 154.5 |  |  | 4 | %
Mexico |  | 96.1 |  |  | 3 | % |  | 89.7 |  |  | 3 | % |  | 78.4 |  |  | 2 | %
Other |  | 247.0 |  |  | 7 | % |  | 219.7 |  |  | 7 | % |  | 350.1 |  |  | 10 | %
Total External Sales |  | $ | 3,525.1 |  |  | 100 | % |  | $ | 3,134.6 |  |  | 100 | % |  | $ | 3,719.6 |  |  | 100 | %
($ in millions) |  | 2017 |  | Percent of total |  | 2016 |  | Percent of total |  | 2015 |  | Percent of total
Total assets: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 4,547.7 |  |  | 88 | % |  | $ | 4,591.5 |  |  | 89 | % |  | $ | 5,073.1 |  |  | 88 | %
China |  | 276.0 |  |  | 5 | % |  | 249.3 |  |  | 5 | % |  | 260.0 |  |  | 5 | %
United Kingdom |  | 122.7 |  |  | 2 | % |  | 122.8 |  |  | 2 | % |  | 154.3 |  |  | 3 | %
Other |  | 239.0 |  |  | 5 | % |  | 206.4 |  |  | 4 | % |  | 264.3 |  |  | 4 | %
Total Assets |  | $ | 5,185.4 |  |  | 100 | % |  | $ | 5,170.0 |  |  | 100 | % |  | $ | 5,751.7 |  |  | 100 | %

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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