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Business Segments | 12 Months Ended
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Dec. 31, 2019
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 2019 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 and electrical energy. 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. Capabilities range from cast/wrought and powder alloy development to final production of highly engineered finished components, including those used for next-generation jet engine forgings and 3D-printed aerospace products. The FRP segment serves a diverse group of end markets, with sales to the oil & gas market and aerospace & defense markets collectively representing over 40% of 2019 sales. Other important end markets for FRP include automotive, food processing equipment and appliances, consumer electronics, and construction & mining. FRP produces nickel-based alloys, specialty alloys, and titanium and titanium-based alloys, and stainless steel products in a variety of 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 the A&T Stainless and Uniti joint ventures, which are accounted for under the equity method. See Note 7 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, restructuring and asset impairment charges, debt extinguishment charges and non-operating gains or losses. 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) |  | 2019 |  | 2018 |  | 2017
Total sales: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 2,501.9 |  |  | $ | 2,413.6 |  |  | $ | 2,127.0 |
Flat Rolled Products |  | 1,820.9 |  |  | 1,799.0 |  |  | 1,527.5 |
Total sales |  | 4,322.8 |  |  | 4,212.6 |  |  | 3,654.5 |
Intersegment sales: |  |  |  |  |  |
High Performance Materials & Components |  | 103.8 |  |  | 79.4 |  |  | 59.6 |
Flat Rolled Products |  | 96.5 |  |  | 86.6 |  |  | 69.8 |
Total intersegment sales |  | 200.3 |  |  | 166.0 |  |  | 129.4 |
Sales to external customers: |  |  |  |  |  |
High Performance Materials & Components |  | 2,398.1 |  |  | 2,334.2 |  |  | 2,067.4 |
Flat Rolled Products |  | 1,724.4 |  |  | 1,712.4 |  |  | 1,457.7 |
Total sales to external customers |  | $ | 4,122.5 |  |  | $ | 4,046.6 |  |  | $ | 3,525.1 |
Total international sales were $1,667.9 million in 2019, $1,698.4 million in 2018, and $1,454.5 million in 2017. Of these amounts, sales by operations in the United States to customers in other countries were $1,262.6 million in 2019, $1,303.8 million in 2018, and $1,078.6 million in 2017.
(In millions) |  | 2019 |  | 2018 |  | 2017
Operating profit: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 343.1 |  |  | $ | 335.4 |  |  | $ | 246.4 |
Flat Rolled Products |  | 37.6 |  |  | 77.8 |  |  | 37.0 |
Total operating profit |  | 380.7 |  |  | 413.2 |  |  | 283.4 |
LIFO and net realizable value reserves (See Note 3) |  | (0.1 | ) |  | (0.7 | ) |  | (0.2 | )
Corporate expenses |  | (66.8 | ) |  | (58.1 | ) |  | (50.5 | )
Closed operations and other expenses |  | (25.5 | ) |  | (21.6 | ) |  | (34.0 | )
Restructuring and other charges |  | (4.5 | ) |  | — |  |  | — |
Impairment of goodwill (See Note 5) |  | — |  |  | — |  |  | (114.4 | )
Debt extinguishment charge (See Note 10) |  | (21.6 | ) |  | — |  |  | (37.0 | )
Gain on joint venture deconsolidation (See Note 7) |  | — |  |  | 15.9 |  |  | — |
Joint venture impairment charge (See Note 7) |  | (11.4 | ) |  | — |  |  | — |
Gain on asset sales, net |  | 89.8 |  |  | — |  |  | — |
Interest expense, net |  | (99.0 | ) |  | (101.0 | ) |  | (133.8 | )
Income (loss) before income taxes |  | $ | 241.6 |  |  | $ | 247.7 |  |  | $ | (86.5 | )
Closed operations and other expenses are primarily presented in selling and administrative expenses in the consolidated statements of operations. 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. Restructuring and other charges for 2019 are comprised of severance obligations for the reduction of approximately 70 positions in order to streamline ATI’s salaried workforce primarily to improve the cost competitiveness of the U.S.-based FRP business. The entire $4.5 million will be paid in 2020 upon completion of these reductions. The $89.8 million net gain on asset sales for 2019 consists of a $91.7 million gain on the sale of certain oil and gas rights in Eddy County, NM (see Note 9) and a $6.2 million gain on the sale of the Company’s Cast Products business, partially offset by an $8.1 million loss on the sale of two non-core forging facilities, located in Portland, IN and Lebanon, KY. See Note 6 for further explanation regarding the sale of business transactions. Certain additional information regarding the Company’s business segments is presented below:
(In millions) |  | 2019 |  | 2018 |  | 2017
Depreciation and amortization: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 99.1 |  |  | $ | 106.5 |  |  | $ | 109.3 |
Flat Rolled Products |  | 49.1 |  |  | 47.0 |  |  | 45.6 |
Corporate |  | 2.9 |  |  | 2.9 |  |  | 5.9 |
Total depreciation and amortization |  | $ | 151.1 |  |  | $ | 156.4 |  |  | $ | 160.8 |
Capital expenditures: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 132.5 |  |  | $ | 79.8 |  |  | $ | 62.7 |
Flat Rolled Products |  | 34.8 |  |  | 56.4 |  |  | 59.1 |
Corporate |  | 0.9 |  |  | 3.0 |  |  | 0.9 |
Total capital expenditures |  | $ | 168.2 |  |  | $ | 139.2 |  |  | $ | 122.7 |
Identifiable assets: |  | 2019 |  | 2018 |  | 2017
High Performance Materials & Components |  | $ | 2,689.9 |  |  | $ | 2,765.4 |  |  | $ | 2,662.3 |
Flat Rolled Products |  | 2,255.8 |  |  | 2,225.7 |  |  | 2,218.4 |
Discontinued Operations |  | — |  |  | — |  |  | 0.2 |
Corporate: |  |  |  |  |  |
Deferred Taxes |  | 64.5 |  |  | 8.7 |  |  | 7.6 |
Cash and cash equivalents and other |  | 624.4 |  |  | 502.0 |  |  | 296.9 |
Total assets |  | $ | 5,634.6 |  |  | $ | 5,501.8 |  |  | $ | 5,185.4 |
($ in millions) |  | 2019 |  | Percent of total |  | 2018 |  | Percent of total |  | 2017 |  | Percent of total
Total assets: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 4,956.4 |  |  | 88 | % |  | $ | 4,859.1 |  |  | 88 | % |  | $ | 4,547.7 |  |  | 88 | %
China |  | 288.1 |  |  | 5 | % |  | 287.3 |  |  | 5 | % |  | 276.0 |  |  | 5 | %
United Kingdom |  | 141.3 |  |  | 3 | % |  | 136.7 |  |  | 3 | % |  | 122.7 |  |  | 2 | %
Other |  | 248.8 |  |  | 4 | % |  | 218.7 |  |  | 4 | % |  | 239.0 |  |  | 5 | %
Total Assets |  | $ | 5,634.6 |  |  | 100 | % |  | $ | 5,501.8 |  |  | 100 | % |  | $ | 5,185.4 |  |  | 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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