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Business Segments | 12 Months Ended
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Dec. 31, 2018
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 2018 HPMC business segment sales are to the aerospace & defense markets, and nearly half of HPMC’s total sales are products for commercial jet engines. Other major HPMC end markets include medical, oil & gas, electrical energy and construction & mining. HPMC produces 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 materials. 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 45% of 2018 sales. Other major end markets for FRP include food processing equipment and appliances, construction & mining, electronics, communication equipment and computers, and aerospace & defense. FRP produces 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% interests in both A&T Stainless and Uniti, which are accounted for under the equity method. See Note 6 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 5), restructuring charges and other costs (see Note 17), debt extinguishment charges (see Note 9) and non-operating gains or losses (see Note 6). 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) |  | 2018 |  | 2017 |  | 2016
Total sales: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 2,413.6 |  |  | $ | 2,127.0 |  |  | $ | 1,979.5 |
Flat Rolled Products |  | 1,799.0 |  |  | 1,527.5 |  |  | 1,260.8 |
Total sales |  | 4,212.6 |  |  | 3,654.5 |  |  | 3,240.3 |
Intersegment sales: |  |  |  |  |  |
High Performance Materials & Components |  | 79.4 |  |  | 59.6 |  |  | 49.1 |
Flat Rolled Products |  | 86.6 |  |  | 69.8 |  |  | 56.6 |
Total intersegment sales |  | 166.0 |  |  | 129.4 |  |  | 105.7 |
Sales to external customers: |  |  |  |  |  |
High Performance Materials & Components |  | 2,334.2 |  |  | 2,067.4 |  |  | 1,930.4 |
Flat Rolled Products |  | 1,712.4 |  |  | 1,457.7 |  |  | 1,204.2 |
Total sales to external customers |  | $ | 4,046.6 |  |  | $ | 3,525.1 |  |  | $ | 3,134.6 |
Total international sales were $1,698.4 million in 2018, $1,454.5 million in 2017, and $1,277.1 million in 2016. Of these amounts, sales by operations in the United States to customers in other countries were $1,303.8 million in 2018, $1,078.6 million in 2017, and $971.4 million in 2016.
(In millions) |  | 2018 |  | 2017 |  | 2016
Operating profit: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 335.4 |  |  | $ | 246.4 |  |  | $ | 168.7 |
Flat Rolled Products |  | 77.8 |  |  | 37.0 |  |  | (163.0 | )
Total operating profit |  | 413.2 |  |  | 283.4 |  |  | 5.7 |
LIFO and net realizable value reserves (See Note 3) |  | (0.7 | ) |  | (0.2 | ) |  | 0.8 |
Corporate expenses |  | (58.1 | ) |  | (50.5 | ) |  | (43.4 | )
Closed operations and other expenses |  | (21.6 | ) |  | (34.0 | ) |  | (34.6 | )
Restructuring and other charges (See Note 17) |  | — |  |  | — |  |  | (538.5 | )
Impairment of goodwill (See Note 5) |  | — |  |  | (114.4 | ) |  | — |
Debt extinguishment charge (See Note 9) |  | — |  |  | (37.0 | ) |  | — |
Gain on joint venture deconsolidation (See Note 6) |  | 15.9 |  |  | — |  |  | — |
Interest expense, net |  | (101.0 | ) |  | (133.8 | ) |  | (124.0 | )
Income (loss) before income taxes |  | $ | 247.7 |  |  | $ | (86.5 | ) |  | $ | (734.0 | )
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 17 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 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 17 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 3 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. Closed operations and other expenses are primarily presented in selling and administrative expenses in the consolidated statements of operations. In 2018, these items included costs at closed facilities, including legal matters, environmental, real estate and other facility costs, and changes in foreign currency remeasurement impacts primarily related to our European Treasury Center operation. The reduction in interest expense in 2018 compared to the prior year periods is due to the redemption of the Company’s previously outstanding 9.375% Senior Notes due 2019 in the fourth quarter of 2017. Certain additional information regarding the Company’s business segments is presented below:
(In millions) |  | 2018 |  | 2017 |  | 2016
Depreciation and amortization: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 106.5 |  |  | $ | 109.3 |  |  | $ | 118.4 |
Flat Rolled Products |  | 47.0 |  |  | 45.6 |  |  | 48.8 |
Corporate |  | 2.9 |  |  | 5.9 |  |  | 3.1 |
Total depreciation and amortization |  | $ | 156.4 |  |  | $ | 160.8 |  |  | $ | 170.3 |
Capital expenditures: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 79.8 |  |  | $ | 62.7 |  |  | $ | 89.9 |
Flat Rolled Products |  | 56.4 |  |  | 59.1 |  |  | 111.8 |
Corporate |  | 3.0 |  |  | 0.9 |  |  | 0.5 |
Total capital expenditures |  | $ | 139.2 |  |  | $ | 122.7 |  |  | $ | 202.2 |
Identifiable assets: |  | 2018 |  | 2017 |  | 2016
High Performance Materials & Components |  | $ | 2,765.4 |  |  | $ | 2,662.3 |  |  | $ | 2,744.3 |
Flat Rolled Products |  | 2,225.7 |  |  | 2,218.4 |  |  | 2,056.4 |
Discontinued Operations |  | — |  |  | 0.2 |  |  | 0.4 |
Corporate: |  |  |  |  |  |
Deferred Taxes |  | 8.7 |  |  | 7.6 |  |  | 12.1 |
Cash and cash equivalents and other |  | 502.0 |  |  | 296.9 |  |  | 356.8 |
Total assets |  | $ | 5,501.8 |  |  | $ | 5,185.4 |  |  | $ | 5,170.0 |
($ in millions) |  | 2018 |  | Percent of total |  | 2017 |  | Percent of total |  | 2016 |  | Percent of total
Total assets: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 4,859.1 |  |  | 88 | % |  | $ | 4,547.7 |  |  | 88 | % |  | $ | 4,591.5 |  |  | 89 | %
China |  | 287.3 |  |  | 5 | % |  | 276.0 |  |  | 5 | % |  | 249.3 |  |  | 5 | %
United Kingdom |  | 136.7 |  |  | 3 | % |  | 122.7 |  |  | 2 | % |  | 122.8 |  |  | 2 | %
Other |  | 218.7 |  |  | 4 | % |  | 239.0 |  |  | 5 | % |  | 206.4 |  |  | 4 | %
Total Assets |  | $ | 5,501.8 |  |  | 100 | % |  | $ | 5,185.4 |  |  | 100 | % |  | $ | 5,170.0 |  |  | 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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