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Operating Segment Information | 12 Months Ended
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Dec. 31, 2017
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Operating Segment Information | NOTE 3—OPERATING SEGMENT INFORMATION Management has defined Constellium’s operating segments based upon product lines, markets and industries it serves, and prepares and reports operating segment information to Constellium’s chief operating decision maker (CODM) (see NOTE 2—Summary of Significant Accounting Policies) on that basis. Group’s operating segments are described below: Packaging and Automotive Rolled Products (P&ARP) P&ARP produces thin-gauge rolled products for customers in the beverage and closures, automotive, customized industrial sheet solutions and high-quality bright surface product markets. P&ARP operates four facilities in three countries and has 3,657 employees at December 31, 2017. Aerospace and Transportation (A&T) A&T focuses on thick-gauge rolled high value-added products for customers in the aerospace, defense and mass-transportation markets and engineering industries. A&T operates six facilities in three countries and has 4,008 employees at December 31, 2017. Automotive Structures and Industry (AS&I) AS&I focuses on specialty products and supplies a variety of hard and soft alloy extruded products, including technically advanced products, to the automotive, rail, industrial, energy and building industries, and to manufacturers of mass transport vehicles and shipbuilders. AS&I operates fifteen facilities in nine countries and has 3,988 employees at December 31, 2017. Holdings & Corporate Holdings & Corporate includes the net cost of Constellium’s head office and corporate support functions (including our technology centers). Intersegment elimination Intersegment trading is conducted on an arm’s length basis and reflects market prices. The accounting principles used to prepare the Company’s operating segment information are the same as those used to prepare the Group’s consolidated financial statements. 3.1 Segment Revenue
|  | Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |  |  | Year ended December 31, 2015 |
(in millions of Euros) |  | Segment revenue |  |  | Inter segment elimination |  |  | External revenue |  |  | Segment revenue |  |  | Inter segment elimination |  |  | External revenue |  |  | Segment revenue |  |  | Inter segment elimination |  |  | External revenue |
P&ARP |  |  | 2,812 |  |  |  | (7 | ) |  |  | 2,805 |  |  |  | 2,498 |  |  |  | (16 | ) |  |  | 2,482 |  |  |  | 2,748 |  |  |  | (6 | ) |  |  | 2,742 |
A&T |  |  | 1,335 |  |  |  | (34 | ) |  |  | 1,301 |  |  |  | 1,302 |  |  |  | (23 | ) |  |  | 1,279 |  |  |  | 1,355 |  |  |  | (7 | ) |  |  | 1,348 |
AS&I |  |  | 1,123 |  |  |  | (5 | ) |  |  | 1,118 |  |  |  | 1,002 |  |  |  | (9 | ) |  |  | 993 |  |  |  | 1,047 |  |  |  | (13 | ) |  |  | 1,034 |
Holdings & Corporate(A) |  |  | 13 |  |  |  | — |  |  |  | 13 |  |  |  | (11 | ) |  |  | — |  |  |  | (11 | ) |  |  | 29 |  |  |  | — |  |  |  | 29 |
Total |  |  | 5,283 |  |  |  | (46 | ) |  |  | 5,237 |  |  |  | 4,791 |  |  |  | (48 | ) |  |  | 4,743 |  |  |  | 5,179 |  |  |  | (26 | ) |  |  | 5,153 |
(A) | For the year ended December 31, 2017, Holdings & Corporate segment includes revenues from supplying metal to third parties.
For the year ended December 31, 2016, Holdings & Corporate segment includes a €20 million one-time payment related to the re-negotiation of a contract with one of Wise’s customers offset by revenues from metal supply to third parties. 3.2 Segment adjusted EBITDA and reconciliation of Adjusted EBITDA to Net Income
(in millions of Euros) |  | Notes |  | Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |  |  | Year ended December 31, 2015 |
P&ARP |  |  |  |  | 202 |  |  |  | 201 |  |  |  | 183 |
A&T |  |  |  |  | 133 |  |  |  | 103 |  |  |  | 103 |
AS&I |  |  |  |  | 119 |  |  |  | 102 |  |  |  | 80 |
Holdings & Corporate |  |  |  |  | (23 | ) |  |  | (29 | ) |  |  | (23 | )
Adjusted EBITDA |  |  |  |  | 431 |  |  |  | 377 |  |  |  | 343 |
Metal price lag(A) |  |  |  |  | 22 |  |  |  | 4 |  |  |  | (34 | )
Start-up and development costs (B) |  |  |  |  | (17 | ) |  |  | (25 | ) |  |  | (21 | )
Manufacturing system and process transformation costs |  |  |  |  | (2 | ) |  |  | (5 | ) |  |  | (11 | )
Wise integration and acquisition costs |  |  |  |  | — |  |  |  | (2 | ) |  |  | (14 | )
Wise one-time costs (C) |  |  |  |  | — |  |  |  | (20 | ) |  |  | (38 | )
Wise purchase price adjustment (D) |  | 7 |  |  | — |  |  |  | 20 |  |  |  | — |
Share based compensation costs |  |  |  |  | (8 | ) |  |  | (6 | ) |  |  | (7 | )
Gains / (Losses) on pension plan amendments (E) |  | 23 |  |  | 20 |  |  |  | — |  |  |  | (5 | )
Depreciation and amortization |  | 15, 16 |  |  | (171 | ) |  |  | (155 | ) |  |  | (140 | )
Impairment |  | 15 |  |  | — |  |  |  | — |  |  |  | (457 | )
Restructuring costs |  |  |  |  | (4 | ) |  |  | (5 | ) |  |  | (8 | )
Unrealized gains/(losses) on derivatives |  | 7 |  |  | 57 |  |  |  | 71 |  |  |  | (20 | )
Unrealized exchange (losses) /gains from the remeasurement of monetary assets and liabilities—net |  | 7 |  |  | (4 | ) |  |  | 3 |  |  |  | (3 | )
Losses on disposals |  |  |  |  | (3 | ) |  |  | (10 | ) |  |  | (5 | )
Other (F) |  |  |  |  | — |  |  |  | (1 | ) |  |  | (6 | )
Income / (loss) from operations |  |  |  |  | 321 |  |  |  | 246 |  |  |  | (426 | )
Finance costs—net |  | 9 |  |  | (243 | ) |  |  | (167 | ) |  |  | (155 | )
Share of loss of joint-ventures |  |  |  |  | (29 | ) |  |  | (14 | ) |  |  | (3 | )
Income / (loss) before income tax |  |  |  |  | 49 |  |  |  | 65 |  |  |  | (584 | )
Income tax (expense) / benefit |  | 10 |  |  | (80 | ) |  |  | (69 | ) |  |  | 32 |
Net loss |  |  |  |  | (31 | ) |  |  | (4 | ) |  |  | (552 | )
(A) | Metal price lag represents the financial impact of the timing difference between when aluminium prices included within Constellium revenues are established and when aluminium purchase prices included in Cost of sales are established. The Group accounts for inventory using a weighted average price basis and this adjustment aims to remove the effect of volatility in LME prices. The calculation of the Group metal price lag adjustment is based on an internal standardized methodology calculated at each of Constellium’s manufacturing sites and is primarily calculated as the average value of product recorded in inventory, which approximates the spot price in the market, less the average value transferred out of inventory, which is the weighted average of the metal element of cost of sales, based on the quantity sold in the period.
(B) | For the year ended December 31, 2017, start-up and development costs include mainly €16 million related to new projects in our AS&I operating segment. For the year ended December 31, 2016, start-up and development costs include €20 million related to Automotive Body Sheet growth projects.
(C) | For the year ended December 31, 2016, Wise one-time costs related to a one-time payment of €20 million, recorded as a reduction of revenues, in relation to the re-negotiation of payment terms, pass through of Midwest premium amounts and other pricing mechanisms in a contract with one of Wise’s customers. We entered into the re-negotiation of these terms in order to align the terms of this contract, acquired during the acquisition of Wise, with Constellium’s normal business terms.
(D) | The contractual price adjustment relating to the acquisition of Wise Metals Intermediate Holdings was finalized in 2016. We received a cash payment of €21 million and recorded a €20 million gain net of costs.
(E) | For the year ended December 31, 2017, amendments to certain Swiss pension plan, US pension plan and OPEB resulted in a €20 million net gain.
(F) | For the year ended December 31, 2017, other includes €3 million of legal fees and lump-sum payments in connection with the renegotiation of a new 5-year collective bargaining agreement offset by accrual reversals of unused provision related to one-time loss contingencies.
3.3 Revenue by product lines
(in millions of Euros) |  | Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |  |  | Year ended December 31, 2015 |
Packaging rolled products |  |  | 2,146 |  |  |  | 2,003 |  |  |  | 2,205 |
Automotive rolled products |  |  | 483 |  |  |  | 319 |  |  |  | 275 |
Specialty and other thin-rolled products |  |  | 176 |  |  |  | 160 |  |  |  | 262 |
Aerospace rolled products |  |  | 760 |  |  |  | 795 |  |  |  | 861 |
Transportation, Industry and other rolled products |  |  | 541 |  |  |  | 484 |  |  |  | 487 |
Automotive extruded products |  |  | 614 |  |  |  | 537 |  |  |  | 544 |
Other extruded products |  |  | 504 |  |  |  | 456 |  |  |  | 490 |
Other |  |  | 13 |  |  |  | (11 | ) |  |  | 29 |
Total Revenue |  |  | 5,237 |  |  |  | 4,743 |  |  |  | 5,153 |
3.4 Segment capital expenditures
(in millions of Euros) |  | Year ended December 31, 2017 |  |  | Year ended December 31, 2016 |  |  | Year ended December 31, 2015 |
P&ARP |  |  | (115 | ) |  |  | (166 | ) |  |  | (170 | )
A&T |  |  | (73 | ) |  |  | (96 | ) |  |  | (112 | )
AS&I |  |  | (83 | ) |  |  | (84 | ) |  |  | (60 | )
Holdings & Corporate |  |  | (5 | ) |  |  | (9 | ) |  |  | (8 | )
Capital expenditures—Property, plant and equipment |  |  | (276 | ) |  |  | (355 | ) |  |  | (350 | )
3.5 Segment assets Segment assets are comprised of total assets of Constellium by segment, less deferred income tax assets, cash and cash equivalents and other financial assets.
(in millions of Euros) |  | At December 31, 2017 |  |  | At December 31, 2016 |
P&ARP |  |  | 1,629 |  |  |  | 1,652 |
A&T |  |  | 769 |  |  |  | 768 |
AS&I |  |  | 449 |  |  |  | 390 |
Holdings & Corporate |  |  | 252 |  |  |  | 212 |
Segment Assets |  |  | 3,099 |  |  |  | 3,022 |
Unallocated: |  |  |  |  |  |  |  |
Deferred income tax assets |  |  | 164 |  |  |  | 252 |
Cash and cash equivalents |  |  | 269 |  |  |  | 347 |
Other financial assets |  |  | 179 |  |  |  | 166 |
Total Assets |  |  | 3,711 |  |  |  | 3,787 |
3.6 Information about major customers Revenue arising from the P&ARP segment for the years ended December 31, 2017, 2016 and 2015 is comprised respectively of €1,364 million, €1,220 million and €1,318 million from sales to the Group’s two largest customers. No other single customer contributed 10% or more to the Group’s revenue for 2017, 2016 and 2015.

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