Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 22, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | Kaiser Aluminum Corp | |
Entity Central Index Key | 811,596 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 16,501,758 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 94.3 | $ 51.1 |
Short-term investments | 88.4 | 183.7 |
Receivables: | ||
Trade receivables, net | 194.5 | 165 |
Other | 24.4 | 15.5 |
Contract assets | 51 | 0 |
Inventories | 196.2 | 207.9 |
Prepaid expenses and other current assets | 24.2 | 33.4 |
Total current assets | 673 | 656.6 |
Property, plant and equipment, net | 595.4 | 571.4 |
Deferred tax assets, net | 42.2 | 72 |
Intangible assets, net | 33 | 25 |
Goodwill | 43.4 | 18.8 |
Other assets | 39 | 41.4 |
Total | 1,426 | 1,385.2 |
Current liabilities: | ||
Accounts payable | 120.4 | 90 |
Accrued salaries, wages and related expenses | 35.1 | 42.6 |
Other accrued liabilities | 37 | 40.5 |
Total current liabilities | 192.5 | 173.1 |
Net liabilities of Salaried VEBA | 31.8 | 31.9 |
Deferred tax liabilities | 4.3 | 4.3 |
Long-term liabilities | 64.7 | 60 |
Long-term debt | 370.2 | 369.6 |
Total liabilities | 663.5 | 638.9 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, 5,000,000 shares authorized at both September 30, 2018 and December 31, 2017; no shares were issued and outstanding at September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, par value $0.01, 90,000,000 shares authorized at both September 30, 2018 and at December 31, 2017; 22,471,628 shares issued and 16,547,237 shares outstanding at September 30, 2018; 22,393,537 shares issued and 16,773,586 shares outstanding at December 31, 2017 | 0.2 | 0.2 |
Additional paid in capital | 1,057.4 | 1,055.9 |
Retained earnings | 135.6 | 85.5 |
Treasury stock, at cost, 5,924,391 shares at September 30, 2018 and 5,619,951 shares at December 31, 2017, respectively | (390.9) | (358.6) |
Accumulated other comprehensive loss | (39.8) | (36.7) |
Total stockholders' equity | 762.5 | 746.3 |
Total | $ 1,426 | $ 1,385.2 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders' equity: | ||
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common Stock, shares issued | 22,471,628 | 22,393,537 |
Common stock, shares outstanding | 16,547,237 | 16,773,586 |
Treasury stock, shares | 5,924,391 | 5,619,951 |
Statements of Consolidated Inco
Statements of Consolidated Income (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Income Statement [Abstract] | ||||||
Revenues | $ 393.1 | $ 332.8 | $ 1,196.5 | $ 1,044.4 | ||
Costs and expenses: | ||||||
Cost of products sold, excluding depreciation and amortization and other items1 | [1] | 323.3 | 256.4 | 983.4 | 808.7 | |
Depreciation and amortization | 11 | 10.2 | 32.4 | 29.3 | ||
Selling, general, administrative, research and development | [2] | 23.9 | 24.7 | 73.9 | 74.7 | |
Goodwill impairment | 0 | 0 | $ 18.4 | 0 | 18.4 | |
Other operating charges, net | 0 | 0 | 0.1 | 0 | ||
Total costs and expenses | 358.2 | 291.3 | 1,089.8 | 931.1 | ||
Operating income | 34.9 | 41.5 | 106.7 | 113.3 | ||
Other income (expense): | ||||||
Interest expense | (5.7) | (5.3) | (17) | (16.4) | ||
Other income (expense), net | 0.7 | (0.2) | 0.3 | 0.5 | ||
Income before income taxes | 29.9 | 36 | 90 | 97.4 | ||
Income tax provision | (8.2) | (16.1) | (21.9) | (36.8) | ||
Net income | $ 21.7 | $ 19.9 | $ 68.1 | $ 60.6 | ||
Net income per common share: | ||||||
Basic (in dollars per share) | $ 1.31 | $ 1.18 | $ 4.09 | $ 3.55 | ||
Diluted (in dollars per share) | $ 1.29 | $ 1.16 | $ 4.03 | $ 3.49 | ||
Weighted-average number of common shares outstanding (in thousands): | ||||||
Basic (shares) | 16,573 | 16,834 | 16,654 | 17,072 | ||
Diluted (shares) | 16,783 | 17,160 | 16,882 | 17,363 | ||
Cash dividends declared (in dollars per share) | $ 0.55 | $ 0.50 | $ 1.65 | $ 1.50 | ||
[1] | See Note 5 for discussion of our adoption of ASU 2017-12 (as defined in Note 1 | |||||
[2] | See Note 1 for discussion of our adoption of ASU 2017-07 (as defined in Note 1 |
Statements of Consolidated Comp
Statements of Consolidated Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 21.7 | $ 19.9 | $ 68.1 | $ 60.6 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Defined benefit pension plan and Salaried VEBA | 1.1 | 0.8 | 3.5 | 2.5 |
Available for sale securities | (0.2) | 0.3 | (0.5) | 0.6 |
Cash flow hedges | (1.7) | 0.4 | (5.7) | 0.7 |
Foreign currency translation | 0 | 0.1 | 0 | 0.2 |
Other comprehensive (loss) income, net of tax | (0.8) | 1.6 | (2.7) | 4 |
Comprehensive income | $ 20.9 | $ 21.5 | $ 65.4 | $ 64.6 |
Statement of Consolidated Stock
Statement of Consolidated Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | |
Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 60.6 | ||||||
Repurchase of common stock (shares) | (806,307) | ||||||
Repurchase of common stock | $ (64.9) | ||||||
Ending balance at Sep. 30, 2017 | $ (32.7) | ||||||
Stockholders' Equity [Roll Forward] | |||||||
Net income | 19.9 | ||||||
Ending balance at Sep. 30, 2017 | (32.7) | ||||||
Stockholders' Equity [Roll Forward] | |||||||
Cumulative-effect adjustment | [1] | 10.1 | $ 10.5 | $ 0 | (0.4) | ||
Adjusted balance | $ 756.4 | $ 0.2 | $ 1,055.9 | 96 | (358.6) | (37.1) | |
Beginning balance (shares) at Dec. 31, 2017 | 16,773,586 | 16,773,586 | |||||
Beginning balance at Dec. 31, 2017 | $ 746.3 | $ 0.2 | 1,055.9 | 85.5 | (358.6) | (36.7) | |
Stockholders' Equity [Roll Forward] | |||||||
Net income | 68.1 | 68.1 | |||||
Other comprehensive loss, net of tax | (2.7) | (2.7) | |||||
Issuance of non-vested shares to non-employee directors (shares) | 9,009 | ||||||
Issuance of common shares to non-employee directors (shares) | 1,954 | ||||||
Issuance of common shares to non-employee directors | 0.2 | 0.2 | |||||
Issuance of common shares to employees upon vesting of restricted stock units and performance shares (shares) | 135,294 | ||||||
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (shares) | (68,166) | ||||||
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | $ (6.9) | (6.9) | |||||
Repurchase of common stock (shares) | (304,440) | (304,440) | |||||
Repurchase of common stock | $ (32.3) | (32.3) | |||||
Cash dividends on common stock and restricted shares and dividend equivalents on restricted stock units and performance shares | (28.5) | (28.5) | |||||
Amortization of unearned equity compensation | $ 8.2 | 8.2 | |||||
Ending balance (shares) at Sep. 30, 2018 | 16,547,237 | 16,547,237 | |||||
Ending balance at Sep. 30, 2018 | $ 762.5 | $ 0.2 | 1,057.4 | 135.6 | (390.9) | (39.8) | |
Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 21.7 | ||||||
Ending balance (shares) at Sep. 30, 2018 | 16,547,237 | 16,547,237 | |||||
Ending balance at Sep. 30, 2018 | $ 762.5 | $ 0.2 | $ 1,057.4 | $ 135.6 | $ (390.9) | $ (39.8) | |
[1] | See Note 1 for discussion of our adoption of ASC 606 and ASU 2016-01 (as defined in Note 1 |
Statement of Consolidated Cash
Statement of Consolidated Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities: | |||
Net income | $ 68.1 | $ 60.6 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property, plant and equipment | 31.3 | 28.3 | |
Amortization of definite-lived intangible assets | 1.1 | 1 | |
Amortization of debt discount and debt issuance costs | 0.8 | 0.9 | |
Deferred income taxes | 27.4 | 38.6 | |
Non-cash equity compensation | 8.4 | 10.1 | |
Gain on disposition of available for sale securities | (2.4) | (1.8) | |
Non-cash asset impairment charge | 0.1 | 18.4 | |
Gain on disposition of property, plant and equipment | (0.2) | (0.4) | |
Non-cash net periodic postretirement benefit cost relating to Salaried VEBA | 4.6 | 3.4 | |
Other non-cash changes in assets and liabilities | 15.6 | (14.8) | |
Changes in operating assets and liabilities: | |||
Trade and other receivables | (35.7) | (4) | |
Contract assets | 4.6 | 0 | |
Inventories | (25.6) | (10.6) | |
Prepaid expenses and other current assets | (1.6) | (1.8) | |
Accounts payable | 31.1 | 21.6 | |
Accrued liabilities | (1) | 0.9 | |
Annual variable cash contributions to VEBAs | (15.7) | (20) | |
Long-term assets and liabilities, net | 1.6 | 1.1 | |
Net cash provided by (used in) operating activities | [1] | 112.5 | 131.5 |
Cash flows from investing activities | |||
Capital expenditures | (53.1) | (56.1) | |
Purchase of available for sale securities | (111.9) | (196) | |
Purchase of equity securities | (0.9) | 0 | |
Proceeds from disposal of property, plant and equipment | 208.7 | 237.2 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | (43.3) | 0 | |
Proceeds from disposal of property, plant and equipment | 0.6 | 0.6 | |
Net cash provided by (used in) investing activities | [2] | 0.1 | (14.3) |
Cash flows from financing activities | |||
Repayment of capital lease | (0.5) | (0.2) | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | (6.9) | (4.5) | |
Repurchase of common stock | (31.9) | (66.7) | |
Cash dividends and dividend equivalents paid | (28.5) | (26.4) | |
Net cash used in financing activities | [2] | (67.8) | (97.8) |
Net increase in cash, cash equivalents and restricted cash during the period | 44.8 | 19.4 | |
Cash, cash equivalents and restricted cash at beginning of period | 64.3 | 67.7 | |
Cash, cash equivalents and restricted cash at end of period | $ 109.1 | $ 87.1 | |
[1] | See Note 9 for adjustments made to arrive at our Consolidated Balance Sheet as of January 1, 2018 upon adopting ASC 606 (as defined in Note 1 | ||
[2] | See Note 13 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies This Quarterly Report on Form 10-Q (this "Report") should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2017 . Unless the context otherwise requires, references in these notes to interim consolidated financial statements - unaudited to "Kaiser Aluminum Corporation," "we," "us," "our," "the Company" and "our Company" refer collectively to Kaiser Aluminum Corporation and its subsidiaries. Organization and Nature of Operations. Kaiser Aluminum Corporation specializes in the production of semi-fabricated specialty aluminum mill products, such as aluminum plate and sheet and extruded and drawn products, for the following end market applications: aerospace and high strength ("Aero/HS products"), automotive applications ("Automotive Extrusions"), general engineering ("GE products") and other industrial ("Other products"). Our business is organized into one operating segment. See Note 14 for additional information regarding our business, product and geographical area information and concentration of risk. Principles of Consolidation and Basis of Presentation. The accompanying unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries and are prepared in accordance with United States generally accepted accounting principles ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods and, therefore, do not include all information and footnotes required by GAAP for complete financial statements. In management's opinion, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for our interim periods are not necessarily indicative of the results of operations that may be achieved for the entire 2018 fiscal year. The financial information as of December 31, 2017 is derived from our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2017 . We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. On the Statements of Consolidated Income, prior period presentation of Unrealized (gain) loss on derivative instruments is now contained within "Cost of products sold, excluding depreciation and amortization and other items." See Note 5 for additional details. See Note 14 for changes relating to the consolidation of the All Other business unit into the Fabricated Products reporting segment. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of our consolidated financial position and results of operations. Fair Value Measurements. We apply the fair value hierarchy established by GAAP for the recognition and measurement of certain financial assets and liabilities. An asset or liability's fair value classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty risk in our assessment of fair value. We also review the underlying inputs that are significant to the fair value measurement of financial instruments to determine if a transfer among hierarchy levels is appropriate. We historically have not had significant transfers into or out of each hierarchy level. Financial assets and liabilities that we measure at fair value each period include our derivative instruments, equity investments related to our deferred compensation plan and debt investment securities classified as available for sale securities (see Note 4 ). Additionally, we measure at fair value once each year at December 31 the plan assets of the Salaried VEBA (defined in Note 4 ) and our Canadian defined benefit pension plan. We record our remaining financial assets and liabilities at carrying value. For a majority of our non-financial assets and liabilities, which include goodwill, intangible assets, inventories and property, plant and equipment, we are not required to measure their fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill), an evaluation of the affected non-financial asset or liability will be required, which could result in a reduction to the carrying amount of such asset or liability. See Note 3 for a discussion of our business acquisition during the quarter ended September 30, 2018 , as well as the goodwill impairment charge recorded during the quarter ended June 30, 2017 related to the operations at our Chandler, Arizona (Extrusion) facility. None of our non-financial assets and liabilities subject to fair value assessments on a non-recurring basis required a material adjustment to the carrying amount of such assets and liabilities for the quarter and nine months ended September 30, 2018 . Inventories. Inventories are stated at the lower of cost or market value. Finished products, work-in-process and raw material inventories are stated on the last-in, first-out ("LIFO") basis. At September 30, 2018 and December 31, 2017 , the current cost of our inventory exceeded its stated LIFO value by $42.9 million and $24.3 million , respectively. Other inventories are stated on the first-in, first-out basis and consist of operating supplies, which are materials and supplies to be consumed during the production process. Inventory costs consist of material, labor and manufacturing overhead, including depreciation. Abnormal costs, such as idle facility expenses, freight, handling costs and spoilage, are accounted for as current period charges (see Note 2 for the components of inventories). Replacement Parts. Replacement parts consist of preventative maintenance and capital spare parts, which are stated on the first-in, first-out basis. Replacement parts are recorded within Prepaid expenses and other current assets or Other assets depending on whether or not the expected utilization of the replacement parts is to occur within the current operating cycle. Property, Plant and Equipment, Net. Property, plant and equipment, net is recorded at cost and includes construction in progress (see Note 2 ). Interest related to the construction of qualifying assets is capitalized as part of the construction costs. The amount of interest expense capitalized as construction in progress was $0.4 million and $0.7 million during the quarters ended September 30, 2018 and September 30, 2017 , respectively. The amount of interest expense capitalized as construction in progress was $1.3 million and $1.9 million during the nine months ended September 30, 2018 and September 30, 2017 , respectively. Depreciation is computed using the straight-line method at rates based on the estimated useful lives of the various classes of assets. Capital lease assets and leasehold improvements are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term. We classify assets as held for sale only when an asset is being actively marketed and expected to sell within 12 months. Assets held for sale are initially measured at the lesser of the assets' carrying amount and the fair value less costs to sell. Derivative Financial Instruments. Consistent with guidelines established by management and approved by our Board of Directors, we use derivative financial instruments to mitigate our exposure to changes in the market price of aluminum, alloying metals, energy, and, to a lesser extent, foreign currency exchange rates. We do not use derivative financial instruments for trading or other speculative purposes. Hedging transactions are executed centrally on behalf of all of our operations to minimize transaction costs, monitor consolidated net exposures and allow for increased responsiveness to changes in market factors. We reflect the fair value of all of our derivative instruments on our Consolidated Balance Sheets (see Note 5 ). The fair value of hedges settling within one year is included in Prepaid expenses and other current assets or Other accrued liabilities. The fair value of hedges settling beyond one year is included in Other assets or Long-term liabilities. Prior to our adoption of ASU 2017-12 (as defined below under " Adoption of New Accounting Standards") , we did not meet the documentation requirements for hedge (deferral) accounting related to our aluminum and energy derivatives. Accordingly, we recorded unrealized gain or loss associated with these hedges in the Statements of Consolidated Income. Subsequent to our adoption of ASU 2017-12 on January 1, 2018, our aluminum and energy derivatives qualified for hedge (deferral) accounting and, as such, we designated such hedges as cash flow hedges. Forward swap contracts for zinc and copper ("Alloying Metals") used in our fabrication operations are also designated as cash flow hedges. Unrealized gains and losses associated with our cash flow hedges are deferred in Other comprehensive income, net of tax and reclassified to Cost of products sold, excluding depreciation and amortization and other items when such hedges settle (see Note 5 ). From time to time, we enter into foreign currency forward contracts to protect the value of anticipated foreign currency expenses associated with cash commitments for equipment purchases. We do not meet the documentation requirements for hedge (deferral) accounting related to foreign currency derivatives and, as such, gains and losses (both unrealized and realized) related to our foreign currency forward contracts are reflected as an increase or reduction in Other income, net. Self Insurance of Workers' Compensation and Employee Healthcare Liabilities . We self-insure the majority of the costs of workers' compensation benefits and employee healthcare benefits and rely on insurance coverage to protect us from large losses on individual claims. Workers' compensation liabilities are based on a combination of estimates for: (i) incurred-but-not-reported claims and (ii) the ultimate expense of incurred claims. Such estimates are based on judgment, using our historical claims data and information and analysis provided by actuarial and claims advisors, our insurance carriers and other professionals. Our undiscounted workers' compensation liabilities were estimated at $27.9 million and $24.8 million as of September 30, 2018 and December 31, 2017 , respectively. However, we account for our workers' compensation accrued liability on a discounted basis, using a discount rate of 3.00% and 2.25% at September 30, 2018 and December 31, 2017 , respectively. Accrued liabilities for employee healthcare benefits, which are estimates of unpaid incurred medical and prescription drug costs as provided by our healthcare administrators, were $3.1 million and $3.5 million as of September 30, 2018 and December 31, 2017 , respectively. Short-Term Incentive Plans ("STI Plans"). We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares of common stock, or a combination of cash and shares of common stock. Amounts earned under STI Plans are based on our adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), modified for certain safety, quality, delivery, cost and individual performance factors. The Adjusted EBITDA targets are determined based on the return on adjusted net assets. Most of our production facilities have similar programs for both hourly and salaried employees. As of September 30, 2018 , we had a liability of $10.6 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments relating to the nine month performance period of our 2018 STI Plan. Long-Term Incentive Programs ("LTI Programs"). Executive officers and other key employees of the Company, as well as non-employee directors of the Company, are eligible to participate in the Kaiser Aluminum Corporation 2016 Equity and Incentive Compensation Plan approved by stockholders on May 26, 2016 ("2016 Plan"). At September 30, 2018 , 577,300 shares were available for awards under the 2016 Plan. We issue new shares of our common stock upon vesting under the 2016 Plan. Adoption of New Accounting Pronouncements Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") was issued in May 2014 and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted ASU 2014-09, including its subsequent amendments as codified under Accounting Standards Codification Topic 606 ("ASC 606"), during the quarter ended March 31, 2018. Upon adoption under the modified retrospective method, we elected to apply the guidance only to contracts that were not completed at the date of initial application, which resulted in a cumulative-effect increase of $10.1 million (see Note 9 ) to our Retained earnings (net of a $3.3 million tax impact) on January 1, 2018. Comparative information in this report has not been adjusted and continues to be reported under previous revenue recognition guidance within Accounting Standards Codification Topic 605 ("ASC 605"). See Statement of Consolidated Stockholders' Equity and Note 9 for details of the significant changes and quantitative impacts of the changes, as well as our policy on revenue recognition. ASU No. 2016-01, Financial Instruments - Overall (S ubtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), was issued in January 2016. The amendments in ASU 2016-01 require equity investments to be measured at fair value with changes in fair value recognized in net income. Equity investments related to our deferred compensation plan that had previously been accounted for as available for sale securities are now accounted for as equity investments with changes in fair value recorded within net income. As such, we recorded a cumulative-effect increase of $0.4 million to our Retained earnings (net of a $0.2 million tax impact) on January 1, 2018 to remove the balance of mark-to-market adjustments recorded within Accumulated other comprehensive income at December 31, 2017. See Note 4 for additional details on our deferred compensation plan, including the fair value of related equity investments. ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07"), was issued in March 2017. ASU 2017-07 amends the requirements related to the income statement presentation of the components of net periodic benefit cost for our defined benefit pension and other postretirement plans. Specifically, ASU 2017-07 requires us to: (i) disaggregate the current-service-cost component from the "other components" of net benefit cost and present it with other current compensation costs for related employees in the income statement and (ii) present the other components elsewhere in the income statement and outside of income from operations. As a result of our retrospective adoption of ASU 2017-07, we reclassified amounts that had previously been presented within Selling, general, administrative, research and development to Other income (expense), net in the Statements of Consolidated Income. See Note 4 for further discussion of our defined benefit pension and other postretirement plans. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"), was issued in August 2017. The amendments under ASU 2017-12 refine and expand hedge accounting requirements for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the related notes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. There was no cumulative effect adjustment to record as a result of early adopting ASU 2017-12 in the quarter ended March 31, 2018; however, we designated all of our outstanding commodity hedges as cash flow hedges beginning January 1, 2018. We therefore have significantly reduced the mark-to-market adjustments that have historically been recorded within the Statements of Consolidated Income. These adjustments have instead been recorded within Other comprehensive income, net of tax beginning in the quarter ended March 31, 2018. See Note 5 for further discussion of our derivatives and hedging programs. There were no material impacts on our consolidated financial statements resulting from our adoption in the quarter ended March 31, 2018 of ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. Accounting Pronouncements Issued But Not Yet Adopted ASU No. 2016-02, Leases (Topic 842): Amendments to the Financial Accounting Standards Board Accounting Standards Codification ("ASU 2016-02"), was issued in February 2016. Under ASU 2016-02, lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). ASU 2016-02 was subsequently amended by three additional pronouncements: (i) ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ; (ii) ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and (iii) ASU No. 2018-11, Leases (Topic 842): Targeted Improvements . ASU 2016-02 and its subsequent amendments (together "ASC 842") become effective for us in the first quarter of 2019. We are currently assessing the impact and expect the adoption of ASC 842 in 2019 to have a material impact on our consolidated financial statements. We plan to apply the optional transition method allowed by ASU 2018-11 upon adoption of ASC 842 in the first quarter of 2019. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), was issued in June 2016. Under ASU 2016-13, existing guidance on reporting credit losses for trade and other receivables and available for sale debt securities will be replaced with a new forward-looking "expected loss" model that generally will result in the earlier recognition of allowances for losses. We are currently in the process of evaluating the impact of adopting ASU 2016-13 in 2020, but do not expect it to have a material impact on our consolidated financial statements. ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ("ASU 2018-15"), was issued in August 2018. Under ASU 2018-15, requirements for capitalizing implementation costs incurred in a hosting arrangement (cloud computing) that is a service contract, are to be aligned with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We are currently in the process of evaluating the impact of adopting ASU 2018-15 in 2020, but do not expect it to have a material impact on our consolidated financial statements. We do not anticipate any material impact on our consolidated financial statements upon the adoption of the following accounting pronouncements: (i) ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ; (ii) ASU No. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made ; (iii) ASU 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ; and (iv) ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information September 30, 2018 December 31, 2017 (In millions of dollars) Cash and Cash Equivalents Cash and money market funds $ 23.2 $ 23.5 Commercial paper 71.1 27.6 Total $ 94.3 $ 51.1 Trade Receivables, Net Billed trade receivables $ 194.2 $ 165.9 Unbilled trade receivables 1.5 0.3 Trade receivables, gross 195.7 166.2 Allowance for doubtful receivables (1.2 ) (1.2 ) Trade receivables, net $ 194.5 $ 165.0 Inventories Finished products $ 41.4 $ 63.8 Work-in-process 73.3 78.3 Raw materials 76.2 61.3 Operating supplies 5.3 4.5 Total $ 196.2 $ 207.9 Property, Plant and Equipment, Net Land and improvements $ 21.4 $ 21.1 Buildings and leasehold improvements 96.4 92.1 Machinery and equipment 736.3 689.1 Construction in progress 38.1 35.1 Property, plant and equipment, gross 892.2 837.4 Accumulated depreciation (298.4 ) (267.9 ) Assets held for sale 1.6 1.9 Property, plant and equipment, net $ 595.4 $ 571.4 Other Accrued Liabilities Uncleared cash disbursements $ 5.6 $ 7.3 Accrued income taxes and taxes payable 8.2 6.8 Accrued annual contribution to VEBAs – Note 4 — 15.7 Accrued interest 8.4 2.9 Other 14.8 7.8 Total $ 37.0 $ 40.5 September 30, 2018 December 31, 2017 (In millions of dollars) Long-Term Liabilities Workers' compensation accruals $ 24.5 $ 22.6 Long-term environmental accrual – Note 7 14.4 15.8 Other long-term liabilities 25.8 21.6 Total $ 64.7 $ 60.0 |
Business Combinations and Goodw
Business Combinations and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure | Business Combinations and Goodwill Business Combinations. On September 19, 2018, we acquired Imperial Machine and Tool Co. ("IMT"), located in Columbia, New Jersey, for $43.3 million in cash, net of cash received. IMT specializes in multi-material additive manufacturing and machining technologies for demanding aerospace and defense, automotive, high-tech and general industrial applications. The acquisition allows us to gain further insights into the potentially disruptive additive manufacturing technology and enhances our ability to address customer needs by broadening our capability to provide innovative solutions for demanding applications. IMT has approximately 25 employees. The following table summarizes recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date (in millions of dollars): Accounts receivable $ 2.7 Inventory 3.4 Property, plant and equipment 4.1 Identifiable intangible assets with definite lives 9.1 Goodwill 24.6 Accounts payable and other current liabilities (0.6 ) Consideration paid, net of cash received $ 43.3 Total acquisition-related costs were approximately $0.3 million , all of which were expensed during the nine months ended September 30, 2018 and were included in Selling, general, administrative, research and development in the Statements of Consolidated Income. Goodwill. The following table presents the changes to goodwill during the nine months ended September 30, 2018 (in millions of dollars): December 31, 2017 Increases to Goodwill 1 September 30, 2018 Goodwill $ 37.2 $ 24.6 $ 61.8 Accumulated impairment loss (18.4 ) — (18.4 ) Carrying value $ 18.8 $ 24.6 $ 43.4 ____________________ 1 The goodwill of $24.6 million arising from the acquisition of IMT after allocating the consideration paid, net of cash received, to all other identifiable assets is expected to be deductible for income tax purposes over the next 15 years . Due to a reduction in our long-term demand assumption for hard alloy extruded shapes, we recorded an impairment charge of $18.4 million |
Employee Benefits
Employee Benefits | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits Pension and Similar Benefit Plans. We provide contributions to: (i) defined contribution 401(k) savings plans for salaried employees and certain hourly employees; (ii) a non-qualified, unfunded, unsecured plan of deferred compensation (see " Deferred Compensation Plan " below); (iii) multi-employer pension plans sponsored by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-CIO, CLC ("USW"), the International Association of Machinists and certain other unions at certain of our production facilities; and (iv) a defined benefit plan for salaried employees at our London, Ontario (Canada) facility. Deferred Compensation Plan . We have a non-qualified, unsecured plan of deferred compensation for key employees who would otherwise suffer a loss of benefits under our defined contribution plan as a result of the limitations imposed by the Internal Revenue Code of 1986. Despite the plan being an unfunded plan, we make an annual contribution to a rabbi trust to fulfill future funding obligations as contemplated by the terms of the plan. These assets are held in various investment funds at certain registered investment companies. Upon adoption of ASU 2016-01 on January 1, 2018 (see Note 1 ), these investments are now accounted for as equity investments with changes in fair value recorded within Other income (expense), net. During the quarter and nine months ended September 30, 2018 , we recognized a $0.1 million loss and a $0.3 million gain, respectively, on equity securities still held at each respective reporting date related to the deferred compensation plan. Assets of our deferred compensation plan are classified within Level 2 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices. The fair value of these assets at September 30, 2018 and December 31, 2017 was $10.9 million and $9.8 million , respectively, and are included in Other assets. Offsetting liabilities relating to the deferred compensation plan are included in Long-term liabilities. Salaried VEBA Postretirement Obligation. Certain retirees who retired prior to 2004 and certain employees who were hired prior to February 2002 and have subsequently retired or will retire with the requisite age and service, along with their surviving spouses and eligible dependents, are eligible to participate in a voluntary employees' beneficiary association ("VEBA") that provides healthcare cost, medical cost and long-term care insurance cost reimbursement benefits ("Salaried VEBA"). We have an ongoing obligation with no express termination date to make variable cash contributions up to a maximum of $2.9 million each year to the Salaried VEBA. We paid the maximum of $2.9 million with respect to 2017 during the quarter ended March 31, 2018. We account for the Salaried VEBA as a defined benefit plan in our financial statements. Union VEBA Postretirement Obligation. Certain other eligible retirees represented by certain unions along with their surviving spouses and eligible dependents participate in a separate VEBA ("Union VEBA"). During the quarter ended March 31, 2018, we made a $12.8 million cash contribution to the Union VEBA with respect to the nine months ended September 30, 2017. This was our final contribution. We have no ongoing obligation to make further contributions to the Union VEBA. Fair Value of Plan Assets. The plan assets of the Salaried VEBA and our Canadian pension plan are measured annually on December 31 and reflected in our Consolidated Balance Sheets at fair value. In determining the fair value of the plan assets at an annual period end, we utilize primarily the results of valuations supplied by the investment advisors responsible for managing the assets of each plan, which we independently review for reasonableness. The following tables present the total expense (income) related to all benefit plans for the periods presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Defined contribution plans 1 $ 1.7 $ 1.4 $ 7.3 $ 7.5 Deferred compensation plan 1 0.2 0.5 1.2 1.4 Multiemployer pension plans 1 1.2 1.1 3.5 3.4 Net periodic postretirement benefit cost relating to Salaried VEBA 2 1.4 1.2 4.5 3.4 Loss (gain) on removal of Union VEBA net assets 2 — 0.5 — (0.8 ) Total $ 4.5 $ 4.7 $ 16.5 $ 14.9 ____________________ 1 Substantially all of the employee benefits related charges are in Cost of products sold, excluding depreciation and amortization and other items with the remaining balance in Selling, general, administrative, research and development ("SG&A and R&D"). 2 On January 1, 2018, we retrospectively adopted ASU 2017-07 (see Note 1 ). As such, the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA is included within the Statements of Consolidated Income in SG&A and R&D for all periods presented. We reclassified all other components of Net periodic postretirement benefit cost relating to Salaried VEBA, as well as Loss (gain) on removal of Union VEBA net assets that had previously been presented within SG&A and R&D, to Other income (expense), net in the Statements of Consolidated Income. Components of Net Periodic Benefit Cost. Our results of operations included the following impacts associated with the Canadian defined benefit plan and the Salaried VEBA: (i) charges for service rendered by employees; (ii) a charge for accretion of interest; (iii) a benefit for the return on plan assets; and (iv) amortization of net gains or losses on assets, prior service costs associated with plan amendments and actuarial differences. Net periodic benefit cost related to the Canadian defined benefit plan was not material for the quarters and nine months ended September 30, 2018 and September 30, 2017 . The following table presents the components of Net periodic postretirement benefit cost relating to Salaried VEBA for the periods presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Salaried VEBA 1 : Interest cost $ 0.7 $ 0.8 $ 2.1 $ 2.3 Expected return on plan assets (0.8 ) (1.0 ) (2.2 ) (3.1 ) Amortization of prior service cost 2 1.3 1.2 4.0 3.6 Amortization of net actuarial loss 0.2 0.2 0.6 0.6 Total net periodic postretirement benefit cost relating to Salaried VEBA $ 1.4 $ 1.2 $ 4.5 $ 3.4 ____________________ 1 The service cost was insignificant for all periods presented. 2 |
Derivatives, Hedging Programs a
Derivatives, Hedging Programs and Other Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives, Hedging Programs and Other Financial Instruments | Derivatives, Hedging Programs and Other Financial Instruments Overview In conducting our business, we enter into derivative transactions, including forward contracts and options, to limit our exposure to: (i) metal price risk related to our sale of fabricated aluminum products and the purchase of metal used as raw material for our fabrication operations; (ii) energy price risk relating to fluctuating prices of natural gas and electricity used in our production processes; and (iii) foreign currency requirements with respect to our foreign subsidiaries and cash commitments for equipment purchases denominated in foreign currency. Our derivative activities are overseen by a committee ("Hedging Committee"), which is composed of our chief executive officer, chief operating officer, chief financial officer, chief accounting officer, vice president of metal management, treasurer and other officers and employees selected by the chief executive officer. The Hedging Committee meets regularly to review commodity price exposure, derivative positions and strategy. Management reviews the scope of the Hedging Committee's activities with our Board of Directors. We are exposed to counterparty credit risk on all of our derivative instruments, which we manage by monitoring the credit quality of our counterparties and allocating our hedging positions among multiple counterparties to limit exposure to any single entity. Our counterparties are major, investment grade financial institutions or trading companies. Hedging transactions are governed by negotiated reciprocal credit lines, which generally require collateral to be posted above specified credit thresholds. We believe the risk of loss is remote and contained due to counterparty credit quality, our diversification practice and collateral requirements. In a majority of our hedging counterparty agreements, our counterparty offers us a credit line that adjusts up or down, depending on our liquidity. Below specified liquidity thresholds, we may have to post collateral if the fair value of our net liability with such counterparty exceeds our reduced credit line. We manage this risk by allocating hedging transactions among multiple counterparties, using options as part of our hedging activities, or both. The aggregate fair value of our derivative instruments that were in a net liability position was $3.1 million and $0.1 million at September 30, 2018 and December 31, 2017 , respectively, and we had no collateral posted as of those dates. Additionally, our firm-price customer sales commitments create incremental customer credit risk related to metal price movements. Under certain circumstances, we mitigate this risk by periodically requiring cash collateral from them, which we classify as deferred revenue and include as a component of Other accrued liabilities. At both September 30, 2018 and December 31, 2017 , we had no cash collateral posted from any of our customers. For more information about concentration risks concerning customers and suppliers, see Note 14 . Aluminum Hedges . Our pricing of fabricated aluminum products is generally intended to lock in a conversion margin (representing the value added from the fabrication process(es)) and to pass through metal price fluctuations to our customers. For some of our higher value added products sold on a spot basis, the pass through of metal price movements can sometimes lag by as much as several months, with a favorable impact to us when metal prices decline and an adverse impact to us when metal prices increase. Additionally, in certain instances, we enter into firm-price arrangements with our customers for stipulated volumes to be delivered in the future. Because we generally purchase primary and secondary aluminum on a floating price basis, the lag in passing through metal price movements to customers on some of our higher value added products sold on a spot basis and the volume that we have committed to sell to our customers under a firm-price arrangement create metal price risk for us. We use third-party hedging instruments to limit exposure to metal price risk related to the metal pass through lag on some of our products and firm-price customer sales contracts. Alloying Metals Hedges . We are exposed to risk of fluctuating prices for Alloying Metals used as raw materials in our fabrication operations. We, from time to time, in the ordinary course of business, use third-party hedging instruments to mitigate our risk from price fluctuations in Alloying Metals. Energy Hedges . We are exposed to risk of fluctuating prices for natural gas and electricity. We, from time to time, in the ordinary course of business, enter into hedging transactions and/or physical delivery commitments with third parties to mitigate our risk from fluctuations in natural gas and electricity prices. Notional Amount of Derivative Contracts The following table summarizes our derivative positions at September 30, 2018 : Aluminum Maturity Period (month/year) Notional Amount of Contracts (mmlbs) Fixed price purchase contracts 10/18 through 12/21 138.3 Fixed price sales contracts 10/18 through 11/19 2.1 Midwest premium swap contracts 1 10/18 through 12/21 105.9 Alloying Metals Maturity Period (month/year) Notional Amount of Contracts (mmlbs) Fixed price purchase contracts 10/18 through 12/19 9.9 Natural Gas 2 Maturity Period (month/year) Notional Amount of Contracts (mmbtu) Fixed price purchase contracts 10/18 through 12/21 4,130,000 Electricity 3 Maturity Period (month/year) Notional Amount of Contracts (Mwh) Fixed price purchase contracts 1/20 through 12/21 219,600 Euro 4 Maturity Period (month/year) Notional Amount of Contracts (euro) Fixed price purchase contracts 11/18 33,064 ____________________ 1 Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum. 2 As of September 30, 2018 , we had derivative and/or physical delivery commitments with energy companies for approximately 70% of the expected natural gas purchases for the remainder of 2018 , 68% of the expected natural gas purchases for 2019 , 67% of the expected natural gas purchases for 2020 and 63% of the expected natural gas purchases for 2021 . 3 As of September 30, 2018 , we had derivative and/or physical delivery commitments with energy companies for approximately 53% of our expected electricity purchases for the remainder of 2018 , 54% of our expected electricity purchases for both 2019 and 2020 and 9% of our expected electricity purchases for 2021 . 4 We use non-designated foreign currency forward contracts designed to line up with the timing and amounts of scheduled payments to foreign equipment manufacturers to mitigate our exposure to currency exchange rate fluctuations on these purchases. Adoption of ASU 2017-12 Prior to our adoption of ASU 2017-12 on January 1, 2018, changes in the fair value of non-designated hedges (aluminum and energy) were recorded within Unrealized (gain) loss on derivative instruments in the Statements of Consolidated Income. Upon settlement, realized gain or loss was recorded within Cost of products sold, excluding depreciation and amortization and other items, with an offsetting reversal of previously recognized unrealized amounts recorded within Unrealized (gain) loss on derivative instruments. Beginning with our adoption of ASU 2017-12 (see Note 1 ), aluminum and energy hedges that were non-designated prior to 2018 are now designated as cash flow hedges. As these previously non-designated hedges are settled, unrealized gains and losses recognized subsequent to December 31, 2017 are reclassified from Accumulated other comprehensive loss to Cost of products sold, excluding depreciation and amortization. (Gain) Loss See Note 8 for the total amount of gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments that was reported in Accumulated other comprehensive income (loss) ("AOCI"), as well as the related reclassifications into earnings and tax effects. Cumulative gains and losses related to cash flow hedges are reclassified out of AOCI when the associated hedged commodity purchases impact earnings. The location and amount of (gain) loss included on the Statements of Consolidated Income associated with all derivative contracts consisted of the following for each period presented (in millions of dollars): Quarter Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of products sold, excluding depreciation and amortization and other items 1 Cost of products sold, excluding depreciation and amortization and other items 1 Unrealized gain on derivative instruments Cost of products sold, excluding depreciation and amortization and other items 1 Cost of products sold, excluding depreciation and amortization and other items 1 Unrealized (gain) loss on derivative instruments Total amounts of income and expense line items presented in the statements of consolidated income in which the effects of hedges are recorded $ 323.3 $ 267.2 $ (10.8 ) $ 983.4 $ 822.7 $ (14.0 ) Loss (gain) recognized in income related to cash flow hedges: Aluminum $ 2.1 $ — $ — $ (1.2 ) $ — $ — Alloying Metals 1.0 (0.3 ) — 0.4 (0.2 ) — Natural gas — — — (0.1 ) — — Total loss (gain) recognized in income $ 3.1 $ (0.3 ) $ — $ (0.9 ) $ (0.2 ) $ — (Gain) loss recognized in income related to non-designated hedges: Aluminum $ — $ (4.0 ) $ (10.6 ) $ — $ (13.8 ) $ (15.3 ) Natural gas — 0.2 (0.2 ) — 0.3 1.3 Foreign exchange — (0.1 ) — — (0.1 ) — Total gain recognized in income $ — $ (3.9 ) $ (10.8 ) $ — $ (13.6 ) $ (14.0 ) ____________________ 1 Beginning with our adoption of ASU 2017-12 effective January 1, 2018, we no longer have Unrealized (gain) loss on derivative instruments on the Statements of Consolidated Income as all of our commodity hedges are designated as cash flow hedges. As such, all Unrealized (gain) loss on derivative instruments is reported in AOCI. For the quarter and nine months ended September 30, 2017 , Unrealized (gain) loss on derivative instruments was reclassified to Cost of products sold, excluding depreciation and amortization and other items in the Statements of Consolidated Income to conform to the current period's presentation, for a combined total of $256.4 million and $808.7 million , respectively. The amounts comprising both line items are presented separately here for comparative purposes. Fair Values of Derivative Contracts The fair values of our derivative contracts are based upon trades in liquid markets. Valuation model inputs can be verified, and valuation techniques do not involve significant judgment. The fair values of such financial instruments are classified within Level 2 of the fair value hierarchy. All of our derivative contracts with counterparties are subject to enforceable master netting arrangements. We reflect the fair value of our derivative contracts on a gross basis on the Consolidated Balance Sheets. The following table presents the fair value of our derivative financial instruments as of the periods presented (in millions of dollars): September 30, 2018 December 31, 2017 Derivative Assets Derivative Liabilities Net Amount Derivative Assets Derivative Liabilities Net Amount Cash Flow Hedges: Aluminum – Fixed price purchase contracts $ 3.0 $ (4.8 ) $ (1.8 ) $ — $ — $ — Fixed price sales contracts — (0.1 ) (0.1 ) — — — Midwest premium swap contracts 5.9 (0.1 ) 5.8 — — — Alloying Metals – Fixed price purchase contracts 0.1 (1.4 ) (1.3 ) 0.9 — 0.9 Natural gas – Fixed price purchase contracts 0.2 (0.6 ) (0.4 ) — — — Electricity – Fixed price purchase contracts — (0.1 ) (0.1 ) — — — Non-Designated Hedges: Aluminum – Fixed price purchase contracts — — — 22.5 — 22.5 Fixed price sales contracts — — — — (0.1 ) (0.1 ) Midwest premium swap contracts — — — 1.7 (0.1 ) 1.6 Natural gas – Fixed price purchase contracts — — — 0.2 (0.5 ) (0.3 ) Electricity – Fixed price purchase contracts — — — — (0.1 ) (0.1 ) Total $ 9.2 $ (7.1 ) $ 2.1 $ 25.3 $ (0.8 ) $ 24.5 The following table presents the balance sheet location of derivative assets and liabilities as of the periods presented (in millions of dollars): September 30, 2018 December 31, 2017 Assets: Prepaid expenses and other current assets $ 8.1 $ 18.9 Other assets 1.1 6.4 Total assets $ 9.2 $ 25.3 Liabilities: Other accrued liabilities $ (4.6 ) $ (0.3 ) Long-term liabilities (2.5 ) (0.5 ) Total Liabilities $ (7.1 ) $ (0.8 ) Fair Value of Other Financial Instruments Cash and Cash Equivalents. See Note 2 for components of cash and cash equivalents. Available for Sale Securities. We hold debt investment securities that are accounted for as available for sale securities and are presented as cash equivalents and short-term investments on our Consolidated Balance Sheets. The fair value of the debt investment securities, which consist of commercial paper, is determined based on valuation models that use observable market data. At September 30, 2018 , all of our short-term investments had maturity dates within 12 months . We review our debt investment portfolio for other-than-temporary impairment at least quarterly or when there are changes in credit risk or other potential valuation concerns. At September 30, 2018 and December 31, 2017 , the total unrealized loss, net of tax, included in AOCI was immaterial and was not other-than-temporarily impaired. We believe that it is probable that the principal and interest will be collected in accordance with the contractual terms, and that the unrealized loss on these securities was due to normal market fluctuations, and not due to increased credit risk or other valuation concerns. The fair value input of our available for sale securities, which are classified within Level 2 of the fair value hierarchy, is calculated based on broker quotes. The amortized cost for available for sale securities approximates their fair value. The following table presents our other financial assets, classified under the appropriate level of the fair value hierarchy, as of September 30, 2018 (in millions of dollars): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 23.2 $ 71.1 $ — $ 94.3 Short-term investments — 88.4 — 88.4 Total $ 23.2 $ 159.5 $ — $ 182.7 The following table presents our other financial assets, classified under the appropriate level of the fair value hierarchy, as of December 31, 2017 (in millions of dollars): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 23.5 $ 27.6 $ — $ 51.1 Short-term investments — 183.7 — 183.7 Total $ 23.5 $ 211.3 $ — $ 234.8 All Other Financial Assets and Liabilities. |
Debt and Credit Facility
Debt and Credit Facility | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facility | Debt and Credit Facility Senior Notes In May 2016, we issued $375.0 million principal amount of 5.875% unsecured senior notes due May 15, 2024 ("Senior Notes") at 100% of the principal amount. The unamortized amount of debt issuance costs as of September 30, 2018 was $4.8 million . Interest expense, including amortization of debt issuance costs, relating to the Senior Notes was $5.7 million for each of the quarters ended September 30, 2018 and September 30, 2017 . Interest expense, including amortization of debt issuance costs, relating to the Senior Notes was $17.1 million for each of the nine months ended September 30, 2018 and September 30, 2017 . A portion of the interest relating to the Senior Notes was capitalized as construction in progress. The effective interest rate of the Senior Notes is approximately 6.1% per annum, taking into account the amortization of debt issuance costs. The fair value of the outstanding Senior Notes, which are Level 1 liabilities, was approximately $383.6 million and $399.9 million at September 30, 2018 and December 31, 2017 , respectively. Revolving Credit Facility Our credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto ("Revolving Credit Facility") provides us with a $300.0 million funding commitment through December 2020. We had $300.0 million of borrowing availability under the Revolving Credit Facility at September 30, 2018 , based on the borrowing base determination then in effect. At September 30, 2018 , there were no borrowings under the Revolving Credit Facility and $8.0 million was being used to support outstanding letters of credit, leaving $292.0 million of net borrowing availability. The interest rate applicable to any overnight borrowings under the Revolving Credit Facility would have been 5.50% at September 30, 2018 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments. We have a variety of financial commitments, including purchase agreements, forward foreign exchange and forward sales contracts, indebtedness and letters of credit (see Note 5 and Note 6 ). Environmental Contingencies. We are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches of such laws and regulations and to potential claims based upon such laws and regulations. We are also subject to legacy environmental contingencies related to activities that occurred at operating facilities prior to July 6, 2006, which represent the majority of our environmental accruals. The status of these environmental contingencies are discussed below. We have established procedures for regularly evaluating environmental loss contingencies. Our environmental accruals represent our undiscounted estimate of costs reasonably expected to be incurred based on presently enacted laws and regulations, existing requirements, currently available facts, existing technology and our assessment of the likely remediation actions to be taken. We continue to pursue remediation activities, primarily to address the historical use of oils containing polychlorinated biphenyls ("PCBs") at our Spokane, Washington ("Trentwood") facility. Our remediation efforts are in collaboration with the Washington State Department of Ecology ("Washington State Ecology"), to which we submitted a feasibility study in 2012 of remediation alternatives and from which we received permission to begin certain remediation activities pursuant to a signed work order. As we have finished a number of sections of the work plan, we have received approval from Washington State Ecology on satisfactory completion of those sections. Additionally, in cooperation with Washington State Ecology, to determine the treatability and evaluate the feasibility of removing PCBs from ground water under the Trentwood facility, we constructed a pilot test facility and began treatment operations at the test facility in the first half of 2016. As the success of the new methodology cannot be reasonably determined at this time, it is possible we may need to make upward adjustments to our related accruals as facts and cost estimates regarding the groundwater treatment method and the operation of the treatment facility become available. During 2013, at the request of the Ohio Environmental Protection Agency ("OEPA"), we initiated an investigational study of the Newark, Ohio ("Newark") facility related to historical on-site waste disposal. Since 2014, we have completed a number of preliminary steps in the preparation of completing the final risk assessment and feasibility study, both of which are subject to review and approval by the OEPA. As work continues and progresses to a final risk assessment and feasibility study, we will establish and update estimates for probable and estimable remediation, if any. The actual and final cost for remediation will not be fully determinable until a final feasibility study is submitted and accepted by the OEPA and work plans are prepared, which is expected to occur in the next 12 to 18 months . At September 30, 2018 , our environmental accrual of $17.2 million represented our estimate of the incremental remediation cost based on: (i) proposed alternatives in the final feasibility study related to the Trentwood facility; (ii) currently available facts with respect to our Newark facility; and (iii) facts related to certain other locations owned or formerly owned by us. In accordance with approved and proposed remediation action plans, we expect that the implementation and ongoing monitoring could occur over a period of 30 or more years. As additional facts are developed, feasibility studies are completed, draft remediation plans are modified, necessary regulatory approvals for the implementation of remediation are obtained, alternative technologies are developed, and/or other factors change, there may be revisions to management's estimates and actual costs may exceed the current environmental accruals. We believe at this time that it is reasonably possible that undiscounted costs associated with these environmental matters may exceed current accruals by amounts that could be, in the aggregate, up to an estimated $11.6 million over the remediation period. It is reasonably possible that our recorded estimate will change in the next 12 months . Other Contingencies. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following table presents the changes in the accumulated balances for each component of AOCI for each period presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Defined Benefit Pension Plan and Salaried VEBA: Beginning balance $ (36.1 ) $ (35.4 ) $ (38.5 ) $ (37.1 ) Amortization of net actuarial loss 1 0.2 0.2 0.6 0.6 Amortization of prior service cost 1 1.3 1.2 4.0 3.6 Less: income tax expense 2 (0.4 ) (0.5 ) (1.1 ) (1.6 ) Net amortization reclassified from AOCI to Net income 1.1 0.9 3.5 2.6 Translation impact on Canadian pension plan AOCI balance — (0.1 ) — (0.1 ) Other comprehensive income, net of tax 1.1 0.8 3.5 2.5 Ending balance $ (35.0 ) $ (34.6 ) $ (35.0 ) $ (34.6 ) Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Available for Sale Securities: Beginning balance $ 0.6 $ 1.1 $ 0.9 $ 0.8 Unrealized gain on available for sale securities 1.3 1.0 3.6 3.1 Less: income tax expense (0.3 ) (0.4 ) (0.9 ) (1.2 ) Net unrealized gain on available for sale securities 1.0 0.6 2.7 1.9 Reclassification of unrealized gain upon sale of available for sale securities 3 (1.6 ) (0.5 ) (4.3 ) (2.1 ) Less: income tax benefit 2 0.4 0.2 1.1 0.8 Net gain reclassified from AOCI to Net income (1.2 ) (0.3 ) (3.2 ) (1.3 ) Other comprehensive (loss) income, net of tax (0.2 ) 0.3 (0.5 ) 0.6 Ending balance $ 0.4 $ 1.4 $ 0.4 $ 1.4 Cash Flow Hedges: Beginning balance $ (3.5 ) $ 0.1 $ 0.5 $ (0.2 ) Unrealized (loss) gain on cash flow hedges (5.2 ) 1.0 (6.5 ) 1.2 Less: income tax benefit (expense) 1.2 (0.4 ) 1.6 (0.5 ) Net unrealized (loss) gain on cash flow hedges (4.0 ) 0.6 (4.9 ) 0.7 Reclassification of unrealized loss (gain) upon settlement of cash flow hedges 4 3.0 (0.3 ) (1.0 ) — Less: income tax (expense) benefit 2 (0.7 ) 0.1 0.2 — Net loss (gain) reclassified from AOCI to Net income 2.3 (0.2 ) (0.8 ) — Other comprehensive (loss) income, net of tax (1.7 ) 0.4 (5.7 ) 0.7 Ending balance $ (5.2 ) $ 0.5 $ (5.2 ) $ 0.5 Foreign Currency Translation: Beginning balance $ — $ (0.1 ) $ — $ (0.2 ) Other comprehensive income, net of tax — 0.1 — 0.2 Ending balance $ — $ — $ — $ — Total AOCI ending balance $ (39.8 ) $ (32.7 ) $ (39.8 ) $ (32.7 ) ____________________ 1 Amounts amortized out of AOCI relating to Salaried VEBA adjustments were included within Other income (expense), net, as a component of Net periodic postretirement benefit cost relating to Salaried VEBA. 2 Income tax amounts reclassified out of AOCI were included as a component of Income tax provision. 3 Amounts reclassified out of AOCI relating to sales of available for sale securities were included as a component of Other income (expense), net. We use the specific identification method to determine the amount reclassified out of AOCI. 4 Amounts reclassified out of AOCI relating to cash flow hedges were included as a component of Cost of products sold, excluding depreciation and amortization and other items. As of September 30, 2018 , we estimate a net mark-to-market loss before tax of $4.4 million |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Disclosure | Revenue Recognition Prior to the Adoption of ASC 606 . Prior to our adoption of ASC 606 on January 1, 2018, we recognized revenue on a gross basis when all of the following criteria were met: (i) persuasive evidence of an arrangement existed; (ii) title, ownership and risk of loss had passed to the customer; (iii) the price to the customer was fixed or determinable; and (iv) collection of the resulting receivable was reasonably assured. Provisions for estimated sales returns from and allowances to customers were made in the same period as the related revenues were recognized, based on historical experience or the specific identification of an event necessitating a reserve. Subsequent to the Adoption of ASC 606 . Subsequent to our adoption of ASC 606 on January 1, 2018 (see " New Accounting Pronouncements" in Note 1 ), we recognize revenue as we fulfill our performance obligations and transfer control of products to our customers. For products that have an alternative use and/or for which we do not have an enforceable right to payment (including a reasonable profit) during the production process, we recognize revenue at a point in time. For products that have no alternative use and for which we have an enforceable right to payment (including a reasonable profit) throughout the production process, we recognize revenue over time. In general, a majority of our Aero/HS products and our Automotive Extrusions are recognized over time, with the remainder of our products recognized at a point in time. For the majority of our business, contracts with customers begin when we acknowledge a purchase order for a specific customer order of product to be delivered in the near term. These purchase orders are short term in nature, although they may reference a longer term "blanket purchase order" or a "terms and conditions" agreement, both of which may span multiple years. For revenue recognized at a point in time, transfer of control usually occurs upon shipment or upon customer receipt of the product, depending on shipping terms. For contracts recognized over time, control transfer occurs incrementally during our production process as progress is made on fulfilling the performance obligation. We use the input method of determining our progress, capturing direct costs beginning at the point that billet or cast ingot is introduced into production at either the extrusion phase or the rolling phase, respectively. We believe the input method more accurately reflects the transfer of control as it represents the best information available of work completed to date for which we have an enforceable right to payment. For products in production, we recognize revenue using estimates of the cost incurred to date plus a reasonable margin. As the duration of our contracts for accounting purposes is typically less than one year, we do not present quantitative information about the aggregate transaction price allocated to unsatisfied performance obligations at the end of the reporting period. We adjust the amount of revenue recognized on all products, regardless of timing of revenue recognition, for variable price consideration, which could include metal market price adjustments, volume rebates and sales discounts. We estimate rebate and discount values based on forecasted order data and historical payment trends for specific customers, adjusted as necessary at each reporting period. Accounts receivable is recorded when our right to consideration becomes unconditional. Payment terms for a majority of our domestic customers are 30 days after invoice date. To accommodate shipping time to overseas locations, payment terms for foreign customers are typically several weeks longer than domestic terms. As such, we do not adjust the promised amount of consideration for the effects of a significant financing component as we do not expect the period between the transfer of control of products to our customers and receipt of payment will be greater than one year. Contract assets primarily relate to our enforceable right to consideration for work completed but not billed at the reporting date on contracts for products recognized over time. Contract assets also include amounts related to our contractual right to consideration for finished goods recognized over time that were in transit as of period end. Incremental Costs of Obtaining a Contract . We expense the costs of obtaining a contract as incurred as the amortization period of the asset that we otherwise would have recognized is one year or less. Shipping and Handling Activities. We account for shipping and handling activities that occur after the customer has obtained control of a product as fulfillment activities (i.e., an expense) rather than as a promised service (i.e., a revenue element). The following table presents the impact on our opening Consolidated Balance Sheet as of January 1, 2018 of adopting ASC 606 (in millions of dollars): December 31, 2017 As Reported Cumulative-effect Adjustments 1 January 1, 2018 As Adjusted Contract assets $ — $ 55.6 $ 55.6 Inventories 207.9 (40.7 ) 167.2 Total current assets 656.6 14.9 671.5 Deferred tax assets, net 72.0 (3.3 ) 68.7 Total assets $ 1,385.2 $ 11.6 $ 1,396.8 Other accrued liabilities 40.5 1.5 42.0 Total current liabilities 173.1 1.5 174.6 Total liabilities $ 638.9 $ 1.5 $ 640.4 Retained earnings 85.5 10.1 95.6 Total stockholders’ equity 746.3 10.1 756.4 Total liabilities and stockholders’ equity $ 1,385.2 $ 11.6 $ 1,396.8 ____________________ 1 Included in the cumulative-effect adjustment was a charge of $5.0 million as a result of decrementing higher cost prior LIFO layers. The following table presents the impact of adopting ASC 606 on our Consolidated Balance Sheet as of the period presented (in millions of dollars): September 30, 2018 As Reported Adjustments September 30, 2018 without Adoption of ASC 606 Contract assets $ 51.0 $ (51.0 ) $ — Inventories 196.2 31.3 227.5 Total current assets 673.0 (19.7 ) 653.3 Deferred tax assets, net 42.2 3.3 45.5 Total assets $ 1,426.0 $ (16.4 ) $ 1,409.6 Other accrued liabilities 37.0 (2.7 ) 34.3 Total current liabilities 192.5 (2.7 ) 189.8 Total liabilities $ 663.5 $ (2.7 ) $ 660.8 Retained earnings 135.6 (13.7 ) 121.9 Total stockholders’ equity 762.5 (13.7 ) 748.8 Total liabilities and stockholders’ equity $ 1,426.0 $ (16.4 ) $ 1,409.6 The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Income for each period presented (in millions of dollars, except per share amounts): Quarter Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Without Adoption of ASC 606 As Reported Adjustments Without Adoption of ASC 606 Net sales $ 393.1 $ 1.6 $ 394.7 $ 1,196.5 $ 4.8 $ 1,201.3 Cost of products sold, excluding depreciation and amortization and other items 1 323.3 1.9 325.2 983.4 9.5 992.9 Operating income 34.9 (0.3 ) 34.6 106.7 (4.7 ) 102.0 Income before income taxes 29.9 (0.3 ) 29.6 90.0 (4.7 ) 85.3 Income tax provision (8.2 ) 0.1 (8.1 ) (21.9 ) 1.1 (20.8 ) Net income $ 21.7 $ (0.2 ) $ 21.5 $ 68.1 $ (3.6 ) $ 64.5 Net income per common share: Basic $ 1.31 $ (0.01 ) $ 1.30 $ 4.09 $ (0.21 ) $ 3.88 Diluted $ 1.29 $ (0.01 ) $ 1.28 $ 4.03 $ (0.21 ) $ 3.82 ____________________ 1 Included in the "as reported" amounts was the benefit of having decremented higher cost prior LIFO layers as part of the cumulative-effect adjustment of adopting ASC 606, as discussed in the opening balance sheet table above. The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Comprehensive Income for each period presented (in millions of dollars): Quarter Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Without Adoption of ASC 606 As Reported Adjustments Without Adoption of ASC 606 Net income $ 21.7 $ (0.2 ) $ 21.5 $ 68.1 $ (3.6 ) $ 64.5 Comprehensive income $ 20.9 $ (0.2 ) $ 20.7 $ 65.4 $ (3.6 ) $ 61.8 The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Cash Flows for the period presented (in millions of dollars): Nine Months Ended September 30, 2018 As Reported Adjustments Nine Months Ended September 30, 2018 without Adoption of ASC 606 Net income $ 68.1 $ (3.6 ) $ 64.5 Changes in operating assets and liabilities: Contract assets 4.6 (4.6 ) — Inventories (25.6 ) 9.4 (16.2 ) Accrued liabilities (1.0 ) (1.2 ) (2.2 ) Net cash provided by operating activities $ 112.5 $ — $ 112.5 |
Other (Expense) Income, Net
Other (Expense) Income, Net | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other (Expense) Income, Net | Other Income (Expense), Net Other income (expense), net, consisted of the following for each period presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Interest income $ 0.1 $ — $ 0.2 $ — Net periodic postretirement benefit cost relating to Salaried VEBA (1.4 ) (1.2 ) (4.5 ) (3.4 ) Gain on removal of Union VEBA net assets — (0.5 ) — 0.8 Realized gain on investments 1.6 0.8 4.7 2.2 All other income (expense), net 0.4 0.7 (0.1 ) 0.9 Other income (expense), net $ 0.7 $ (0.2 ) $ 0.3 $ 0.5 |
Income Tax Matters
Income Tax Matters | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Matters | Income Tax Matters The provision for in come taxes for each period presented consisted of the following (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Domestic $ 7.5 $ 15.7 $ 20.5 $ 35.8 Foreign 0.7 0.4 1.4 1.0 Total $ 8.2 $ 16.1 $ 21.9 $ 36.8 The income tax provision for the quarters ended September 30, 2018 and September 30, 2017 was $8.2 million and $16.1 million , respectively, reflecting an effective tax rate of 27.3% and 44.7% , respectively. The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2018 was primarily due to: (i) an increase of $0.6 million (or 1.9% of taxable income) related to non-deductible compensation expense; (ii) an increase of $0.3 million (or 1.0% of taxable income) for an Advance Pricing Agreement settlement with Canada; and (iii) an increase of $0.2 million (or 0.7% of taxable income) for the sequestration of AMT credits, partially offset by a decrease of $0.4 million (or 1.3% of taxable income) to the valuation allowance for certain state net operating losses. The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended September 30, 2017 was due to an increase of $2.5 million (or 7.1% of taxable income) for the recognition of a deferred tax liability associated with earnings of our Canadian subsidiary that are no longer considered indefinitely reinvested. We determined our indefinite reinvestment assertion with respect to our Canadian foreign earnings was no longer applicable based primarily on expectations that productivity improvements will obviate the need to make sizable capital investments to increase capacity. The income tax provision for the nine months ended September 30, 2018 and September 30, 2017 was $21.9 million and $36.8 million , respectively, reflecting an effective tax rate of 24.3% and 37.8% respectively. The difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2018 was due to: (i) a decrease of $2.0 million (or 2.3% of taxable income) for the recognition of excess tax benefits from stock-based compensation and (ii) a decrease of $0.9 million (or 1.0% of taxable income) to the valuation allowance for certain state net operating losses, partially offset by; (i) an increase of $1.7 million (or 1.9% of taxable income) related to non-deductible compensation expense; (ii) an increase of 0.6 million (or 0.6% of taxable income) for the sequestration of AMT credits; and (iii) an increase of $0.3 million (or 0.3% of taxable income) for an Advance Pricing Agreement settlement with Canada. The difference between the effective tax rate and the projected blended statutory tax rate for the nine months ended September 30, 2017 was due to: (i) a decrease of $1.7 million (or 1.7% of taxable income) for the recognition of excess tax benefits from stock-based compensation; (ii) a decrease of $0.5 million (or 0.6% of taxable income) to the valuation allowance for certain state net operating losses; (iii) a decrease of $0.2 million (or 0.2% of taxable income) related to unrecognized tax benefits, including interest and penalties; and (iv) an increase of $2.5 million (or 2.6% of taxable income) for the recognition of a deferred tax liability associated with earnings of our Canadian subsidiary that are no longer indefinitely reinvested. Our gross unrecognized benefits relating to uncertain tax positions were $1.5 million at both September 30, 2018 and December 31, 2017 , of which, $0.4 million would be recorded through our income tax provision and thus impact the effective tax rate at both September 30, 2018 and December 31, 2017 if the gross unrecognized tax benefits were to be recognized. We do not expect our gross unrecognized tax benefits to significantly change within the next 12 months . The Tax Cuts and Jobs Act ("The Tax Act") was enacted on December 22, 2017. The Tax Act reduces the US federal corporate income tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. We are applying the guidance in Staff Accounting Bulletin No. 118 when accounting for the enactment-date effects of the Tax Act. Our accounting for the Tax Act is incomplete, as noted at year-end. However, we were able to reasonably estimate certain effects and, therefore, recorded provisional adjustments at December 31, 2017 associated with the reduction of the US federal corporate tax rate, the deemed repatriation transition tax and IRC Section 162(m). During the nine months ended September 30, 2018 |
Net Income Per Share and Stockh
Net Income Per Share and Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income per Share and Stockholders Equity | Net Income Per Share and Stockholders' Equity Net Income Per Share . Basic net income per share is computed by dividing distributed and undistributed net income allocable to common shares by the weighted-average number of common shares outstanding during the applicable period. The basic weighted-average number of common shares outstanding during the period excludes unvested share-based payment awards. Diluted net income per share was calculated under the treasury stock method for the quarters and nine months ended September 30, 2018 and September 30, 2017 , which in all periods was more dilutive than the two-class method. The following table sets forth the computation of basic and diluted net income per share for periods presented (in millions of dollars, except share and per share amounts): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net income $ 21.7 $ 19.9 $ 68.1 $ 60.6 Denominator – Weighted-average common shares outstanding (in thousands): Basic 16,573 16,834 16,654 17,072 Add: dilutive effect of non-vested common shares, restricted stock units and performance shares 1 210 326 228 291 Diluted 16,783 17,160 16,882 17,363 Net income per common share, Basic: $ 1.31 $ 1.18 $ 4.09 $ 3.55 Net income per common share, Diluted: $ 1.29 $ 1.16 $ 4.03 $ 3.49 ____________________ 1 For both the quarter and nine months ended September 30, 2017 , a total of three thousand non-vested common shares, restricted stock units and performance shares were excluded from the weighted-average diluted shares computation as their inclusion would have been anti-dilutive. There were no anti-dilutive securities during both the quarter and nine months ended September 30, 2018 . Dividends . During the nine months ended September 30, 2018 and September 30, 2017 , we paid a total of approximately $28.5 million and $26.4 million , respectively, in cash dividends to stockholders, including the holders of restricted stock, and in dividend equivalents to the holders of certain restricted stock units and performance shares. Treasury Stock. From time to time, we repurchase shares pursuant to a stock repurchase program authorized by our Board of Directors. Repurchase transactions will occur at such times and prices as management deems appropriate and will be funded with our excess liquidity after giving consideration to, among other things, internal and external growth opportunities and future cash flows. Repurchases may be in open-market transactions or in privately negotiated transactions and the program may be modified or terminated by our Board of Directors at any time. Repurchases of our common stock pursuant to the stock repurchase program are recorded as Treasury stock and consisted of the following for each period presented: Nine Months Ended September 30, 2018 2017 Number of common shares repurchased 304,440 806,307 Weighted-average repurchase price (dollars per share) $ 106.00 $ 80.60 Total cost of repurchased common shares (in millions of dollars) $ 32.3 $ 64.9 During September 2018, our Board of Directors authorized an additional $100.0 million for repurchases of our common shares. At September 30, 2018 , $178.3 million remained available to repurchase our common shares pursuant to the stock repurchase program. Preferred Stock . In connection with a tax asset protection rights plan, our Board of Directors declared a dividend, payable April 22, 2016, of one right for each outstanding share of our common stock. In general, if the rights become exercisable, each right would allow its holder to purchase one one-hundredth of a share of our Series A Preferred Stock. The authorized number of shares of Series A Preferred Stock is 900,000 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Nine Months Ended September 30, 2018 2017 (In millions of dollars) Interest paid $ 10.6 $ 10.0 Non-cash investing and financing activities: Unpaid purchases of property and equipment (included in Accounts payable) $ 5.8 $ 3.4 Stock repurchases not yet settled (included in Accounts payable) $ 0.4 $ — Acquisition of property and equipment through capital leasing arrangements $ 0.3 $ 0.3 September 30, 2018 September 30, 2017 (In millions of dollars) Components of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 94.3 $ 73.9 Restricted cash included in Prepaid expenses and other current assets 1 0.3 0.3 Restricted cash included in Other assets 1 14.5 12.9 Total cash, cash equivalents and restricted cash shown in the Statements of Consolidated Cash Flows $ 109.1 $ 87.1 ____________________ 1 |
Business, Product and Geographi
Business, Product and Geographical Area Information and Concentration of Risk | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Business, Product and Geographical Area Information and Concentration of Risk | 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 % |
Condensed Guarantor and Non-Gua
Condensed Guarantor and Non-Guarantor Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Guarantor and Non-Guarantor Financial Statement [Abstract] | |
Condensed Guarantor and Non-Guarantor Financial Statements | Condensed Guarantor and Non-Guarantor Financial Information During the quarter ended June 30, 2016, we issued $375.0 million aggregate principal amount of our Senior Notes. The Senior Notes were issued by Kaiser Aluminum Corporation ("Parent") pursuant to an indenture dated May 12, 2016 ("Indenture") with Wells Fargo Bank, National Association, as trustee ("Trustee"). The obligations of the Parent under the Indenture are guaranteed by Kaiser Aluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC and Kaiser Aluminum Washington, LLC, ("Guarantor Subsidiaries"). All Guarantor Subsidiaries are 100% owned by the Parent. The guarantees are full and unconditional and joint and several but have customary releases in the following situations: (i) the sale of the Guarantor Subsidiary or all of its assets; (ii) the declaration of a Guarantor Subsidiary as an unrestricted subsidiary under the Indenture; (iii) the termination or release of the Guarantor Subsidiary's guarantee of certain other indebtedness; or (iv) our exercise of legal defeasance or covenant defeasance or the discharge of our obligations under the Indenture. The following condensed consolidating financial information as of September 30, 2018 and December 31, 2017 , and for the quarters and nine months ended September 30, 2018 and September 30, 2017 present: (i) the financial position, results of operation and cash flows for each of (a) Parent, (b) the Guarantor Subsidiaries on a combined basis and (c) the Non-Guarantor Subsidiaries on a combined basis; (ii) the "Consolidating Adjustments," which represent the adjustments necessary to eliminate the investments in our subsidiaries, other intercompany balances and other intercompany sales and cost of sales among Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries; and (iii) the resulting totals, reflecting information for us on a consolidated basis, as reported. The condensed consolidating financial information should be read in conjunction with the consolidated financial statements herein. CONDENSED CONSOLIDATING BALANCE SHEET (In millions of dollars) September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 90.4 $ 3.9 $ — $ 94.3 Short-term investments — 88.4 — — 88.4 Receivables: Trade receivables, net — 188.7 5.8 — 194.5 Intercompany loans receivable 43.0 0.5 1.8 (45.3 ) — Other — 20.1 4.3 — 24.4 Contract assets — 48.2 2.8 — 51.0 Inventories — 183.9 12.3 — 196.2 Prepaid expenses and other current assets 0.1 23.7 0.4 — 24.2 Total current assets 43.1 643.9 31.3 (45.3 ) 673.0 Investments in and advances to subsidiaries 1,101.5 93.9 — (1,195.4 ) — Property, plant and equipment, net — 561.4 34.0 — 595.4 Long-term intercompany loans receivable — — 12.4 (12.4 ) — Deferred tax assets, net — 37.5 — 4.7 42.2 Intangible assets, net — 23.9 9.1 — 33.0 Goodwill — 18.8 24.6 — 43.4 Other assets — 39.0 — — 39.0 Total $ 1,144.6 $ 1,418.4 $ 111.4 $ (1,248.4 ) $ 1,426.0 LIABILITIES AND STOCKHOLDERS ' EQUITY Current liabilities: Accounts payable $ 3.6 $ 106.3 $ 10.5 $ — $ 120.4 Intercompany loans payable — 44.9 0.4 (45.3 ) — Accrued salaries, wages and related expenses — 33.6 1.5 — 35.1 Other accrued liabilities 8.3 33.1 0.4 (4.8 ) 37.0 Total current liabilities 11.9 217.9 12.8 (50.1 ) 192.5 Net liabilities of Salaried VEBA — 31.8 — — 31.8 Deferred tax liabilities — — 4.3 — 4.3 Long-term intercompany loans payable — 12.4 — (12.4 ) — Long-term liabilities — 61.7 3.0 — 64.7 Long-term debt 370.2 — — — 370.2 Total liabilities 382.1 323.8 20.1 (62.5 ) 663.5 Total stockholders' equity 762.5 1,094.6 91.3 (1,185.9 ) 762.5 Total $ 1,144.6 $ 1,418.4 $ 111.4 $ (1,248.4 ) $ 1,426.0 CONDENSED CONSOLIDATING BALANCE SHEET (In millions of dollars) December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 48.4 $ 2.7 $ — $ 51.1 Short-term investments — 183.7 — — 183.7 Receivables: Trade receivables, net — 160.1 4.9 — 165.0 Intercompany receivables 22.8 0.1 0.7 (23.6 ) — Other — 14.7 0.8 — 15.5 Inventories — 198.7 9.2 — 207.9 Prepaid expenses and other current assets 0.1 32.9 0.4 — 33.4 Total current assets 22.9 638.6 18.7 (23.6 ) 656.6 Investments in and advances to subsidiaries 1,097.7 48.2 — (1,145.9 ) — Property, plant and equipment, net — 541.2 30.2 — 571.4 Long-term intercompany receivables — — 12.4 (12.4 ) — Deferred tax assets, net — 67.3 — 4.7 72.0 Intangible assets, net — 25.0 — — 25.0 Goodwill — 18.8 — — 18.8 Other assets — 41.4 — — 41.4 Total $ 1,120.6 $ 1,380.5 $ 61.3 $ (1,177.2 ) $ 1,385.2 LIABILITIES AND STOCKHOLDERS ' EQUITY Current liabilities: Accounts payable $ 1.9 $ 81.4 $ 6.7 $ — $ 90.0 Intercompany payable — 23.5 0.1 (23.6 ) — Accrued salaries, wages and related expenses — 41.0 1.6 — 42.6 Other accrued liabilities 2.8 46.2 1.0 (9.5 ) 40.5 Total current liabilities 4.7 192.1 9.4 (33.1 ) 173.1 Net liabilities of Salaried VEBA — 31.9 — — 31.9 Deferred tax liabilities — — 4.3 — 4.3 Long-term intercompany payable — 12.4 — (12.4 ) — Long-term liabilities — 58.0 2.0 — 60.0 Long-term debt 369.6 — — — 369.6 Total liabilities 374.3 294.4 15.7 (45.5 ) 638.9 Total stockholders' equity 746.3 1,086.1 45.6 (1,131.7 ) 746.3 Total $ 1,120.6 $ 1,380.5 $ 61.3 $ (1,177.2 ) $ 1,385.2 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Quarter Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 385.9 $ 33.7 $ (26.5 ) $ 393.1 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items — 317.9 31.5 (26.1 ) 323.3 Depreciation and amortization — 10.5 0.5 — 11.0 Selling, general, administrative, research and development 1.0 22.8 0.5 (0.4 ) 23.9 Total costs and expenses 1.0 351.2 32.5 (26.5 ) 358.2 Operating (loss) income (1.0 ) 34.7 1.2 — 34.9 Other (expense) income: Interest expense (5.4 ) (0.4 ) — 0.1 (5.7 ) Other expense, net — 0.6 0.2 (0.1 ) 0.7 (Loss) income before income taxes (6.4 ) 34.9 1.4 — 29.9 Income tax provision — (9.0 ) (0.8 ) 1.6 (8.2 ) Earnings in equity of subsidiaries 28.1 0.6 — (28.7 ) — Net income $ 21.7 $ 26.5 $ 0.6 $ (27.1 ) $ 21.7 Comprehensive income $ 20.9 $ 25.7 $ 0.6 $ (26.3 ) $ 20.9 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Quarter Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 325.9 $ 26.3 $ (19.4 ) $ 332.8 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items 1 — 250.8 24.0 (18.4 ) 256.4 Depreciation and amortization — 9.7 0.5 — 10.2 Selling, general, administrative, research and development 2 1.0 23.5 0.8 (0.6 ) 24.7 Total costs and expenses 1.0 284.0 25.3 (19.0 ) 291.3 Operating (loss) income (1.0 ) 41.9 1.0 (0.4 ) 41.5 Other (expense) income: Interest expense (5.0 ) (0.4 ) — 0.1 (5.3 ) Other (expense) income, net — (0.4 ) 0.3 (0.1 ) (0.2 ) (Loss) income before income taxes (6.0 ) 41.1 1.3 (0.4 ) 36.0 Income tax provision — (18.0 ) (0.4 ) 2.3 (16.1 ) Earnings in equity of subsidiaries 25.9 0.6 — (26.5 ) — Net income $ 19.9 $ 23.7 $ 0.9 $ (24.6 ) $ 19.9 Comprehensive income $ 21.5 $ 25.3 $ 0.9 $ (26.2 ) $ 21.5 ____________________ 1 See Note 5 for discussion of our adoption of ASU 2017-12 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Unrealized (gain) loss on derivative instruments and now included within Cost of products sold, excluding depreciation and amortization and other items. 2 See Note 1 for discussion of our adoption of ASU 2017-07 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Selling, general, administrative, research and development and now included within Other income (expense). CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Nine Months Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,168.5 $ 103.3 $ (75.3 ) $ 1,196.5 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items — 962.9 93.5 (73.0 ) 983.4 Depreciation and amortization — 30.8 1.6 — 32.4 Selling, general, administrative, research and development 3.7 67.8 4.7 (2.3 ) 73.9 Other operating charges, net — 0.1 — — 0.1 Total costs and expenses 3.7 1,061.6 99.8 (75.3 ) 1,089.8 Operating (loss) income (3.7 ) 106.9 3.5 — 106.7 Other (expense) income: Interest expense (15.9 ) (1.5 ) — 0.4 (17.0 ) Other income, net — 0.4 0.3 (0.4 ) 0.3 (Loss) income before income taxes (19.6 ) 105.8 3.8 — 90.0 Income tax provision — (25.3 ) (1.4 ) 4.8 (21.9 ) Earnings in equity of subsidiaries 87.7 2.4 — (90.1 ) — Net income $ 68.1 $ 82.9 $ 2.4 $ (85.3 ) $ 68.1 Comprehensive income $ 65.4 $ 80.2 $ 2.4 $ (82.6 ) $ 65.4 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,019.7 $ 85.4 $ (60.7 ) $ 1,044.4 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items 1 — 791.8 75.0 (58.1 ) 808.7 Depreciation and amortization — 27.7 1.6 — 29.3 Selling, general, administrative, research and development 2 3.4 67.2 5.7 (1.6 ) 74.7 Goodwill impairment — 18.4 — — 18.4 Total costs and expenses 3.4 905.1 82.3 (59.7 ) 931.1 Operating (loss) income (3.4 ) 114.6 3.1 (1.0 ) 113.3 Other (expense) income: Interest expense (15.3 ) (1.2 ) — 0.1 (16.4 ) Other income, net — 0.1 0.5 (0.1 ) 0.5 (Loss) income before income taxes (18.7 ) 113.5 3.6 (1.0 ) 97.4 Income tax provision — (43.0 ) (0.9 ) 7.1 (36.8 ) Earnings in equity of subsidiaries 79.3 1.8 — (81.1 ) — Net income $ 60.6 $ 72.3 $ 2.7 $ (75.0 ) $ 60.6 Comprehensive income $ 64.6 $ 76.3 $ 2.7 $ (79.0 ) $ 64.6 ____________________ 1 See Note 5 for discussion of our adoption of ASU 2017-12 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Unrealized (gain) loss on derivative instruments and now included within Cost of products sold, excluding depreciation and amortization and other items. 2 See Note 1 for discussion of our adoption of ASU 2017-07 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Selling, general, administrative, research and development and now included within Other income (expense). CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions of dollars) Nine Months Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows from operating activities: Net cash provided by operating activities $ 87.5 $ 78.5 $ 46.5 $ (100.0 ) $ 112.5 Cash flows from investing activities: Capital expenditures — (51.9 ) (1.2 ) — (53.1 ) Purchase of available for sale securities — (111.9 ) — — (111.9 ) Purchase of equity securities — (0.9 ) — — (0.9 ) Proceeds from disposition of available for sale securities — 208.7 — — 208.7 Cash payment for acquisition of Imperial Machine & Tool Co., net of cash received — — (43.3 ) — (43.3 ) Proceeds from disposal of property, plant and equipment — 0.6 — — 0.6 Intercompany loans receivable (20.2 ) (0.4 ) (1.1 ) 21.7 — Net cash (used in) provided by investing activities (20.2 ) 44.2 (45.6 ) 21.7 0.1 Cash flows from financing activities: Repayment of capital lease — (0.5 ) — — (0.5 ) Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (6.9 ) — — — (6.9 ) Repurchase of common stock (31.9 ) — — — (31.9 ) Cash dividends paid to Parent — (100.0 ) — 100.0 — Cash dividends and dividend equivalents paid (28.5 ) — — — (28.5 ) Intercompany loans payable — 21.4 0.3 (21.7 ) — Net cash (used in) provided by financing activities (67.3 ) (79.1 ) 0.3 78.3 (67.8 ) Net increase in cash, cash equivalents and restricted cash during the period — 43.6 1.2 — 44.8 Cash, cash equivalents and restricted cash at beginning of period — 61.3 3.0 — 64.3 Cash, cash equivalents and restricted cash at end of period $ — $ 104.9 $ 4.2 $ — $ 109.1 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions of dollars) Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ (12.8 ) $ 137.4 $ 6.9 $ — $ 131.5 Cash flows from investing activities: Capital expenditures — (55.7 ) (0.4 ) — (56.1 ) Purchase of available for sale securities — (196.0 ) — — (196.0 ) Proceeds from disposition of available for sale securities — 237.2 — — 237.2 Proceeds from disposal of property, plant, and equipment — 0.6 — — 0.6 Intercompany loans receivable 110.4 — (5.6 ) (104.8 ) — Net cash provided by (used in) investing activities 110.4 (13.9 ) (6.0 ) (104.8 ) (14.3 ) Cash flows from financing activities: Repayment of capital lease — (0.2 ) — — (0.2 ) Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (4.5 ) — — — (4.5 ) Repurchase of common stock (66.7 ) — — — (66.7 ) Cash dividends and dividend equivalents paid (26.4 ) — — — (26.4 ) Intercompany loans payable — (104.8 ) — 104.8 — Net cash used in financing activities (97.6 ) (105.0 ) — 104.8 (97.8 ) Net increase in cash, cash equivalents and restricted cash during the period — 18.5 0.9 — 19.4 Cash, cash equivalents and restricted cash at beginning of period — 65.1 2.6 — 67.7 Cash, cash equivalents and restricted cash at end of period $ — $ 83.6 $ 3.5 $ — $ 87.1 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividend Declaration . On October 15, 2018 , we announced that our Board of Directors declared a cash dividend of $0.55 per common share. As such, we expect to pay approximately $9.2 million (including dividend equivalents) on or about November 15, 2018 to stockholders of record and the holders of certain restricted stock units at the close of business on October 25, 2018 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation. The accompanying unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries and are prepared in accordance with United States generally accepted accounting principles ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods and, therefore, do not include all information and footnotes required by GAAP for complete financial statements. In management's opinion, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for our interim periods are not necessarily indicative of the results of operations that may be achieved for the entire 2018 fiscal year. The financial information as of December 31, 2017 is derived from our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2017 . We have reclassified certain amounts in prior-period financial statements to conform to the current period’s presentation. On the Statements of Consolidated Income, prior period presentation of Unrealized (gain) loss on derivative instruments is now contained within "Cost of products sold, excluding depreciation and amortization and other items." See Note 5 for additional details. See Note 14 |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of our consolidated financial position and results of operations. |
Fair Value Measurements | Fair Value Measurements. We apply the fair value hierarchy established by GAAP for the recognition and measurement of certain financial assets and liabilities. An asset or liability's fair value classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty risk in our assessment of fair value. We also review the underlying inputs that are significant to the fair value measurement of financial instruments to determine if a transfer among hierarchy levels is appropriate. We historically have not had significant transfers into or out of each hierarchy level. Financial assets and liabilities that we measure at fair value each period include our derivative instruments, equity investments related to our deferred compensation plan and debt investment securities classified as available for sale securities (see Note 4 ). Additionally, we measure at fair value once each year at December 31 the plan assets of the Salaried VEBA (defined in Note 4 ) and our Canadian defined benefit pension plan. We record our remaining financial assets and liabilities at carrying value. For a majority of our non-financial assets and liabilities, which include goodwill, intangible assets, inventories and property, plant and equipment, we are not required to measure their fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill), an evaluation of the affected non-financial asset or liability will be required, which could result in a reduction to the carrying amount of such asset or liability. See Note 3 for a discussion of our business acquisition during the quarter ended September 30, 2018 , as well as the goodwill impairment charge recorded during the quarter ended June 30, 2017 related to the operations at our Chandler, Arizona (Extrusion) facility. None of our non-financial assets and liabilities subject to fair value assessments on a non-recurring basis required a material adjustment to the carrying amount of such assets and liabilities for the quarter and nine months ended September 30, 2018 |
Inventories | Inventories. Inventories are stated at the lower of cost or market value. Finished products, work-in-process and raw material inventories are stated on the last-in, first-out ("LIFO") basis. At September 30, 2018 and December 31, 2017 , the current cost of our inventory exceeded its stated LIFO value by $42.9 million and $24.3 million , respectively. Other inventories are stated on the first-in, first-out basis and consist of operating supplies, which are materials and supplies to be consumed during the production process. Inventory costs consist of material, labor and manufacturing overhead, including depreciation. Abnormal costs, such as idle facility expenses, freight, handling costs and spoilage, are accounted for as current period charges (see Note 2 |
Replacement Parts | Replacement Parts. Replacement parts consist of preventative maintenance and capital spare parts, which are stated on the first-in, first-out basis. Replacement parts are recorded within Prepaid expenses and other current assets or Other assets depending on whether or not the expected utilization of the replacement parts is to occur within the current operating cycle. |
Property, Plant and Equipment - Net | Property, Plant and Equipment, Net. Property, plant and equipment, net is recorded at cost and includes construction in progress (see Note 2 ). Interest related to the construction of qualifying assets is capitalized as part of the construction costs. The amount of interest expense capitalized as construction in progress was $0.4 million and $0.7 million during the quarters ended September 30, 2018 and September 30, 2017 , respectively. The amount of interest expense capitalized as construction in progress was $1.3 million and $1.9 million during the nine months ended September 30, 2018 and September 30, 2017 , respectively. Depreciation is computed using the straight-line method at rates based on the estimated useful lives of the various classes of assets. Capital lease assets and leasehold improvements are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term. |
Derivative Financial Instruments | Derivative Financial Instruments. Consistent with guidelines established by management and approved by our Board of Directors, we use derivative financial instruments to mitigate our exposure to changes in the market price of aluminum, alloying metals, energy, and, to a lesser extent, foreign currency exchange rates. We do not use derivative financial instruments for trading or other speculative purposes. Hedging transactions are executed centrally on behalf of all of our operations to minimize transaction costs, monitor consolidated net exposures and allow for increased responsiveness to changes in market factors. We reflect the fair value of all of our derivative instruments on our Consolidated Balance Sheets (see Note 5 ). The fair value of hedges settling within one year is included in Prepaid expenses and other current assets or Other accrued liabilities. The fair value of hedges settling beyond one year is included in Other assets or Long-term liabilities. Prior to our adoption of ASU 2017-12 (as defined below under " Adoption of New Accounting Standards") , we did not meet the documentation requirements for hedge (deferral) accounting related to our aluminum and energy derivatives. Accordingly, we recorded unrealized gain or loss associated with these hedges in the Statements of Consolidated Income. Subsequent to our adoption of ASU 2017-12 on January 1, 2018, our aluminum and energy derivatives qualified for hedge (deferral) accounting and, as such, we designated such hedges as cash flow hedges. Forward swap contracts for zinc and copper ("Alloying Metals") used in our fabrication operations are also designated as cash flow hedges. Unrealized gains and losses associated with our cash flow hedges are deferred in Other comprehensive income, net of tax and reclassified to Cost of products sold, excluding depreciation and amortization and other items when such hedges settle (see Note 5 ). |
Self Insurance of Workers' Compensation and Employee Healthcare Liabilities | Self Insurance of Workers' Compensation and Employee Healthcare Liabilities . We self-insure the majority of the costs of workers' compensation benefits and employee healthcare benefits and rely on insurance coverage to protect us from large losses on individual claims. Workers' compensation liabilities are based on a combination of estimates for: (i) incurred-but-not-reported claims and (ii) the ultimate expense of incurred claims. Such estimates are based on judgment, using our historical claims data and information and analysis provided by actuarial and claims advisors, our insurance carriers and other professionals. Our undiscounted workers' compensation liabilities were estimated at $27.9 million and $24.8 million as of September 30, 2018 and December 31, 2017 , respectively. However, we account for our workers' compensation accrued liability on a discounted basis, using a discount rate of 3.00% and 2.25% at September 30, 2018 and December 31, 2017 , respectively. Accrued liabilities for employee healthcare benefits, which are estimates of unpaid incurred medical and prescription drug costs as provided by our healthcare administrators, were $3.1 million and $3.5 million as of September 30, 2018 and December 31, 2017 |
Short-Term Incentive Plans (STI Plans) | Short-Term Incentive Plans ("STI Plans"). We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares of common stock, or a combination of cash and shares of common stock. Amounts earned under STI Plans are based on our adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), modified for certain safety, quality, delivery, cost and individual performance factors. The Adjusted EBITDA targets are determined based on the return on adjusted net assets. Most of our production facilities have similar programs for both hourly and salaried employees. As of September 30, 2018 , we had a liability of $10.6 million |
Long-Term Incentive Programs (LTI Programs) | Long-Term Incentive Programs ("LTI Programs"). Executive officers and other key employees of the Company, as well as non-employee directors of the Company, are eligible to participate in the Kaiser Aluminum Corporation 2016 Equity and Incentive Compensation Plan approved by stockholders on May 26, 2016 ("2016 Plan"). At September 30, 2018 , 577,300 |
New Accounting Pronouncements | Adoption of New Accounting Pronouncements Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09") was issued in May 2014 and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted ASU 2014-09, including its subsequent amendments as codified under Accounting Standards Codification Topic 606 ("ASC 606"), during the quarter ended March 31, 2018. Upon adoption under the modified retrospective method, we elected to apply the guidance only to contracts that were not completed at the date of initial application, which resulted in a cumulative-effect increase of $10.1 million (see Note 9 ) to our Retained earnings (net of a $3.3 million tax impact) on January 1, 2018. Comparative information in this report has not been adjusted and continues to be reported under previous revenue recognition guidance within Accounting Standards Codification Topic 605 ("ASC 605"). See Statement of Consolidated Stockholders' Equity and Note 9 for details of the significant changes and quantitative impacts of the changes, as well as our policy on revenue recognition. ASU No. 2016-01, Financial Instruments - Overall (S ubtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01"), was issued in January 2016. The amendments in ASU 2016-01 require equity investments to be measured at fair value with changes in fair value recognized in net income. Equity investments related to our deferred compensation plan that had previously been accounted for as available for sale securities are now accounted for as equity investments with changes in fair value recorded within net income. As such, we recorded a cumulative-effect increase of $0.4 million to our Retained earnings (net of a $0.2 million tax impact) on January 1, 2018 to remove the balance of mark-to-market adjustments recorded within Accumulated other comprehensive income at December 31, 2017. See Note 4 for additional details on our deferred compensation plan, including the fair value of related equity investments. ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07"), was issued in March 2017. ASU 2017-07 amends the requirements related to the income statement presentation of the components of net periodic benefit cost for our defined benefit pension and other postretirement plans. Specifically, ASU 2017-07 requires us to: (i) disaggregate the current-service-cost component from the "other components" of net benefit cost and present it with other current compensation costs for related employees in the income statement and (ii) present the other components elsewhere in the income statement and outside of income from operations. As a result of our retrospective adoption of ASU 2017-07, we reclassified amounts that had previously been presented within Selling, general, administrative, research and development to Other income (expense), net in the Statements of Consolidated Income. See Note 4 for further discussion of our defined benefit pension and other postretirement plans. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"), was issued in August 2017. The amendments under ASU 2017-12 refine and expand hedge accounting requirements for both financial (e.g., interest rate) and commodity risks. Its provisions create more transparency around how economic results are presented, both on the face of the financial statements and in the related notes. It also makes certain targeted improvements to simplify the application of hedge accounting guidance. There was no cumulative effect adjustment to record as a result of early adopting ASU 2017-12 in the quarter ended March 31, 2018; however, we designated all of our outstanding commodity hedges as cash flow hedges beginning January 1, 2018. We therefore have significantly reduced the mark-to-market adjustments that have historically been recorded within the Statements of Consolidated Income. These adjustments have instead been recorded within Other comprehensive income, net of tax beginning in the quarter ended March 31, 2018. See Note 5 for further discussion of our derivatives and hedging programs. There were no material impacts on our consolidated financial statements resulting from our adoption in the quarter ended March 31, 2018 of ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. Accounting Pronouncements Issued But Not Yet Adopted ASU No. 2016-02, Leases (Topic 842): Amendments to the Financial Accounting Standards Board Accounting Standards Codification ("ASU 2016-02"), was issued in February 2016. Under ASU 2016-02, lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). ASU 2016-02 was subsequently amended by three additional pronouncements: (i) ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ; (ii) ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and (iii) ASU No. 2018-11, Leases (Topic 842): Targeted Improvements . ASU 2016-02 and its subsequent amendments (together "ASC 842") become effective for us in the first quarter of 2019. We are currently assessing the impact and expect the adoption of ASC 842 in 2019 to have a material impact on our consolidated financial statements. We plan to apply the optional transition method allowed by ASU 2018-11 upon adoption of ASC 842 in the first quarter of 2019. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), was issued in June 2016. Under ASU 2016-13, existing guidance on reporting credit losses for trade and other receivables and available for sale debt securities will be replaced with a new forward-looking "expected loss" model that generally will result in the earlier recognition of allowances for losses. We are currently in the process of evaluating the impact of adopting ASU 2016-13 in 2020, but do not expect it to have a material impact on our consolidated financial statements. ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract ("ASU 2018-15"), was issued in August 2018. Under ASU 2018-15, requirements for capitalizing implementation costs incurred in a hosting arrangement (cloud computing) that is a service contract, are to be aligned with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. We are currently in the process of evaluating the impact of adopting ASU 2018-15 in 2020, but do not expect it to have a material impact on our consolidated financial statements. We do not anticipate any material impact on our consolidated financial statements upon the adoption of the following accounting pronouncements: (i) ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ; (ii) ASU No. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made ; (iii) ASU 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ; and (iv) ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans |
Revenue Recognition | Prior to the Adoption of ASC 606 . Prior to our adoption of ASC 606 on January 1, 2018, we recognized revenue on a gross basis when all of the following criteria were met: (i) persuasive evidence of an arrangement existed; (ii) title, ownership and risk of loss had passed to the customer; (iii) the price to the customer was fixed or determinable; and (iv) collection of the resulting receivable was reasonably assured. Provisions for estimated sales returns from and allowances to customers were made in the same period as the related revenues were recognized, based on historical experience or the specific identification of an event necessitating a reserve. Subsequent to the Adoption of ASC 606 . Subsequent to our adoption of ASC 606 on January 1, 2018 (see " New Accounting Pronouncements" in Note 1 ), we recognize revenue as we fulfill our performance obligations and transfer control of products to our customers. For products that have an alternative use and/or for which we do not have an enforceable right to payment (including a reasonable profit) during the production process, we recognize revenue at a point in time. For products that have no alternative use and for which we have an enforceable right to payment (including a reasonable profit) throughout the production process, we recognize revenue over time. In general, a majority of our Aero/HS products and our Automotive Extrusions are recognized over time, with the remainder of our products recognized at a point in time. For the majority of our business, contracts with customers begin when we acknowledge a purchase order for a specific customer order of product to be delivered in the near term. These purchase orders are short term in nature, although they may reference a longer term "blanket purchase order" or a "terms and conditions" agreement, both of which may span multiple years. For revenue recognized at a point in time, transfer of control usually occurs upon shipment or upon customer receipt of the product, depending on shipping terms. For contracts recognized over time, control transfer occurs incrementally during our production process as progress is made on fulfilling the performance obligation. We use the input method of determining our progress, capturing direct costs beginning at the point that billet or cast ingot is introduced into production at either the extrusion phase or the rolling phase, respectively. We believe the input method more accurately reflects the transfer of control as it represents the best information available of work completed to date for which we have an enforceable right to payment. For products in production, we recognize revenue using estimates of the cost incurred to date plus a reasonable margin. As the duration of our contracts for accounting purposes is typically less than one year, we do not present quantitative information about the aggregate transaction price allocated to unsatisfied performance obligations at the end of the reporting period. We adjust the amount of revenue recognized on all products, regardless of timing of revenue recognition, for variable price consideration, which could include metal market price adjustments, volume rebates and sales discounts. We estimate rebate and discount values based on forecasted order data and historical payment trends for specific customers, adjusted as necessary at each reporting period. Accounts receivable is recorded when our right to consideration becomes unconditional. Payment terms for a majority of our domestic customers are 30 days after invoice date. To accommodate shipping time to overseas locations, payment terms for foreign customers are typically several weeks longer than domestic terms. As such, we do not adjust the promised amount of consideration for the effects of a significant financing component as we do not expect the period between the transfer of control of products to our customers and receipt of payment will be greater than one year. Contract assets primarily relate to our enforceable right to consideration for work completed but not billed at the reporting date on contracts for products recognized over time. Contract assets also include amounts related to our contractual right to consideration for finished goods recognized over time that were in transit as of period end. Incremental Costs of Obtaining a Contract . We expense the costs of obtaining a contract as incurred as the amortization period of the asset that we otherwise would have recognized is one year or less. Shipping and Handling Activities. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Disclosures | emental Balance Sheet Information September 30, 2018 December 31, 2017 (In millions of dollars) Cash and Cash Equivalents Cash and money market funds $ 23.2 $ 23.5 Commercial paper 71.1 27.6 Total $ 94.3 $ 51.1 Trade Receivables, Net Billed trade receivables $ 194.2 $ 165.9 Unbilled trade receivables 1.5 0.3 Trade receivables, gross 195.7 166.2 Allowance for doubtful receivables (1.2 ) (1.2 ) Trade receivables, net $ 194.5 $ 165.0 Inventories Finished products $ 41.4 $ 63.8 Work-in-process 73.3 78.3 Raw materials 76.2 61.3 Operating supplies 5.3 4.5 Total $ 196.2 $ 207.9 Property, Plant and Equipment, Net Land and improvements $ 21.4 $ 21.1 Buildings and leasehold improvements 96.4 92.1 Machinery and equipment 736.3 689.1 Construction in progress 38.1 35.1 Property, plant and equipment, gross 892.2 837.4 Accumulated depreciation (298.4 ) (267.9 ) Assets held for sale 1.6 1.9 Property, plant and equipment, net $ 595.4 $ 571.4 Other Accrued Liabilities Uncleared cash disbursements $ 5.6 $ 7.3 Accrued income taxes and taxes payable 8.2 6.8 Accrued annual contribution to VEBAs – Note 4 — 15.7 Accrued interest 8.4 2.9 Other 14.8 7.8 Total $ 37.0 $ 40.5 September 30, 2018 December 31, 2017 (In millions of dollars) Long-Term Liabilities Workers' compensation accruals $ 24.5 $ 22.6 Long-term environmental accrual – Note 7 14.4 15.8 Other long-term liabilities 25.8 21.6 Total $ 64.7 $ 60.0 |
Business Combinations and Goo_2
Business Combinations and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date (in millions of dollars): Accounts receivable $ 2.7 Inventory 3.4 Property, plant and equipment 4.1 Identifiable intangible assets with definite lives 9.1 Goodwill 24.6 Accounts payable and other current liabilities (0.6 ) Consideration paid, net of cash received $ 43.3 |
Schedule of Goodwill | Goodwill. The following table presents the changes to goodwill during the nine months ended September 30, 2018 (in millions of dollars): December 31, 2017 Increases to Goodwill 1 September 30, 2018 Goodwill $ 37.2 $ 24.6 $ 61.8 Accumulated impairment loss (18.4 ) — (18.4 ) Carrying value $ 18.8 $ 24.6 $ 43.4 ____________________ 1 The goodwill of $24.6 million arising from the acquisition of IMT after allocating the consideration paid, net of cash received, to all other identifiable assets is expected to be deductible for income tax purposes over the next 15 years |
Employee Benefits (Tables)
Employee Benefits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Total Expense (Income) Related to Benefit Plans | The following tables present the total expense (income) related to all benefit plans for the periods presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Defined contribution plans 1 $ 1.7 $ 1.4 $ 7.3 $ 7.5 Deferred compensation plan 1 0.2 0.5 1.2 1.4 Multiemployer pension plans 1 1.2 1.1 3.5 3.4 Net periodic postretirement benefit cost relating to Salaried VEBA 2 1.4 1.2 4.5 3.4 Loss (gain) on removal of Union VEBA net assets 2 — 0.5 — (0.8 ) Total $ 4.5 $ 4.7 $ 16.5 $ 14.9 ____________________ 1 Substantially all of the employee benefits related charges are in Cost of products sold, excluding depreciation and amortization and other items with the remaining balance in Selling, general, administrative, research and development ("SG&A and R&D"). 2 On January 1, 2018, we retrospectively adopted ASU 2017-07 (see Note 1 ). As such, the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA is included within the Statements of Consolidated Income in SG&A and R&D for all periods presented. We reclassified all other components of Net periodic postretirement benefit cost relating to Salaried VEBA, as well as Loss (gain) on removal of Union VEBA net assets that had previously been presented |
Schedule of Net Benefit Costs | The following table presents the components of Net periodic postretirement benefit cost relating to Salaried VEBA for the periods presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Salaried VEBA 1 : Interest cost $ 0.7 $ 0.8 $ 2.1 $ 2.3 Expected return on plan assets (0.8 ) (1.0 ) (2.2 ) (3.1 ) Amortization of prior service cost 2 1.3 1.2 4.0 3.6 Amortization of net actuarial loss 0.2 0.2 0.6 0.6 Total net periodic postretirement benefit cost relating to Salaried VEBA $ 1.4 $ 1.2 $ 4.5 $ 3.4 ____________________ 1 The service cost was insignificant for all periods presented. 2 |
Derivatives, Hedging Programs_2
Derivatives, Hedging Programs and Other Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of material derivative positions | The following table summarizes our derivative positions at September 30, 2018 : Aluminum Maturity Period (month/year) Notional Amount of Contracts (mmlbs) Fixed price purchase contracts 10/18 through 12/21 138.3 Fixed price sales contracts 10/18 through 11/19 2.1 Midwest premium swap contracts 1 10/18 through 12/21 105.9 Alloying Metals Maturity Period (month/year) Notional Amount of Contracts (mmlbs) Fixed price purchase contracts 10/18 through 12/19 9.9 Natural Gas 2 Maturity Period (month/year) Notional Amount of Contracts (mmbtu) Fixed price purchase contracts 10/18 through 12/21 4,130,000 Electricity 3 Maturity Period (month/year) Notional Amount of Contracts (Mwh) Fixed price purchase contracts 1/20 through 12/21 219,600 Euro 4 Maturity Period (month/year) Notional Amount of Contracts (euro) Fixed price purchase contracts 11/18 33,064 ____________________ 1 Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum. 2 As of September 30, 2018 , we had derivative and/or physical delivery commitments with energy companies for approximately 70% of the expected natural gas purchases for the remainder of 2018 , 68% of the expected natural gas purchases for 2019 , 67% of the expected natural gas purchases for 2020 and 63% of the expected natural gas purchases for 2021 . 3 As of September 30, 2018 , we had derivative and/or physical delivery commitments with energy companies for approximately 53% of our expected electricity purchases for the remainder of 2018 , 54% of our expected electricity purchases for both 2019 and 2020 and 9% of our expected electricity purchases for 2021 . 4 |
Summary of realized and unrealized gains and losses | The location and amount of (gain) loss included on the Statements of Consolidated Income associated with all derivative contracts consisted of the following for each period presented (in millions of dollars): Quarter Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of products sold, excluding depreciation and amortization and other items 1 Cost of products sold, excluding depreciation and amortization and other items 1 Unrealized gain on derivative instruments Cost of products sold, excluding depreciation and amortization and other items 1 Cost of products sold, excluding depreciation and amortization and other items 1 Unrealized (gain) loss on derivative instruments Total amounts of income and expense line items presented in the statements of consolidated income in which the effects of hedges are recorded $ 323.3 $ 267.2 $ (10.8 ) $ 983.4 $ 822.7 $ (14.0 ) Loss (gain) recognized in income related to cash flow hedges: Aluminum $ 2.1 $ — $ — $ (1.2 ) $ — $ — Alloying Metals 1.0 (0.3 ) — 0.4 (0.2 ) — Natural gas — — — (0.1 ) — — Total loss (gain) recognized in income $ 3.1 $ (0.3 ) $ — $ (0.9 ) $ (0.2 ) $ — (Gain) loss recognized in income related to non-designated hedges: Aluminum $ — $ (4.0 ) $ (10.6 ) $ — $ (13.8 ) $ (15.3 ) Natural gas — 0.2 (0.2 ) — 0.3 1.3 Foreign exchange — (0.1 ) — — (0.1 ) — Total gain recognized in income $ — $ (3.9 ) $ (10.8 ) $ — $ (13.6 ) $ (14.0 ) ____________________ 1 Beginning with our adoption of ASU 2017-12 effective January 1, 2018, we no longer have Unrealized (gain) loss on derivative instruments on the Statements of Consolidated Income as all of our commodity hedges are designated as cash flow hedges. As such, all Unrealized (gain) loss on derivative instruments is reported in AOCI. For the quarter and nine months ended September 30, 2017 , Unrealized (gain) loss on derivative instruments was reclassified to Cost of products sold, excluding depreciation and amortization and other items in the Statements of Consolidated Income to conform to the current period's presentation, for a combined total of $256.4 million and $808.7 million , respectively. The amounts comprising both line items are presented separately here for comparative purposes. |
Fair Value of Derivative Assets and Liabilities Measured on Recurring Basis | The following table presents the fair value of our derivative financial instruments as of the periods presented (in millions of dollars): September 30, 2018 December 31, 2017 Derivative Assets Derivative Liabilities Net Amount Derivative Assets Derivative Liabilities Net Amount Cash Flow Hedges: Aluminum – Fixed price purchase contracts $ 3.0 $ (4.8 ) $ (1.8 ) $ — $ — $ — Fixed price sales contracts — (0.1 ) (0.1 ) — — — Midwest premium swap contracts 5.9 (0.1 ) 5.8 — — — Alloying Metals – Fixed price purchase contracts 0.1 (1.4 ) (1.3 ) 0.9 — 0.9 Natural gas – Fixed price purchase contracts 0.2 (0.6 ) (0.4 ) — — — Electricity – Fixed price purchase contracts — (0.1 ) (0.1 ) — — — Non-Designated Hedges: Aluminum – Fixed price purchase contracts — — — 22.5 — 22.5 Fixed price sales contracts — — — — (0.1 ) (0.1 ) Midwest premium swap contracts — — — 1.7 (0.1 ) 1.6 Natural gas – Fixed price purchase contracts — — — 0.2 (0.5 ) (0.3 ) Electricity – Fixed price purchase contracts — — — — (0.1 ) (0.1 ) Total $ 9.2 $ (7.1 ) $ 2.1 $ 25.3 $ (0.8 ) $ 24.5 The following table presents the balance sheet location of derivative assets and liabilities as of the periods presented (in millions of dollars): September 30, 2018 December 31, 2017 Assets: Prepaid expenses and other current assets $ 8.1 $ 18.9 Other assets 1.1 6.4 Total assets $ 9.2 $ 25.3 Liabilities: Other accrued liabilities $ (4.6 ) $ (0.3 ) Long-term liabilities (2.5 ) (0.5 ) Total Liabilities $ (7.1 ) $ (0.8 ) |
Fair Value, Non-Derivative Assets Measured on Recurring Basis | The following table presents our other financial assets, classified under the appropriate level of the fair value hierarchy, as of September 30, 2018 (in millions of dollars): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 23.2 $ 71.1 $ — $ 94.3 Short-term investments — 88.4 — 88.4 Total $ 23.2 $ 159.5 $ — $ 182.7 The following table presents our other financial assets, classified under the appropriate level of the fair value hierarchy, as of December 31, 2017 (in millions of dollars): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 23.5 $ 27.6 $ — $ 51.1 Short-term investments — 183.7 — 183.7 Total $ 23.5 $ 211.3 $ — $ 234.8 All Other Financial Assets and Liabilities. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in the accumulated balances for each component of AOCI for each period presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Defined Benefit Pension Plan and Salaried VEBA: Beginning balance $ (36.1 ) $ (35.4 ) $ (38.5 ) $ (37.1 ) Amortization of net actuarial loss 1 0.2 0.2 0.6 0.6 Amortization of prior service cost 1 1.3 1.2 4.0 3.6 Less: income tax expense 2 (0.4 ) (0.5 ) (1.1 ) (1.6 ) Net amortization reclassified from AOCI to Net income 1.1 0.9 3.5 2.6 Translation impact on Canadian pension plan AOCI balance — (0.1 ) — (0.1 ) Other comprehensive income, net of tax 1.1 0.8 3.5 2.5 Ending balance $ (35.0 ) $ (34.6 ) $ (35.0 ) $ (34.6 ) Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Available for Sale Securities: Beginning balance $ 0.6 $ 1.1 $ 0.9 $ 0.8 Unrealized gain on available for sale securities 1.3 1.0 3.6 3.1 Less: income tax expense (0.3 ) (0.4 ) (0.9 ) (1.2 ) Net unrealized gain on available for sale securities 1.0 0.6 2.7 1.9 Reclassification of unrealized gain upon sale of available for sale securities 3 (1.6 ) (0.5 ) (4.3 ) (2.1 ) Less: income tax benefit 2 0.4 0.2 1.1 0.8 Net gain reclassified from AOCI to Net income (1.2 ) (0.3 ) (3.2 ) (1.3 ) Other comprehensive (loss) income, net of tax (0.2 ) 0.3 (0.5 ) 0.6 Ending balance $ 0.4 $ 1.4 $ 0.4 $ 1.4 Cash Flow Hedges: Beginning balance $ (3.5 ) $ 0.1 $ 0.5 $ (0.2 ) Unrealized (loss) gain on cash flow hedges (5.2 ) 1.0 (6.5 ) 1.2 Less: income tax benefit (expense) 1.2 (0.4 ) 1.6 (0.5 ) Net unrealized (loss) gain on cash flow hedges (4.0 ) 0.6 (4.9 ) 0.7 Reclassification of unrealized loss (gain) upon settlement of cash flow hedges 4 3.0 (0.3 ) (1.0 ) — Less: income tax (expense) benefit 2 (0.7 ) 0.1 0.2 — Net loss (gain) reclassified from AOCI to Net income 2.3 (0.2 ) (0.8 ) — Other comprehensive (loss) income, net of tax (1.7 ) 0.4 (5.7 ) 0.7 Ending balance $ (5.2 ) $ 0.5 $ (5.2 ) $ 0.5 Foreign Currency Translation: Beginning balance $ — $ (0.1 ) $ — $ (0.2 ) Other comprehensive income, net of tax — 0.1 — 0.2 Ending balance $ — $ — $ — $ — Total AOCI ending balance $ (39.8 ) $ (32.7 ) $ (39.8 ) $ (32.7 ) ____________________ 1 Amounts amortized out of AOCI relating to Salaried VEBA adjustments were included within Other income (expense), net, as a component of Net periodic postretirement benefit cost relating to Salaried VEBA. 2 Income tax amounts reclassified out of AOCI were included as a component of Income tax provision. 3 Amounts reclassified out of AOCI relating to sales of available for sale securities were included as a component of Other income (expense), net. We use the specific identification method to determine the amount reclassified out of AOCI. 4 Amounts reclassified out of AOCI relating to cash flow hedges were included as a component of Cost of products sold, excluding depreciation and amortization and other items. As of September 30, 2018 , we estimate a net mark-to-market loss before tax of $4.4 million |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Impact of Adopting ASC 606 | The following table presents the impact on our opening Consolidated Balance Sheet as of January 1, 2018 of adopting ASC 606 (in millions of dollars): December 31, 2017 As Reported Cumulative-effect Adjustments 1 January 1, 2018 As Adjusted Contract assets $ — $ 55.6 $ 55.6 Inventories 207.9 (40.7 ) 167.2 Total current assets 656.6 14.9 671.5 Deferred tax assets, net 72.0 (3.3 ) 68.7 Total assets $ 1,385.2 $ 11.6 $ 1,396.8 Other accrued liabilities 40.5 1.5 42.0 Total current liabilities 173.1 1.5 174.6 Total liabilities $ 638.9 $ 1.5 $ 640.4 Retained earnings 85.5 10.1 95.6 Total stockholders’ equity 746.3 10.1 756.4 Total liabilities and stockholders’ equity $ 1,385.2 $ 11.6 $ 1,396.8 ____________________ 1 Included in the cumulative-effect adjustment was a charge of $5.0 million as a result of decrementing higher cost prior LIFO layers. The following table presents the impact of adopting ASC 606 on our Consolidated Balance Sheet as of the period presented (in millions of dollars): September 30, 2018 As Reported Adjustments September 30, 2018 without Adoption of ASC 606 Contract assets $ 51.0 $ (51.0 ) $ — Inventories 196.2 31.3 227.5 Total current assets 673.0 (19.7 ) 653.3 Deferred tax assets, net 42.2 3.3 45.5 Total assets $ 1,426.0 $ (16.4 ) $ 1,409.6 Other accrued liabilities 37.0 (2.7 ) 34.3 Total current liabilities 192.5 (2.7 ) 189.8 Total liabilities $ 663.5 $ (2.7 ) $ 660.8 Retained earnings 135.6 (13.7 ) 121.9 Total stockholders’ equity 762.5 (13.7 ) 748.8 Total liabilities and stockholders’ equity $ 1,426.0 $ (16.4 ) $ 1,409.6 The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Income for each period presented (in millions of dollars, except per share amounts): Quarter Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Without Adoption of ASC 606 As Reported Adjustments Without Adoption of ASC 606 Net sales $ 393.1 $ 1.6 $ 394.7 $ 1,196.5 $ 4.8 $ 1,201.3 Cost of products sold, excluding depreciation and amortization and other items 1 323.3 1.9 325.2 983.4 9.5 992.9 Operating income 34.9 (0.3 ) 34.6 106.7 (4.7 ) 102.0 Income before income taxes 29.9 (0.3 ) 29.6 90.0 (4.7 ) 85.3 Income tax provision (8.2 ) 0.1 (8.1 ) (21.9 ) 1.1 (20.8 ) Net income $ 21.7 $ (0.2 ) $ 21.5 $ 68.1 $ (3.6 ) $ 64.5 Net income per common share: Basic $ 1.31 $ (0.01 ) $ 1.30 $ 4.09 $ (0.21 ) $ 3.88 Diluted $ 1.29 $ (0.01 ) $ 1.28 $ 4.03 $ (0.21 ) $ 3.82 ____________________ 1 Included in the "as reported" amounts was the benefit of having decremented higher cost prior LIFO layers as part of the cumulative-effect adjustment of adopting ASC 606, as discussed in the opening balance sheet table above. The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Comprehensive Income for each period presented (in millions of dollars): Quarter Ended September 30, 2018 Nine Months Ended September 30, 2018 As Reported Adjustments Without Adoption of ASC 606 As Reported Adjustments Without Adoption of ASC 606 Net income $ 21.7 $ (0.2 ) $ 21.5 $ 68.1 $ (3.6 ) $ 64.5 Comprehensive income $ 20.9 $ (0.2 ) $ 20.7 $ 65.4 $ (3.6 ) $ 61.8 The following table presents the impact of adopting ASC 606 on our Statements of Consolidated Cash Flows for the period presented (in millions of dollars): Nine Months Ended September 30, 2018 As Reported Adjustments Nine Months Ended September 30, 2018 without Adoption of ASC 606 Net income $ 68.1 $ (3.6 ) $ 64.5 Changes in operating assets and liabilities: Contract assets 4.6 (4.6 ) — Inventories (25.6 ) 9.4 (16.2 ) Accrued liabilities (1.0 ) (1.2 ) (2.2 ) Net cash provided by operating activities $ 112.5 $ — $ 112.5 |
Other (Expense) Income, Net (Ta
Other (Expense) Income, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other (Expense) Income, Net | Other income (expense), net, consisted of the following for each period presented (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Interest income $ 0.1 $ — $ 0.2 $ — Net periodic postretirement benefit cost relating to Salaried VEBA (1.4 ) (1.2 ) (4.5 ) (3.4 ) Gain on removal of Union VEBA net assets — (0.5 ) — 0.8 Realized gain on investments 1.6 0.8 4.7 2.2 All other income (expense), net 0.4 0.7 (0.1 ) 0.9 Other income (expense), net $ 0.7 $ (0.2 ) $ 0.3 $ 0.5 |
Income Tax Matters (Tables)
Income Tax Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Tax Provision | The provision for in come taxes for each period presented consisted of the following (in millions of dollars): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Domestic $ 7.5 $ 15.7 $ 20.5 $ 35.8 Foreign 0.7 0.4 1.4 1.0 Total $ 8.2 $ 16.1 $ 21.9 $ 36.8 |
Net Income Per Share and Stoc_2
Net Income Per Share and Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted net income per share for periods presented (in millions of dollars, except share and per share amounts): Quarter Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Numerator: Net income $ 21.7 $ 19.9 $ 68.1 $ 60.6 Denominator – Weighted-average common shares outstanding (in thousands): Basic 16,573 16,834 16,654 17,072 Add: dilutive effect of non-vested common shares, restricted stock units and performance shares 1 210 326 228 291 Diluted 16,783 17,160 16,882 17,363 Net income per common share, Basic: $ 1.31 $ 1.18 $ 4.09 $ 3.55 Net income per common share, Diluted: $ 1.29 $ 1.16 $ 4.03 $ 3.49 ____________________ 1 For both the quarter and nine months ended September 30, 2017 , a total of three thousand non-vested common shares, restricted stock units and performance shares were excluded from the weighted-average diluted shares computation as their inclusion would have been anti-dilutive. There were no anti-dilutive securities during both the quarter and nine months ended September 30, 2018 . |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Nine Months Ended September 30, 2018 2017 (In millions of dollars) Interest paid $ 10.6 $ 10.0 Non-cash investing and financing activities: Unpaid purchases of property and equipment (included in Accounts payable) $ 5.8 $ 3.4 Stock repurchases not yet settled (included in Accounts payable) $ 0.4 $ — Acquisition of property and equipment through capital leasing arrangements $ 0.3 $ 0.3 September 30, 2018 September 30, 2017 (In millions of dollars) Components of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 94.3 $ 73.9 Restricted cash included in Prepaid expenses and other current assets 1 0.3 0.3 Restricted cash included in Other assets 1 14.5 12.9 Total cash, cash equivalents and restricted cash shown in the Statements of Consolidated Cash Flows $ 109.1 $ 87.1 ____________________ 1 |
Business, Product and Geograp_2
Business, Product and Geographical Area Information and Concentration of Risk (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of net sales by end market segment applications | 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 |
Schedule of income taxes paid by geographical area | 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 |
Schedule of information for contractual delivery of primary aluminum supply from major suppliers | 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 % |
Condensed Guarantor and Non-G_2
Condensed Guarantor and Non-Guarantor Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Guarantor and Non-Guarantor Financial Statement [Abstract] | |
Condensed Financial Statements | CONDENSED CONSOLIDATING BALANCE SHEET (In millions of dollars) September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 90.4 $ 3.9 $ — $ 94.3 Short-term investments — 88.4 — — 88.4 Receivables: Trade receivables, net — 188.7 5.8 — 194.5 Intercompany loans receivable 43.0 0.5 1.8 (45.3 ) — Other — 20.1 4.3 — 24.4 Contract assets — 48.2 2.8 — 51.0 Inventories — 183.9 12.3 — 196.2 Prepaid expenses and other current assets 0.1 23.7 0.4 — 24.2 Total current assets 43.1 643.9 31.3 (45.3 ) 673.0 Investments in and advances to subsidiaries 1,101.5 93.9 — (1,195.4 ) — Property, plant and equipment, net — 561.4 34.0 — 595.4 Long-term intercompany loans receivable — — 12.4 (12.4 ) — Deferred tax assets, net — 37.5 — 4.7 42.2 Intangible assets, net — 23.9 9.1 — 33.0 Goodwill — 18.8 24.6 — 43.4 Other assets — 39.0 — — 39.0 Total $ 1,144.6 $ 1,418.4 $ 111.4 $ (1,248.4 ) $ 1,426.0 LIABILITIES AND STOCKHOLDERS ' EQUITY Current liabilities: Accounts payable $ 3.6 $ 106.3 $ 10.5 $ — $ 120.4 Intercompany loans payable — 44.9 0.4 (45.3 ) — Accrued salaries, wages and related expenses — 33.6 1.5 — 35.1 Other accrued liabilities 8.3 33.1 0.4 (4.8 ) 37.0 Total current liabilities 11.9 217.9 12.8 (50.1 ) 192.5 Net liabilities of Salaried VEBA — 31.8 — — 31.8 Deferred tax liabilities — — 4.3 — 4.3 Long-term intercompany loans payable — 12.4 — (12.4 ) — Long-term liabilities — 61.7 3.0 — 64.7 Long-term debt 370.2 — — — 370.2 Total liabilities 382.1 323.8 20.1 (62.5 ) 663.5 Total stockholders' equity 762.5 1,094.6 91.3 (1,185.9 ) 762.5 Total $ 1,144.6 $ 1,418.4 $ 111.4 $ (1,248.4 ) $ 1,426.0 CONDENSED CONSOLIDATING BALANCE SHEET (In millions of dollars) December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 48.4 $ 2.7 $ — $ 51.1 Short-term investments — 183.7 — — 183.7 Receivables: Trade receivables, net — 160.1 4.9 — 165.0 Intercompany receivables 22.8 0.1 0.7 (23.6 ) — Other — 14.7 0.8 — 15.5 Inventories — 198.7 9.2 — 207.9 Prepaid expenses and other current assets 0.1 32.9 0.4 — 33.4 Total current assets 22.9 638.6 18.7 (23.6 ) 656.6 Investments in and advances to subsidiaries 1,097.7 48.2 — (1,145.9 ) — Property, plant and equipment, net — 541.2 30.2 — 571.4 Long-term intercompany receivables — — 12.4 (12.4 ) — Deferred tax assets, net — 67.3 — 4.7 72.0 Intangible assets, net — 25.0 — — 25.0 Goodwill — 18.8 — — 18.8 Other assets — 41.4 — — 41.4 Total $ 1,120.6 $ 1,380.5 $ 61.3 $ (1,177.2 ) $ 1,385.2 LIABILITIES AND STOCKHOLDERS ' EQUITY Current liabilities: Accounts payable $ 1.9 $ 81.4 $ 6.7 $ — $ 90.0 Intercompany payable — 23.5 0.1 (23.6 ) — Accrued salaries, wages and related expenses — 41.0 1.6 — 42.6 Other accrued liabilities 2.8 46.2 1.0 (9.5 ) 40.5 Total current liabilities 4.7 192.1 9.4 (33.1 ) 173.1 Net liabilities of Salaried VEBA — 31.9 — — 31.9 Deferred tax liabilities — — 4.3 — 4.3 Long-term intercompany payable — 12.4 — (12.4 ) — Long-term liabilities — 58.0 2.0 — 60.0 Long-term debt 369.6 — — — 369.6 Total liabilities 374.3 294.4 15.7 (45.5 ) 638.9 Total stockholders' equity 746.3 1,086.1 45.6 (1,131.7 ) 746.3 Total $ 1,120.6 $ 1,380.5 $ 61.3 $ (1,177.2 ) $ 1,385.2 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Quarter Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 385.9 $ 33.7 $ (26.5 ) $ 393.1 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items — 317.9 31.5 (26.1 ) 323.3 Depreciation and amortization — 10.5 0.5 — 11.0 Selling, general, administrative, research and development 1.0 22.8 0.5 (0.4 ) 23.9 Total costs and expenses 1.0 351.2 32.5 (26.5 ) 358.2 Operating (loss) income (1.0 ) 34.7 1.2 — 34.9 Other (expense) income: Interest expense (5.4 ) (0.4 ) — 0.1 (5.7 ) Other expense, net — 0.6 0.2 (0.1 ) 0.7 (Loss) income before income taxes (6.4 ) 34.9 1.4 — 29.9 Income tax provision — (9.0 ) (0.8 ) 1.6 (8.2 ) Earnings in equity of subsidiaries 28.1 0.6 — (28.7 ) — Net income $ 21.7 $ 26.5 $ 0.6 $ (27.1 ) $ 21.7 Comprehensive income $ 20.9 $ 25.7 $ 0.6 $ (26.3 ) $ 20.9 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Quarter Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 325.9 $ 26.3 $ (19.4 ) $ 332.8 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items 1 — 250.8 24.0 (18.4 ) 256.4 Depreciation and amortization — 9.7 0.5 — 10.2 Selling, general, administrative, research and development 2 1.0 23.5 0.8 (0.6 ) 24.7 Total costs and expenses 1.0 284.0 25.3 (19.0 ) 291.3 Operating (loss) income (1.0 ) 41.9 1.0 (0.4 ) 41.5 Other (expense) income: Interest expense (5.0 ) (0.4 ) — 0.1 (5.3 ) Other (expense) income, net — (0.4 ) 0.3 (0.1 ) (0.2 ) (Loss) income before income taxes (6.0 ) 41.1 1.3 (0.4 ) 36.0 Income tax provision — (18.0 ) (0.4 ) 2.3 (16.1 ) Earnings in equity of subsidiaries 25.9 0.6 — (26.5 ) — Net income $ 19.9 $ 23.7 $ 0.9 $ (24.6 ) $ 19.9 Comprehensive income $ 21.5 $ 25.3 $ 0.9 $ (26.2 ) $ 21.5 ____________________ 1 See Note 5 for discussion of our adoption of ASU 2017-12 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Unrealized (gain) loss on derivative instruments and now included within Cost of products sold, excluding depreciation and amortization and other items. 2 See Note 1 for discussion of our adoption of ASU 2017-07 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Selling, general, administrative, research and development and now included within Other income (expense). CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Nine Months Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,168.5 $ 103.3 $ (75.3 ) $ 1,196.5 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items — 962.9 93.5 (73.0 ) 983.4 Depreciation and amortization — 30.8 1.6 — 32.4 Selling, general, administrative, research and development 3.7 67.8 4.7 (2.3 ) 73.9 Other operating charges, net — 0.1 — — 0.1 Total costs and expenses 3.7 1,061.6 99.8 (75.3 ) 1,089.8 Operating (loss) income (3.7 ) 106.9 3.5 — 106.7 Other (expense) income: Interest expense (15.9 ) (1.5 ) — 0.4 (17.0 ) Other income, net — 0.4 0.3 (0.4 ) 0.3 (Loss) income before income taxes (19.6 ) 105.8 3.8 — 90.0 Income tax provision — (25.3 ) (1.4 ) 4.8 (21.9 ) Earnings in equity of subsidiaries 87.7 2.4 — (90.1 ) — Net income $ 68.1 $ 82.9 $ 2.4 $ (85.3 ) $ 68.1 Comprehensive income $ 65.4 $ 80.2 $ 2.4 $ (82.6 ) $ 65.4 CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (In millions of dollars) Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,019.7 $ 85.4 $ (60.7 ) $ 1,044.4 Costs and expenses: Cost of products sold, excluding depreciation and amortization and other items 1 — 791.8 75.0 (58.1 ) 808.7 Depreciation and amortization — 27.7 1.6 — 29.3 Selling, general, administrative, research and development 2 3.4 67.2 5.7 (1.6 ) 74.7 Goodwill impairment — 18.4 — — 18.4 Total costs and expenses 3.4 905.1 82.3 (59.7 ) 931.1 Operating (loss) income (3.4 ) 114.6 3.1 (1.0 ) 113.3 Other (expense) income: Interest expense (15.3 ) (1.2 ) — 0.1 (16.4 ) Other income, net — 0.1 0.5 (0.1 ) 0.5 (Loss) income before income taxes (18.7 ) 113.5 3.6 (1.0 ) 97.4 Income tax provision — (43.0 ) (0.9 ) 7.1 (36.8 ) Earnings in equity of subsidiaries 79.3 1.8 — (81.1 ) — Net income $ 60.6 $ 72.3 $ 2.7 $ (75.0 ) $ 60.6 Comprehensive income $ 64.6 $ 76.3 $ 2.7 $ (79.0 ) $ 64.6 ____________________ 1 See Note 5 for discussion of our adoption of ASU 2017-12 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Unrealized (gain) loss on derivative instruments and now included within Cost of products sold, excluding depreciation and amortization and other items. 2 See Note 1 for discussion of our adoption of ASU 2017-07 and the related reclassification of amounts previously presented in the Statements of Consolidated Income within Selling, general, administrative, research and development and now included within Other income (expense). CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions of dollars) Nine Months Ended September 30, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows from operating activities: Net cash provided by operating activities $ 87.5 $ 78.5 $ 46.5 $ (100.0 ) $ 112.5 Cash flows from investing activities: Capital expenditures — (51.9 ) (1.2 ) — (53.1 ) Purchase of available for sale securities — (111.9 ) — — (111.9 ) Purchase of equity securities — (0.9 ) — — (0.9 ) Proceeds from disposition of available for sale securities — 208.7 — — 208.7 Cash payment for acquisition of Imperial Machine & Tool Co., net of cash received — — (43.3 ) — (43.3 ) Proceeds from disposal of property, plant and equipment — 0.6 — — 0.6 Intercompany loans receivable (20.2 ) (0.4 ) (1.1 ) 21.7 — Net cash (used in) provided by investing activities (20.2 ) 44.2 (45.6 ) 21.7 0.1 Cash flows from financing activities: Repayment of capital lease — (0.5 ) — — (0.5 ) Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (6.9 ) — — — (6.9 ) Repurchase of common stock (31.9 ) — — — (31.9 ) Cash dividends paid to Parent — (100.0 ) — 100.0 — Cash dividends and dividend equivalents paid (28.5 ) — — — (28.5 ) Intercompany loans payable — 21.4 0.3 (21.7 ) — Net cash (used in) provided by financing activities (67.3 ) (79.1 ) 0.3 78.3 (67.8 ) Net increase in cash, cash equivalents and restricted cash during the period — 43.6 1.2 — 44.8 Cash, cash equivalents and restricted cash at beginning of period — 61.3 3.0 — 64.3 Cash, cash equivalents and restricted cash at end of period $ — $ 104.9 $ 4.2 $ — $ 109.1 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In millions of dollars) Nine Months Ended September 30, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ (12.8 ) $ 137.4 $ 6.9 $ — $ 131.5 Cash flows from investing activities: Capital expenditures — (55.7 ) (0.4 ) — (56.1 ) Purchase of available for sale securities — (196.0 ) — — (196.0 ) Proceeds from disposition of available for sale securities — 237.2 — — 237.2 Proceeds from disposal of property, plant, and equipment — 0.6 — — 0.6 Intercompany loans receivable 110.4 — (5.6 ) (104.8 ) — Net cash provided by (used in) investing activities 110.4 (13.9 ) (6.0 ) (104.8 ) (14.3 ) Cash flows from financing activities: Repayment of capital lease — (0.2 ) — — (0.2 ) Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (4.5 ) — — — (4.5 ) Repurchase of common stock (66.7 ) — — — (66.7 ) Cash dividends and dividend equivalents paid (26.4 ) — — — (26.4 ) Intercompany loans payable — (104.8 ) — 104.8 — Net cash used in financing activities (97.6 ) (105.0 ) — 104.8 (97.8 ) Net increase in cash, cash equivalents and restricted cash during the period — 18.5 0.9 — 19.4 Cash, cash equivalents and restricted cash at beginning of period — 65.1 2.6 — 67.7 Cash, cash equivalents and restricted cash at end of period $ — $ 83.6 $ 3.5 $ — $ 87.1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies, Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | |
Significant accounting policies | ||||||
Excess of current cost over the stated LIFO value of inventory | $ 42.9 | $ 42.9 | $ 24.3 | |||
Interest expense capitalized | 0.4 | $ 0.7 | 1.3 | $ 1.9 | ||
Workers compensation liability | 27.9 | $ 27.9 | $ 24.8 | |||
Workers' compensation accrual, discount rate (percent) | 3.00% | 2.25% | ||||
Accrued liabilities for employee healthcare benefits | $ 3.1 | $ 3.1 | $ 3.5 | |||
Shares available for award (shares) | 577,300 | 577,300 | ||||
Retained earnings | $ 135.6 | $ 135.6 | $ 85.5 | $ 95.6 | ||
Accrued salaries, wages and related expenses | ||||||
Significant accounting policies | ||||||
Accrued salaries, wages and related expenses | 10.6 | 10.6 | ||||
Accounting Standards Update 2016-01 | ||||||
Significant accounting policies | ||||||
Retained earnings | 0.4 | |||||
Tax impact | 0.2 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Significant accounting policies | ||||||
Retained earnings | $ (13.7) | $ (13.7) | 10.1 | |||
Tax impact | $ 3.3 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents | |||
Cash and money market funds | $ 23.2 | $ 23.5 | |
Commercial paper | 71.1 | 27.6 | |
Total | 94.3 | 51.1 | |
Trade Receivables – Net | |||
Trade receivables, gross | 195.7 | 166.2 | |
Allowance for doubtful receivables | (1.2) | (1.2) | |
Trade receivables – net | 194.5 | 165 | |
Inventories | |||
Finished products | 41.4 | 63.8 | |
Work-in-process | 73.3 | 78.3 | |
Raw materials | 76.2 | 61.3 | |
Operating supplies | 5.3 | 4.5 | |
Total | 196.2 | $ 167.2 | 207.9 |
Property, Plant and Equipment – Net | |||
Land and improvements | 21.4 | 21.1 | |
Buildings and leasehold improvements | 96.4 | 92.1 | |
Machinery and equipment | 736.3 | 689.1 | |
Construction in progress | 38.1 | 35.1 | |
Property, plant and equipment – gross | 892.2 | 837.4 | |
Accumulated depreciation | (298.4) | (267.9) | |
Assets held for sale | 1.6 | 1.9 | |
Property, plant and equipment – net | 595.4 | 571.4 | |
Other Accrued Liabilities | |||
Uncleared cash disbursements | 5.6 | 7.3 | |
Accrued income taxes and taxes payable | 8.2 | 6.8 | |
Accrued annual contribution to VEBAs | 0 | 15.7 | |
Accrued interest | 8.4 | 2.9 | |
Other | 14.8 | 7.8 | |
Total | 37 | $ 42 | 40.5 |
Long-Term Liabilities | |||
Workers’ compensation accruals | 24.5 | 22.6 | |
Long-term environmental accrual | 14.4 | 15.8 | |
Other long-term liabilities | 25.8 | 21.6 | |
Total | 64.7 | 60 | |
Billed | |||
Trade Receivables – Net | |||
Trade receivables, gross | 194.2 | 165.9 | |
Unbilled | |||
Trade Receivables – Net | |||
Trade receivables, gross | $ 1.5 | $ 0.3 |
Business Combinations and Goo_3
Business Combinations and Goodwill, Narrative (Details) - USD ($) $ in Millions | Sep. 19, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 61.8 | $ 37.2 | |
Period over which goodwill is deductible for tax | 15 years | ||
Imperial Machine and Tool Co. (''IMT'') | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 2.7 | ||
Inventory | 3.4 | ||
Property, plant and equipment | 4.1 | ||
Identifiable intangible assets with definite lives | 9.1 | ||
Goodwill | 24.6 | ||
Accounts payable and other current liabilities | (0.6) | ||
Consideration paid, net of cash received | $ 43.3 | ||
Acquisition-related costs | $ 0.3 |
Business Combinations and Goo_4
Business Combinations and Goodwill, Goodwill Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill [Roll Forward] | |||||
Goodwill, Gross | $ 37.2 | ||||
Goodwill, Accumulated Impairment Loss | (18.4) | ||||
Goodwill | 18.8 | ||||
Goodwill, Acquired During Period | 24.6 | ||||
Goodwill impairment | $ 0 | $ 0 | $ 18.4 | 0 | $ 18.4 |
Goodwill, Increase | 24.6 | ||||
Goodwill, Gross | 61.8 | 61.8 | |||
Goodwill, Accumulated Impairment Loss | (18.4) | (18.4) | |||
Goodwill | $ 43.4 | $ 43.4 |
Employee Benefits Tables (Detai
Employee Benefits Tables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure | ||||
Total net periodic postretirement benefit cost relating to Salaried VEBA | $ 4.6 | $ 3.4 | ||
Gain on removal of Union VEBA net assets | $ 0 | $ 0.5 | 0 | (0.8) |
Other Postretirement Benefits Plan | ||||
Defined Benefit Plan Disclosure | ||||
Defined Contribution Plan, Cost | 1.7 | 1.4 | 7.3 | 7.5 |
Deferred Compensation Arrangement with Individual, Compensation Expense | 0.2 | 0.5 | 1.2 | 1.4 |
Multiemployer Plan, Contributions by Employer | 1.2 | 1.1 | 3.5 | 3.4 |
Total other employee benefit plans | 4.5 | 4.7 | 16.5 | 14.9 |
Postretirement Health Coverage | Salaried VEBA | ||||
Defined Benefit Plan Disclosure | ||||
Total net periodic postretirement benefit cost relating to Salaried VEBA | 1.4 | 1.2 | 4.5 | 3.4 |
Salaried VEBA: | ||||
Interest cost | 0.7 | 0.8 | 2.1 | 2.3 |
Expected return on plan assets | (0.8) | (1) | (2.2) | (3.1) |
Amortization of prior service cost | 1.3 | 1.2 | 4 | 3.6 |
Amortization of net actuarial loss | 0.2 | 0.2 | 0.6 | 0.6 |
Postretirement Health Coverage | Union VEBA | ||||
Defined Benefit Plan Disclosure | ||||
Gain on removal of Union VEBA net assets | $ 0 | $ (0.5) | $ 0 | $ 0.8 |
Employee Benefits Narrative (De
Employee Benefits Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure | |||||
Equity Securities, FV-NI, Unrealized Gain (Loss) | $ (0.1) | $ 0.3 | |||
Payment for Other Postretirement Benefits | 15.7 | $ 20 | |||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||
Defined Benefit Plan Disclosure | |||||
Fair value of deferred compensation assets | $ 10.9 | 10.9 | $ 9.8 | ||
Postretirement Health Coverage | Union VEBA | |||||
Defined Benefit Plan Disclosure | |||||
Maximum contribution threshold | $ 12.8 | ||||
Postretirement Health Coverage | Salaried VEBA | |||||
Defined Benefit Plan Disclosure | |||||
Maximum contribution threshold | $ 2.9 | ||||
Payment for Other Postretirement Benefits | $ 2.9 |
Derivatives, Hedging Programs_3
Derivatives, Hedging Programs and Other Financial Instruments, Narrative (Details) - USD ($) | 9 Months Ended | |||||
Sep. 30, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||||||
Collateral posted for net derivatives | $ 0 | $ 0 | ||||
Customer collateral deposits | $ 0 | 0 | ||||
Maturity period of short-term investments | 12 months | |||||
Designated as Hedging Instrument | Purchase | ||||||
Derivative [Line Items] | ||||||
Derivative net liability | $ 3,100,000 | $ 100,000 | ||||
Scenario, Forecast | Natural Gas | ||||||
Derivative [Line Items] | ||||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 63.00% | 67.00% | 68.00% | 70.00% | ||
Scenario, Forecast | Electricity | ||||||
Derivative [Line Items] | ||||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 9.00% | 54.00% | 54.00% | 53.00% |
Derivatives, Hedging Programs_4
Derivatives, Hedging Programs and Other Financial Instruments, Material Derivative Positions (Details) mmlbs in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018EUR (€)MMBTUMWHmmlbs |
Aluminum | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | 138.3 | ||||
Aluminum | Designated as Hedging Instrument | Sales | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | 2.1 | ||||
Midwest premium swap contracts | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | 105.9 | ||||
Alloy Metal Hedge | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | 9.9 | ||||
Natural Gas | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | MMBTU | 4,130,000 | ||||
Electricity | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative non-monetary notional amount | MWH | 219,600 | ||||
Foreign Exchange Contract | Designated as Hedging Instrument | Purchase | |||||
Derivative [Line Items] | |||||
Derivative notional amount | € | € 33,064 | ||||
Scenario, Forecast | Natural Gas | |||||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 63.00% | 67.00% | 68.00% | 70.00% | |
Scenario, Forecast | Electricity | |||||
Derivative [Line Items] | |||||
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 9.00% | 54.00% | 54.00% | 53.00% |
Derivatives, Hedging Programs_5
Derivatives, Hedging Programs and Other Financial Instruments, Realized and Unrealized Gains (Losses) Table (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Derivative Instruments Gain Loss [Line Items] | |||||
Cost of products sold, excluding depreciation and amortization and other items1 | [1] | $ 323.3 | $ 256.4 | $ 983.4 | $ 808.7 |
Cost of Sales | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Cost of products sold, excluding depreciation and amortization and other items1 | 267.2 | 822.7 | |||
Cost of Sales | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 3.1 | (0.3) | (0.9) | (0.2) | |
Cost of Sales | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | 3.9 | 0 | 13.6 | |
Cost of Sales | Aluminum | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 2.1 | 0 | (1.2) | 0 | |
Cost of Sales | Aluminum | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | (4) | 0 | (13.8) | |
Cost of Sales | Alloy Metal Hedge | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 1 | (0.3) | 0.4 | (0.2) | |
Cost of Sales | Natural Gas | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | (0.1) | |||
Cost of Sales | Natural Gas | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | 0.2 | 0 | 0.3 | |
Cost of Sales | Foreign Exchange Contract | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | $ 0 | (0.1) | $ 0 | (0.1) | |
Gain (Loss) on Derivative Instruments | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 10.8 | 14 | |||
Gain (Loss) on Derivative Instruments | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | 0 | |||
Gain (Loss) on Derivative Instruments | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 10.8 | 14 | |||
Gain (Loss) on Derivative Instruments | Aluminum | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | 0 | |||
Gain (Loss) on Derivative Instruments | Aluminum | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | (10.6) | (15.3) | |||
Gain (Loss) on Derivative Instruments | Alloy Metal Hedge | Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | 0 | 0 | |||
Gain (Loss) on Derivative Instruments | Natural Gas | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | (0.2) | 1.3 | |||
Gain (Loss) on Derivative Instruments | Foreign Exchange Contract | Not Designated as Hedging Instrument | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Loss (gain) recognized in income related to cash flow hedges: | $ 0 | $ 0 | |||
[1] | See Note 5 for discussion of our adoption of ASU 2017-12 (as defined in Note 1 |
Derivatives, Hedging Programs_6
Derivatives, Hedging Programs and Other Financial Instruments, Fair Value Hierarchy Table (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ 9.2 | $ 25.3 |
Derivative liability | (7.1) | (0.8) |
Cash and cash equivalents | 94.3 | 51.1 |
Total | 182.7 | 234.8 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 23.2 | 23.5 |
Total | 23.2 | 23.5 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 9.2 | 25.3 |
Derivative liability | (7.1) | (0.8) |
Derivative Assets (Liabilities), at Fair Value, Net | 2.1 | 24.5 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total | 0 | 0 |
Designated as Hedging Instrument | Purchase | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (3.1) | (0.1) |
Designated as Hedging Instrument | Purchase | Aluminum | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 3 | 0 |
Derivative liability | (4.8) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | (1.8) | 0 |
Designated as Hedging Instrument | Purchase | Midwest premium swap contracts | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 5.9 | 0 |
Derivative liability | (0.1) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | 5.8 | 0 |
Designated as Hedging Instrument | Purchase | Alloy Metal Hedge | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0.1 | 0.9 |
Derivative liability | (1.4) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | (1.3) | 0.9 |
Designated as Hedging Instrument | Purchase | Natural Gas | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0.2 | 0 |
Derivative liability | (0.6) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | (0.4) | 0 |
Designated as Hedging Instrument | Purchase | Electricity | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | (0.1) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | (0.1) | 0 |
Designated as Hedging Instrument | Sales | Aluminum | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | (0.1) | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | (0.1) | 0 |
Not Designated as Hedging Instrument | Purchase | Aluminum | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 22.5 |
Derivative liability | 0 | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 22.5 |
Not Designated as Hedging Instrument | Purchase | Midwest premium swap contracts | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 1.7 |
Derivative liability | 0 | (0.1) |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | 1.6 |
Not Designated as Hedging Instrument | Purchase | Natural Gas | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0.2 |
Derivative liability | 0 | (0.5) |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | (0.3) |
Not Designated as Hedging Instrument | Purchase | Electricity | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | (0.1) |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | (0.1) |
Not Designated as Hedging Instrument | Sales | Aluminum | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | (0.1) |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | (0.1) |
Debt Securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 88.4 | 183.7 |
Debt Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Debt Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 71.1 | 27.6 |
Short-term investments | 88.4 | 183.7 |
Total | 159.5 | 211.3 |
Debt Securities | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 0 | $ 0 |
Derivatives, Hedging Programs_7
Derivatives, Hedging Programs and Other Financial Instruments, Balance Sheet (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Derivative asset | $ 9.2 | $ 25.3 |
Derivative liability | (7.1) | (0.8) |
Other Current Liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (4.6) | (0.3) |
Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability | (2.5) | (0.5) |
Other Current Assets | ||
Derivative [Line Items] | ||
Derivative asset | 8.1 | 18.9 |
Other Assets | ||
Derivative [Line Items] | ||
Derivative asset | $ 1.1 | $ 6.4 |
Debt and Credit Facility, Narra
Debt and Credit Facility, Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | May 15, 2016 | |
Debt Instrument | ||||||
Unamortized debt issuance cost | $ 4,800,000 | $ 4,800,000 | ||||
Senior Notes Due 2024 | Senior Notes | ||||||
Debt Instrument | ||||||
Debt principal amount | $ 375,000,000 | |||||
Debt instrument contractual rate (percent) | 5.875% | |||||
Debt issuance, percentage of principal amount | 100.00% | |||||
Interest expense | $ 5,700,000 | $ 5,700,000 | $ 17,100,000 | $ 17,100,000 | ||
Effective interest rate (percent) | 6.10% | 6.10% | ||||
Fair value of outstanding debt | $ 383,600,000 | $ 383,600,000 | $ 399,900,000 | |||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument | ||||||
Funding commitment provided | 300,000,000 | 300,000,000 | ||||
Available borrowing capacity under the Revolving Facility | 300,000,000 | 300,000,000 | ||||
Outstanding borrowings | 0 | 0 | ||||
Net borrowing availability | 292,000,000 | 292,000,000 | ||||
Revolving Credit Facility | Letter of Credit | ||||||
Debt Instrument | ||||||
Outstanding borrowings | $ 8,000,000 | $ 8,000,000 | ||||
Would have been | Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument | ||||||
Applicable interest rate at period end (percent) | 5.50% | 5.50% |
Commitments and Contingencies,
Commitments and Contingencies, Environmental (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Environmental Contingency | ||
Environmental accrual | $ 17.2 | $ 17.2 |
Expected period related to remediation expenditures for environmental contingencies period | 30 years | |
Potential increase in environmental costs | $ 11.6 | $ 11.6 |
Time period within which Companys recorded estimate of its obligation may change | 12 months | |
Minimum | ||
Environmental Contingency | ||
Period for final feasibility study | 12 months | |
Maximum | ||
Environmental Contingency | ||
Period for final feasibility study | 18 months |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Estimated net mark-to-market loss before tax within next twelve months | $ (4.4) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 746.3 | |||
Other comprehensive (loss) income, net of tax | (2.7) | |||
Ending balance | 762.5 | 762.5 | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (36.1) | $ (35.4) | (38.5) | $ (37.1) |
Less: income tax benefit | (0.4) | (0.5) | (1.1) | (1.6) |
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent | 1.1 | 0.9 | 3.5 | 2.6 |
Defined Benefit Plan, Benefit Obligation, Foreign Currency Translation Gain (Loss) | 0 | (0.1) | 0 | (0.1) |
Other comprehensive (loss) income, net of tax | 1.1 | 0.8 | 3.5 | 2.5 |
Ending balance | (35) | (34.6) | (35) | (34.6) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification of unrealized gain upon sale of available for sale securities | 0.2 | 0.2 | 0.6 | 0.6 |
Accumulated Defined Benefit Plans Adjustment, Net Prior Service Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification of unrealized gain upon sale of available for sale securities | 1.3 | 1.2 | 4 | 3.6 |
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0.6 | 1.1 | 0.9 | 0.8 |
Unrealized gain on available for sale securities | 1.3 | 1 | 3.6 | 3.1 |
Less: income tax expense | (0.3) | (0.4) | (0.9) | (1.2) |
Net unrealized gain on available for sale securities | 1 | 0.6 | 2.7 | 1.9 |
Reclassification of unrealized gain upon sale of available for sale securities | (1.6) | (0.5) | (4.3) | (2.1) |
Less: income tax benefit | 0.4 | 0.2 | 1.1 | 0.8 |
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent | (1.2) | (0.3) | (3.2) | (1.3) |
Other comprehensive (loss) income, net of tax | (0.2) | 0.3 | (0.5) | 0.6 |
Ending balance | 0.4 | 1.4 | 0.4 | 1.4 |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (3.5) | 0.1 | 0.5 | |
Unrealized gain on available for sale securities | (5.2) | 1 | (6.5) | 1.2 |
Less: income tax expense | 1.2 | (0.4) | 1.6 | (0.5) |
Net unrealized gain on available for sale securities | (4) | 0.6 | (4.9) | 0.7 |
Reclassification of unrealized gain upon sale of available for sale securities | 3 | (0.3) | (1) | 0 |
Less: income tax benefit | (0.7) | 0.1 | 0.2 | 0 |
Reclassification from AOCI, Current Period, Net of Tax, Attributable to Parent | 2.3 | (0.2) | (0.8) | 0 |
Other comprehensive (loss) income, net of tax | (1.7) | 0.4 | (5.7) | 0.7 |
Ending balance | (5.2) | 0.5 | (5.2) | 0.5 |
Accumulated Other Comprehensive Loss (Other) [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 0 | (0.1) | 0 | (0.2) |
Other comprehensive (loss) income, net of tax | 0 | 0.1 | 0 | 0.2 |
Ending balance | 0 | 0 | 0 | 0 |
AOCI Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (36.7) | |||
Other comprehensive (loss) income, net of tax | (2.7) | |||
Ending balance | $ (39.8) | $ (32.7) | $ (39.8) | $ (32.7) |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues | $ 393.1 | $ 332.8 | $ 1,196.5 | $ 1,044.4 | |||
Cost of products sold, excluding depreciation and amortization and other items1 | [1] | 323.3 | 256.4 | 983.4 | 808.7 | ||
Effect of LIFO Inventory Liquidation on Income | $ 5 | ||||||
Contract assets | 55.6 | 51 | 51 | $ 0 | |||
Inventories | 167.2 | 196.2 | 196.2 | 207.9 | |||
Total current assets | 671.5 | 673 | 673 | 656.6 | |||
Deferred tax assets, net | 68.7 | 42.2 | 42.2 | 72 | |||
Assets | 1,396.8 | 1,426 | 1,426 | 1,385.2 | |||
Other accrued liabilities | 42 | 37 | 37 | 40.5 | |||
Total current liabilities | 174.6 | 192.5 | 192.5 | 173.1 | |||
Total liabilities | 640.4 | 663.5 | 663.5 | 638.9 | |||
Retained earnings | 95.6 | 135.6 | 135.6 | 85.5 | |||
Total stockholders' equity | 756.4 | 762.5 | 762.5 | 746.3 | |||
Total liabilities and stockholders’ equity | 1,396.8 | 1,426 | 1,426 | 1,385.2 | |||
Operating income | 34.9 | 41.5 | 106.7 | 113.3 | |||
Income before income taxes | 29.9 | 36 | 90 | 97.4 | |||
Income tax provision | (8.2) | (16.1) | (21.9) | (36.8) | |||
Net income | $ 21.7 | $ 19.9 | $ 68.1 | $ 60.6 | |||
Basic earnings per share (in dollars per share) | $ 1.31 | $ 1.18 | $ 4.09 | $ 3.55 | |||
Diluted earnings per share (in dollars per share) | $ 1.29 | $ 1.16 | $ 4.03 | $ 3.49 | |||
Comprehensive income | $ 20.9 | $ 21.5 | $ 65.4 | $ 64.6 | |||
Contract assets | 4.6 | 0 | |||||
Inventories | (25.6) | (10.6) | |||||
Accrued liabilities | (1) | 0.9 | |||||
Net cash provided by (used in) operating activities | [2] | 112.5 | $ 131.5 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||
Revenues | 1.6 | 4.8 | |||||
Cost of products sold, excluding depreciation and amortization and other items1 | 1.9 | 9.5 | |||||
Contract assets | 55.6 | (51) | (51) | ||||
Inventories | (40.7) | 31.3 | 31.3 | ||||
Total current assets | 14.9 | (19.7) | (19.7) | ||||
Deferred tax assets, net | (3.3) | 3.3 | 3.3 | ||||
Assets | 11.6 | (16.4) | (16.4) | ||||
Other accrued liabilities | 1.5 | (2.7) | (2.7) | ||||
Total current liabilities | 1.5 | (2.7) | (2.7) | ||||
Total liabilities | 1.5 | (2.7) | (2.7) | ||||
Retained earnings | 10.1 | (13.7) | (13.7) | ||||
Total stockholders' equity | 10.1 | (13.7) | (13.7) | ||||
Total liabilities and stockholders’ equity | $ 11.6 | (16.4) | (16.4) | ||||
Operating income | (0.3) | (4.7) | |||||
Income before income taxes | (0.3) | (4.7) | |||||
Income tax provision | 0.1 | 1.1 | |||||
Net income | $ (0.2) | $ (3.6) | |||||
Basic earnings per share (in dollars per share) | $ (0.01) | $ (0.21) | |||||
Diluted earnings per share (in dollars per share) | $ (0.01) | $ (0.21) | |||||
Comprehensive income | $ (0.2) | $ (3.6) | |||||
Contract assets | (4.6) | ||||||
Inventories | 9.4 | ||||||
Accrued liabilities | (1.2) | ||||||
Net cash provided by (used in) operating activities | 0 | ||||||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||
Revenues | 394.7 | 1,201.3 | |||||
Cost of products sold, excluding depreciation and amortization and other items1 | 325.2 | 992.9 | |||||
Contract assets | 0 | 0 | 0 | ||||
Inventories | 227.5 | 227.5 | 207.9 | ||||
Total current assets | 653.3 | 653.3 | 656.6 | ||||
Deferred tax assets, net | 45.5 | 45.5 | 72 | ||||
Assets | 1,409.6 | 1,409.6 | 1,385.2 | ||||
Other accrued liabilities | 34.3 | 34.3 | 40.5 | ||||
Total current liabilities | 189.8 | 189.8 | 173.1 | ||||
Total liabilities | 660.8 | 660.8 | 638.9 | ||||
Retained earnings | 121.9 | 121.9 | 85.5 | ||||
Total stockholders' equity | 748.8 | 748.8 | 746.3 | ||||
Total liabilities and stockholders’ equity | 1,409.6 | 1,409.6 | $ 1,385.2 | ||||
Operating income | 34.6 | 102 | |||||
Income before income taxes | 29.6 | 85.3 | |||||
Income tax provision | (8.1) | (20.8) | |||||
Net income | $ 21.5 | $ 64.5 | |||||
Basic earnings per share (in dollars per share) | $ 1.30 | $ 3.88 | |||||
Diluted earnings per share (in dollars per share) | $ 1.28 | $ 3.82 | |||||
Comprehensive income | $ 20.7 | $ 61.8 | |||||
Contract assets | 0 | ||||||
Inventories | (16.2) | ||||||
Accrued liabilities | (2.2) | ||||||
Net cash provided by (used in) operating activities | $ 112.5 | ||||||
[1] | See Note 5 for discussion of our adoption of ASU 2017-12 (as defined in Note 1 | ||||||
[2] | See Note 9 for adjustments made to arrive at our Consolidated Balance Sheet as of January 1, 2018 upon adopting ASC 606 (as defined in Note 1 |
Other (Expense) Income, Net (De
Other (Expense) Income, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ 0.1 | $ 0 | $ 0.2 | $ 0 |
Net periodic postretirement benefit cost relating to Salaried VEBA | (1.4) | (1.2) | (4.5) | (3.4) |
Gain on removal of Union VEBA net assets | 0 | (0.5) | 0 | 0.8 |
Realized gain on investments | 1.6 | 0.8 | 4.7 | 2.2 |
All other income (expense), net | 0.4 | 0.7 | (0.1) | 0.9 |
Other income (expense), net | $ 0.7 | $ (0.2) | $ 0.3 | $ 0.5 |
Income Tax Matters, Provision T
Income Tax Matters, Provision Table (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Tax Provision | ||||
Domestic | $ 7.5 | $ 15.7 | $ 20.5 | $ 35.8 |
Foreign | 0.7 | 0.4 | 1.4 | 1 |
Total | $ 8.2 | $ 16.1 | $ 21.9 | $ 36.8 |
Income Tax Matters, Narrative (
Income Tax Matters, Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax provision | $ 8.2 | $ 16.1 | $ 21.9 | $ 36.8 | |
Effective tax rate (percent) | 27.30% | 44.70% | 24.30% | 37.80% | |
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Amount | $ (2) | $ (1.7) | |||
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax Benefit, Percent | (2.30%) | (1.70%) | |||
Effective tax rate reconciliation, increase (decrease) to the valuation allowance for certain state net operating losses | $ (0.4) | $ (0.9) | $ (0.5) | ||
Effective tax rate reconciliation, increase (decrease) to the valuation allowance for certain state net operating losses (percent) | (1.30%) | (1.00%) | (0.60%) | ||
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | $ 2.5 | $ 2.5 | |||
Effective Income Tax Rate Reconciliation,Other Reconciling Items, Percent | 7.10% | 2.60% | |||
Effective Income Tax Rate Reconciliation, Unrecognized Tax Benefit Amount | $ (0.2) | ||||
Effective Income Tax Rate Reconciliation Unrecognized Tax Benefit Percent | (0.20%) | ||||
Effective Income Tax Rate Reconciliation Sequestration of AMT Credits Amount | $ 0.2 | $ 0.6 | |||
Effective Income Tax Rate Reconciliation Sequestration of AMT Credits Percent | 0.70% | 0.60% | |||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Amount | $ 0.6 | $ 1.7 | |||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent | 1.90% | 1.90% | |||
Effective Income Tax Rate Reconciliation Advance Pricing Agreement, Amount | $ 0.3 | $ 0.3 | |||
Effective Income Tax Rate Reconciliation Advance Pricing Agreement, Percent | 1.00% | 0.30% | |||
Gross unrecognized tax benefits | $ 1.5 | $ 1.5 | $ 1.5 | ||
Gross unrecognized tax benefits that would impact effective tax rate | $ 0.4 | $ 0.4 | $ 0.4 |
Net Income Per Share and Stoc_3
Net Income Per Share and Stockholders' Equity, Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income | $ 21.7 | $ 19.9 | $ 68.1 | $ 60.6 |
Denominator — Weighted-average common shares outstanding (in thousands): | ||||
Basic (shares) | 16,573 | 16,834 | 16,654 | 17,072 |
Add: dilutive effect of non-vested common shares, restricted stock units, performance shares and stock options (shares) | 210 | 326 | 228 | 291 |
Diluted (shares) | 16,783 | 17,160 | 16,882 | 17,363 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 1.31 | $ 1.18 | $ 4.09 | $ 3.55 |
Earnings per common share, Diluted: | ||||
Diluted (in dollars per share) | $ 1.29 | $ 1.16 | $ 4.03 | $ 3.49 |
Net Income Per Share and Stoc_4
Net Income Per Share and Stockholders' Equity, Anti Dilution Table (Details) | Apr. 07, 2016 | Sep. 30, 2018shares | Sep. 30, 2017shares | Sep. 30, 2018shares | Sep. 30, 2017shares | Dec. 31, 2017shares | Apr. 22, 2016shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 3,000 | 0 | 3,000 | |||
Authorized number of shares of Series A Preferred Stock (shares) | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Series A Preferred Stock [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||||||
Preferred Stock, Rights Conversion Ratio into Preferred Stock | 1 | ||||||
Authorized number of shares of Series A Preferred Stock (shares) | 900,000 |
Net Income Per Share and Stoc_5
Net Income Per Share and Stockholders' Equity, Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Equity [Abstract] | ||
Number of common shares repurchased (shares) | 304,440 | 806,307 |
Weighted-average repurchase price (in usd per share) | $ 106 | $ 80.60 |
Total cost of repurchased common shares | $ 32.3 | $ 64.9 |
Net Income Per Share and Stoc_6
Net Income Per Share and Stockholders' Equity, Narrative (Details) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 17, 2018 | |
Earnings Per Share [Abstract] | |||
Dividends paid | $ 28.5 | $ 26.4 | |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 100 | ||
Availability remaining to repurchase common shares pursuant to stock repurchase program | $ 178.3 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Supplemental disclosure of cash flow information: | ||||
Interest paid | $ 10.6 | $ 10 | ||
Non-cash investing and financing activities: | ||||
Unpaid purchases of property and equipment (included in Accounts payable) | 5.8 | 3.4 | ||
Stock repurchases not yet settled (included in Accounts payable) | 0.4 | 0 | ||
Acquisition of property and equipment through capital leasing arrangements | 0.3 | 0.3 | ||
Components of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 94.3 | 73.9 | $ 51.1 | |
Restricted cash included in Prepaid expenses and other current assets | 0.3 | 0.3 | ||
Restricted cash included in Other assets | 14.5 | 12.9 | ||
Total cash, cash equivalents and restricted cash shown in the Statements of Consolidated Cash Flows | $ 109.1 | $ 87.1 | $ 64.3 | $ 67.7 |
Business, Product and Geograp_3
Business, Product and Geographical Area Information and Concentration of Risk, Net Sales by End Market Segment Applications (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Sales: | ||||
Revenues | $ 393.1 | $ 332.8 | $ 1,196.5 | $ 1,044.4 |
Transferred at Point in Time | ||||
Net Sales: | ||||
Revenues | 127.8 | 425.2 | ||
Transferred over Time | ||||
Net Sales: | ||||
Revenues | 265.3 | 771.3 | ||
Aero/HS products | ||||
Net Sales: | ||||
Revenues | 185.7 | 150.2 | 540.9 | 483.2 |
Automotive Extrusions | ||||
Net Sales: | ||||
Revenues | 56.1 | 52.7 | 183.9 | 161.6 |
GE products | ||||
Net Sales: | ||||
Revenues | 133.9 | 115.9 | 425.1 | 361.1 |
Other products | ||||
Net Sales: | ||||
Revenues | $ 17.4 | $ 14 | $ 46.6 | $ 38.5 |
Business, Product and Geograp_4
Business, Product and Geographical Area Information and Concentration of Risk, Income Taxes Paid by Geographical Area (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information | ||||
Income taxes paid | $ 0.4 | $ 0.3 | $ 3.3 | $ 0.8 |
Domestic | ||||
Segment Reporting Information | ||||
Income taxes paid | 0.4 | 0.3 | 1.3 | 0.7 |
Foreign | ||||
Segment Reporting Information | ||||
Income taxes paid | $ 0 | $ 0 | $ 2 | $ 0.1 |
Business, Product and Geograp_5
Business, Product and Geographical Area Information and Concentration of Risk, Supply Information (Details) - Supplier Concentration Risk - Aluminum | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Top five major suppliers | ||||
Concentration Risk | ||||
Percentage of total primary aluminum supply (percent) | 83.00% | 86.00% | 82.00% | 86.00% |
Largest supplier | ||||
Concentration Risk | ||||
Percentage of total primary aluminum supply (percent) | 33.00% | 35.00% | 36.00% | 36.00% |
Second and third largest suppliers | ||||
Concentration Risk | ||||
Percentage of total primary aluminum supply (percent) | 36.00% | 35.00% | 32.00% | 33.00% |
Business, Product and Geograp_6
Business, Product and Geographical Area Information and Concentration of Risk, Narrative (Details) - productionfacilities | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information | |||||
Percentage of employees covered by collective bargaining agreements | 61.00% | 61.00% | |||
Percentage of employees covered by collective bargaining agreements expiring within one year | 0.00% | 0.00% | |||
Domestic | |||||
Segment Reporting Information | |||||
Number of production facilities | 12 | ||||
Foreign | |||||
Segment Reporting Information | |||||
Number of production facilities | 1 | ||||
Customer Concentration Risk | Largest Customer | Sales Revenue, Net | |||||
Segment Reporting Information | |||||
Concentration percentages (percent) | 26.00% | 27.00% | 26.00% | 28.00% | |
Customer Concentration Risk | Largest Customer | Accounts Receivable | |||||
Segment Reporting Information | |||||
Concentration percentages (percent) | 24.00% | 22.00% | |||
Customer Concentration Risk | Second Largest Customer | Sales Revenue, Net | |||||
Segment Reporting Information | |||||
Concentration percentages (percent) | 15.00% | 11.00% | 13.00% | 10.00% | |
Customer Concentration Risk | Second Largest Customer | Accounts Receivable | |||||
Segment Reporting Information | |||||
Concentration percentages (percent) | 15.00% | 14.00% |
Condensed Guarantor and Non-G_3
Condensed Guarantor and Non-Guarantor Financial Information, Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets: | ||||
Cash and cash equivalents | $ 94.3 | $ 51.1 | $ 73.9 | |
Short-term investments | 88.4 | 183.7 | ||
Receivables: | ||||
Trade receivables, net | 194.5 | 165 | ||
Intercompany receivables | 0 | 0 | ||
Other | 24.4 | 15.5 | ||
Contract assets | 51 | $ 55.6 | 0 | |
Inventories | 196.2 | 167.2 | 207.9 | |
Prepaid expenses and other current assets | 24.2 | 33.4 | ||
Total current assets | 673 | 671.5 | 656.6 | |
Investments in and advances to subsidiaries | 0 | 0 | ||
Property, plant and equipment, net | 595.4 | 571.4 | ||
Long-term intercompany loans receivable | 0 | 0 | ||
Deferred tax assets, net | 42.2 | 68.7 | 72 | |
Intangible assets, net | 33 | 25 | ||
Goodwill | 43.4 | 18.8 | ||
Other assets | 39 | 41.4 | ||
Total | 1,426 | 1,396.8 | 1,385.2 | |
Current liabilities: | ||||
Accounts payable | 120.4 | 90 | ||
Intercompany loans payable | 0 | 0 | ||
Accrued salaries, wages and related expenses | 35.1 | 42.6 | ||
Other accrued liabilities | 37 | 42 | 40.5 | |
Total current liabilities | 192.5 | 174.6 | 173.1 | |
Net liabilities of Salaried VEBA | 31.8 | 31.9 | ||
Deferred tax liabilities | 4.3 | 4.3 | ||
Long-term intercompany loans payable | 0 | 0 | ||
Long-term liabilities | 64.7 | 60 | ||
Long-term debt | 370.2 | 369.6 | ||
Total liabilities | 663.5 | 640.4 | 638.9 | |
Total stockholders' equity | 762.5 | 756.4 | 746.3 | |
Total | 1,426 | $ 1,396.8 | 1,385.2 | |
Consolidating Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Short-term investments | 0 | 0 | ||
Receivables: | ||||
Trade receivables, net | 0 | 0 | ||
Intercompany receivables | (45.3) | (23.6) | ||
Other | 0 | 0 | ||
Contract assets | 0 | |||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (45.3) | (23.6) | ||
Investments in and advances to subsidiaries | (1,195.4) | (1,145.9) | ||
Property, plant and equipment, net | 0 | 0 | ||
Long-term intercompany loans receivable | (12.4) | (12.4) | ||
Deferred tax assets, net | 4.7 | 4.7 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total | (1,248.4) | (1,177.2) | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Intercompany loans payable | (45.3) | (23.6) | ||
Accrued salaries, wages and related expenses | 0 | 0 | ||
Other accrued liabilities | (4.8) | (9.5) | ||
Total current liabilities | (50.1) | (33.1) | ||
Net liabilities of Salaried VEBA | 0 | 0 | ||
Deferred tax liabilities | 0 | 0 | ||
Long-term intercompany loans payable | (12.4) | (12.4) | ||
Long-term liabilities | 0 | 0 | ||
Long-term debt | 0 | 0 | ||
Total liabilities | (62.5) | (45.5) | ||
Total stockholders' equity | (1,185.9) | (1,131.7) | ||
Total | (1,248.4) | (1,177.2) | ||
Parent | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Short-term investments | 0 | 0 | ||
Receivables: | ||||
Trade receivables, net | 0 | 0 | ||
Intercompany receivables | 43 | 22.8 | ||
Other | 0 | 0 | ||
Contract assets | 0 | |||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 0.1 | 0.1 | ||
Total current assets | 43.1 | 22.9 | ||
Investments in and advances to subsidiaries | 1,101.5 | 1,097.7 | ||
Property, plant and equipment, net | 0 | 0 | ||
Long-term intercompany loans receivable | 0 | 0 | ||
Deferred tax assets, net | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total | 1,144.6 | 1,120.6 | ||
Current liabilities: | ||||
Accounts payable | 3.6 | 1.9 | ||
Intercompany loans payable | 0 | 0 | ||
Accrued salaries, wages and related expenses | 0 | 0 | ||
Other accrued liabilities | 8.3 | 2.8 | ||
Total current liabilities | 11.9 | 4.7 | ||
Net liabilities of Salaried VEBA | 0 | 0 | ||
Deferred tax liabilities | 0 | 0 | ||
Long-term intercompany loans payable | 0 | 0 | ||
Long-term liabilities | 0 | 0 | ||
Long-term debt | 370.2 | 369.6 | ||
Total liabilities | 382.1 | 374.3 | ||
Total stockholders' equity | 762.5 | 746.3 | ||
Total | 1,144.6 | 1,120.6 | ||
Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 90.4 | 48.4 | ||
Short-term investments | 88.4 | 183.7 | ||
Receivables: | ||||
Trade receivables, net | 188.7 | 160.1 | ||
Intercompany receivables | 0.5 | 0.1 | ||
Other | 20.1 | 14.7 | ||
Contract assets | 48.2 | |||
Inventories | 183.9 | 198.7 | ||
Prepaid expenses and other current assets | 23.7 | 32.9 | ||
Total current assets | 643.9 | 638.6 | ||
Investments in and advances to subsidiaries | 93.9 | 48.2 | ||
Property, plant and equipment, net | 561.4 | 541.2 | ||
Long-term intercompany loans receivable | 0 | 0 | ||
Deferred tax assets, net | 37.5 | 67.3 | ||
Intangible assets, net | 23.9 | 25 | ||
Goodwill | 18.8 | 18.8 | ||
Other assets | 39 | 41.4 | ||
Total | 1,418.4 | 1,380.5 | ||
Current liabilities: | ||||
Accounts payable | 106.3 | 81.4 | ||
Intercompany loans payable | 44.9 | 23.5 | ||
Accrued salaries, wages and related expenses | 33.6 | 41 | ||
Other accrued liabilities | 33.1 | 46.2 | ||
Total current liabilities | 217.9 | 192.1 | ||
Net liabilities of Salaried VEBA | 31.8 | 31.9 | ||
Deferred tax liabilities | 0 | 0 | ||
Long-term intercompany loans payable | 12.4 | 12.4 | ||
Long-term liabilities | 61.7 | 58 | ||
Long-term debt | 0 | 0 | ||
Total liabilities | 323.8 | 294.4 | ||
Total stockholders' equity | 1,094.6 | 1,086.1 | ||
Total | 1,418.4 | 1,380.5 | ||
Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 3.9 | 2.7 | ||
Short-term investments | 0 | 0 | ||
Receivables: | ||||
Trade receivables, net | 5.8 | 4.9 | ||
Intercompany receivables | 1.8 | 0.7 | ||
Other | 4.3 | 0.8 | ||
Contract assets | 2.8 | |||
Inventories | 12.3 | 9.2 | ||
Prepaid expenses and other current assets | 0.4 | 0.4 | ||
Total current assets | 31.3 | 18.7 | ||
Investments in and advances to subsidiaries | 0 | 0 | ||
Property, plant and equipment, net | 34 | 30.2 | ||
Long-term intercompany loans receivable | 12.4 | 12.4 | ||
Deferred tax assets, net | 0 | 0 | ||
Intangible assets, net | 9.1 | 0 | ||
Goodwill | 24.6 | 0 | ||
Other assets | 0 | 0 | ||
Total | 111.4 | 61.3 | ||
Current liabilities: | ||||
Accounts payable | 10.5 | 6.7 | ||
Intercompany loans payable | 0.4 | 0.1 | ||
Accrued salaries, wages and related expenses | 1.5 | 1.6 | ||
Other accrued liabilities | 0.4 | 1 | ||
Total current liabilities | 12.8 | 9.4 | ||
Net liabilities of Salaried VEBA | 0 | 0 | ||
Deferred tax liabilities | 4.3 | 4.3 | ||
Long-term intercompany loans payable | 0 | 0 | ||
Long-term liabilities | 3 | 2 | ||
Long-term debt | 0 | 0 | ||
Total liabilities | 20.1 | 15.7 | ||
Total stockholders' equity | 91.3 | 45.6 | ||
Total | $ 111.4 | $ 61.3 |
Condensed Guarantor and Non-G_4
Condensed Guarantor and Non-Guarantor Financial Information, Comprehensive Income Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Condensed Financial Statements, Captions | ||||||
Revenues | $ 393.1 | $ 332.8 | $ 1,196.5 | $ 1,044.4 | ||
Cost of products sold, excluding depreciation and amortization and other items1 | [1] | 323.3 | 256.4 | 983.4 | 808.7 | |
Purchase of equity securities | (0.9) | 0 | ||||
Costs and expenses: | ||||||
Depreciation and amortization | 11 | 10.2 | 32.4 | 29.3 | ||
Selling, general, administrative, research and development | [2] | 23.9 | 24.7 | 73.9 | 74.7 | |
Goodwill impairment | 0 | 0 | $ 18.4 | 0 | 18.4 | |
Other operating charges, net | 0 | 0 | 0.1 | 0 | ||
Total costs and expenses | 358.2 | 291.3 | 1,089.8 | 931.1 | ||
Operating income | 34.9 | 41.5 | 106.7 | 113.3 | ||
Other income (expense): | ||||||
Interest expense | (5.7) | (5.3) | (17) | (16.4) | ||
Other (expense) income, net | 0.7 | (0.2) | 0.3 | 0.5 | ||
Income before income taxes | 29.9 | 36 | 90 | 97.4 | ||
Income tax provision | (8.2) | (16.1) | (21.9) | (36.8) | ||
Earnings in equity of subsidiaries | 0 | 0 | 0 | 0 | ||
Net income | 21.7 | 19.9 | 68.1 | 60.6 | ||
Comprehensive income | 20.9 | 21.5 | 65.4 | 64.6 | ||
Consolidating Adjustments | ||||||
Condensed Financial Statements, Captions | ||||||
Revenues | (26.5) | (19.4) | (75.3) | (60.7) | ||
Cost of products sold, excluding depreciation and amortization and other items1 | (26.1) | (18.4) | (73) | (58.1) | ||
Purchase of equity securities | 0 | |||||
Costs and expenses: | ||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Selling, general, administrative, research and development | (0.4) | (0.6) | (2.3) | (1.6) | ||
Goodwill impairment | 0 | |||||
Other operating charges, net | 0 | |||||
Total costs and expenses | (26.5) | (19) | (75.3) | (59.7) | ||
Operating income | 0 | (0.4) | 0 | (1) | ||
Other income (expense): | ||||||
Interest expense | 0.1 | 0.1 | 0.4 | 0.1 | ||
Other (expense) income, net | (0.1) | (0.1) | (0.4) | (0.1) | ||
Income before income taxes | 0 | (0.4) | 0 | (1) | ||
Income tax provision | 1.6 | 2.3 | 4.8 | 7.1 | ||
Earnings in equity of subsidiaries | (28.7) | (26.5) | (90.1) | (81.1) | ||
Net income | (27.1) | (24.6) | (85.3) | (75) | ||
Comprehensive income | (26.3) | (26.2) | (82.6) | (79) | ||
Parent | ||||||
Condensed Financial Statements, Captions | ||||||
Revenues | 0 | 0 | 0 | 0 | ||
Cost of products sold, excluding depreciation and amortization and other items1 | 0 | 0 | 0 | 0 | ||
Purchase of equity securities | 0 | |||||
Costs and expenses: | ||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Selling, general, administrative, research and development | 1 | 1 | 3.7 | 3.4 | ||
Goodwill impairment | 0 | |||||
Other operating charges, net | 0 | |||||
Total costs and expenses | 1 | 1 | 3.7 | 3.4 | ||
Operating income | (1) | (1) | (3.7) | (3.4) | ||
Other income (expense): | ||||||
Interest expense | (5.4) | (5) | (15.9) | (15.3) | ||
Other (expense) income, net | 0 | 0 | 0 | 0 | ||
Income before income taxes | (6.4) | (6) | (19.6) | (18.7) | ||
Income tax provision | 0 | 0 | 0 | 0 | ||
Earnings in equity of subsidiaries | 28.1 | 25.9 | 87.7 | 79.3 | ||
Net income | 21.7 | 19.9 | 68.1 | 60.6 | ||
Comprehensive income | 20.9 | 21.5 | 65.4 | 64.6 | ||
Guarantor Subsidiaries | ||||||
Condensed Financial Statements, Captions | ||||||
Revenues | 385.9 | 325.9 | 1,168.5 | 1,019.7 | ||
Cost of products sold, excluding depreciation and amortization and other items1 | 317.9 | 250.8 | 962.9 | 791.8 | ||
Purchase of equity securities | (0.9) | |||||
Costs and expenses: | ||||||
Depreciation and amortization | 10.5 | 9.7 | 30.8 | 27.7 | ||
Selling, general, administrative, research and development | 22.8 | 23.5 | 67.8 | 67.2 | ||
Goodwill impairment | 18.4 | |||||
Other operating charges, net | 0.1 | |||||
Total costs and expenses | 351.2 | 284 | 1,061.6 | 905.1 | ||
Operating income | 34.7 | 41.9 | 106.9 | 114.6 | ||
Other income (expense): | ||||||
Interest expense | (0.4) | (0.4) | (1.5) | (1.2) | ||
Other (expense) income, net | 0.6 | (0.4) | 0.4 | 0.1 | ||
Income before income taxes | 34.9 | 41.1 | 105.8 | 113.5 | ||
Income tax provision | (9) | (18) | (25.3) | (43) | ||
Earnings in equity of subsidiaries | 0.6 | 0.6 | 2.4 | 1.8 | ||
Net income | 26.5 | 23.7 | 82.9 | 72.3 | ||
Comprehensive income | 25.7 | 25.3 | 80.2 | 76.3 | ||
Non-Guarantor Subsidiaries | ||||||
Condensed Financial Statements, Captions | ||||||
Revenues | 33.7 | 26.3 | 103.3 | 85.4 | ||
Cost of products sold, excluding depreciation and amortization and other items1 | 31.5 | 24 | 93.5 | 75 | ||
Purchase of equity securities | 0 | |||||
Costs and expenses: | ||||||
Depreciation and amortization | 0.5 | 0.5 | 1.6 | 1.6 | ||
Selling, general, administrative, research and development | 0.5 | 0.8 | 4.7 | 5.7 | ||
Goodwill impairment | 0 | |||||
Other operating charges, net | 0 | |||||
Total costs and expenses | 32.5 | 25.3 | 99.8 | 82.3 | ||
Operating income | 1.2 | 1 | 3.5 | 3.1 | ||
Other income (expense): | ||||||
Interest expense | 0 | 0 | 0 | 0 | ||
Other (expense) income, net | 0.2 | 0.3 | 0.3 | 0.5 | ||
Income before income taxes | 1.4 | 1.3 | 3.8 | 3.6 | ||
Income tax provision | (0.8) | (0.4) | (1.4) | (0.9) | ||
Earnings in equity of subsidiaries | 0 | 0 | 0 | 0 | ||
Net income | 0.6 | 0.9 | 2.4 | 2.7 | ||
Comprehensive income | $ 0.6 | $ 0.9 | $ 2.4 | $ 2.7 | ||
[1] | See Note 5 for discussion of our adoption of ASU 2017-12 (as defined in Note 1 | |||||
[2] | See Note 1 for discussion of our adoption of ASU 2017-07 (as defined in Note 1 |
Condensed Guarantor and Non-G_5
Condensed Guarantor and Non-Guarantor Financial Information, Cash Flow Statements (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities: | |||
Net cash provided by operating activities | [1] | $ 112.5 | $ 131.5 |
Cash flows from investing activities | |||
Capital expenditures | (53.1) | (56.1) | |
Purchase of available for sale securities | (111.9) | (196) | |
Purchase of equity securities | (0.9) | 0 | |
Proceeds from disposition of available for sale securities | 208.7 | 237.2 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | (43.3) | 0 | |
Proceeds from disposal of property, plant and equipment | 0.6 | 0.6 | |
Intercompany loans receivable | 0 | 0 | |
Net cash provided by (used in) investing activities | [2] | 0.1 | (14.3) |
Cash flows from financing activities | |||
Repayment of capital lease | (0.5) | (0.2) | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | (6.9) | (4.5) | |
Repurchase of common stock | (31.9) | (66.7) | |
Cash dividends paid to Parent | 0 | ||
Cash dividends and dividend equivalents paid | (28.5) | (26.4) | |
Intercompany loans payable | 0 | 0 | |
Net cash used in financing activities | [2] | (67.8) | (97.8) |
Net increase in cash, cash equivalents, and restricted cash during the period | 44.8 | 19.4 | |
Cash, cash equivalents and restricted cash at beginning of period | 64.3 | 67.7 | |
Cash, cash equivalents and restricted cash at end of period | 109.1 | 87.1 | |
Consolidating Adjustments | |||
Cash flows from operating activities: | |||
Net cash provided by operating activities | (100) | 0 | |
Cash flows from investing activities | |||
Capital expenditures | 0 | 0 | |
Purchase of available for sale securities | 0 | 0 | |
Purchase of equity securities | 0 | ||
Proceeds from disposition of available for sale securities | 0 | 0 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | 0 | ||
Proceeds from disposal of property, plant and equipment | 0 | 0 | |
Intercompany loans receivable | 21.7 | (104.8) | |
Net cash provided by (used in) investing activities | 21.7 | (104.8) | |
Cash flows from financing activities | |||
Repayment of capital lease | 0 | 0 | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | 0 | 0 | |
Repurchase of common stock | 0 | 0 | |
Cash dividends paid to Parent | 100 | ||
Cash dividends and dividend equivalents paid | 0 | 0 | |
Intercompany loans payable | (21.7) | 104.8 | |
Net cash used in financing activities | 78.3 | 104.8 | |
Net increase in cash, cash equivalents, and restricted cash during the period | 0 | 0 | |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | |
Cash, cash equivalents and restricted cash at end of period | 0 | 0 | |
Parent | |||
Cash flows from operating activities: | |||
Net cash provided by operating activities | 87.5 | (12.8) | |
Cash flows from investing activities | |||
Capital expenditures | 0 | 0 | |
Purchase of available for sale securities | 0 | 0 | |
Purchase of equity securities | 0 | ||
Proceeds from disposition of available for sale securities | 0 | 0 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | 0 | ||
Proceeds from disposal of property, plant and equipment | 0 | 0 | |
Intercompany loans receivable | (20.2) | 110.4 | |
Net cash provided by (used in) investing activities | (20.2) | 110.4 | |
Cash flows from financing activities | |||
Repayment of capital lease | 0 | 0 | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | (6.9) | (4.5) | |
Repurchase of common stock | (31.9) | (66.7) | |
Cash dividends paid to Parent | 0 | ||
Cash dividends and dividend equivalents paid | (28.5) | (26.4) | |
Intercompany loans payable | 0 | 0 | |
Net cash used in financing activities | (67.3) | (97.6) | |
Net increase in cash, cash equivalents, and restricted cash during the period | 0 | 0 | |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | |
Cash, cash equivalents and restricted cash at end of period | 0 | 0 | |
Guarantor Subsidiaries | |||
Cash flows from operating activities: | |||
Net cash provided by operating activities | 78.5 | 137.4 | |
Cash flows from investing activities | |||
Capital expenditures | (51.9) | (55.7) | |
Purchase of available for sale securities | (111.9) | (196) | |
Purchase of equity securities | (0.9) | ||
Proceeds from disposition of available for sale securities | 208.7 | 237.2 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | 0 | ||
Proceeds from disposal of property, plant and equipment | 0.6 | 0.6 | |
Intercompany loans receivable | (0.4) | 0 | |
Net cash provided by (used in) investing activities | 44.2 | (13.9) | |
Cash flows from financing activities | |||
Repayment of capital lease | (0.5) | (0.2) | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | 0 | 0 | |
Repurchase of common stock | 0 | 0 | |
Cash dividends paid to Parent | (100) | ||
Cash dividends and dividend equivalents paid | 0 | 0 | |
Intercompany loans payable | 21.4 | (104.8) | |
Net cash used in financing activities | (79.1) | (105) | |
Net increase in cash, cash equivalents, and restricted cash during the period | 43.6 | 18.5 | |
Cash, cash equivalents and restricted cash at beginning of period | 61.3 | 65.1 | |
Cash, cash equivalents and restricted cash at end of period | 104.9 | 83.6 | |
Non-Guarantor Subsidiaries | |||
Cash flows from operating activities: | |||
Net cash provided by operating activities | 46.5 | 6.9 | |
Cash flows from investing activities | |||
Capital expenditures | (1.2) | (0.4) | |
Purchase of available for sale securities | 0 | 0 | |
Purchase of equity securities | 0 | ||
Proceeds from disposition of available for sale securities | 0 | 0 | |
Cash payment for acquisition of manufacturing facility and related assets, net of cash received | (43.3) | ||
Proceeds from disposal of property, plant and equipment | 0 | 0 | |
Intercompany loans receivable | (1.1) | (5.6) | |
Net cash provided by (used in) investing activities | (45.6) | (6) | |
Cash flows from financing activities | |||
Repayment of capital lease | 0 | 0 | |
Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares | 0 | 0 | |
Repurchase of common stock | 0 | 0 | |
Cash dividends paid to Parent | 0 | ||
Cash dividends and dividend equivalents paid | 0 | 0 | |
Intercompany loans payable | 0.3 | 0 | |
Net cash used in financing activities | 0.3 | 0 | |
Net increase in cash, cash equivalents, and restricted cash during the period | 1.2 | 0.9 | |
Cash, cash equivalents and restricted cash at beginning of period | 3 | 2.6 | |
Cash, cash equivalents and restricted cash at end of period | $ 4.2 | $ 3.5 | |
[1] | See Note 9 for adjustments made to arrive at our Consolidated Balance Sheet as of January 1, 2018 upon adopting ASC 606 (as defined in Note 1 | ||
[2] | See Note 13 |
Condensed Guarantor and Non-G_6
Condensed Guarantor and Non-Guarantor Financial Information, Narrative (Details) - USD ($) | Sep. 30, 2018 | May 15, 2016 |
Condensed Financial Statements, Captions | ||
Ownership interest by parent | 100.00% | |
Senior Notes Due 2024 | Senior Notes | ||
Condensed Financial Statements, Captions | ||
Debt principal amount | $ 375,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 15, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Subsequent Event [Line Items] | |||||
Cash dividends declared (in dollars per share) | $ 0.55 | $ 0.50 | $ 1.65 | $ 1.50 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared (in dollars per share) | $ 0.55 | ||||
Cash dividends declared | $ 9.2 |