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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Carpenter Technology Corp | NYSE:CRS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.85 | 1.02% | 84.58 | 86.79 | 82.46 | 82.98 | 1,084,268 | 01:00:00 |
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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23-0458500
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1735 Market Street, 15th Floor
Philadelphia, Pennsylvania
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19103
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer:
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x
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Accelerated filer:
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Non-accelerated filer:
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(Do not check if a smaller reporting company)
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Smaller reporting company:
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o
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Emerging growth company
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March 31,
2017 |
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June 30,
2016 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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16.6
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$
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82.0
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Accounts receivable, net
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267.2
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253.6
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Inventories
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718.3
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628.7
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Other current assets
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49.3
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46.4
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Total current assets
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1,051.4
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1,010.7
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Property, plant and equipment, net
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1,312.1
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1,351.4
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Goodwill
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270.9
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244.8
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Other intangibles, net
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58.2
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63.2
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Deferred income taxes
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7.5
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8.2
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Other assets
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122.3
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116.0
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Total assets
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$
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2,822.4
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$
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2,794.3
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LIABILITIES
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Current liabilities:
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Short-term debt
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$
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14.2
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$
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—
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Accounts payable
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191.3
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159.6
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Accrued liabilities
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116.7
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139.2
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Total current liabilities
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322.2
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298.8
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Long-term debt
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604.1
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611.3
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Accrued pension liabilities
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402.9
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509.3
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Accrued postretirement benefits
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118.6
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116.6
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Deferred income taxes
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169.4
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102.4
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Other liabilities
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43.6
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51.0
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Total liabilities
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1,660.8
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1,689.4
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Contingencies and commitments (see Note 10)
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STOCKHOLDERS’ EQUITY
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Common stock — authorized 100,000,000 shares; issued 55,349,304 shares at March 31, 2017 and 55,254,569 shares at June 30, 2016; outstanding 46,740,525 shares at March 31, 2017 and 46,600,125 shares at June 30, 2016
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276.7
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276.3
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Capital in excess of par value
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283.6
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273.5
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Reinvested earnings
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1,304.8
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1,308.9
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Common stock in treasury (8,608,779 shares and 8,654,444 shares at March 31, 2017 and June 30, 2016, respectively), at cost
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(342.1
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)
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(343.9
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)
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Accumulated other comprehensive loss
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(361.4
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)
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(409.9
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)
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Total stockholders' equity
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1,161.6
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1,104.9
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Total liabilities and stockholders' equity
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$
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2,822.4
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$
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2,794.3
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Three Months Ended
March 31, |
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Nine Months Ended
March 31, |
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2017
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2016
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2017
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2016
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||||||||
Net income (loss)
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$
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20.7
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$
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(23.9
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)
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$
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21.5
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$
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(3.6
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)
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Other comprehensive income (loss), net of tax
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Pension and postretirement benefits, net of tax of $(3.5), $(2.2), $(17.4) and $(6.8), respectively
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5.7
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3.8
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28.8
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11.2
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Net gain (loss) on derivative instruments, net of tax of $(4.3), $(3.4), $(13.2) and $3.3, respectively
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7.2
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5.7
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21.8
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(5.5
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)
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Foreign currency translation
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2.6
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7.7
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(2.1
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2.1
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Other comprehensive income
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15.5
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17.2
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48.5
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7.8
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Comprehensive income (loss)
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$
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36.2
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$
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(6.7
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)
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$
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70.0
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$
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4.2
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Nine Months Ended
March 31, |
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2017
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2016
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||||
OPERATING ACTIVITIES
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Net income (loss)
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$
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21.5
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$
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(3.6
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)
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Adjustments to reconcile net income (loss) to net cash provided from operating activities:
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Depreciation and amortization
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88.8
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90.0
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Goodwill impairment charge
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—
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12.5
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Non-cash excess inventory write-down
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—
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22.5
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Non-cash restructuring and asset impairment charges
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—
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7.6
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Deferred income taxes
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37.4
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(6.6
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)
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Net pension expense
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39.7
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40.3
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Payments from qualified pension plan associated with restructuring
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—
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9.4
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Share-based compensation expense
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10.0
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6.8
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Net loss on disposals of property and equipment
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2.2
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0.2
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Changes in working capital and other, net of acquisition:
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Accounts receivable
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(15.0
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)
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32.6
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Inventories
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(89.0
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)
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(18.0
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Other current assets
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3.6
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(13.0
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Accounts payable
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40.6
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(6.6
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Accrued liabilities
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4.1
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(22.3
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)
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Pension plan contributions
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(100.0
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)
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—
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Other postretirement plan contributions
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(2.4
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)
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(9.5
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)
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Cash paid as collateral under derivative agreements
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—
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(8.0
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)
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Other, net
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(6.0
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)
|
|
2.9
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Net cash provided from operating activities
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35.5
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|
137.2
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INVESTING ACTIVITIES
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||
Purchases of property, equipment and software
|
(63.1
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)
|
|
(66.1
|
)
|
||
Proceeds from disposals of property and equipment
|
—
|
|
|
0.3
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|
||
Acquisition of business
|
(35.3
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)
|
|
—
|
|
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Proceeds from the sale of equity method investment
|
—
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|
|
6.3
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|
||
Proceeds from note receivable from the sale of equity method investment
|
6.3
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|
|
—
|
|
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Other
|
—
|
|
|
4.0
|
|
||
Net cash used for investing activities
|
(92.1
|
)
|
|
(55.5
|
)
|
||
FINANCING ACTIVITIES
|
|
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|
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Change in short-term debt
|
14.2
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|
|
25.0
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|
||
Payments of debt issue costs
|
(1.4
|
)
|
|
—
|
|
||
Dividends paid
|
(25.6
|
)
|
|
(26.3
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(123.9
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)
|
||
Payments on seller financed debt related to purchase of software
|
—
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|
|
(3.7
|
)
|
||
Tax benefits on share-based compensation
|
0.4
|
|
|
—
|
|
||
Proceeds from stock options exercised
|
2.2
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|
|
0.3
|
|
||
Net cash used for financing activities
|
(10.2
|
)
|
|
(128.6
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
1.4
|
|
|
0.3
|
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(65.4
|
)
|
|
(46.6
|
)
|
||
Cash and cash equivalents at beginning of period
|
82.0
|
|
|
70.0
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|
||
Cash and cash equivalents at end of period
|
$
|
16.6
|
|
|
$
|
23.4
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
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|
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Non-cash investing activities:
|
|
|
|
|
|
||
Acquisition of property, equipment and software
|
$
|
5.8
|
|
|
$
|
7.3
|
|
Sale of equity method investment
|
$
|
—
|
|
|
$
|
12.6
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|
|
Common Stock
|
|
Reinvested Earnings
|
|
Common Stock in Treasury
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Equity
|
||||||||||||||
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Par Value Of $5
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Capital in Excess of Par Value
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||||||||||||||||
Balances at June 30, 2016
|
$
|
276.3
|
|
|
$
|
273.5
|
|
|
$
|
1,308.9
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|
|
$
|
(343.9
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)
|
|
$
|
(409.9
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)
|
|
$
|
1,104.9
|
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Net income
|
|
|
|
|
|
|
21.5
|
|
|
|
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|
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|
|
21.5
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|
||||||
Pension and postretirement benefits gain, net of tax
|
|
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|
|
|
|
|
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|
|
28.8
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|
|
28.8
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|
||||||
Net gain on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
21.8
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|
|
21.8
|
|
||||||
Foreign currency translation
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|
(2.1
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)
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|
(2.1
|
)
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||||||
Cash Dividends:
|
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0
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|
||||||
Common @ $0.54 per share
|
|
|
|
|
|
|
(25.6
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)
|
|
|
|
|
|
|
|
(25.6
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)
|
||||||
Share-based compensation plans
|
|
|
|
7.9
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|
|
|
|
|
1.8
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|
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|
|
9.7
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|
||||||
Stock options exercised
|
0.4
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|
|
1.8
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|
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|
|
|
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2.2
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||||||
Tax windfall on share-based compensation
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|
0.4
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|
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|
0.4
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|
||||||
Balances at March 31, 2017
|
$
|
276.7
|
|
|
$
|
283.6
|
|
|
$
|
1,304.8
|
|
|
$
|
(342.1
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)
|
|
$
|
(361.4
|
)
|
|
$
|
1,161.6
|
|
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Common Stock
|
|
Reinvested Earnings
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|
Common Stock in Treasury
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Equity
|
||||||||||||||
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Par Value Of $5
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Capital in Excess of Par Value
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||||||||||||||||
Balances at June 30, 2015
|
$
|
276.2
|
|
|
$
|
266.6
|
|
|
$
|
1,332.4
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|
|
$
|
(221.1
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)
|
|
$
|
(328.2
|
)
|
|
$
|
1,325.9
|
|
Net loss
|
|
|
|
|
|
|
(3.6
|
)
|
|
|
|
|
|
|
|
(3.6
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)
|
||||||
Pension and postretirement benefits gain, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
11.2
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|
|
11.2
|
|
||||||
Net loss on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.5
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)
|
|
(5.5
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)
|
||||||
Foreign currency translation
|
|
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|
|
|
|
|
|
|
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|
|
2.1
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|
|
2.1
|
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||||||
Cash Dividends:
|
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0
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||||||
Common @ $0.54 per share
|
|
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|
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(26.3
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)
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|
|
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|
(26.3
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)
|
||||||
Purchase of treasury stock
|
|
|
|
|
|
|
(123.9
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)
|
|
|
|
(123.9
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)
|
||||||||||
Share-based compensation plans
|
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|
|
6.2
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|
|
|
|
|
0.8
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|
|
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|
|
7.0
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||||||
Stock options exercised
|
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|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
||||||
Tax shortfall on share-based compensation
|
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|
|
(0.2
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)
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
||||||
Balances at March 31, 2016
|
$
|
276.2
|
|
|
$
|
272.9
|
|
|
$
|
1,302.5
|
|
|
$
|
(344.2
|
)
|
|
$
|
(320.4
|
)
|
|
$
|
1,187.0
|
|
1.
|
Basis of Presentation
|
2.
|
Acquisition
|
3.
|
Restructuring and Asset Impairment Charges
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($ in millions)
|
|
June 30, 2015
|
|
Impairment Losses
|
|
Other
|
|
June 30, 2016
|
|
Acquisition
|
|
March 31, 2017
|
||||||||||||
Goodwill
|
|
$
|
292.1
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
292.0
|
|
|
$
|
26.1
|
|
|
$
|
318.1
|
|
Accumulated impairment losses
|
|
(34.7
|
)
|
|
(12.5
|
)
|
|
—
|
|
|
(47.2
|
)
|
|
—
|
|
|
(47.2
|
)
|
||||||
Total goodwill
|
|
$
|
257.4
|
|
|
$
|
(12.5
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
244.8
|
|
|
$
|
26.1
|
|
|
$
|
270.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Specialty Alloys Operations
|
|
$
|
195.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195.5
|
|
|
$
|
—
|
|
|
$
|
195.5
|
|
Performance Engineered Products
|
|
61.9
|
|
|
(12.5
|
)
|
|
(0.1
|
)
|
|
49.3
|
|
|
26.1
|
|
|
75.4
|
|
||||||
Total goodwill
|
|
$
|
257.4
|
|
|
$
|
(12.5
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
244.8
|
|
|
$
|
26.1
|
|
|
$
|
270.9
|
|
5.
|
Earnings per Common Share
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
(in millions, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss)
|
|
$
|
20.7
|
|
|
$
|
(23.9
|
)
|
|
$
|
21.5
|
|
|
$
|
(3.6
|
)
|
Less: earnings and dividends allocated to participating securities
|
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Earnings (loss) available for common stockholders used in calculation of basic earnings per common share
|
|
$
|
20.6
|
|
|
$
|
(23.9
|
)
|
|
$
|
21.3
|
|
|
$
|
(3.6
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, basic
|
|
47.0
|
|
|
47.1
|
|
|
47.0
|
|
|
48.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share
|
|
$
|
0.44
|
|
|
$
|
(0.51
|
)
|
|
$
|
0.45
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
20.7
|
|
|
$
|
(23.9
|
)
|
|
$
|
21.5
|
|
|
$
|
(3.6
|
)
|
Less: earnings and dividends allocated to participating securities
|
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Earnings (loss) available for common stockholders used in calculation of diluted earnings per common share
|
|
$
|
20.6
|
|
|
$
|
(23.9
|
)
|
|
$
|
21.3
|
|
|
$
|
(3.6
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding, basic
|
|
47.0
|
|
|
47.1
|
|
|
47.0
|
|
|
48.5
|
|
||||
Effect of shares issuable under share-based compensation plans
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Weighted average number of common shares outstanding, diluted
|
|
47.1
|
|
|
47.1
|
|
|
47.1
|
|
|
48.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share
|
|
$
|
0.44
|
|
|
$
|
(0.51
|
)
|
|
$
|
0.45
|
|
|
$
|
(0.08
|
)
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Stock options
|
|
2.0
|
|
|
1.6
|
|
|
1.9
|
|
|
1.6
|
|
6.
|
Inventories
|
($ in millions)
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Raw materials and supplies
|
|
$
|
157.5
|
|
|
$
|
137.6
|
|
Work in process
|
|
374.0
|
|
|
298.9
|
|
||
Finished and purchased products
|
|
186.8
|
|
|
192.2
|
|
||
Total inventory
|
|
$
|
718.3
|
|
|
$
|
628.7
|
|
7.
|
Accrued Liabilities
|
($ in millions)
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Accrued compensation and benefits
|
|
$
|
48.7
|
|
|
$
|
41.8
|
|
Accrued postretirement benefits
|
|
13.8
|
|
|
13.8
|
|
||
Derivative financial instruments
|
|
11.7
|
|
|
31.6
|
|
||
Accrued interest expense
|
|
5.6
|
|
|
11.2
|
|
||
Other
|
|
36.9
|
|
|
40.8
|
|
||
Total accrued liabilities
|
|
$
|
116.7
|
|
|
$
|
139.2
|
|
8.
|
Pension and Other Postretirement Benefits
|
Three months ended March 31,
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
2.2
|
|
|
$
|
7.8
|
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
Interest cost
|
|
12.4
|
|
|
14.4
|
|
|
2.3
|
|
|
2.5
|
|
||||
Expected return on plan assets
|
|
(16.6
|
)
|
|
(16.4
|
)
|
|
(1.7
|
)
|
|
(1.7
|
)
|
||||
Amortization of net loss
|
|
9.5
|
|
|
6.8
|
|
|
0.8
|
|
|
0.7
|
|
||||
Amortization of prior service cost (benefit)
|
|
0.5
|
|
|
0.1
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||
Net periodic benefit costs
|
|
$
|
8.0
|
|
|
$
|
12.7
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
Nine months ended March 31,
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
18.1
|
|
|
$
|
23.4
|
|
|
$
|
2.8
|
|
|
$
|
2.5
|
|
Interest cost
|
|
37.8
|
|
|
43.2
|
|
|
6.9
|
|
|
7.7
|
|
||||
Expected return on plan assets
|
|
(48.4
|
)
|
|
(49.3
|
)
|
|
(5.1
|
)
|
|
(5.2
|
)
|
||||
Amortization of net loss
|
|
28.3
|
|
|
20.5
|
|
|
2.4
|
|
|
2.0
|
|
||||
Amortization of prior service cost (benefit)
|
|
1.3
|
|
|
0.3
|
|
|
(4.9
|
)
|
|
(4.8
|
)
|
||||
Curtailment charge
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit costs
|
|
$
|
37.6
|
|
|
$
|
38.1
|
|
|
$
|
2.1
|
|
|
$
|
2.2
|
|
9.
|
Debt
|
($ in millions)
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
Medium-term notes, Series B at 6.97% to 7.10% due from April 2018 to May 2018 (face value of $55.0 million at March 31, 2017 and June 30, 2016)
|
|
$
|
55.0
|
|
|
$
|
55.0
|
|
Senior unsecured notes, 5.20% due July 2021 (face value of $250.0 million at March 31, 2017 and June 30, 2016)
|
|
250.4
|
|
|
257.8
|
|
||
Senior unsecured notes, 4.45% due March 2023 (face value of $300.0 million at March 31, 2017 and June 30, 2016)
|
|
298.7
|
|
|
298.5
|
|
||
Total
|
|
604.1
|
|
|
611.3
|
|
||
Less: amounts due within one year
|
|
—
|
|
|
—
|
|
||
Long-term debt, net of current portion
|
|
$
|
604.1
|
|
|
$
|
611.3
|
|
10.
|
Contingencies and Commitments
|
11.
|
Share Repurchase Program
|
12.
|
Fair Value Measurements
|
March 31, 2017
|
|
Fair Value
Measurements Using
Input Type
|
||
($ in millions)
|
|
Level 2
|
||
Assets:
|
|
|
|
|
Marketable securities:
|
|
|
|
|
Municipal auction rate securities
|
|
$
|
4.2
|
|
Derivative financial instruments
|
|
15.1
|
|
|
Total assets
|
|
$
|
19.3
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Derivative financial instruments
|
|
$
|
14.7
|
|
June 30, 2016
|
|
Fair Value
Measurements Using
Input Type
|
||
($ in millions)
|
|
Level 2
|
||
Assets:
|
|
|
|
|
Marketable securities:
|
|
|
|
|
Municipal auction rate securities
|
|
$
|
4.1
|
|
Derivative financial instruments
|
|
11.8
|
|
|
Total assets
|
|
$
|
15.9
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Derivative financial instruments
|
|
$
|
43.9
|
|
|
|
March 31, 2017
|
|
June 30, 2016
|
||||||||||||
($ in millions)
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Long-term debt
|
|
$
|
604.1
|
|
|
$
|
622.7
|
|
|
$
|
611.3
|
|
|
$
|
597.7
|
|
Company-owned life insurance
|
|
$
|
15.6
|
|
|
$
|
15.6
|
|
|
$
|
14.0
|
|
|
$
|
14.0
|
|
13
.
|
Derivatives and Hedging Activities
|
March 31, 2017
|
|
Interest
Rate Swaps
|
|
Foreign
Currency
Contracts
|
|
Commodity
Contracts
|
|
Total
Derivatives
|
||||||||
($ in millions)
|
|
|
|
|
||||||||||||
Asset Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets
|
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
6.5
|
|
|
$
|
7.2
|
|
Other assets
|
|
2.0
|
|
|
—
|
|
|
5.9
|
|
|
7.9
|
|
||||
Total asset derivatives
|
|
$
|
2.4
|
|
|
$
|
0.3
|
|
|
$
|
12.4
|
|
|
$
|
15.1
|
|
Liability Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.7
|
|
|
$
|
11.7
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
||||
Total liability derivatives
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.7
|
|
|
$
|
14.7
|
|
June 30, 2016
|
|
Interest
Rate Swaps
|
|
Foreign
Currency
Contracts
|
|
Commodity
Contracts
|
|
Total
Derivatives
|
||||||||
($ in millions)
|
|
|
|
|
||||||||||||
Asset Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets
|
|
$
|
1.2
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
2.1
|
|
Other assets
|
|
9.7
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
||||
Total asset derivatives
|
|
$
|
10.9
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
11.8
|
|
Liability Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
31.3
|
|
|
$
|
31.6
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|
12.3
|
|
||||
Total liability derivatives
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
43.6
|
|
|
$
|
43.9
|
|
|
|
Amount of (Loss) Gain
Recognized in AOCI on Derivatives (Effective Portion) |
||||||||||||||
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Derivatives in Cash Flow Hedging Relationship:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
$
|
(5.7
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(21.1
|
)
|
|
$
|
(41.3
|
)
|
Foreign exchange contracts
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
0.5
|
|
|
0.4
|
|
||||
Total
|
|
$
|
(5.9
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(20.6
|
)
|
|
$
|
(40.9
|
)
|
($ in millions)
|
|
Location of (Loss) Gain
Reclassified from AOCI into
Income
|
|
Amount of (Loss) Gain
Reclassified from AOCI
into Income
(Effective Portion)
|
|
Amount of Gain
Reclassified from AOCI into Income (Ineffective Portion) |
||||||||||||
|
|
Three Months Ended
March 31, |
|
Three Months Ended
March 31, |
||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
Derivatives in Cash Flow Hedging Relationship:
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(3.1
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
1.4
|
|
|
$
|
0.5
|
|
Foreign exchange contracts
|
|
Net sales
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Forward interest rate swaps
|
|
Interest expense
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
(2.8
|
)
|
|
$
|
(11.8
|
)
|
|
$
|
1.4
|
|
|
$
|
0.5
|
|
($ in millions)
|
|
Location of (Loss) Gain
Reclassified from AOCI into Income |
|
Amount of (Loss) Gain
Reclassified from AOCI into Income (Effective Portion) |
|
Amount of Gain
Reclassified from AOCI into Income (Ineffective Portion) |
||||||||||||
|
|
Nine Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
Derivatives in Cash Flow Hedging Relationship:
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(21.0
|
)
|
|
$
|
(32.6
|
)
|
|
$
|
2.0
|
|
|
$
|
1.5
|
|
Foreign exchange contracts
|
|
Net sales
|
|
0.7
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Forward interest rate swaps
|
|
Interest expense
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
(20.0
|
)
|
|
$
|
(32.1
|
)
|
|
$
|
2.0
|
|
|
$
|
1.5
|
|
14.
|
Other Income (Expense), Net
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign exchange loss
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(1.0
|
)
|
|
$
|
(2.3
|
)
|
Unrealized gains (losses) on company-owned life insurance contracts and investments held in rabbi trusts
|
|
0.6
|
|
|
(1.3
|
)
|
|
1.3
|
|
|
(1.8
|
)
|
||||
Equity in earnings (losses) of unconsolidated subsidiaries
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
0.6
|
|
||||
Other
|
|
1.3
|
|
|
—
|
|
|
1.7
|
|
|
0.1
|
|
||||
Total other income (expense), net
|
|
$
|
1.0
|
|
|
$
|
(1.5
|
)
|
|
$
|
2.0
|
|
|
$
|
(3.4
|
)
|
15.
|
Income Taxes
|
16.
|
Business Segments
|
Segment Data
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Alloys Operations
|
|
$
|
383.3
|
|
|
$
|
370.5
|
|
|
$
|
1,047.0
|
|
|
$
|
1,106.7
|
|
Performance Engineered Products
|
|
98.7
|
|
|
91.4
|
|
|
260.4
|
|
|
268.3
|
|
||||
Intersegment
|
|
(8.4
|
)
|
|
(5.6
|
)
|
|
(17.5
|
)
|
|
(19.3
|
)
|
||||
Consolidated net sales
|
|
$
|
473.6
|
|
|
$
|
456.3
|
|
|
$
|
1,289.9
|
|
|
$
|
1,355.7
|
|
Segment Data
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty Alloys Operations
|
|
$
|
51.9
|
|
|
$
|
45.6
|
|
|
$
|
112.6
|
|
|
$
|
128.3
|
|
Performance Engineered Products
|
|
4.7
|
|
|
(0.9
|
)
|
|
2.7
|
|
|
(4.2
|
)
|
||||
Corporate costs (including restructuring and impairment charges)
|
|
(15.8
|
)
|
|
(64.5
|
)
|
|
(45.6
|
)
|
|
(89.3
|
)
|
||||
Pension earnings, interest and deferrals
|
|
(5.6
|
)
|
|
(4.8
|
)
|
|
(18.2
|
)
|
|
(14.4
|
)
|
||||
Intersegment
|
|
0.6
|
|
|
0.3
|
|
|
1.1
|
|
|
2.0
|
|
||||
Consolidated operating income (loss)
|
|
$
|
35.8
|
|
|
$
|
(24.3
|
)
|
|
$
|
52.6
|
|
|
$
|
22.4
|
|
Segment Data
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Specialty Alloys Operations
|
|
$
|
23.7
|
|
|
$
|
23.4
|
|
|
$
|
70.8
|
|
|
$
|
70.9
|
|
Performance Engineered Products
|
|
5.2
|
|
|
5.5
|
|
|
15.5
|
|
|
17.0
|
|
||||
Corporate
|
|
1.3
|
|
|
0.9
|
|
|
3.0
|
|
|
2.8
|
|
||||
Intersegment
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
||||
Consolidated depreciation and amortization
|
|
$
|
30.0
|
|
|
$
|
29.6
|
|
|
$
|
88.8
|
|
|
$
|
90.0
|
|
Segment Data
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
||||||
Specialty Alloys Operations
|
|
$
|
8.6
|
|
|
$
|
11.2
|
|
|
$
|
31.6
|
|
|
$
|
47.9
|
|
Performance Engineered Products
|
|
2.9
|
|
|
3.6
|
|
|
9.9
|
|
|
14.9
|
|
||||
Corporate
|
|
6.6
|
|
|
1.9
|
|
|
21.8
|
|
|
3.5
|
|
||||
Intersegment
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Consolidated capital expenditures
|
|
$
|
18.0
|
|
|
$
|
16.6
|
|
|
$
|
63.1
|
|
|
$
|
66.1
|
|
Segment Data
|
|
March 31,
2017 |
|
June 30,
2016 |
||||
($ in millions)
|
|
|
||||||
Total Assets:
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
2,261.1
|
|
|
$
|
2,256.5
|
|
Performance Engineered Products
|
|
453.0
|
|
|
415.8
|
|
||
Corporate
|
|
123.2
|
|
|
151.3
|
|
||
Intersegment
|
|
(14.9
|
)
|
|
(29.3
|
)
|
||
Consolidated total assets
|
|
$
|
2,822.4
|
|
|
$
|
2,794.3
|
|
17.
|
Recent Accounting Pronouncements
|
18.
|
Reclassifications from Accumulated Other Comprehensive (Loss) Income
|
Three Months Ended March 31, 2017 ($ in millions) (a) |
|
Cash flow
hedging items
|
|
Pension and
other
postretirement
benefit plan
items
|
|
Unrealized
losses on
available-for-
sale securities
|
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
|
$
|
(7.2
|
)
|
|
$
|
(321.2
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(48.2
|
)
|
|
$
|
(376.9
|
)
|
Other comprehensive income before reclassifications
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
8.1
|
|
|||||
Amounts reclassified from AOCI (b)
|
|
1.7
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|||||
Net other comprehensive income
|
|
7.2
|
|
|
5.7
|
|
|
—
|
|
|
2.6
|
|
|
15.5
|
|
|||||
Balance at March 31, 2017
|
|
$
|
—
|
|
|
$
|
(315.5
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(45.6
|
)
|
|
$
|
(361.4
|
)
|
Three Months Ended March 31, 2016 ($ in millions) (a) |
|
Cash flow
hedging items
|
|
Pension and
other
postretirement
benefit plan
items
|
|
Unrealized
losses on
available-for-
sale securities
|
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
|
$
|
(39.7
|
)
|
|
$
|
(249.4
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(48.2
|
)
|
|
$
|
(337.6
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
7.7
|
|
|
6.0
|
|
|||||
Amounts reclassified from AOCI (b)
|
|
7.4
|
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|||||
Net other comprehensive income
|
|
5.7
|
|
|
3.8
|
|
|
—
|
|
|
7.7
|
|
|
17.2
|
|
|||||
Balance at March 31, 2016
|
|
$
|
(34.0
|
)
|
|
$
|
(245.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(40.5
|
)
|
|
$
|
(320.4
|
)
|
(a)
|
All amounts are net of tax. Amounts in parentheses indicate debits.
|
(b)
|
See separate table below for further details.
|
Nine Months Ended March 31, 2017
($ in millions) (a) |
|
Cash flow
hedging items |
|
Pension and
other postretirement benefit plan items |
|
Unrealized
losses on available-for- sale securities |
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at June 30, 2016
|
|
$
|
(21.8
|
)
|
|
$
|
(344.3
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(43.5
|
)
|
|
$
|
(409.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
9.4
|
|
|
11.7
|
|
|
—
|
|
|
(2.1
|
)
|
|
19.0
|
|
|||||
Amounts reclassified from AOCI (b)
|
|
12.4
|
|
|
17.1
|
|
|
—
|
|
|
—
|
|
|
29.5
|
|
|||||
Net other comprehensive income (loss)
|
|
21.8
|
|
|
28.8
|
|
|
—
|
|
|
(2.1
|
)
|
|
48.5
|
|
|||||
Balance at March 31, 2017
|
|
$
|
—
|
|
|
$
|
(315.5
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(45.6
|
)
|
|
$
|
(361.4
|
)
|
Nine Months Ended March 31, 2016
($ in millions) (a) |
|
Cash flow
hedging items |
|
Pension and
other postretirement benefit plan items |
|
Unrealized
losses on available-for- sale securities |
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at June 30, 2015
|
|
$
|
(28.5
|
)
|
|
$
|
(256.8
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(42.6
|
)
|
|
$
|
(328.2
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(25.5
|
)
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|
(23.4
|
)
|
|||||
Amounts reclassified from AOCI (b)
|
|
20.0
|
|
|
11.2
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
|||||
Net other comprehensive (loss) income
|
|
(5.5
|
)
|
|
11.2
|
|
|
—
|
|
|
2.1
|
|
|
7.8
|
|
|||||
Balance at March 31, 2016
|
|
$
|
(34.0
|
)
|
|
$
|
(245.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(40.5
|
)
|
|
$
|
(320.4
|
)
|
(a)
|
All amounts are net of tax. Amounts in parentheses indicate debits.
|
(b)
|
See separate table below for further details.
|
($ in millions) (a)
|
|
Location of
(loss) gain
|
|
Amount Reclassified from AOCI
Three Months Ended March 31, |
|
Amount Reclassified from AOCI Nine Months Ended March 31,
|
||||||||||||
Details about AOCI Components
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Cash flow hedging items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(3.1
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
(21.0
|
)
|
|
$
|
(32.6
|
)
|
Foreign exchange contracts
|
|
Net sales
|
|
0.2
|
|
|
0.1
|
|
|
0.7
|
|
|
0.2
|
|
||||
Forward interest rate swaps
|
|
Interest expense
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
||||
|
|
Total before tax
|
|
(2.8
|
)
|
|
(11.8
|
)
|
|
(20.0
|
)
|
|
(32.1
|
)
|
||||
|
|
Tax benefit
|
|
1.1
|
|
|
4.4
|
|
|
7.6
|
|
|
12.1
|
|
||||
|
|
Net of tax
|
|
$
|
(1.7
|
)
|
|
$
|
(7.4
|
)
|
|
$
|
(12.4
|
)
|
|
$
|
(20.0
|
)
|
($ in millions) (a)
|
|
Location of
(loss) gain
|
|
Amount Reclassified from AOCI
Three Months Ended March 31, |
|
Amount Reclassified from AOCI Nine Months Ended March 31,
|
||||||||||||
Details about AOCI Components
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Amortization of pension and other postretirement benefit plan items:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net actuarial loss
|
|
(b)
|
|
$
|
(10.3
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
(30.7
|
)
|
|
$
|
(22.5
|
)
|
Prior service cost
|
|
(b)
|
|
1.1
|
|
|
1.5
|
|
|
3.6
|
|
|
4.5
|
|
||||
Curtailment charge
|
|
(b)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||
|
|
Total before tax
|
|
(9.2
|
)
|
|
(6.0
|
)
|
|
(27.6
|
)
|
|
(18.0
|
)
|
||||
|
|
Tax benefit
|
|
3.5
|
|
|
2.2
|
|
|
10.5
|
|
|
6.8
|
|
||||
|
|
Net of tax
|
|
$
|
(5.7
|
)
|
|
$
|
(3.8
|
)
|
|
$
|
(17.1
|
)
|
|
$
|
(11.2
|
)
|
(a)
|
Amounts in parentheses indicate debits to income/loss.
|
(b)
|
These AOCI components are included in the computation of net periodic benefit cost (see Note 8. Pension and Other Postretirement Benefits for additional details).
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Pension plans
|
|
$
|
8.0
|
|
|
$
|
12.7
|
|
|
$
|
37.6
|
|
|
$
|
38.1
|
|
Other postretirement plans
|
|
0.7
|
|
|
0.7
|
|
|
2.1
|
|
|
2.2
|
|
||||
Net periodic benefit costs
|
|
$
|
8.7
|
|
|
$
|
13.4
|
|
|
$
|
39.7
|
|
|
$
|
40.3
|
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
|
$
|
2.7
|
|
|
$
|
7.0
|
|
|
$
|
17.4
|
|
|
$
|
21.1
|
|
Pension earnings, interest and deferrals
|
|
3.8
|
|
|
3.3
|
|
|
12.8
|
|
|
9.9
|
|
||||
|
|
6.5
|
|
|
10.3
|
|
|
30.2
|
|
|
31.0
|
|
||||
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service cost
|
|
0.4
|
|
|
1.6
|
|
|
3.5
|
|
|
4.8
|
|
||||
Pension earnings, interest and deferrals
|
|
1.8
|
|
|
1.5
|
|
|
5.5
|
|
|
4.5
|
|
||||
Curtailment charge
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
|
|
2.2
|
|
|
3.1
|
|
|
9.5
|
|
|
9.3
|
|
||||
Net pension expense
|
|
$
|
8.7
|
|
|
$
|
13.4
|
|
|
$
|
39.7
|
|
|
$
|
40.3
|
|
|
|
Three Months Ended
March 31, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
251.4
|
|
|
$
|
244.6
|
|
|
$
|
6.8
|
|
|
3
|
%
|
Energy
|
|
41.0
|
|
|
36.7
|
|
|
4.3
|
|
|
12
|
%
|
|||
Transportation
|
|
37.1
|
|
|
39.8
|
|
|
(2.7
|
)
|
|
(7
|
)%
|
|||
Medical
|
|
33.9
|
|
|
31.7
|
|
|
2.2
|
|
|
7
|
%
|
|||
Industrial and Consumer
|
|
77.3
|
|
|
72.6
|
|
|
4.7
|
|
|
6
|
%
|
|||
Distribution
|
|
32.9
|
|
|
30.9
|
|
|
2.0
|
|
|
6
|
%
|
|||
Total net sales
|
|
$
|
473.6
|
|
|
$
|
456.3
|
|
|
$
|
17.3
|
|
|
4
|
%
|
|
|
Three Months Ended
March 31, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
214.0
|
|
|
$
|
208.4
|
|
|
$
|
5.6
|
|
|
3
|
%
|
Energy
|
|
36.6
|
|
|
33.3
|
|
|
3.3
|
|
|
10
|
%
|
|||
Transportation
|
|
31.3
|
|
|
34.7
|
|
|
(3.4
|
)
|
|
(10
|
)%
|
|||
Medical
|
|
31.6
|
|
|
30.2
|
|
|
1.4
|
|
|
5
|
%
|
|||
Industrial and Consumer
|
|
66.7
|
|
|
65.0
|
|
|
1.7
|
|
|
3
|
%
|
|||
Distribution
|
|
32.7
|
|
|
30.8
|
|
|
1.9
|
|
|
6
|
%
|
|||
Total net sales excluding surcharge
|
|
$
|
412.9
|
|
|
$
|
402.4
|
|
|
$
|
10.5
|
|
|
3
|
%
|
|
|
Three Months Ended
March 31, |
||||||
($ in millions)
|
|
2017
|
|
2016
|
||||
Net sales
|
|
$
|
473.6
|
|
|
$
|
456.3
|
|
Less: surcharge revenue
|
|
60.7
|
|
|
53.9
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
412.9
|
|
|
$
|
402.4
|
|
|
|
|
|
|
||||
Gross profit
|
|
$
|
83.1
|
|
|
$
|
47.5
|
|
Excess inventory write-down
|
|
—
|
|
|
22.5
|
|
||
Gross profit excluding the excess inventory write-down
|
|
$
|
83.1
|
|
|
$
|
70.0
|
|
|
|
|
|
|
||||
Gross margin
|
|
17.5
|
%
|
|
10.4
|
%
|
||
|
|
|
|
|
||||
Gross margin excluding surcharge revenue and excess inventory write-down
|
|
20.1
|
%
|
|
17.4
|
%
|
|
|
Three Months Ended
March 31, |
||||||
($ in millions)
|
|
2017
|
|
2016
|
||||
Net sales
|
|
$
|
473.6
|
|
|
$
|
456.3
|
|
Less: surcharge revenue
|
|
60.7
|
|
|
53.9
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
412.9
|
|
|
$
|
402.4
|
|
|
|
|
|
|
||||
Operating income (loss)
|
|
$
|
35.8
|
|
|
$
|
(24.3
|
)
|
Pension EID
|
|
5.6
|
|
|
4.8
|
|
||
Operating income (loss) excluding pension EID
|
|
41.4
|
|
|
(19.5
|
)
|
||
Special items:
|
|
|
|
|
||||
Excess inventory write-down
|
|
—
|
|
|
22.5
|
|
||
Restructuring and asset impairment charges
|
|
—
|
|
|
17.6
|
|
||
Goodwill impairment
|
|
—
|
|
|
12.5
|
|
||
Consulting costs
|
|
—
|
|
|
2.1
|
|
||
Operating income excluding pension EID and other special items
|
|
$
|
41.4
|
|
|
$
|
35.2
|
|
|
|
|
|
|
||||
Operating margin
|
|
7.6
|
%
|
|
(5.3
|
)%
|
||
|
|
|
|
|
||||
Operating margin excluding surcharge, pension EID and other special items
|
|
10.0
|
%
|
|
8.7
|
%
|
|
|
Three Months Ended
March 31, |
|
Increase (Decrease) |
|
%
Increase (Decrease) |
||||||
(Pounds sold, in thousands)
|
|
2017
|
|
2016
|
|
|
||||||
Specialty Alloys Operations
|
|
61,006
|
|
|
59,082
|
|
|
1,924
|
|
|
3
|
%
|
Performance Engineered Products *
|
|
2,840
|
|
|
2,774
|
|
|
66
|
|
|
2
|
%
|
Intersegment
|
|
(576
|
)
|
|
(518
|
)
|
|
(58
|
)
|
|
(11
|
)%
|
Consolidated pounds sold
|
|
63,270
|
|
|
61,338
|
|
|
1,932
|
|
|
3
|
%
|
|
|
Three Months Ended
March 31, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
383.3
|
|
|
$
|
370.5
|
|
|
$
|
12.8
|
|
|
3
|
%
|
Performance Engineered Products
|
|
98.7
|
|
|
91.4
|
|
|
7.3
|
|
|
8
|
%
|
|||
Intersegment
|
|
(8.4
|
)
|
|
(5.6
|
)
|
|
(2.8
|
)
|
|
(50
|
)%
|
|||
Total net sales
|
|
$
|
473.6
|
|
|
$
|
456.3
|
|
|
$
|
17.3
|
|
|
4
|
%
|
|
|
Three Months Ended
March 31, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
322.4
|
|
|
$
|
316.5
|
|
|
$
|
5.9
|
|
|
2
|
%
|
Performance Engineered Products
|
|
98.5
|
|
|
91.2
|
|
|
7.3
|
|
|
8
|
%
|
|||
Intersegment
|
|
(8.0
|
)
|
|
(5.3
|
)
|
|
(2.7
|
)
|
|
(51
|
)%
|
|||
Total net sales excluding surcharge revenue
|
|
$
|
412.9
|
|
|
$
|
402.4
|
|
|
$
|
10.5
|
|
|
3
|
%
|
|
|
Nine Months Ended
March 31, |
|
$
Decrease
|
|
%
Decrease |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
700.1
|
|
|
$
|
727.7
|
|
|
$
|
(27.6
|
)
|
|
(4
|
)%
|
Energy
|
|
99.5
|
|
|
104.2
|
|
|
(4.7
|
)
|
|
(5
|
)%
|
|||
Transportation
|
|
105.9
|
|
|
122.6
|
|
|
(16.7
|
)
|
|
(14
|
)%
|
|||
Medical
|
|
85.3
|
|
|
89.7
|
|
|
(4.4
|
)
|
|
(5
|
)%
|
|||
Industrial and Consumer
|
|
210.4
|
|
|
222.3
|
|
|
(11.9
|
)
|
|
(5
|
)%
|
|||
Distribution
|
|
88.7
|
|
|
89.2
|
|
|
(0.5
|
)
|
|
(1
|
)%
|
|||
Total net sales
|
|
$
|
1,289.9
|
|
|
$
|
1,355.7
|
|
|
$
|
(65.8
|
)
|
|
(5
|
)%
|
|
|
Nine Months Ended
March 31, |
|
$
Decrease |
|
%
Decrease |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
586.3
|
|
|
$
|
603.8
|
|
|
$
|
(17.5
|
)
|
|
(3
|
)%
|
Energy
|
|
89.5
|
|
|
91.7
|
|
|
(2.2
|
)
|
|
(2
|
)%
|
|||
Transportation
|
|
90.5
|
|
|
103.7
|
|
|
(13.2
|
)
|
|
(13
|
)%
|
|||
Medical
|
|
79.7
|
|
|
84.4
|
|
|
(4.7
|
)
|
|
(6
|
)%
|
|||
Industrial and Consumer
|
|
185.2
|
|
|
194.6
|
|
|
(9.4
|
)
|
|
(5
|
)%
|
|||
Distribution
|
|
88.3
|
|
|
88.8
|
|
|
(0.5
|
)
|
|
(1
|
)%
|
|||
Total net sales excluding surcharge
|
|
$
|
1,119.5
|
|
|
$
|
1,167.0
|
|
|
$
|
(47.5
|
)
|
|
(4
|
)%
|
|
|
Nine Months Ended
March 31, |
||||||
($ in millions)
|
|
2017
|
|
2016
|
||||
Net sales
|
|
$
|
1,289.9
|
|
|
$
|
1,355.7
|
|
Less: surcharge revenue
|
|
170.4
|
|
|
188.7
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
1,119.5
|
|
|
$
|
1,167.0
|
|
|
|
|
|
|
||||
Gross profit
|
|
$
|
191.6
|
|
|
$
|
182.4
|
|
Excess inventory write-down
|
|
—
|
|
|
22.5
|
|
||
Gross profit excluding the excess inventory write-down
|
|
$
|
191.6
|
|
|
$
|
204.9
|
|
|
|
|
|
|
||||
Gross margin
|
|
14.9
|
%
|
|
13.5
|
%
|
||
|
|
|
|
|
||||
Gross margin excluding surcharge revenue
|
|
17.1
|
%
|
|
17.6
|
%
|
|
|
Nine Months Ended
March 31, |
||||||
($ in millions)
|
|
2017
|
|
2016
|
||||
Net sales
|
|
$
|
1,289.9
|
|
|
$
|
1,355.7
|
|
Less: surcharge revenue
|
|
170.4
|
|
|
188.7
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
1,119.5
|
|
|
$
|
1,167.0
|
|
|
|
|
|
|
||||
Operating income
|
|
$
|
52.6
|
|
|
$
|
22.4
|
|
Pension EID
|
|
18.2
|
|
|
14.4
|
|
||
Operating income excluding pension EID
|
|
70.8
|
|
|
36.8
|
|
||
|
|
|
|
|
||||
Special items:
|
|
|
|
|
||||
Pension curtailment charge
|
|
0.5
|
|
|
—
|
|
||
Excess inventory write-down
|
|
—
|
|
|
22.5
|
|
||
Restructuring and asset impairment charges
|
|
—
|
|
|
18.0
|
|
||
Goodwill impairment
|
|
—
|
|
|
12.5
|
|
||
Consulting costs
|
|
—
|
|
|
7.2
|
|
||
Operating income excluding pension EID and other special items
|
|
$
|
71.3
|
|
|
$
|
97.0
|
|
|
|
|
|
|
||||
Operating margin
|
|
4.1
|
%
|
|
1.7
|
%
|
||
|
|
|
|
|
||||
Operating margin excluding surcharge, pension EID and other special items
|
|
6.4
|
%
|
|
8.3
|
%
|
|
|
Nine Months Ended
March 31, |
|
(Decrease) Increase |
|
%
(Decrease) Increase |
||||||
(Pounds sold, in thousands)
|
|
2017
|
|
2016
|
|
|
||||||
Specialty Alloys Operations
|
|
164,682
|
|
|
170,690
|
|
|
(6,008
|
)
|
|
(4
|
)%
|
Performance Engineered Products *
|
|
7,604
|
|
|
8,530
|
|
|
(926
|
)
|
|
(11
|
)%
|
Intersegment
|
|
(1,550
|
)
|
|
(2,530
|
)
|
|
980
|
|
|
39
|
%
|
Consolidated pounds sold
|
|
170,736
|
|
|
176,690
|
|
|
(5,954
|
)
|
|
(3
|
)%
|
|
|
Nine Months Ended
March 31, |
|
$
(Decrease) Increase |
|
%
(Decrease) Increase |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
1,047.0
|
|
|
$
|
1,106.7
|
|
|
$
|
(59.7
|
)
|
|
(5
|
)%
|
Performance Engineered Products
|
|
260.4
|
|
|
268.3
|
|
|
(7.9
|
)
|
|
(3
|
)%
|
|||
Intersegment
|
|
(17.5
|
)
|
|
(19.3
|
)
|
|
1.8
|
|
|
9
|
%
|
|||
Total net sales
|
|
$
|
1,289.9
|
|
|
$
|
1,355.7
|
|
|
$
|
(65.8
|
)
|
|
(5
|
)%
|
|
|
Nine Months Ended
March 31, |
|
$
(Decrease) Increase |
|
%
(Decrease) Increase |
|||||||||
($ in millions)
|
|
2017
|
|
2016
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
876.4
|
|
|
$
|
917.2
|
|
|
$
|
(40.8
|
)
|
|
(4
|
)%
|
Performance Engineered Products
|
|
259.7
|
|
|
267.8
|
|
|
(8.1
|
)
|
|
(3
|
)%
|
|||
Intersegment
|
|
(16.6
|
)
|
|
(18.0
|
)
|
|
1.4
|
|
|
8
|
%
|
|||
Total net sales excluding surcharge revenue
|
|
$
|
1,119.5
|
|
|
$
|
1,167.0
|
|
|
$
|
(47.5
|
)
|
|
(4
|
)%
|
Covenant
|
|
Covenant Requirement
|
|
Actual Ratio
|
Consolidated interest coverage
|
|
3.50 to 1.00 (minimum)
|
|
8.94 to 1.00
|
Consolidated debt to capital
|
|
55% (maximum)
|
|
34.7%
|
($ in millions, except per share amounts)
|
|
Income Before Income Taxes
|
|
Income Tax Expense
|
|
Net Income
|
|
Earnings Per Diluted Share
|
||||||||
Three months ended March 31, 2017, as reported
|
|
$
|
29.1
|
|
|
$
|
(8.4
|
)
|
|
$
|
20.7
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
None reported
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended March 31, 2017, as adjusted
|
|
$
|
29.1
|
|
|
$
|
(8.4
|
)
|
|
$
|
20.7
|
|
|
$
|
0.44
|
|
($ in millions, except per share amounts)
|
|
(Loss) Income Before Income Taxes
|
|
Income Tax Benefit (Expense)
|
|
Net (Loss) Income
|
|
(Loss) Earnings Per Diluted Share*
|
||||||||
Three months ended March 31, 2016, as reported
|
|
$
|
(33.0
|
)
|
|
$
|
9.1
|
|
|
$
|
(23.9
|
)
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
Excess inventory write-down
|
|
22.5
|
|
|
(7.8
|
)
|
|
14.7
|
|
|
0.31
|
|
||||
Restructuring and asset impairment charges
|
|
17.6
|
|
|
(5.6
|
)
|
|
12.0
|
|
|
0.26
|
|
||||
Goodwill impairment
|
|
12.5
|
|
|
(3.2
|
)
|
|
9.3
|
|
|
0.20
|
|
||||
Consulting costs
|
|
2.1
|
|
|
(0.7
|
)
|
|
1.4
|
|
|
0.03
|
|
||||
Impact of tax law change
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
|
0.01
|
|
||||
Total impact of special items
|
|
54.7
|
|
|
(16.5
|
)
|
|
38.2
|
|
|
0.81
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended March 31, 2016, as adjusted
|
|
$
|
21.7
|
|
|
$
|
(7.4
|
)
|
|
$
|
14.3
|
|
|
$
|
0.30
|
|
($ in millions, except per share amounts)
|
|
Income Before Income Taxes
|
|
Income Tax (Expense) Benefit
|
|
Net Income
|
|
Earnings Per Diluted Share*
|
||||||||
Nine months ended March 31, 2017, as reported
|
|
$
|
32.1
|
|
|
$
|
(10.6
|
)
|
|
$
|
21.5
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
Pension curtailment
|
|
0.5
|
|
|
(0.1
|
)
|
|
0.4
|
|
|
0.01
|
|
||||
Income tax item**
|
|
—
|
|
|
2.1
|
|
|
2.1
|
|
|
0.04
|
|
||||
Total impact of special items
|
|
0.5
|
|
|
2.0
|
|
|
2.5
|
|
|
0.05
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended March 31, 2017, as adjusted
|
|
$
|
32.6
|
|
|
$
|
(8.6
|
)
|
|
$
|
24.0
|
|
|
$
|
0.50
|
|
($ in millions, except per share amounts)
|
|
(Loss) Income Before Income Taxes
|
|
Income Tax (Expense) Benefit
|
|
Net (Loss) Income
|
|
(Loss) Earnings Per Diluted Share*
|
||||||||
Nine months ended March 31, 2016, as reported
|
|
$
|
(1.8
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
Excess inventory write-down
|
|
22.5
|
|
|
(7.8
|
)
|
|
14.7
|
|
|
0.30
|
|
||||
Restructuring and asset impairment charges
|
|
18.0
|
|
|
(5.7
|
)
|
|
12.3
|
|
|
0.25
|
|
||||
Goodwill impairment
|
|
12.5
|
|
|
(3.2
|
)
|
|
9.3
|
|
|
0.19
|
|
||||
Consulting costs
|
|
7.2
|
|
|
(2.5
|
)
|
|
4.7
|
|
|
0.10
|
|
||||
Income tax item**
|
|
—
|
|
|
2.8
|
|
|
2.8
|
|
|
0.06
|
|
||||
Impact of tax law change
|
|
—
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.01
|
)
|
||||
Total impact of special items
|
|
60.2
|
|
|
(17.2
|
)
|
|
43.0
|
|
|
0.89
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended March 31, 2016, as adjusted
|
|
$
|
58.4
|
|
|
$
|
(19.0
|
)
|
|
$
|
39.4
|
|
|
$
|
0.81
|
|
|
|
Nine Months Ended
March 31, |
||||||
($ in millions)
|
|
2017
|
|
2016
|
||||
Net cash provided from operating activities
|
|
$
|
35.5
|
|
|
$
|
137.2
|
|
Purchases of property, equipment and software
|
|
(63.1
|
)
|
|
(66.1
|
)
|
||
Proceeds from disposals of property and equipment
|
|
—
|
|
|
0.3
|
|
||
Acquisition of business
|
|
(35.3
|
)
|
|
—
|
|
||
Proceeds from the sale of equity method investment
|
|
—
|
|
|
6.3
|
|
||
Proceeds from note receivable from the sale of equity method investment
|
|
6.3
|
|
|
—
|
|
||
Dividends paid
|
|
(25.6
|
)
|
|
(26.3
|
)
|
||
Other
|
|
—
|
|
|
4.0
|
|
||
Free cash flow
|
|
$
|
(82.2
|
)
|
|
$
|
55.4
|
|
(a)
|
Evaluation of Effectiveness of Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control over Financial Reporting
|
Exhibit
No.
|
|
Description
|
|
|
|
10 (A)
|
|
Credit Agreement, dated as of March 31, 2017, among Carpenter Technology Corporation, as borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto, JPMorgan Chase Bank, N.A., as Syndication Agent, PNC Bank, National Association, US Bank, National Association and Wells Fargo Bank, National Association, each, as Documentation Agent and Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers and Joint Bookrunners (Exhibit 10.1 to our Current Report on Form 8-K filed on April 4, 2017 and incorporated herein by reference).
|
|
|
|
31 (A)
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended. (filed herewith)
|
|
|
|
31 (B)
|
|
Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended. (filed herewith)
|
|
|
|
32
|
|
Certification of President and Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
|
|
|
101
|
|
The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Changes in Equity; and (vi) the Notes to the Consolidated Financial Statements.
|
|
Carpenter Technology Corporation
|
|
(Registrant)
|
|
|
Date: April 27, 2017
|
/s/ Damon J. Audia
|
|
Damon J. Audia
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer
)
|
Exhibit
No.
|
|
Description
|
|
|
|
31 (A)
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended.
|
|
|
|
31 (B)
|
|
Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended.
|
|
|
|
32
|
|
Certification of President and Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Changes in Equity; and (vi) the Notes to the Consolidated Financial Statements.
|
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