UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20152016
Commission File Number: 1-5415
 
A. M. CASTLE & CO.
(Exact name of registrant as specified in its charter)
Maryland 36-0879160
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
   
1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (847) 455-7111
Securities registered pursuant to Section 12(b) of the Act: 
Title of each class Name of each exchange on which registered
Common Stock - $0.01 par value New York Stock ExchangeOTCQB® Venture Market
Securities registered pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes  ¨    No  x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    
Yes  ¨    No  x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
 





Large Accelerated Filer ¨  Accelerated Filer x
¨

       
Non-Accelerated Filer ¨  Smaller Reporting Company ¨x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter is $84,137,59434,364,029.
The number of shares outstanding of the registrant’s common stock on March 10, 201624, 2017 was 23,794,39032,482,533 shares.


 








Disclosure Regarding Forward-Looking Statements
Information provided and statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this report and the Company assumes no obligation to update the information included in this report. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy, and the cost savings and other benefits that we expect to achieve from our facility closures and organizational changes. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “predict,” “plan,” “should,” or similar expressions. These statements are not guarantees of performance or results, and they involve risks, uncertainties, and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements, including those risk factors identified in Item 1A “Risk Factors” of this report. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future, to reflect the occurrence of unanticipated events or for any other reason.
INDUSTRY AND MARKET DATA
In this report, we rely on and refer to information and statistics regarding the metal service center industry and general manufacturing markets. We obtained this information and these statistics from sources other than us, such as the Metals Service Center Institute, which we have supplemented where necessary with information from publicly available sources and our own internal estimates. Although we have not independently verified such information, we have used these sources and estimates and believe them to be reliable.
PART I
ITEM 1 — Business
In this annual report on Form 10-K, “the Company,” “we” or “our” refer to A. M. Castle & Co., a Maryland corporation, and its subsidiaries included in the consolidated financial statements, except as otherwise indicated or as the context otherwise requires.
Business and Markets
Company Overview
The Company is a specialty metals (83% of net sales in 2015) and plastics (17% of net sales in 2015) distribution company serving customers on a global basis. The Company provides a broad range of products and value-added processing and supply chain services to a wide array of customers. The Company's metals customers are principally within the producer durable equipment, oil and gas, aerospace, heavy industrial equipment, industrial goods, and construction equipment, oil and gas, and retail sectors of the global economy, and its plastics customers are primarily in the retail, marine and automotive sectors.economy. Particular focus is placed on the aerospace and defense, power generation, mining, heavy industrial equipment, manufacturing and oil and gas for metals and automotive, marine, office furniture and fixtures, safety products, life sciences applications, transportation and general manufacturing industries, for plastics.as well as general engineering applications.
In March 2016, the Company completed the sale of substantially all the assets of its wholly-owned subsidiary, Total Plastics, Inc. ("TPI"). Prior to the sale of TPI, the Company had two reportable business segments, Metals and Plastics. Subsequent to the sale of TPI, which represented the Company's Plastics segment in its entirety, the Company has only one reportable business segment, Metals.
The Company’s corporate headquarters is located in Oak Brook, Illinois. As of December 31, 2015,2016, the Company operates out of 24 metals21 service centers located throughout North America (19)(16), Europe (3) and Asia (2) and 17 plastics service centers located in the United States.. The Company’sCompany's service centers hold inventory and process and distribute products to both local and export markets.
Industry and Markets
Service centers act as supply chain intermediaries between primary producers, which deal in bulk quantities in order to achieve economies of scale, and end-users in a variety of industries that require specialized products in significantly smaller quantities and forms. Service centers also manage the differences in lead times that exist in the supply chain. While original equipment manufacturers (“OEM”) and other customers often demand delivery within hours, the lead time required by primary producers can be as long as several months. Service centers provide value to customers by


aggregating purchasing, providing warehousing and distribution services to meet specific customer needs, including demanding delivery times and precise metal specifications, and by providing value-added metals processing services.

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The principal markets served by the Company are highly competitive. Competition is based on service, quality, processing capabilities, inventory availability, timely delivery, ability to provide supply chain solutions and price. The Company competes in a highly fragmented industry. Competition in the various markets in which the Company participates comes from a large number of value-added metals processors and service centers on a regional and local basis, some of which have greater financial resources and some of which have more established brand names in the local, regional and global markets served by the Company.
The Company also competes to a lesser extent with primary metals producers who typically sell to larger customers requiring shipments of large volumes of metal.
In order to capture scale efficiencies and remain competitive, many primary metal producers are consolidating their operations and focusing on their core production activities. These producers have increasingly outsourced metals distribution, inventory management and value-added metals processing services to metals service centers. This process of outsourcing allows them to work with a relatively small number of intermediaries rather than many end customers. As a result, metals service centers, including the Company, are now providing a range of services for their customers, including metal purchasing, processing and supply chain solutions.
Procurement
The Company purchases metals and plastics from many producers. Material is purchased in large lots and stocked at its service centers until sold, usually in smaller quantities and typically with some value-added processing services performed. The Company’s ability to provide quick delivery of a wide variety of specialty metals and plastic products, along with its processing capabilities and supply chain management solutions, allows customers to lower their own inventory investment by reducing their need to order the large quantities required by producers and their need to perform additional material processing services. Some of the Company’s purchases are covered by long-term contracts and commitments, which generally have corresponding customer sales agreements.
Orders are primarily filled with materials shipped from Company stock. The materials required to fill the balance of sales are obtained from other sources, such as purchases from other distributors or direct mill shipments to customers. Deliveries are made principally by the Company’s fleet contracted through third party logistics providers. Common carrier delivery is used in areas not serviced directly by the Company’s fleet.
As of December 31, 2015, the Company had 1,515 full-time employees. Of these full-time employees, 225 were represented by the United Steelworkers of America under collective bargaining agreements.
Business Segments
The Company distributes and performs processing on both metals and plastics. Although the distribution processes are similar, the customer markets, supplier bases and types of products are different. Additionally, the Company’s Chief Executive Officer, the chief operating decision-maker, reviews and manages these two businesses separately. As such, these businesses are considered reportable segments and are reported accordingly in the Company’s various public filings. Neither of the Company’s reportable segments has any unusual working capital requirements.
In the last three years, the percentages of total sales of the two segments were as follows:
 2015 2014 2013
Metals83% 86% 87%
Plastics17% 14% 13%
 100% 100% 100%
Metals Segment
In its Metals segment, the Company’s marketing strategy focuses on distributing highly engineered specialty grades and alloys of metals as well as providing specialized processing services designed to meet very precise specifications. Core products include alloy, aluminum, nickel, stainless steel, carbon and titanium. Inventories of these products assume many forms such as plate, sheet, extrusions, round bar, hexagon bar, square and flat bar, tubing and coil. Depending on the size of the facility and the nature of the markets it serves, the Company's service centers are equipped as needed with bar saws, plate saws, oxygen and plasma arc flame cutting machinery, trepanning machinery, boring machinery, honing equipment, water-jet cutting equipment, stress relieving and annealing furnaces, surface grinding equipment, CNC machinery, and sheet shearing and cut-to-length equipment. This segmentVarious specialized fabrications are also performs various specialized

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fabricationsperformed for its customers through pre-qualified subcontractors that thermally process, turn, polish, cut-to-length and straighten alloy and carbon bar.
Procurement
The Company purchases metals from many producers. Material is purchased in large lots and stocked at its service centers until sold, usually in smaller quantities and typically with some value-added processing services performed. The Company’s ability to provide quick delivery of a wide variety of specialty metals products, along with its processing capabilities and supply chain management solutions, allows customers to lower their own inventory investment by reducing their need to order the large quantities required by producers and their need to perform additional material processing services. Some of the Company’s purchases are covered by long-term contracts and commitments, which generally have corresponding customer sales agreements.
Thousands of customers from a wide array of industries are serviced primarily through the Company’s own sales organization. Orders are primarily filled with materials shipped from Company stock. The materials required to fill the balance of sales are obtained from other sources, such as purchases from other distributors or direct mill shipments to customers. Deliveries are made principally by the Company’s fleet contracted through third party logistics providers. Common carrier delivery is used in areas not serviced directly by the Company’s fleet. The Company’s broad network of locations provides same or next-day delivery to most of their markets, and two-day delivery to substantially all of the remaining markets.
Customers
The Company’s customer base is well diversified and therefore, the Company does not have dependence upon any single customer, or a few customers. OurThe customer base includes many Fortune 500 companies as well as thousands of mediummedium- and smaller sizedsmaller-sized firms.
The Company’s broad network of locations provides same or next-day delivery to most of the segment’s markets, and two-day delivery to substantially all of the remaining markets.
Plastics Segment
The Company’s Plastics segment consists exclusively of a wholly-owned subsidiary that operates as Total Plastics, Inc. (“TPI”), headquartered in Kalamazoo, Michigan, and its wholly-owned subsidiaries. The Plastics segment stocks and distributes a wide variety of plastics in forms that include plate, rod, tube, clear sheet, tape, gaskets and fittings. Processing activities within this segment include cut-to-length, cut-to-shape, bending and forming according to customer specifications.
The Plastics segment’s diverse customer base consists of companies in the retail (point-of-purchase), automotive, marine, office furniture and fixtures, safety products, life sciences applications, and general manufacturing industries. TPI has locations throughout the upper northeast and midwest regions of the U.S. and one facility in Florida from which it services a wide variety of users of industrial plastics.
On March 11, 2016, the Company entered into an asset purchase agreement with an unrelated third-party for the sale of TPI. TPI represents the entirety of the Company's Plastics segment and therefore, the Company will only have one reporting segment, the Metals segment, going forward. As of December 31, 2015, TPI did not meet the criteria to be classified as held for sale and accordingly its results are presented with continuing operations. The terms of the sale are discussed in Note 15 - Subsequent Events to the consolidated financial statements.
For further information on the Company's segment results,net sales by geographic area, see Part II Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 1314 - Segment Reporting within the notes to the Company's consolidated financial statementsConsolidated Financial Statements appearing elsewhere in this annual report on Form 10-K.
Employees
As of December 31, 2016, the Company had 908 full-time employees. Of these full-time employees, 123 were represented by the United Steelworkers of America under collective bargaining agreements.



Joint Venture
The Company holdsheld a 50% joint venture interest in Kreher Steel Company, LLC (“Kreher”), a national distributor and processor of carbon and alloy steel bar products, headquartered in Melrose Park, Illinois.Illinois, until the Company sold its ownership share to its joint venture partner in August 2016. The Company’s equity in the earnings (losses) of this joint venture is reported separately in the Company’s consolidated statementsConsolidated Statements of operations. Kreher's stand-alone financial statements are includedOperations and Comprehensive Loss. For information on the Company's sale of its ownership share of Kreher, see Note 3 - Joint Venture within the notes to the Company's Consolidated Financial Statements appearing elsewhere in this filing.annual report on Form 10-K.
Access to SEC Filings
The Company makes available free of charge on or through its Web site at www.castlemetals.com the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”). Information on our website does not constitute part of this annual report on Form 10-K.
ITEM 1A — Risk Factors
(Dollar amounts in millions, except per share data)
Our business, financial condition, results of operations, and cash flows are subject to various risks, many of which are not exclusively within our control that may cause actual performance to differ materially from historical or projected future performance. Any of the following risks, as well as other risks and uncertainties not currently known to us or that we currently consider to be immaterial, could materially and adversely affect our business, financial condition, results of operations, or cash flows.
Our future operating results are impacted by the volatility of the prices of metals and plastics, which could cause our results to be adversely affected.
The prices we pay for raw materials, both metals and plastics, and the prices we charge for products may fluctuate depending on many factors, including general economic conditions (both domestic and international), competition, production levels, import duties and other trade restrictions and currency fluctuations. To the extent metals and plastics prices decline, we would generally expect lower sales, pricing and possibly lower operating income. Depending on

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the timing of the price changes and to the extent we are not able to pass on to our customers any increases in our raw materials prices, our operating results may be adversely affected. In addition, because we maintain substantial inventories of metals and plastics in order to meet short lead-times and the just-in-time delivery requirements of our customers, a reduction in our selling prices could result in lower profitability or, in some cases, losses, either of which could adversely impact our ability to remain in compliance with certain provisions of our debt instruments, as well as result in us incurring impairment charges.
Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our debt instruments.
We have substantial debt service obligations. As of December 31, 2015,2016, we had approximately $333.6$298.9 million of total debt outstanding, excluding capital lease obligations of $0.40.1 million, all of which $276.1 million is secured. AsThe debt outstanding, in order of December 31, 2015, we had approximately $30.1priority, was comprised of $99.5 million of additional unrestricted borrowing capacityborrowings against our new 11.0% secured credit facilities due 2018 (the “Credit Facilities”), $177.0 million aggregate principal amount of 12.75% Senior Secured Notes due 2018 (the "New Secured Notes"), $22.3 million aggregate principal amount of 5.25% Senior Secured Convertible Notes due 2019 (the "New Convertible Notes"), and approximately $0.1 million aggregate principal amount of 7.0% Convertible Notes due 2017 (the "Convertible Notes"). In December 2016, we entered into the Credit Facilities with certain financial institutions in order to replace and repay outstanding borrowings and support the continuance of letters of credit under our former senior secured asset-based revolving credit facility. The Credit Facilities are in the form of senior secured first lien term loan facilities in an aggregate principal amount of up to $112.0 million. The Credit Facilities consist of a $75.0 million initial term loan facility funded at closing and a $37.0 million delayed-draw term loan facility (the “Delayed Draw Facility”). Under the Delayed Draw Facility, $24.5 million was available in December 2016 and $12.5 million is expected to become available in June 2017 or thereafter. In December 2014,2016, we obtained an extension on our revolving credit facility, extending its maturity date from December 15, 2015 to December 10, 2019 (or 91 days prior toborrowed the maturity date of our Senior Secured Notes or Convertible Notes if they have not been refinanced). In January 2014, we partially exercised the accordion option under our revolving credit facility to increase the aggregate commitments by $25.0 million. As a result, our borrowing capacity increased from $100.0 million to $125.0 million. We maintain the option to exercise the accordion for an additional $25.0$24.5 million of aggregate commitmentsthe Delayed Draw Facility available in the future, assuming we meet certain thresholds for incurring additional debt. Subject to restrictions contained in the debt instruments, we may incur additional indebtedness.accordance with its terms.


Our substantial level of indebtedness could have significant effects on our business, including the following:
it may be more difficult for us to satisfy our financial obligations;
our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions or general corporate purposes may be impaired;
we must use a substantial portion of our cash flow from operations to pay interest on our indebtedness, which will reduce the funds available to use for operations and other purposes, including potentially accretive acquisitions;
our ability to fund a change of control offer under our debt instruments may be limited;
our substantial level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt;
our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and
our substantial level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business.
We expect to obtain the funds to pay our expenses and to satisfy our debt obligations primarily from our operations and inavailable resources under the case of the principal amount of our indebtedness, from the refinancing thereof. In February 2016, as part of an overall plan to refinance our public debt, we completed a private exchange offer and consent solicitation (the "Exchange Offer") to certain eligible holders of our 12.75% Senior Secured Notes due 2016 (the "2016 Notes"). In the Exchange Offer we exchanged $203.3 million aggregate principal amount of 12.75% Senior Secured Notes due 2018 (the "2018 Notes") for a like amount of 2016 Notes, leaving at most $6.7 million aggregate principal amount of 2016 Notes outstanding.Credit Facilities. Our ability to meet our expenses and make these principal and interest payments as they come due, therefore, depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, and our anticipated revenue and cash flow may not be realized, either or both of which could result in our being unable to repay indebtedness or to fund other liquidity needs. If we do not have enough funds, we may be required to refinance all or part of our then existing debt, sell assets or borrow more funds, which we may not be able to accomplish on terms acceptable to us, or at all. In addition, the terms of existing or future debt agreements may restrict us from pursuing any of these alternatives which could have an adverse effect on our financial condition or liquidity.
As a result of the Exchange Offer, in February 2016, Standard & Poor's upgraded our 2016 Notes debt rating to CCC- from D and maintained our outlook as negative. Also in February 2016, Moody's Investor Services downgraded the debt rating on our 2016 Notes to C from Caa2 and affirmed our outlook as stable. With the completion of the Exchange Offer, both Standard & Poor's and Moody's Investor Services have withdrawn all ratings on the Company.

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We may not be able to generate sufficient cash to service all of our existing debt service obligations, and may be forced to take other actions to satisfy our obligations under our debt agreements, which may not be successful.
In February 2016, we completed the Exchange Offer in which we exchanged $203.3 millionOur total outstanding debt under our New Secured Notes, New Convertible Notes, Convertible Notes, and Credit Facilities has an aggregate principal amount of $298.9 million as of December 31, 2016. Through September 2018, Notes for a like amount of 2016 Notes, leaving at most $6.7 million aggregate principal amount of 2016 Notes outstanding. We have also agreed to effect exchange offers of new 5.25% Senior Secured Convertible Noteswhen our Credit Facilities borrowings presently become due, 2019 for our outstanding 7.00% Convertible Notes due 2017 (the "Convertible Notes"). Our annual debt service obligations until December 2016, when the remaining 2016 Notes are scheduled to mature,on such debt will be primarily limited to interest payments on our outstanding debt securities, with an aggregate principal amount of $267.5 million, and on borrowings under our revolving credit facility, if any. We had $66.1 million of borrowings outstanding under the revolving credit facility as of December 31, 2015.payments. Our ability to make scheduled payments on or to refinance our debt obligations depends on our future financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Therefore, we may not be able to maintain or realize a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
Our principal sources of liquidity are cash flows from operations and available borrowing capacityavailability under its revolving credit facility.our Credit Facilities.  We currently plan that we will have sufficient cash flows from our operations (including planned inventory reductions) to continue as a going concern, however, these plans rely on certain underlying assumptions and estimates that may differ from actual results. Such assumptions include improvements in operating results and cash flows driven by the restructuring activities taken duringwe completed in 2015 thatand 2016, which streamlined our organizational structure, lowered operating costs and increased liquidity. Continued losses from operations and insufficient cash flow from operations in the future could have a material adverse effect on our liquidity and financial condition and could raise substantial doubt about our ability to continue as a going concern. Our plans also included the sale for cash of all of our remaining inventory at our Houston and Edmonton facilities and the sale of its wholly-owned subsidiary, TPI. Both of these actions were completed in the first quarter of 2016 and provide liquidity in addition to the planned operating cash flows to meet working capital needs, capital expenditures and debt service obligations for the next twelve months.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments, capital expenditures or potentially accretive acquisitions, sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous borrowing covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of principal and interest on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness or the terms thereof. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations which could have an adverse effect on our financial condition or liquidity.


Our debt instruments impose significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions and our failure to comply with the covenants contained in our debt instruments could result in an event of default that could adversely affect our operating results.
Our debt agreements impose, and future debt agreements may impose, operating and financial restrictions on us. These restrictions limit or prohibit, among other things, our ability to:
 
incur additional indebtedness unless certain financial tests are satisfied, or issue disqualified capital stock;
pay dividends, redeem subordinated debt or make other restricted payments;
make certain investments or acquisitions;
issue stock of subsidiaries;
grant or permit certain liens on our assets;
enter into certain transactions with affiliates;
merge, consolidate or transfer substantially all of our assets;
incur dividend or other payment restrictions affecting certain of our subsidiaries;
transfer, sell or acquire assets, including capital stock of our subsidiaries; and
change the business we conduct.
These covenants could adversely affect our ability to finance our future operations or capital needs, withstand a future downturn in our business or the economy in general, engage in business activities, including future opportunities that

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may be in our interest, and plan for or react to market conditions or otherwise execute our business strategies. A breach of any of these covenants could result in a default in respect of the related indebtedness. If a default occurs, in certain circumstances, the relevant lenders or holders of such indebtedness could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness. If the maturity of our indebtedness is accelerated, we may not have sufficient cash resources to satisfy our debt obligations and may not be able to continue our operations as planned.
Our future operating results are impacted by the volatility of the prices of metals, which could cause our results to be adversely affected.
The prices we pay for metal raw materials and the prices we charge for products may fluctuate depending on many factors, including general economic conditions (both domestic and international), competition, production levels, import duties and other trade restrictions and currency fluctuations. To the extent metal prices decline, we would generally expect lower sales, pricing and possibly lower operating income. Depending on the timing of the price changes and to the extent we are not able to pass on to our customers any increases in our metal raw materials prices, our operating results may be adversely affected. In addition, because we maintain substantial inventories of metals in order to meet short lead-times and the just-in-time delivery requirements of our customers, a reduction in our selling prices could result in lower profitability or, in some cases, losses, either of which could adversely impact our ability to remain in compliance with certain provisions of our debt instruments, as well as result in us incurring impairment charges.
We may not achieve all of the expected benefits from our restructuring and performance enhancement initiatives.
In the second quarter ofApril 2015, we announced additionalan operational restructuring activities.plan that was completed in May 2016. The organizational changes completed as part of this most recent restructuring plan includeincluded workforce reductions and the consolidations of facilities in locations it deemsdeemed to have redundant operations. The consolidations and organizational changes arewere part of our plan to streamline the organizational structure, lower structural operating costs, and increase liquidity. With regards to our 2015most recent restructuring plan, as well as previous restructuring plans which were completed in 2013 and 2014, we have made certain assumptions in estimating the anticipated impact of these restructuring and performance enhancement initiatives. These assumptions may turn out to be incorrect due to a variety of factors. In addition, our ability to realize the expected benefits from these initiatives is subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. Some of our cost saving measures may not have the impact on our operating profitability that we currently project. If we are unsuccessful in implementing these initiatives or if we do not achieve our expected results, our results of operations and cash flows could be materially adversely affected.
If

We are continuing to evaluate various additional restructuring and strategic alternatives designed to further reduce long-term debt and cash interest obligations, the timing and outcome of which are highly uncertain and could be dilutive to the holders of our outstanding equity securities and adversely affect the trading prices and values of our current debt and equity securities.
We believe that reduction in our long-term debt and cash interest obligations would strengthen our financial position and flexibility and therefore remains a key near-term financial objective. Accordingly, we expect to continue to failexplore, evaluate and implement various restructuring and strategic alternatives, whether through seeking additional capital, restructuring or refinancing our indebtedness, debt repurchases, exchanges of existing debt securities for new debt securities and exchanges or conversions of existing debt securities for new equity securities, or other options. The timing and outcome of these efforts currently is highly uncertain. One or more of these alternatives could potentially be consummated without the consent of any one or more of our current security holders and, if consummated, could be dilutive to satisfy the continued listing standardsholders of our outstanding equity securities and adversely affect the trading prices and values of our current debt and equity securities.
Our common stock was delisted in early 2017 by the New York Stock Exchange (NYSE), or if(the "NYSE") for failing to satisfy the NYSE fails to accept our plan that demonstrates our ability to return the Company to conformity with the continued listing standards, and our common stock could be delisted fromis now traded on the NYSE,OTCQB® Venture Market (the "OTCQB"), which could have an adverse impact on the liquiditymarket price and market priceliquidity of our common stock and other adverse consequences under the terms of our debt instruments.could involve additional risks compared to being listed on a national securities exchange.
On January 21,December 6, 2016, we received written noticewere notified by the NYSE that it had determined to commence proceedings to delist our common stock from the NYSE that we are not in complianceas a result of our failure to comply with one of the continued listing standards related to the maintenance of a minimum level of stockholders' equity and market capitalization asstandard set forth in Section 802.01B of the NYSE Listed Company Manual and, if we are unable to remedy such non-compliance, we may be subject to delisting proceedings.maintain an average global market capitalization over a consecutive 30 trading-day period of at least $15 million for our common stock. The Company has submitted a plan toNYSE also suspended the trading of our common stock at the close of trading on December 6, 2016. On January 4, 2017, the NYSE thatfiled a Form 25 with the SEC to delist the Company from the NYSE. Such delisting became effective on January 17, 2017.
While we believe demonstrates ourhad the ability to returnappeal the Company to conformity with the continued listing standards. However, if the NYSE fails to accept our plan or if we continue to fail to satisfy the continued listing standards ofdecision by the NYSE, our Board of Directors determined that it was in our best interest and the best interest of our shareholders to begin trading on the over-the-counter (the "OTC") market following the suspension of trading of our common stock. On December 7, 2016, our common stock will be delisted, which could have an adverse impactimmediately began trading on the liquidity andOTCQB, which is operated by OTC Markets Group Inc., under the symbol “CASL”.
The trading of our common stock in the OTC market rather than NYSE may negatively impact the trading price of our common stock and other adverse consequences, includingthe levels of liquidity available to our shareholders. Securities traded in the OTC market generally have less liquidity due to factors such as the reduced number of investors that will consider investing in the securities, the reduced number of market makers in the securities, and the reduced number of securities analysts that follow such securities. As a fundamental change, under the termsresult, holders of certainshares of our debt instruments.common stock may find it difficult to resell their shares at prices quoted in the market or at all.
Furthermore, because of the limited market and generally low volume of trading in our common stock that could occur, the share price of our common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets perception of our business, and announcements made by us, our competitors, or parties with whom we have business relationships.
Because our common stock trades on the OTC market, in some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of our securities. The lack of liquidity in our common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future. Accordingly, we urge that extreme caution be exercised with respect to existing and future investments in our common stock.
Holders of our Senior Secured Convertible Notes (the "New Convertible Notes") can require us to repurchase their New Convertible Notes following a fundamental change, which includes, among other things, the delisting of our Common Stock from the NYSE and the acquisition of more than 50% of our outstanding voting power by a person or group. We may not have sufficient funds to satisfy such cash obligations.
As of December 31, 2015,2016, we had approximately $57.5$22.3 million of aggregate principal amount outstanding under the New Convertible Notes. The New Convertible Notes bear cash interest semiannually at a rate of 7.0%5.25% per year, and mature on December 15, 2017.30, 2019. Upon the occurrence of a fundamental change (as defined in the indenture for the New Convertible Notes), which includes delisting of our common stock from the NYSE or the acquisition of more than 50% of our outstanding voting power by a person or group, we may be required to repurchase some or all of the Convertible Notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Notes being repurchased, plus any accrued and unpaid interest up to but excluding the relevant fundamental change repurchase date. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable


terms or at all. In addition, our ability to satisfy such cash obligations will be restricted pursuant to covenants contained in the indenture for the New Convertible Notes and will be permitted to be paid only in limited circumstances. We may also be limited in our ability to satisfy such cash obligations by applicable law or the terms of other instruments governing our indebtedness. Our inability to make any cash payments that may be required to satisfy the obligations described above would trigger an event of default under the New Convertible Notes, which in turn could constitute an event of default under our other outstanding indebtedness, thereby potentially resulting in the acceleration of certain of such indebtedness, the prepayment of which could further restrict our ability to satisfy such cash obligations.

8




The conditional conversion featuresexercise of our outstanding warrants for common stock and the conversion of our New Convertible Notes if triggered, may adversely affectinto common stock will dilute the ownership interest of our financial condition and operating results.existing shareholders.
In the event the conditionalAny issuance by us of our common stock upon exercise of our outstanding warrants or conversion features of the Convertible Notes are triggered, holders of theour New Convertible Notes will be entitleddilute the ownership interest of our existing shareholders. In addition, any such issuance of common stock could have a dilutive effect on our net income per share to convert the Convertible Notes at any timeextent that the average stock price during specified periods at their option. If one or more holders elect to convert theirthe period is greater than the conversion prices and exercise prices of the New Convertible Notes and we elect or are deemed to have elected cash settlement or combination settlement, we would be required to pay cash to satisfy all or a portionwarrants, respectively. Furthermore, any sales in the public market of our common stock upon exercise of the warrants or sales in the public market of our common stock issuable upon conversion obligation for suchof the New Convertible Notes which could adversely affect our liquidity. Even if holders do not elect to convert their Convertible Notes, in the absence of sufficient availability under the revolving credit facility, we could be required under applicable accounting guidance to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability. The reclassification of all or a portion of the outstanding principal to a current liability would result in a material reductionprevailing market prices of our net working capital.common stock.
We service industries that are highly cyclical, and any downturn in our customers’ industries could reduce our revenue and profitability.
Many of our products are sold to customers in industries that experience significant fluctuations in demand based on economic conditions, energy prices, consumer demand, availability of adequate credit and financing, customer inventory levels, changes in governmental policies and other factors beyond our control. As a result of this volatility in the industries we serve, when one or more of our customers' industries experiences a decline, we may have difficulty increasing or maintaining our level of sales or profitability if we are not able to divert sales of our products to customers in other industries. Historically, we have made a strategic decision to focus sales resources on certain industries, specifically the aerospace, oil and gas, heavy equipment, machine tools and general industrial equipment industries. A downturn in these industries has had, and may in the future continue to have, an adverse effect on our operating results. We are also particularly sensitive to market trends in the manufacturing and oil and gas sectors of the North American economy. In 2015, the downturn in the oil and gas sector had a significant impact on our financial results as sales to customers which operate in that market were significantly lower than they had been previously. In February 2016, we announced the sale of all inventory from our Houston and Edmonton facilities that primarily serviceserviced the oil and gas sector. With this sale and the plannedsubsequent closure of the Houston and Edmonton facilities, the Company haswe significantly lowered itsour exposure to oil-related market fluctuations. Going forward, we will be primarily focused on two key industries, aerospace and industrial.
A portion of our sales, particularly in the aerospace industry, are related to contracts awarded to our customers under various U.S. Government defense-related programs. Significant changes in defense spending, or in government priorities and requirements could impact the funding, or the timing of funding, of those defense programs, which could negatively impact our results of operations and financial condition. The level of U.S. spending for defense, alternative energy and other programs to which such funding is allocated, is subject to periodic congressional appropriation actions, including the sequestration of appropriations in fiscal years 2013 and after, under the Budget Control Act of 2011, and is subject to change at any time.
Our industry is highly competitive, which may force us to lower our prices and may have an adverse effect on our operating results.
The principal markets that we serve are highly competitive. Competition is based principally on price, service, quality, processing capabilities, inventory availability and timely delivery. We compete in a highly fragmented industry. Competition in the various markets in which we participate comes from a large number of value-added metals processors and service centers on a regional and local basis, some of which have greater financial resources than we do and some of which have more established brand names in the local markets we serve. We also compete to a lesser extent with primary metals producers who typically sell to very large customers requiring shipments of large volumes of metal. Increased competition could force us to lower our prices or to offer increased services at a higher cost to us, which could have an adverse effect on our operating results.
Our operating results are subject to the seasonal nature of our customers’ businesses.
A portion of our customers experience seasonal slowdowns. Historically, our revenues in the months of July, November and December have been lower than in other months because of a reduced number of shipping days and holiday or


vacation closures for some customers. Dependent on market and economic conditions, our sales in the first two quarters of the year, therefore, can be higher than in the third and fourth quarters due to this seasonality. As a result, analysts and investors may inaccurately estimate the effects of seasonality on our operating results in one or more future quarters and, consequently, our operating results may fall below expectations.

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An additional impairment or restructuring charge could have an adverse effect on our operating results.
We continue to evaluate opportunities to reduce costs and improve operating performance. These actions could result in restructuring and related charges, including but not limited to asset impairments, employee termination costs, charges for pension benefits, and pension curtailments, which could be significant and could adversely affect our financial condition and results of operations.
We have a significant amount of long-lived assets, including goodwill and intangible assets. We review the recoverability of goodwill annually or whenever significant events or changes occur that might impair the recovery of recorded costs, making certain assumptions regarding future operating performance. We review the recoverability of definite lived intangible assets and other long-lived assets whenever significant events or changes occur which might impair the recovery of recorded costs, making certain assumptions regarding future operating performance. The results of these calculations may be affected by the current demand and any decline in market conditions for our products, as well as interest rates and general economic conditions. If impairment is determined to exist, we will incur impairment losses, which may have an adverse effect on our operating results.
In 2015, we recorded a $33.7 million non-cash intangible assets impairment charge to eliminate the customer relationships and trade name intangible assets acquired with our 2011 acquisition of Tube Supply, Co. We recorded a $56.2 million non-cash goodwill impairment charge in 2014 to eliminate the Metals segment goodwill entirely. The results of our most recent annual impairment test of goodwill indicates that as of December 1, 2015 there is approximately $10.2 million (24.6%) of excess estimated fair-value over carrying value for the Plastics reporting unit.
Our ability to use our net operating loss carryforwards (NOLs) may be limited.
We have incurred substantial losses since 2008. We may not generate future taxable income so that we can use our available net operating loss carryforwards, or NOLs, toas an offset. As of December 31, 2015,2016, we had U.S. federal NOLs of $144.5$197.9 million. The $144.5$197.9 million in U.S. federal NOLs will expire in various years beginning with 2032. We have determined that an ownership shift of greater than fifty percent occurred in 2015. As such, it is expected that a portion of the pre- ownership shift NOLs will be subject to a Section 382 limitation that will act to prevent the Company from utilizing all of its losses against future taxable income. We have not yet finalized our analysis of the impact of the Section 382 limitation on the preexperienced another ownership shift NOLs. Wechange in 2016, and we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership that we cannot predict or control that could result in further limitations being placed on our ability to utilize our federal NOLs. As of December 31, 2015, the Company has established2016, we have a full valuation allowance against itsour federal and state NOLs.
Disruptions or shortages in the supply of raw materials could adversely affect our operating results and our ability to meet our customers’ demands.
Our business requires materials that are sourced from third party suppliers. If, for any reason, our primary suppliers of metals should curtail or discontinue their delivery of raw materials to us at competitive prices and in a timely manner, our operating results could suffer. Unforeseen disruptions in our supply bases could materially impact our ability to deliver products to customers. The number of available suppliers could be reduced by factors such as industry consolidation and bankruptcies affecting metals and plastics producers, or suppliers may be unwilling or unable to meet our demand due to industry supply conditions. If we are unable to obtain sufficient amounts of raw materials from our traditional suppliers, we may not be able to obtain such raw materials from alternative sources at competitive prices to meet our delivery schedules, which could have an adverse impact on our operating results. To the extent we have quoted prices to customers and accepted orders for products prior to purchasing necessary raw materials, or have existing contracts, we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials to our customers.
In some cases the availability of raw materials requires long lead times. As a result, we may experience delays or shortages in the supply of raw materials. If we are unable to obtain adequate and timely deliveries of required raw materials, we may be unable to timely supply customers with sufficient quantities of products. This could cause us to lose sales, incur additional costs, or suffer harm to our reputation, all of which may adversely affect our operating results.
Increases in freight and energy prices would increase our operating costs and we may be unable to pass these increases on to our customers in the form of higher prices, which may adversely affect our operating results.
We use energy to process and transport our products. The prices for and availability of energy resources are subject to volatile market conditions, which are affected by political, economic and regulatory factors beyond our control. Our operating costs increase if energy costs, including electricity, diesel fuel and natural gas, rise. During periods of higher freight and energy costs, we may not be able to recover our operating cost increases through price increases without

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reducing demand for our products. In addition, we typically do not hedge our exposure to higher freight or energy prices.


We operate in international markets, which expose us to a number of risks.
Although a substantial majority of our business activity takes place in the United States, we serve and operate in certain international markets, which exposes us to political, economic and currency related risks, including the following:
potential for adverse change in the local political or social climate or in government policies, laws and regulations;
difficulty staffing and managing geographically diverse operations and the application of foreign labor regulations;
restrictions on imports and exports or sources of supply;
currency exchange rate risk; and
changechanges in duties and taxes.
In addition to the United States, we operate in Canada, Mexico, France, the United Kingdom, Singapore, and China. An act of war or terrorism or major pandemic event could disrupt international shipping schedules, cause additional delays in importing or exporting products into or out of any of these countries, including the United States, or increase the costs required to do so. In addition, acts of crime or violence in these international markets could adversely affect our operating results. Fluctuations in the value of the U.S. dollar versus foreign currencies could reduce the value of these assets as reported in our financial statements, which could reduce our stockholders' equity. If we do not adequately anticipate and respond to these risks and the other risks inherent in international operations, it could have a material adverse impact on our operating results.
Political and economic uncertainty arising from the outcome of the recent referendum on the membership of the United Kingdom in the European Union could adversely impact our financial condition and operating results.
On June 23, 2016, the United Kingdom voted to leave the European Union (the “EU”), which triggered short-term financial volatility, including a decline in the value of the British pound in comparison to both the U.S. dollar and the euro. Before the United Kingdom leaves the EU, a process of negotiation is required to determine the future terms of the United Kingdom’s relationship with the EU. The uncertainty before, during and after the period of negotiation could have a negative economic impact and result in further volatility in the markets for several years. Such ongoing uncertainty may result in various economic and financial consequences for businesses operating in the United Kingdom, the EU and beyond.
During the year ended December 31, 2016, approximately 5% of our consolidated net sales were attributable to operations in the United Kingdom, and approximately 12% of our consolidated net sales were attributable to operations in Europe overall. The Company and its various subsidiaries hold financial assets and liabilities denominated in British pounds, including cash and cash equivalents, accounts receivable, and accounts payable, and the future impacts of the United Kingdom's exit from the EU could have a materially adverse impact on our financial condition and operating results.
A portion of our workforce is represented by collective bargaining units, which may lead to work stoppages.
As of December 31, 2015,2016, approximately 27%20% of our U.S. employees were represented by the United Steelworkers of America ("USW") under collective bargaining agreements, including hourly warehouse employees at our distribution centers in Franklin Park, IllinoisCleveland, Ohio and Cleveland, Ohio. On January 31, 2016, our Franklin Park, Illinois distribution center was closed and those USW employees terminated, resulting in only 19% of our U.S employees being represented by the USW as of that date.Hammond, Indiana. As these agreements expire, there can be no assurance that we will succeed in concluding collective bargaining agreements with the USW to replace those that expire. Although we believe that our labor relations have generally been satisfactory, we cannot predict how stable our relationships with the USW will be or whether we will be able to meet the USW requirements without impacting our operating results and financial condition. The USW may also limit our flexibility in dealing with our workforce. Work stoppages and instability in our relationship with the USW could negatively impact the timely processing and shipment of our products, which could strain relationships with customers or suppliers and adversely affect our operating results. On October 1, 2014, we entered into a four yearfour-year collective bargaining agreement with the USW, which covers approximately 197101 employees at our Franklin Park, Illinois (closedlargest facility in January 2016)Cleveland, Ohio. This agreement is scheduled to expire in September 2018, and Cleveland, Ohio facilities.our goal is to engage in early negotiations in the spring of 2018 to secure another four-year agreement and avoid disruption to the business. Approximately 2822 employees at our Hammond, Indiana facility are covered by a separate collective bargaining agreement with the USW throughthat was renegotiated in August 2016.2016 and expires in August 2020.
We rely upon our suppliers as to the specifications of the metals we purchase from them.
We rely on mill or supplier certifications that attest to the physical and chemical specifications of the metals or plastics received from our suppliers for resale and generally, consistent with industry practice, do not undertake independent testing of such metals or plastics.metals. We rely on our customers to notify us of any product that does not conform to the specifications certified by the supplier.supplier or ordered by the customer. Although our primary sources of products have been domestic suppliers,


we have and will continue to purchase product from foreign suppliers when we believe it is appropriate. In the event that metal purchased from domestic suppliers is deemed to not meet quality specifications as set forth in the mill or supplier certifications or customer specifications, we generally have recourse against these suppliers for both the cost of the products purchased and possible claims from our customers. However, such recourse will not compensate us for the damage to our reputation that may arise from sub-standard products and possible losses of customers. Moreover, there is a greater level of risk that similar recourse will not be available to us in the event of claims by our customers related to products from foreign suppliers that do not meet the specifications set forth in the mill or supplier certifications. In such circumstances, we may be at greater risk of loss for claims for which we do not carry, or do not carry sufficient, insurance.
Our business could be adversely affected by a disruption to our primary distribution hubs.
Our largest facilities, in Cleveland, Ohio, and Hammond, Indiana, as well as our recently opened 208,000 square foot facility in Janesville, Wisconsin, serve as primary distribution centers that ship product to our other facilities as well as external customers. Our business could be adversely impacted by a major disruption at any of these facilities due to unforeseen developments occurring in or around the facility, such as:

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damage to or inoperability of our warehouse or related systems;
a prolonged power or telecommunication failure;
a natural disaster, environmental or public health issue, or an act of war or terrorism on-site.
A prolonged disruption of the services and capabilities of these or other of our facilities could adversely impact our operating results.
Damage to or a disruption in our information technology systems could impact our ability to conduct business and could subject us to liability for failure to comply with privacy and information security laws.
Difficulties associated with the design and implementation of our enterprise resource planning ("ERP") systemor other information technology systems could adversely affect our business, our customer service and our operating results.
We rely primarily on one information technology system to provide inventory availability to our sales and operating personnel, improve customer service through better order and product reference data and monitor operating results. Difficulties associated with upgrades or integration with new systems could lead to business interruption that could harm our reputation, increase our operating costs and decrease profitability. In addition, any significant disruption relating to our current information technology systems, whether resulting from such things as fire, flood, tornado and other natural disasters, power loss, network failures, loss of data, security breaches and computer viruses, or otherwise, may have an adverse effect on our business, our operating results and our ability to report our financial performance in a timely manner.
The success of our business depends on the security of our networks and, in part, on the security of the network infrastructures of our third-party vendors. In connection with conducting our business in the ordinary course, we store and transmit limited amounts of customer, vendor, and employee information, including account or credit card information, and other personally identifiable information. Unauthorized or inappropriate access to, or use of, our networks, computer systems or services, whether intentional, unintentional or as a result of criminal activity, could potentially jeopardize the security of this confidential information. A number of other companies have publicly disclosed breaches of their security, some of which have involved sophisticated and highly targeted attacks on portions of their networks. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the perception of the effectiveness of our security measures could be harmed and we could lose employees, customers, or vendors. A party that is able to circumvent our security measures could misappropriate our proprietary information or the information of our customers, vendors, or employees, cause interruption in our operations, or damage our computers or those of our customers or vendors which could expose us to claims from such persons or from regulators, financial institutions or others with whom we do business, any of which could have an adverse impact on our financial condition and results of operations.
We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches, including any breach related to us or the parties with which we have commercial relationships, could damage our reputation and expose us to a risk of loss, litigation, and possible liability. We cannot give assurance that the security measures we take will be effective in preventing these types of activities. We also cannot give assurance that the security measures of our third-party vendors, including network providers, providers of customer and vendor support services, and other vendors, will be adequate. In addition to potential legal liability,


these activities may adversely impact our reputation or our revenues and may interfere with our ability to provide our products and services, all of which could adversely impact our business.
Ownership of our stock is concentrated, which may limit stockholders’ ability to influence corporate matters.
From time to time, the Company has experienced concentrations of ownership among institutional investors and/or hedge funds. As of December 31, 2015,2016, based on filings made with the SEC and other information made available to us as of that date, we believe fourone of our directors, Jonathan B. Mellin, and Reuben S. Donnelley, through their affiliationshis affiliation with W. B. & Co., and Allan Young and Kenneth Traub, through their affiliations with Raging Capital Management, LLC, may be deemed to beneficially own approximately 48%35% of our common stock. Accordingly, Mr. Mellin Mr. Donnelley, Mr. Young and Mr. Traub and theirhis affiliates, and/or any other concentrated ownership interests (including Stonehouse Management, LLC, which beneficially owned approximately 17% of our common stock as of December 31, 2015) may have the voting power to substantially affect or control the outcome of matters requiring a stockholder vote including the election of directors and the approval of significant corporate matters. Such a concentration of control could adversely affect the market price of our common stock or prevent a change in control or other business combinations that might be beneficial to us.

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We arecould be vulnerable to interest rate fluctuations on our indebtedness, which could hurt our operating results.
We are exposed to various interest rate risks that arise in the normal course of business. We finance our operations with fixed and variable rate borrowings. Market risk arises from changes in variable interest rates. UnderWe currently finance our revolving credit facility,operations with fixed rate borrowings, and the market value of our $298.9 million of fixed rate borrowings may be impacted by changes in interest rates. Historically, we have financed our operations with variable rate on borrowings is subjectin addition to changes based on fluctuationsfixed rate borrowings. If, in the LIBORfuture, we use variable rate borrowings to finance our operations, and prime rates of interest. If interest rates subsequently increase significantly, increase, we could be unable to service our debt whichit could have an adverse effect on our operating results orand liquidity.
Commodity hedging transactions may expose us to loss or limit our potential gains.
We have entered into certain fixed price sales contracts with customers which expose us to risks associated with fluctuations in commodity prices. As part of our risk management program, we may use financial instruments from time-to-time to mitigate all or portions of these risks, including commodity futures, forwards or other derivative instruments. While intended to reduce the effects of the commodity price fluctuations, these transactions may limit our potential gains or expose us to losses. Also, should our counterparties to such transactions fail to honor their obligations due to financial distress, we would be exposed to potential losses or the inability to recover anticipated gains from these transactions.
We may face risks associated with current or future litigation and claims.
From time to time, we are involved in a variety of lawsuits, claims and other proceedings relating to the conduct of our business. These suits concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, personal injury and product liability matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future. While it is not feasible to predict the outcome of all pending lawsuits and claims, we do not believe that the disposition of any such pending matters is likely to have a materially adverse effect on our financial condition or liquidity, although the resolution in any reporting period of one of more of these matters could have an adverse effect on our operating results for that period. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.
We could incur substantial costs in order to comply with, or to address any violations under, environmental and employee health and safety laws, which could adversely affect our operating results.
Our operations are subject to various environmental statutes and regulations, including laws and regulations governing materials we use and our facilities. In addition, certain of our operations are subject to international, federal, state and local environmental laws and regulations that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. Our operations are also subject to various employee safety and health laws and regulations, including those concerning occupational injury and illness, employee exposure to hazardous materials and employee complaints. Certain of our facilities are located in industrial areas, have a history of heavy industrial use and have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled and disposed of hazardous and other regulated wastes. Currently unknown cleanup obligations at these facilities, or at off-site locations at which materials from our operations were disposed, could result in future expenditures that cannot be currently quantified, but which could have a material adverse effect on our financial condition, liquidity or operating results.
We may face risks associated with current or future litigation and claims.
From time to time, we are involved in a variety of lawsuits, claims and other proceedings relating to the conduct of our business. These suits concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, personal injury and product liability matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future. While it is not feasible to predict the outcome of all pending lawsuits and claims, we do not believe that the disposition of any such pending matters is likely to have a materially adverse effect on our financial condition or liquidity, although the resolution in any reporting period of one of more of these matters could have an adverse effect on our operating results for that period. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.
Potential environmental legislative and regulatory actions could impose significant costs on the operations of our customers and suppliers, which could have a material adverse impact on our results of operations, financial condition and cash flows.
Climate change regulation or some form of legislation aimed at reducing greenhouse gas (''GHG'') emissions is currently being considered in the United States as well as elsewhere globally. As a metals and plastics distributor, our operations do not emit significant amounts of GHG. However, the manufacturing processes of many of our suppliers and customers are energy intensive and generate carbon dioxide and other GHG emissions. Any adopted future climate change and GHG regulations may impose significant costs on the operations of our customers and suppliers and indirectly impact our operations.
Until the timing, scope and extent of any future regulation becomes known, we cannot predict the effect on our results of operations, financial condition and cash flows.

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We have various mechanisms in place that may prevent a change in control that stockholders may otherwise consider favorable.
In August 2013, the Companywe elected by resolution of the Board of Directors to become subject to Section 3-803 of the Maryland General Corporation Law or the MGCL.(the "MGCL"). As a result of this election, the Board of Directors was classified into three separate classes of directors, with each class generally serving three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. The provision for a classified board could prevent a party who acquires control of a majority of our outstanding voting stock from obtaining control of our Board of Directors until the second annual stockholders meeting following the date the acquiring party obtains the controlling interest. The classified board provision could discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us and could increase the likelihood that incumbent directors will retain their positions.
In addition, our charter and by-laws and the MGCL include provisions that may be deemed to have anti-takeover effects and may delay, defer or prevent a takeover attempt that stockholders might consider to be in their best interests. For example, the MGCL, our charter and bylaws require the approval of the holders of two-thirds of the votes entitled to be cast on the matter to amend our charter (unless our Board of Directors has unanimously approved the amendment, in which case the approval of the holders of a majority of such votes is required), contain certain advance notice procedures for nominating candidates for election to our Board of Directors, and permit our Board of Directors to issue up to 9.988 million shares of preferred stock.
Furthermore, we are subject to the anti-takeover provisions of the MGCL that prohibit us from engaging in a “business combination” with an “interested stockholder” for a period of five years after the date of the transaction in which the person first becomes an “interested stockholder,” unless the business combination or stockholder interest is approved in a prescribed manner. The application of these and certain other provisions of our charter or the MGCL could have the effect of delaying or preventing a change of control, which could adversely affect the market price of our common stock.
The provisions of our debt instruments also contain limitations on our ability to enter into change of control transactions. In addition, the repurchase rights in our 7.0% convertible senior notes due 2017 (“New Convertible Notes”)Notes triggered by the occurrence of a “fundamental change”fundamental change (as defined in the indenture for the New Convertible Notes), and the additional shares of our common stock by which the conversion rate is increased in connection with certain fundamental change transactions, as described in the indenture for the New Convertible Notes, could discourage a potential acquirer.
ITEM 1B — Unresolved Staff Comments
None.

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ITEM 2 — Properties
The Company’s corporate headquarters are located in Oak Brook, Illinois. All properties and equipment are sufficient for the Company’s current level of activities. As of December 31, 2015,2016, distribution centers and sales offices are maintained at each of the following locations, most of which are leased, except as indicated:
Locations
Approximate
Floor Area in
Square Feet

 
Metals Segment  
North America  
Bedford Heights, Ohio374,400
(1)
Charlotte, North Carolina116,500
(1)
Edmonton, Alberta87,100
(4)
Fairless Hills, Pennsylvania71,600
(1)
Fort Smith, Arkansas24,800
 
Grand Prairie, Texas78,000
(1)
Hammond, Indiana (H-A Industries)243,000
  
Houston, Texas274,000
(3)(4)
Janesville, Wisconsin208,000
 
Kennesaw, Georgia87,500
  
Mexicali, Mexico21,200
 
Mississauga, Ontario57,000
  
Paramount, California155,500
  
Santa Cantarina, Nuevo Leon, Mexico112,000
  
Saskatoon, Saskatchewan15,000
  
Selkirk, Manitoba50,000
(1)
Stockton, California60,000
  
Wichita, Kansas102,000
  
Europe  
Blackburn, England62,140
  
Trafford Park, England30,000
 
Montoir de Bretagne, France38,940
  
Asia  
Shanghai, China45,700
  
Singapore76,000
 
Sales Offices  
Bilbao, Spain(Intentionally left blank)
 
Fairfield, Ohio(Intentionally left blank)
 
Kansas City, Missouri(Intentionally left blank)
 
Total Metals Segment2,390,380
  
   

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Locations
Approximate
Floor Area in
Square Feet

 
Plastics Segment  
Baltimore, Maryland24,000
  
Bronx, New York18,500
 
Cleveland, Ohio8,580
  
Cranston, Rhode Island14,900
  
Detroit, Michigan22,000
  
Elk Grove Village, Illinois22,500
  
Fort Wayne, Indiana17,600
  
Grand Rapids, Michigan42,500
(1)
Harrisburg, Pennsylvania13,880
  
Indianapolis, Indiana13,500
  
Kalamazoo, Michigan102,650
  
Knoxville, Tennessee16,530
  
New Philadelphia, Ohio15,700
  
Pittsburgh, Pennsylvania12,800
  
Rockford, Michigan53,650
  
Tampa, Florida17,700
  
Walker, Michigan59,630
 
Total Plastics Segment476,620
  
Headquarters  
Oak Brook, Illinois39,360
(2)
GRAND TOTAL2,906,360
  
Locations
Approximate
Floor Area in
Square Feet

 
North America  
Bedford Heights, Ohio374,400
(1)
Charlotte, North Carolina116,500
(1)
Fairless Hills, Pennsylvania71,600
(1)
Fort Smith, Arkansas28,000
 
Grand Prairie, Texas78,000
(1)
Hammond, Indiana (H-A Industries)252,595
  
Janesville, Wisconsin208,000
 
Kennesaw, Georgia87,500
  
Mexicali, Mexico160,220
 
Mississauga, Ontario57,000
  
Paramount, California155,568
  
Santa Cantarina, Nuevo Leon, Mexico112,000
  
Saskatoon, Saskatchewan15,000
  
Selkirk, Manitoba50,000
(1)
Stockton, California60,000
  
Wichita, Kansas58,000
  
Europe  
Blackburn, England62,140
  
Trafford Park, England30,000
 
Montoir de Bretagne, France38,940
  
Asia  
Shanghai, China45,700
  
Singapore39,578
 
Sales Offices  
Auburn, Massachusetts(Intentionally left blank)
 
Bilbao, Spain(Intentionally left blank)
 
Fairfield, Ohio(Intentionally left blank)
 
Sub-Total2,100,741
  
   
Headquarters  
Oak Brook, Illinois39,361
(2)
GRAND TOTAL2,140,102
  
 
(1)Represents owned facility.
(2)The Company’s principal executive office does not include a distribution center.
(3)Represents two leased facilities.
(4)In February 2016, the Company announced the sale of all inventory held at these locations as well as the planned closure of these facilities in 2016.


ITEM 3 — Legal Proceedings
The Company is party to a variety of legal proceedings, claims, and other claims,inquiries, including proceedings or inquiries by governmentgovernmental authorities, which arise from the operation of its business. These proceedings, claims, and inquiries are incidental to and occur in the normal course of the Company's business affairs. The majority of these proceedings, claims, and proceedingsinquiries relate to commercial disputes with customers, suppliers, and others; employment including benefit matters;and employee benefits-related disputes; product quality;quality disputes with vendors and/or customers; and environmental, health and safety claims. It is the opinion of management that the currently expected outcome of these proceedings, claims, and claims,inquiries, after taking into account recorded accruals and the availability and limits of our insurance coverage, will not have a material adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

ITEM 4 — Mine Safety Disclosures
Not applicable.

16




Executive Officers of the Registrant
The following selected information for each of our current executive officers (as defined by regulations of the SEC) was prepared as of March 10, 2016.April 7, 2017.
Name and TitleAge Business Experience
Patrick R. Anderson
Executive Vice President, Chief Financial Officer & Treasurer
4445
 Mr. Anderson began his employment with the registrant in 2007 as Vice President, Corporate Controller and Chief Accounting Officer. In September 2014, he was appointed to the position of Interim Vice President, Chief Financial Officer and Treasurer, and in May 2015 was appointed to his current role as the Executive Vice President, Chief Financial Officer & Treasurer. Prior to joining the registrant, he was employed with Deloitte & Touche LLP (a global accounting firm) from 1994 to 2007.
Marec E. Edgar
Executive Vice President, General Counsel, Secretary & Chief Administrative Officer
4041
 Mr. Edgar began his employment with the registrant in April 2014, as Vice President, General Counsel and Secretary. In May 2015, he was appointed to his current role as Executive Vice President, General Counsel, Secretary & Chief Administrative Officer. Prior to joining the registrant, he held positions of increasing responsibility with Gardner Denver, Inc. (a global manufacturer of industrial compressors, blowers, pumps, loading arms and fuel systems) from 2004 to 2014. Most recently, he served as Assistant General Counsel and Risk Manager and Chief Compliance Officer of Gardner Denver.
Thomas L. Garrett
Vice President and
President, Total Plastics, Inc.
53
Mr. Garrett began his employment with Total Plastics, Inc., a wholly owned subsidiary of the registrant, in 1988 and was appointed to the position of Controller. In 1996, he was elected to the position of Vice President and in 2001 was appointed to the position of Vice President of the registrant and President of Total Plastics, Inc.
Ronald E. Knopp
Executive Vice President, Chief Operating Officer		4546
 Mr. Knopp began his employment with the registrant in 2007 and was appointed to the position of Operations Manager of the Bedford Heights facility. In 2009, he was appointed Director of Operations for the Western Region and in 2010 served as Director of Operations for the Metals and Plate Commercial Units. In July 2013, Mr. Knopp was appointed to the position of Vice President, Operations, and in May 2015 was appointed to his current position as Executive Vice President, Chief Operating Officer. Prior to joining the registrant, Mr. Knopp served as Plant Manager for Alcoa, Inc., Aerospace Division (global producer of aluminum) from 2003 to 2007.
Steven W. Scheinkman
President & Chief Executive Officer

6263
 
President and Chief Executive Officer of the Company since April 2015. Mr. Scheinkman also served as an independent member of the Company’s Board of Directors from March 2015 to April 2015. Prior to joining the registrant, Mr. Scheinkman served as President and Chief Executive Officer and a director of Innovative Building Systems LLC, and certain of its affiliates and predecessor entities (a leading customer modular home producer) since 2010. He served as a director of Claymont Steel Holdings, Inc. (a manufacturer of custom discrete steel plate) from 2006 to 2008. He served as the President and Chief Executive Officer and a director of Transtar Metals Corp. (“Transtar”) (a supply chain manager/distributor of high alloy metal products for the transportation, aerospace and defense industries) from 1999 to 2006. Following Transtar’s acquisition by the Company in September 2006, he served as President of Transtar Metals Holdings, Inc. until September 2007, and thereafter served as its advisor until December 2007. He served in various capacities as an executive officer of Macsteel Service Centers USA (a distributor and processor of steel products) including President, Chief Operating Officer and Chief Financial Officer, from 1986 to 1999.


17




Name and TitleAgeBusiness Experience
Paul Schwind
Corporate Controller & Chief Accounting Officer

39
Mr. Schwind began his employment with the registrant in September 2015, as Controller and Chief Accounting Officer. Prior to joining the registrant, he was employed as the Corporate Controller at Global Brass and Copper Holdings, Inc. (a value-added converter, fabricator, distributor, and processor of specialized copper and brass products) from 2010 to 2015. Mr. Schwind served as the Senior Manager, Financial Reporting & Consolidations at PepsiAmericas (a food and beverage company) from 2009 to 2010.


18




PART II
ITEM 5 — Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company’s common stock trades on the NYSE under the ticker symbol “CAS”. The Company's current stockholders’ equity and market capitalization no longer satisfies the minimum NYSE levels. On January 21,December 6, 2016, the Company received written noticewas notified by the New York Stock Exchange (the “NYSE”) that the NYSE had determined to commence proceedings to delist the Company's common stock from the NYSE that it is not in complianceas a result of the Company’s failure to comply with one of the continued listing standardsstandard set forth in Section 802.01B of the NYSE Listed Company Manual and, if it is unable to remedy such non-compliance, it may be subjectmaintain an average global market capitalization over a consecutive 30 trading-day period of at least $15 million for its common stock. The NYSE also suspended the trading of the common stock at the close of trading on December 6, 2016.
While the Company had the ability to delisting proceedings. The Company has submitted a plan toappeal the decision by the NYSE, the Company's Board of Directors determined that demonstrates its ability to returnit was in the best interest of the Company and its shareholders to conformity withimmediately begin trading on the continued listing standards.OTCQB® Venture Market (the "OTCQB"), which is operated by OTC Markets Group Inc. On December 7, 2016, the Company's common stock immediately began trading on the OTCQB under the symbol “CASL”.
As of March 10, 2016,24, 2017, there were approximately 772724 shareholders of record. Payment of cash dividends and repurchase of common stock are currently limited due to restrictions contained in the Company’s debt agreements. No cash dividends were declared or paid on the Company’s common stock in 20152016 or 2014.2015. We may consider paying cash dividends on the Company common stock at some point in the future, subject to the limitations described above. Any future payment of cash dividends, if any, is at the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements and financial condition, restrictions under the Company’s debt instruments, and such other factors as the Board of Directors may consider.
See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”, for information regarding common stock authorized for issuance under equity compensation plans.
The table below presents shares of the Company’s common stock which were acquired by the Company during the three months ended December 31, 2015:2016:
Period
Total
Number of
Shares
Purchased
(1)
 
Average
Price
Paid per
Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
 
Maximum Number (or
Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs
Total
Number of
Shares
Purchased
(1)
 
Average
Price
Paid per
Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
 
Maximum Number (or
Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs
October 1 through October 31—
 —
 —
 —
—
 —
 —
 —
November 1 through November 30—
 —
 —
 —
—
 —
 —
 —
December 1 through December 315,601
 $1.59
 —
 —
3,945
 $0.25
 —
 —
Total5,601
 $1.59
 —
 —
3,945
 $0.25
 —
 —

(1)The total number of shares purchased represents shares surrendered to the Company by employees to satisfy tax withholding obligations upon vesting of restricted stock units awarded pursuant to the Company’s 2008 Omnibus Incentive Plan (as amended and restated as of April 25, 2013)July 27, 2016).
The following table sets forth the range of the high and low sales prices of shares of the Company’s common stock as reported by the NYSE and OTCQB for the periods indicated:
2015 20142016 2015
Low High Low HighLow High Low High
First Quarter$2.80
 $8.15
 $13.42
 $15.64
$1.28
 $3.58
 $2.80
 $8.15
Second Quarter$3.44
 $7.01
 $10.87
 $14.99
$1.51
 $5.10
 $3.44
 $7.01
Third Quarter$2.11
 $6.31
 $8.15
 $11.87
$0.68
 $1.81
 $2.11
 $6.31
Fourth Quarter$1.50
 $3.00
 $6.16
 $8.57
$0.20
 $0.87
 $1.50
 $3.00

19




The following graph compares the cumulative total stockholder return on our common stock for the five-year period December 31, 2010 through December 31, 2015 with the cumulative total return of the Standard and Poor’s 500 Index and to a peer group index that the Company selected. The comparison in the graph assumes the investment of $100 on December 31, 2010. Cumulative total stockholder return means share price increases or decreases plus dividends paid, with the dividends reinvested, and reflect market capitalization weighting. The graph does not forecast future performance of our common stock. The Company has utilized the same general peer group index since 2010 with adjustments made to remove peer companies acquired over the period by companies not suitable for the peer group. The Company believes the peer group provides a meaningful comparison of our stock performance, and it is generally consistent with the peer group used for the relative total shareholder return performance measure under the Company’s long term compensation plans. The peer group index is made up of companies in the metals industry or in the industrial products distribution business, although not all of the companies included in the peer group index participate in all of the lines of business in which the Company is engaged and some of the companies included in the peer group index also engage in lines of business in which the Company does not participate. Additionally, the market capitalizations of many of the companies in the peer group are quite different from that of the Company.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among A.M. Castle & Co., the S&P 500 Index, and a Peer Group
*$100 invested on 12/31/10 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright© 2014 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
 12/10 12/11 12/12 12/13 12/14 12/15
A. M. Castle & Co.$100.00
 $51.39
 $80.23
 $80.23
 $43.35
 $8.64
S&P 500100.00
 102.11
 118.45
 156.82
 178.29
 180.75
Peer Group (a)100.00
 90.53
 91.79
 107.10
 97.00
 76.33
(a)The Peer Group Index consists of the following companies: AEP Industries Inc.; AK Steel Holding Corp.; Allegheny Technologies Inc.; Applied Industrial Technologies Inc.; Carpenter Technology Corp.; Cliffs Natural Resources Inc.; Commercial Metals Company; Fastenal Company; Gibraltar Industries Inc.; Haynes International Inc.; Kaman Corp.; Lawson Products Inc.; MSC Industrial Direct Company Inc.; Nucor Corp.; Olin Corp.; Olympic Steel, Inc.; Quanex Building Products Corp.; Reliance Steel & Aluminum Co.; Schnitzer Steel Industries Inc.; Steel Dynamics Inc.; Stillwater Mining Company; United States Steel Corp.; and Worthington Industries Inc. In 2015, RTI International Metals Inc. was removed from the peer group as it was acquired by Alcoa.

20




ITEM 6 — Selected Financial Data
(Dollar amounts in millions, except per share data)
The following table sets forth selected consolidated financial data for the five years ended December 31, 2015.2016. This selected consolidated financial data should be read in conjunction with Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and the notes thereto.
The selected financial data in the table below includes the results of the December 2011 acquisition of Tube Supply from the date of acquisition. During the fourth quarter of 2015, the Company changed its method of accounting for its U.S. metals inventories, which were accounted for under LIFO method, to the average cost method. The change was applied retrospectively to the prior year financial information presented below. See Note 1- Basis of Presentation and Significant Accounting Policies to the consolidated financial statements for discussion of this accounting change and its related impact.
2015 2014 2013 2012 2011
(Dollar amounts in millions, except per share data)

2016 2015 2014 2013 2012
For the year ended December 31:                  
Net sales$770.8
 $979.8
 $1,053.1
 $1,270.4
 $1,132.4
$533.1
 $637.9
 $841.7
 $918.3
 $1,143.9
Equity in (losses) earnings of joint venture(1.4) 7.7
 7.0
 7.2
 11.7
(4.2) (1.4) 7.7
 7.0
 7.2
Net (loss) income from continuing operations (a)
(209.8) (119.4) (39.5) (9.7) 7.8
Basic (loss) earnings per common share from continuing operations (a)
(8.91) (5.11) (1.70) (0.42) 0.34
Diluted (loss) earnings per common share from continuing operations (a)
(8.91) (5.11) (1.70) (0.42) 0.34
Loss from continuing operations (a)
(114.1) (212.8) (122.7) (41.8) (10.8)
Income from discontinued operations, net of income taxes6.1
 3.0
 3.3
 2.3
 1.1
Net loss (a)
$(108.0) $(209.8) $(119.4) $(39.5) $(9.7)
Basic and diluted earnings (loss) per common share:         
Continuing operations$(3.93) $(9.04) $(5.25) $(1.80) $(0.47)
Discontinued operations0.21
 0.13
 0.14
 0.10
 0.05
Net basic and diluted loss per common share (a)
$(3.72) $(8.91) $(5.11) $(1.70) $(0.42)
As of December 31:                  
Total assets497.7
 710.7
 806.5
 924.4
 957.8
$329.3
 $493.5
 $703.8
 $797.3
 $912.8
Long-term debt, less current portion314.8
 309.4
 245.6
 296.2
 314.2
286.5
 310.6
 302.5
 236.4
 284.6
Total debt321.8
 310.1
 246.0
 297.1
 314.9
286.6
 317.6
 303.3
 236.8
 285.5
Total stockholders’ equity47.0
 252.6
 388.5
 421.5
 396.4
Total stockholders’ (deficit) equity(35.1) 47.0
 252.6
 388.5
 421.5
(a) Results include a $33.7 million impairment of intangible assets charge and a $61.5 million charge for the write-down of inventory and purchase commitments in 2015, and a $56.2 million goodwill impairment charge in 2014.

ITEM 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Dollar amounts in millions, except per share data)
Information regarding the business and markets of A.M. Castle & Co. and its subsidiaries (the “Company”), including its reportable segments, is included in Item 1 “Business” of this annual report on Form 10-K.
The following discussion should be read in conjunction with Item 6 “Selected Financial Data” and the Company’s consolidated financial statements and related notes thereto in Item 8 “Financial Statements and Supplementary Data”. The following discussion and analysis of our financial condition and results of operations contain forward-looking statements and includes numerous risks and uncertainties, including those described under Item 1A "Risk Factors" and "Disclosure Regarding Forward-Looking Statements" of this annual report on Form 10-K. Actual results may differ materially from those contained in any forward-looking statements.
EXECUTIVE OVERVIEW
The Company’s strategy is to become the foremost global provider of metals products and services and specialized supply chain solutions to targeted global industries.
The following significant events occurred whichDuring 2016, the Company engaged in several restructuring and refinancing activities that impacted the Company’s operations and/or financial results:results. The following is a summary of the significant restructuring and refinancing activities that occurred in 2016:

Net sales declined by 21.3% compared to 2014 primarily due to decreased Metals segment sales volumes and downward pricing on most products;
Operating cash flows improved from use of cash of $75.1 million in 2014 to a use of cash of $22.1 million in 2015 as a result of a significant reduction in inventory;

21




Completed the operational restructuring plan announced in April 2015 including the implementation of a new executive and branch management structure and the closure of seven facilities in geographically overlapping areas. Recognized $50.6 million in restructuring costs for the year including $25.7 million related to inventory identified to be scrapped or written down;
Opened a new warehouse and distribution center of excellence in Janesville, Wisconsin in the fourth quarter of 2015;
Recognized a $16.0 million restructuring gain on of the sale of the Company's facilities in Franklin Park, IL and Worcester, MA in the fourth quarter of 2015 and a $5.6 million gain on the sale of the Company's facility in Blaine, MN in the first quarter of 2015;
Recorded a $33.7 million non-cash impairment charge in the fourth quarter of 2015 related to the customer relationships and trade names intangible assets acquired in the Tube Supply acquisition in December 2011;
Recorded a $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Company's Houston and Edmonton facilities. In February 2016, the Company announced the salesold all of thisits inventory at its Houston and Edmonton facilities, which primarily serviced the oil and gas industry, as well as planssector of the energy market, to closean unrelated third party and recognized net sales and cost of materials of $27.1 million. Subsequently, the Company sold all of its equipment at its Houston and Edmonton facilities and agreed to a reduction in future proceeds from the inventory sale in exchange for the assignment of its remaining lease obligations at its Houston facility. The Company ceased operations at the Houston and Edmonton facilities;
During the fourth quarterfacilities in February 2016 and recorded total restructuring expense of 2015, the Company elected to change its method of inventory costing for its U.S. metals inventory$7.3 million related to the average cost method fromclosure of these facilities in 2016. The sale of the last-in first-out ("LIFO") method. The Company applied this change in methodassets and subsequent closure of inventory costing by retrospectively adjusting the prior period financial statements;Houston and Edmonton facilities did not qualify as a discontinued operation under the authoritative accounting guidance.



In FebruaryMarch 2016, the Company completed the sale of substantially all the assets of its wholly-owned subsidiary, Total Plastics, Inc. ("TPI"), for $53.6 million in cash. The Company used the proceeds from the sale to repay indebtedness, pursuant to its previously announced plan to improve its capital structure. The sale of TPI, which resulted in pre-tax and after-tax gains of $2.0 million and $1.3 million, respectively, allows the Company to focus solely on its core metals business. TPI is reflected in the Consolidated Financial Statements as a private exchangediscontinued operation.

In June 2016, the Company received an offer from its joint venture partner to purchase the Company's ownership share in Kreher Steel Company, LLC ("Kreher") for an amount that was less than the current carrying value of the Company's investment in Kreher. The Company determined that this offer indicated that the Company may not be able to recover the full carrying amount of its investment and consent solicitationtherefore, the Company recognized a $4.6 million other-than-temporary impairment charge in the second quarter of 2016 to certain eligible holdersreduce the carrying amount of the investment to exchangethe negotiated purchase price. In August 2016, the Company completed the sale of its ownership share in Kreher to its joint venture partner for aggregate cash proceeds of $31.6 million, which resulted in an insignificant loss on disposal. The proceeds from the sale were ultimately used to repay indebtedness. Because the sale of the Company's investment in Kreher is not considered to be a strategic shift that will have a major effect on the Company's operations and financial results, the results of Kreher through the date of sale are reflected within continuing operations in the Consolidated Financial Statements.
In the first half of 2016, the Company exchanged $204.5 million aggregate principal amount of 12.75% Senior Secured Notes due December 2016 (the "Secured Notes") for $204.5 million aggregate principal amount of new 12.75% Senior Secured Notes due December 2018 (the "New Secured Notes"). The Company also exchanged $57.5 million aggregate principal amount of its 7.0% Convertible Notes due December 2017 (the "Convertible Notes") for a combination of $23.8 million aggregate principal amount of 5.25% Convertible Notes due December 2019 (the "New Convertible Notes") and 7.9 million shares of the Company’s outstanding 12.75% SeniorCompany's common stock (the "Convertible Note Exchange"). These actions extended the maturity of substantially all of the Company's Secured Notes due 2016; and Convertible Notes on terms that improved the Company's capital structure.

TheAs part of the Company's refinancing of the Secured Notes, it agreed to make special redemptions using Designated Asset Sales Proceeds (as defined by the indenture governing the New Secured Notes). Pursuant to the indenture governing the New Secured Notes, the Company engagedredeemed $27.5 million of aggregate principal amount of the New Secured Notes in a plan to market its wholly-owned subsidiary, Total Plastics, Inc ("TPI") in earlyNovember 2016. On March 11,

In December 2016, the Company entered into new secured credit facilities (the “Credit Facilities”) with certain financial institutions in order to replace and repay outstanding borrowings and support the continuance of letters of credit under the Company's senior secured asset-based revolving credit facility (the “Revolving Credit Facility”). The Credit Facilities are in the form of senior secured first lien term loan facilities in an asset purchaseaggregate principal amount of up to $112.0 million. The Credit Facilities consist of a $75.0 million initial term loan facility funded at closing and a $37.0 million delayed-draw term loan facility (the “Delayed Draw Facility”). Under the Delayed Draw Facility, $24.5 million was available in December 2016 and $12.5 million is expected to be available in June 2017 or thereafter. In December 2016, the Company borrowed the $24.5 million of the Delayed Draw Facility available in accordance with its terms.

In connection with the closing of the Credit Facilities, commitments pursuant to the Revolving Credit Facility were terminated, liens granted to the collateral agent pursuant thereto were released in full, and Revolving Credit Facility borrowings outstanding were repaid by the Company using proceeds from the Credit Facilities.

On April 6, 2017, the Company entered into a restructuring support agreement (the “RSA”) with certain of their creditors, including certain holders of the Company’s (a) term loans under its Credit Facilities agreement, (b) New Secured Notes, and (c) New Convertible Notes. The RSA contemplates the financial restructuring of the debt and equity of the Company (the “Restructuring”) pursuant to a Restructuring Term Sheet attached to the RSA as an unrelated third-partyexhibit (the “Term Sheet”). The Term Sheet sets forth the terms and condition of the Restructuring and provides for the saleconsummation thereof either as part of TPI, which makes upout-of-court proceedings or by prepackaged Chapter 11 plan of reorganization (a “Plan”) confirmed by the entiretyU.S. Bankruptcy Court for the District of Delaware. If this were consummated through a Plan, the Plan would be confirmed following a filing by the Company for voluntary relief under Chapter 11 of the Company's Plastics segment (17% of net sales in 2015) leaving only the Company's core Metals business. As of December 31, 2015, TPI did not meet the criteria to be classified as held for sale and accordingly its results are presented with continuing operations. The terms of the sale are discussed in Note 15 - Subsequent Events to the consolidated financial statements.United States Bankruptcy Code.


Recent Market and Pricing Trends
Metals segment salesSales were down 24.2%16.4% in 20152016 compared to 20142015 as the Company experiencedcontinued to experience a combination of lower demand and pricing pressure for virtually all of its core metals products. The products most notably down during the year were those dependent on the energy sector, which includes oil and gas, and the industrials sector. The aerospace sector showed some signs of improvement mainly on the strength of aluminum demand and pricing.
Industry data provided by the Metals Service Center Institute ("MSCI") indicates that overall 20152016 U.S. steel service center shipment volumes decreased 8% compared to 20142015 levels. According to MSCI data, industry sales volumes of products consistent with the Company's product mix were also down 8%15% in 20152016 compared to 2014.2015. The products which had the most significant declines according to MSCI data included those heavily dependent on the energy sector and the industrials sector, namelycarbon alloy bar, cold finished carbon products,bar, carbon plate, and carbon pipe and tube products.
A decrease in the demand for the Company's products as was seen in 2015 compared to 2014, has a significant impact on the Company's operating results. A decrease in demand results in lower sales dollars which, once costs and expenses are factored in, leads to less dollars earned from normal operations. Although the lower demand also decreases the cost of materials and operating costs, including warehouse, delivery, selling, general and administrative expenses, the decrease in these costs and expenses is often less than the decrease in sales dollars due to fixed costs, resulting in lower operating margins. Through the Company's recent restructuring activities, management believes it will beis in a better position to react to decreases in customer demand and manage the impact that demand decreases have on operating margins. Similarly,In periods of increasing demand, management believes itits restructuring activities will allow the Company to experience operating margin growth, and therefore growth in operating margin dollars,dollars.
As it was in periods of increasing demand.
The2015, the Company was impacted by significant downward pricing pressure on most of its Metals products in 2015.2016. Pricing for Metals segmentits products can have a more significant impact on the Company's operating results than demand because of the following reasons, among others:
Changes in volume resulting from changes in demand typically result in corresponding changes to the Company’s variable costs. However, as pricing changes occur, variable expenses are not directly impacted.
If surcharges are not passed through to the customer or are passed through without a mark-up, the Company’s profitability will be adversely impacted.

22




Throughout the year the Company was forced to lower its pricing to remain competitive, a consequence that was largely due to historicallycontinuing high levels of import material coming into the U.S. market and deflating prices. Overall, the gross margins,material margin, calculated as net sales less cost of materials divided by net sales, decreasedincreased from 23.4%8.9% in 20142015 to 12.5%21.0% in 2015. The year ended December 31, 2015 cost2016. Cost of materials for 2015 included a $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Company's Houston and Edmonton facilities and a $25.7 million non-cash charge for inventory to be scrapped or written down related to 2015 restructuring activities. Cost of materials for 2016 included $27.1 million from the sale of all inventory at the Houston and Edmonton facilities to an unrelated third party at a zero gross profit margin and $14.2 million of aged and excess inventory that was sold for $2.5 million. Excluding these non-cash charges,specified items from both years, the gross margins between 2015 and 2014 were relatively flat. Themargin for 2016 improved slightly from the gross margin for 2015. Despite the decline in pricing during 2016, the Company was able to maintainimprove its gross margins, excluding the two non-cash inventory charges discussed above,margin from 2015 by implementing improved inventory management strategies and better matching of sales prices with the inventory replacement cost. Although the Company expects the pricing pressure to continue into 2016,2017, which will continue to impact the Company's operating results, management believes that favorable pricing from suppliers, implementation of its inventory management strategies and a focus on quality and superior customer service will provide a competitive advantage in a difficult metals pricing environment.
The Plastics segment experienced a 3.8% decrease in demand for its products in 2015 compared to 2014, primarily due to slightly lower demand in the automotive and life sciences sectors amplified by raw material pricing declines across most product lines. The decline in automotive business was due to the completion of several large customer programs and the decline in life sciences was largely due to a cyclical trend in that sector. In 2016, management expects demand in both sectors to return to previous sales levels due to their cyclical nature.
Current Business Outlook
The current business conditions are different for eachWith the February 2016 closure of the Company's target markets. The energy market,Houston and Edmonton facilities, which is largely tied toprimarily serviced the oil and gas sector is particularly weak as lower oil prices have forced oil and gas companies to significantly decrease their spending on capital projects which useof the Company's metal products. The Company expects this trend to continue well into 2016. The industrialenergy market, in which the Company sells products is also generally soft with global economic uncertainties, particularly in China, causing the end-usersbecame principally focused on two key markets, aerospace and industrial.
The stronger of the Company's products to take a conservative approach towards capital spending. The strongest of the Company's target metal markets continues to be aerospace, with strong defense and commercial spending driving the demand for the Company's aluminum and stainless products. The Company expects the aerospace market to remain stable and for business to improve, particularly where the Company has long-term contracts with subcontractors who support platforms that are anticipated to grow. However, the Company does anticipate continued growth opportunitiespressure on transactional pricing.
Demand in the aerospace market. The plasticsindustrial market has not improved and continues to be cyclical with sales in 2015 down from the previous year on lower demandgenerally soft. The Company does not expect to see significant growth at its larger customers in the automotive and life sciences sectors. The timingshort term. Given the Company's lower cost structure, which is the result of certain long-running programs, particularly in automotive, can impact plastics sales from one yearits restructuring activities, it does see an opportunity to the next.grow market share by improving its conversion rate on transactional business on a competitive basis at still accretive net margins.
In February 2016, the Company announced the sale of all inventory from its Houston and Edmonton facilities that primarily service the oil and gas sector. With this sale, and the planned closure of the Houston and Edmonton facilities, the Company has significantly lowered its exposure to oil-related market fluctuations. Going forward, the Company will be primarily focused on two key industries, aerospace and industrial.
With regards to metals pricing, lower
Lower pricing on manymost of the Company's products in 2015 hadcontinued to have a significant negative impact on its financial performance.performance in 2016. Historically high levels of foreign imports into the U.S. market have driven prices down, as have inventory de-stocking actions taken by many of the Company's competitors. In response to both of these pricing pressures, the Company has beenwas forced to lower its prices in order to remain competitive in the market. The Company expects thethat pricing pressures experiencedmay begin showing improvement in 2015 to continue into the next year.2017, as a result of possible U.S. protectionist policies, improved demand and supportive raw material costs.
The Company believes that the actions taken with its 2015 restructuring plan provide signs of encouragement even in the challenging environment currently facing the steel, plastics and commodity markets. Namely, the Company has consolidated its facilities and pushed more accountability down to its local branch management. The Company believes this will allow it to be more responsive to the needs of its customers and enable it to quickly capitalize on transactional sales opportunities as they become available in the markets served. With the reduction in its cost structure and improved asset management, the Company believes it will be better positioned to generate positive operating cash flow in periods of sluggish sales and incremental profitability in periods of sales growth.
On March 11, 2016, the Company entered into an asset purchase agreement with an unrelated third-party for the sale of TPI, which makes up the entirety of the Company's Plastics segment (17% of net sales in 2015). The Company plans to use the proceeds from the sale of TPI to further pay down debt and de-lever the Company's balance sheet. With sale of its Plastics segment, management believes it has streamlined its future operations to be primarily focused on returning its core Metals business to profitability.

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RESULTS OF OPERATIONS: YEAR-TO-YEAR COMPARISONS AND COMMENTARY
Our discussion of comparative period results is based upon the following components of the Company’s consolidated statementsConsolidated Statements of operations.Operations and Comprehensive Loss.
Net Sales —The Company derives its sales from the processing and delivery of metals and plastics.metals. Pricing is established with each customer order and includes charges for the material, processing activities and delivery. The pricing varies by product line and type of processing. From time to time, the Company may enter into fixed price arrangements with customers while simultaneously obtaining similar agreements with its suppliers.
Cost of Materials — Cost of materials consists of the costs that the Company pays suppliers for metals plastics and related inbound freight charges, excluding depreciation and amortization which are included in operating costs and expenses discussed below. During the fourth quarter of 2015, the Company elected to change its method of inventory costing for its U.S. metals inventory to the average cost method from the last-in first-out ("LIFO") method. The accounting policy change has been applied retrospectively to the prior year financial statements presented (See Note 1 - Basis of Presentation and Significant Accounting Policies to consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K).
Operating Costs and Expenses — Operating costs and expenses primarily consist of:  
Warehouse, processing and delivery expenses, including occupancy costs, compensation and employee benefits for warehouse personnel, processing, shipping and handling costs;
Sales expenses, including compensation and employee benefits for sales personnel;
General and administrative expenses, including compensation for executive officers and general management, expenses for professional services primarily related to accounting and legal advisory services, bad debt expense, data communication and computer hardware and maintenance;
Restructuring expense and income, including moving costs and gain on the sale of fixed assets associated with plant consolidations, employee termination and related benefits costs associated with workforce reductions, lease termination costs and other exit costs;
Depreciation and amortization expenses, including depreciation for all owned property and equipment, and amortization of various intangible assets; and
Impairment of intangible assets and/or goodwill.

2016 Results Compared to 2015
The following table sets forth certain statement of operations data for the years ended December 31, 2016 and 2015. Included in the operating results below is the sale of all inventory and subsequent closure of the Company's Houston and Edmonton facilities which occurred in the first quarter of 2016.
24
 Year Ended December 31,    
 2016 2015 Favorable/(Unfavorable)
 (Dollar amounts in millions)
$ % of Net Sales $ % of Net Sales $ Change % Change
Net sales$533.1
 100.0 % $637.9
 100.0 % $(104.8) (16.4)%
Cost of materials (exclusive of depreciation and amortization)(a)
421.3
 79.0 % 581.2
 91.1 % 159.9
 27.5 %
Operating costs and expenses(b)
182.1
 34.2 % 244.8
 38.4 % 62.7
 25.6 %
Operating loss$(70.3) (13.2)% $(188.1) (29.5)% $117.8
 62.6 %
(a) Cost of materials includes $0.5 million of inventory scrapping expenses associated with restructuring activities for 2016. Cost of materials for 2015 includes a $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Company's Houston and Edmonton locations and a $25.7 million non-cash charge for inventory that was identified to be scrapped or written down in conjunction with 2015 restructuring activities.
(b) Operating costs and expenses include $12.9 million and $9.0 million of restructuring expenses for the years 2016 and 2015, respectively. Also included in 2015 are a $33.7 million non-cash intangible assets impairment charge and a $5.6 million gain from the sale of an operating facility.


Net Sales
Net sales in 2016 were $533.1 million, a decrease of $104.8 million, or 16.4%, compared to 2015. The decrease in net sales was mainly attributable to a 13.5% decrease in tons sold per day to customers compared to 2015 and a 6.7% decrease in average selling prices, partly offset by a slightly favorable change in product mix and the impact of the Company's $27.1 million sale of all its inventory at its Houston and Edmonton facilities to an unrelated third party in the first quarter of 2016. The sale of this inventory, which was sold at a zero gross profit margin, was the result of a decision to lower the Company's exposure to oil and gas market fluctuations. Including this inventory sale, net sales from the Houston and Edmonton locations were $33.0 million and $51.9 million in 2016 and 2015, respectively.
Sales volumes in 2016 decreased on virtually all products compared to 2015, with alloy bar, cold finished carbon, SBQ bar, stainless and tubing having the most significant declines. The closure of the Company's Houston and Edmonton facilities in February 2016 also led to decreased sales volume as the tons sold from these locations, which primarily were sold to oil and gas customers, were not replaced by subsequent sales out of another of the Company's service centers.
Downward pricing pressures in 2016 resulted in lower average selling prices on all of the products the Company sells compared to 2015. Lower pricing on high volumes of foreign metal imports and de-stocking by many of the Company's competitors caused the Company to lower prices in order to remain competitive. The 6.7% decrease in average selling prices in 2016 compared to 2015 was driven by average selling price decreases of 7% to 17% on many of the Company's highest selling products by volume, with a partial offset from favorable product mix.
Cost of Materials
Cost of materials (exclusive of depreciation and amortization) during 2016 was $421.3 million compared to $581.2 million during 2015. The $159.9 million, or 27.5%, decrease is largely due to the decrease in sales volume during 2016, partly offset by the $27.1 million of cost of materials recognized on the sale of all inventory at the Company's Houston and Edmonton facilities in the first quarter of 2016, as discussed above. In addition, in an effort to reduce the amount of aged and excess inventory on hand, cost of materials in 2016 included $14.2 million of aged and excess inventory that was sold for $2.5 million in the fourth quarter of 2016, which increased the operating loss for 2016 by $11.7 million. Included in cost of materials in 2015 are a $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Houston and Edmonton facilities and a $25.7 million non-cash restructuring charge related to the write-down of aged and excess inventory, compared to a restructuring charge of $0.5 million for inventory scrapping expenses in 2016.
As a percent of net sales, cost of materials (exclusive of depreciation and amortization) was 79.0% of net sales in 2016, compared to 91.1% of net sales for 2015. The 2016 percentage was significantly affected by the sale of the Houston and Edmonton inventory and the sales of aged and excess inventory, while the 2015 percentage was impacted by the $61.5 million non-cash write-down of inventory and purchase commitments of the Houston and Edmonton facilities and the $25.7 million non-cash restructuring charge related to the write-down of aged and excess inventory.
Operating Costs and Expenses and Operating Loss
Operating costs and expenses for 2016 and 2015 were as follows:
 Year Ended December 31, Favorable/(Unfavorable)
(Dollar amounts in millions)2016 2015 $ Change % Change
Warehouse, processing and delivery expense$84.5
 $100.9
 $16.4
 16.3 %
Sales, general and administrative expense68.3
 77.9
 9.6
 12.3 %
Restructuring expense12.9
 9.0
 (3.9) (43.3)%
Depreciation and amortization expense16.4
 23.3
 6.9
 29.6 %
Impairment of intangible assets—
 33.7
 33.7
 100.0 %
Total operating costs and expenses$182.1
 $244.8
 $62.7
 25.6 %
Operating costs and expenses decreased by $62.7 million from $244.8 million during 2015 to $182.1 million during 2016:
Warehouse, processing and delivery expense decreased by $16.4 million as a result of lower payroll, benefits and facility costs resulting from plant consolidations, the February 2016 closure of the Houston and Edmonton


facilities, and lower variable costs resulting from the decrease in sales activity. The expense for 2015 was reduced by a $5.6 million gain from the sale of an operating facility.
Sales, general and administrative expense of $68.3 million for 2016 decreased by $9.6 million compared to 2015 mainly as a result of lower payroll and benefits costs, most notably pension expense.
Restructuring expense of $12.9 million in 2016 consisted mainly of lease termination charges associated with the closure of the Company's Houston and Edmonton facilities and moving expenses associated with plant consolidations, while restructuring activities for 2015 primarily consisted of employee termination and related benefits related to workforce reductions, moving costs associated with plant consolidations, partly offset by a $16.0 million gain on the sale of the Company's warehouse and distribution facilities in Franklin Park, Illinois and Worcester, Massachusetts.
Depreciation and amortization expense of $16.4 million in 2016 decreased by $6.9 million from 2015 mainly as a result of the impairment of intangible assets recorded in the fourth quarter of 2015, as well as plant consolidations and closures, and equipment sales.
Impairment of intangible assets of $33.7 million in 2015 represented the non-cash write-off of the remaining intangible assets from the Company's 2011 Tube Supply acquisition, and resulted from the decision to close the Houston and Edmonton facilities.
Operating loss in 2016, including restructuring charges of $12.9 million and inventory scrapping expense associated with restructuring activities of $0.5 million, was $70.3 million. Operating loss in 2015, including intangible assets impairment charges of $33.7 million, net restructuring losses of $9.0 million, total write-downs of inventory and purchase commitments of $87.1 million, and a $5.6 million gain on sale of facility, was $188.1 million.
Other Income and Expense, Income Taxes and Net Loss
Interest expense was $36.4 million in 2016, a decrease of $4.1 million from the $40.5 million in 2015, which was primarily attributable to lower outstanding borrowings.
Unrealized gain on the embedded conversion option associated with the 5.25% Convertible Notes due December 30, 2019 was $10.5 million for 2016. There was no conversion option associated with convertible debt requiring mark-to-market accounting in 2015.
Debt restructuring loss of $8.6 million in 2016 consisted primarily of eligible holder consent fees and legal and other professional fees incurred in conjunction with the exchange of Secured Notes for New Secured Notes, the Convertible Note Exchange, and the termination of the Revolving Credit Facility. These fees were partly offset by gains resulting from the conversion of New Convertible Notes to equity.
Other expense, comprised mostly of foreign currency transaction losses, was $7.6 million in 2016 compared to $6.3 million for 2015. These losses are primarily related to unhedged intercompany financing arrangements.
The Company recorded an income tax benefit of $2.5 million for 2016 compared to an income tax benefit of $23.6 million for 2015. The Company’s effective tax rate is expressed as income tax expense (benefit), which includes tax expense on the Company’s share of joint venture losses, as a percentage of loss from continuing operations beforeincome taxes and equity in losses of joint venture. The effective tax rate for 2016 and 2015 was 2.3% and 10.0%, respectively. The lower effective tax rate for 2016 resulted primarily from changes in the geographic mix and timing of income (losses) and changes in valuation allowance positions in the U.S. and Canada during 2015, which drove one-time charges to income tax expense in that period.
Equity in losses of joint venture was $4.2 million in 2016, compared to equity in losses of joint venture of $1.4 million in 2015. In August 2016, the Company completed the sale of its joint venture investment for aggregate cash proceeds of $31.6 million. Included in the equity in losses of the Company's joint venture in 2016 was an impairment charge of $4.6 million related to the write-down of the Company's joint venture investment to fair value (refer to Note 3 - Joint Ventureto the Consolidated Financial Statements). Equity in losses of joint venture for 2015 included a $1.8 million charge associated with the impairment of goodwill at the joint venture.
Loss from continuing operations for 2016 was $114.1 million, compared to a loss from continuing operations of $212.8 million for 2015. Income from discontinued operations, net of income taxes, was $6.1 million for 2016, compared to income from discontinued operations, net of income taxes, of $3.0 million for 2015. Income from discontinued operations, net of income taxes, for 2016 includes an after-tax gain on the sale of TPI of $1.3 million.


Net loss for 2016, which includes income from discontinued operations (net of income taxes) of $6.1 million, was $108.0 million. Net loss for 2015, which includes income from discontinued operations (net of income taxes) of $3.0 million, was $209.8 million.
2015 Results Compared to 2014
Consolidated results by business segment are summarized in theThe following table sets forth certain statement of operations data for yearsthe year ended December 31, 2015 and 2014.
Operating Results by Segment
 Year Ended December 31,    
 2015 2014 Favorable/(Unfavorable)
(Dollar amounts in millions)$ % of Net Sales $ % of Net Sales $ Change % Change
Net sales$637.9
 100.0 % $841.7
 100.0 % $(203.8) (24.2)%
Cost of materials (exclusive of depreciation and amortization)(a)
581.2
 91.1 % 652.4
 77.5 % 71.2
 10.9 %
Operating costs and expenses(b)
244.8
 38.4 % 298.5
 35.5 % 53.7
 18.0 %
Operating loss$(188.1) (29.5)% $(109.2) (13.0)% $(78.9) (72.3)%
 Year Ended December 31, Favorable / (Unfavorable)
 2015 2014 $ Change % Change
Net Sales       
Metals$638.0
 $841.7
 $(203.7) (24.2)%
Plastics132.8
 138.1
 (5.3) (3.8)%
Total Net Sales$770.8
 $979.8
 $(209.0) (21.3)%
Cost of Materials       
Metals$581.3
 $652.5
 $71.2
 10.9 %
% of Metals Sales91.1 % 77.5 %    
Plastics93.4
 97.9
 4.5
 4.6 %
% of Plastics Sales70.3 % 70.9 %    
Total Cost of Materials$674.7
 $750.4
 $75.7
 10.1 %
% of Total Sales87.5 % 76.6 %    
Operating Costs and Expenses       
Metals$233.8
 $287.9
 $54.1
 18.8 %
Plastics33.0
 33.9
 0.9
 2.7 %
Other11.0
 10.5
 (0.5) (4.8)%
Total Operating Costs and Expenses$277.8
 $332.3
 $54.5
 16.4 %
% of Total Sales36.0 % 33.9 %    
Operating (Loss) Income       
Metals$(177.1) $(98.7) $(78.4) (79.4)%
% of Metals Sales(27.8)% (11.7)%    
Plastics6.4
 6.3
 0.1
 1.6 %
% of Plastics Sales4.8 % 4.6 %    
Other(11.0) (10.5) (0.5) (4.8)%
Total Operating Loss$(181.7) $(102.9) $(78.8) (76.6)%
% of Total Sales(23.6)% (10.5)%    
“Other”(a) Cost of materials includes costsa $61.5 million non-cash charge for the write-down of executive, legalinventory and elementspurchase commitments of the finance department which are shared by both segmentsCompany's Houston and Edmonton locations recognized in the fourth quarter of 2015 and a $25.7 million non-cash charge for inventory that was identified to be scrapped or written down in conjunction with 2015 restructuring activities.
(b) The Company recorded a $33.7 million non-cash intangible assets impairment charge and a $5.6 million gain on the sale of the Company.Company's facility in Blaine, Minnesota during the year ended December 31, 2015. The Company recorded a $56.2 million non-cash goodwill impairment charge during the year ended December 31, 2014.
Net Sales:Sales
Consolidated netNet sales were $770.8$637.9 million in 2015, a decrease of $209.0 million, or 21.3%, compared to 2014. Metals segment net sales during 2015 of $638.0 million were $203.7$203.8 million, or 24.2%, lower thancompared to 2014 reflecting lower demand and average selling prices compared to 2014. Plastics segment 2015 net sales of $132.8 million were $5.3 million, or 3.8%, lower than 2014.
Total Metals segment pricingThe average selling price per ton sold increased by 1.4% compared to 2014 mainly on the strength of pricing for aluminum and stainless products and a slightly favorable sales mix towards aluminum and stainless products and away from tubing products, which had a large price decrease in 2015. In 2015, significant downward pricing pressure on many of the products the Company sells were the result of record high imports into the U.S as well as lower prices on the products purchased from mills. This downward pricing resulted in lower average selling prices of 5% to 13% on several of the Company's largest product categories as a percentage of tons sold including tubing and SBQ bar. Total Metals segment sales volumes declined by 25.7% compared to 2014 with the most significant declines in sales volume on those products traditionally sold to the energy market (oil and gas) including tubing, alloy bar and carbon and alloy plate. Tons sold per day of aluminum, which is traditionally sold to the Aerospace market, increased in 2015 compared to 2014. The decrease in Plastics segment net sales during 2015 was primarily due to a decrease in the

25




automotive sector resulting from the completion of certain customer programs in the first half of 2014 and lower demand in the life sciences market in 2015.
Cost of Materials:Materials
Cost of materials (exclusive of depreciation and amortization) during 2015 were $674.7$581.2 million, a decrease of $75.7$71.2 million,, or 10.1%10.9%, compared to 2014 cost of materials of $750.4 million.$652.4 million, primarily due to the decrease in sales volume during 2015. 2015 included a $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Company's Houston and Edmonton locations recognized in the fourth quarter of 2015 and a $25.7 million non-cash charge for inventory which was identified to be scrapped or written down at in conjunction with 2015 restructuring activities. The restructuring charge includes a provision for small pieces of inventory at closing branches which were not moved, as well as provisions for excess inventory levels based on estimates of current and future market demand. Management decided it was more economically feasible to scrap aged material as opposed to expending the time and effort to sell such material in the normal course. The majority of the inventory written down in 2015 was inventory for the oil and gas market.
Cost of materials for the Metals segment in 2015 were $581.3 million, or 91.1% as a percent of net sales, compared to $652.5 million, or 77.5% as a percent of net sales, in 2014. The $71.2 million, or 10.9%, decrease is primarily due to the decrease in sales volume during 2015. Metals segment cost of materials as a percent of net sales were higher in 2015 than 2014 due to the $61.5 million non-cash charge for the write-down of inventory and purchase commitments of the Company's Houston and Edmonton locations and the $25.7 million non-cash charge for inventory written down in conjunction with 2015 restructuring activities. Cost of materials for the Plastics segment in 2015 were $93.4 million compared to $97.9 million in 2014. Plastics segment cost of materials as a percent of net sales improved slightly from 70.9% in 2014 to 70.3% in 2015 due to increased fabrication work, which typically generates higher margins and keeps the cost of materials down.


Operating Costs and Expenses and Operating (Loss) Income:Loss
Operating costs and expenses for the year ended December 31, 2015 and 2014 were as follows:
 Year Ended December 31, Favorable/(Unfavorable)
(Dollar amounts in millions)2015 2014 $ Change % Change
Warehouse, processing and delivery expense$100.9
 $126.7
 $25.8
 20.4%
Sales, general and administrative expense77.9
 94.2
 16.3
 17.3%
Restructuring expense (income)9.0
 (3.0) (12.0) 400.0%
Depreciation and amortization expense23.3
 24.4
 1.1
 4.5%
Impairment of intangible assets33.7
 —
 (33.7) —%
Impairment of goodwill—
 56.2
 56.2
 100.0%
Total operating costs and expenses$244.8
 $298.5
 $53.7
 18.0%
On a consolidated basis,Total operating costs and expenses decreased $54.5$53.7 million, or 16.4%18.0%, from $332.3$298.5 million in 2014 to $277.8$244.8 million during 2015. As a percent of net sales, operating costs and expenses increased to 36.0%38.4% in 2015 compared to 33.9%35.5% in 2014. In 2015, the Company recorded a $33.7 million non-cash intangible assets impairment charge and a $5.6 million gain on the sale of the Company's facility in Blaine, Minnesota. In 2014, the Company recorded a $56.2 million non-cash goodwill impairment charge. In addition, a net loss of $9.0 million associated with the Company's restructuring activities was included in operating costs and expenses in 2015 compared to a net gain of $3.0 million included in 2014. Restructuring activities for 2015 consisted of employee termination and related benefits related to workforce reductions, lease termination costs, moving costs associated with plant consolidations, a gain on the sale of the Company's warehouse and distribution facilities in Franklin Park, Illinois and Worcester, Massachusetts and professional fees. The restructuring charges recorded during 2014 consisted of a $5.5 million gain on the sale of fixed assets, partially offset by employee termination and related benefits for the workforce reductions announced in June 2014, moving costs associated with plant consolidations announced in October 2013 and lease termination costs related to the restructuring activities announced in January 2013. For additional detail, see2013 (refer to Note 1011 - Restructuring Activity to the consolidated financial statements.Consolidated Financial Statements).
In addition to the intangible assets impairment in 2015, the goodwill impairment in 2014 and restructuring gains and losses in both years, all other operating costs and expenses decreased by $44.0$43.2 million in 2015 compared to 2014. The decrease was primarily due to decreases in sales, general and administrative costs and warehouse, processing and delivery costs which related to the following:
and sales, general and administrative costs:
Warehouse, processing and delivery costs decreased by $25.8 million, which includes the $5.6 million gain on sale of facility in the first quarter of 2015. Other items contributing to the decrease were lower payroll and benefits costs, lower facility costs resulting from plant closures, and lower variable costs resulting from the decrease in sales volume in the year.2015 from 2014.
Sales, general and administrative costs decreased by $17.0$16.3 million, primarily due to lower payroll and benefits costs resulting from restructuring activity workforce reductions, lower discretionary spending and lower fees for outside consulting services.
Depreciation and amortization expense decreased by $1.2$1.1 million in 2015 mainly due to lower amortization expense resulting from the non-compete and developed technology intangible assets which became fully amortized in 2014.
Consolidated operatingOperating loss for 2015, including intangible assets impairment charges of $33.7 million, net restructuring losses of $9.0 million, total write-downs of inventory and purchase commitments of $87.1 million and a $5.6 million

26




gain on sale of facility, was $181.7$188.1 million, compared to a consolidatedan operating loss of $102.9$109.2 million in 2014, which included a goodwill impairment charge of $56.2 million and net restructuring gain of $3.0 million.
Other Income and Expense, Income Taxes and Net Loss:Loss
Interest expense was $42.0$40.5 million in 2015, an increase of $1.4$0.7 million compared to 2014 as a result of higher revolver borrowings in 2015.
Other expense, mostly related to foreign currency transaction losses, was $6.3 million in 2015 compared to $4.3 million for 2014. The majority of these transaction losses related to unhedged intercompany financing arrangements between the United States and the United Kingdom and Canada.


The Company recorded an income tax benefit of $21.6$23.6 million in 2015 compared to a tax benefit of $20.6$22.9 million in 2014. The Company’s effective tax rate is expressed as income tax benefit (expense), which includes tax expense on the Company’s share of joint venture earnings or losses, as a percentage of income (loss)loss continuing operations before income taxes and equity in earnings (losses) of joint venture. The effective tax rate for 2015 and 2014 was 9.4%10.0% and 14.0%15.0%, respectively. The lower effective tax rate results from changes in the geographic mix and timing of income (losses), recording valuation allowances against certain deferred tax assets in the U.S. and at certain foreign jurisdictions, and the impact of the goodwill impairment charge in 2014.
Equity in losses of the Company’s joint venture was $1.4$1.4 million in 2015 compared to equity in the earnings of the Company's joint venture of $7.7$7.7 million in 2014.2014. Weaker demand and pricing for Kreher's products, mainly in the energy and industrial markets, were the primary factors contributing to the decrease in the earnings of the Company's joint venture. In addition, in 2015 Kreher recognized a $3.5 million charge for the impairment of goodwill in 2015, of which $1.8 million was recognized by the Company through the equity in losses of joint venture and a $1.0 million expense was recognized by the Company related to foreign currency losses associated with intercompany financing arrangements among Kreher entities.
ConsolidatedLoss from continuing operations for 2015 was $212.8 million compared to a loss from continuing operations of $122.7 million for 2014. Income from discontinued operations, net of income taxes, was $3.0 million for 2015 compared to income from discontinued operations, net of income taxes, of $3.3 million for 2014. Net loss for 2015 was $209.8$209.8 million,, or $8.91$8.91 per diluted share, compared to net loss of $119.4 million, or $5.11 per diluted share, for 2014.

27




2014 Results Compared to 2013
Consolidated results by business segment are summarized in the following table for years 2014 and 2013.
Operating Results by Segment
 Year Ended December 31, Favorable / (Unfavorable)
 2014 2013 $ Change % Change
Net Sales       
Metals$841.7
 $918.3
 $(76.6) (8.3)%
Plastics138.1
 134.8
 3.3
 2.4 %
Total Net Sales$979.8
 $1,053.1
 $(73.3) (7.0)%
Cost of Materials       
Metals$652.5
 $692.2
 $39.7
 5.7 %
% of Metals Sales77.5 % 75.4 %    
Plastics97.9
 95.9
 (2.0) (2.1)%
% of Plastics Sales70.9 % 71.1 %    
Total Cost of Materials$750.4
 $788.1
 $37.7
 4.8 %
% of Total Sales76.6 % 74.8 %    
Operating Costs and Expenses       
Metals$287.9
 $246.6
 $(41.3) (16.7)%
Plastics33.9
 34.6
 0.7
 2.0 %
Other10.5
 8.4
 (2.1) (25.0)%
Total Operating Costs and Expenses$332.3
 $289.6
 $(42.7) (14.7)%
% of Total Sales33.9 % 27.5 %    
Operating (Loss) Income       
Metals$(98.7) $(20.5) $(78.2) (381.5)%
% of Metals Sales(11.7)% (2.2)%    
Plastics6.3
 4.3
 2.0
 46.5 %
% of Plastics Sales4.6 % 3.2 %    
Other(10.5) (8.4) (2.1) (25.0)%
Total Operating Loss$(102.9) $(24.6) $(78.3) (318.3)%
% of Total Sales(10.5)% (2.3)%    
“Other” includes costs of executive, legal and elements of the finance department which are shared by both segments of the Company.
Net Sales:
Consolidated net sales were $979.8 million in 2014, a decrease of $73.3 million, or 7.0%, compared to 2013. Metals segment net sales during 2014 of $841.7 million were $76.6 million, or 8.3%, lower than 2013 reflecting lower average selling prices and demand compared to 2013. Plastics segment 2014 net sales of $138.1 million were $3.3 million, or 2.4%, higher than 2013.
Metals segment pricing declined by 5.9% compared to 2013. The pricing decline was primarily driven by average price decreases for aluminum, nickel and tubing products. Metals segment sales volumes declined by 1.7% compared to 2013. Carbon and alloy plate, tubing and aluminum products had the most significant decline in sales volumes compared to 2013. All of the Metals segment products had lower average selling prices when compared to 2013, with most average selling prices lower by 4% to 9%. The increase in Plastics segment net sales during 2014 was primarily due to strength in the automotive, marine, life science and home goods markets.

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Cost of Materials:
Cost of materials (exclusive of depreciation and amortization) during 2014 were $750.4 million, a decrease of $37.7 million, or 4.8%, compared to 2013.
Cost of materials for the Metals segment were $652.5 million, or 77.5% as a percent of net sales, in 2014 compared to $692.2 million, or 75.4% as a percent of net sales, in 2013. Metals segment cost of materials included charges associated with net realized and unrealized losses for forward contracts related to the commodity hedging program of $0.3 million and $2.1 million for 2014 and 2013, respectively. Metals segment 2013 cost of materials included $1.2 million of charges related to the write off of inventory as part of the Company's restructuring activities that were announced in January 2013. Metals segment cost of materials as a percent of net sales were higher in 2014 than 2013 primarily due to increases in inventory reserves for excess and obsolete material. Cost of materials for the Plastics segment were $97.9 million, or 70.9% as a percent of net sales, in 2014 as compared to $95.9 million, or 71.1% as a percent of net sales, for 2013. Plastics segment cost of materials as a percent of net sales were lower in 2014 compared to 2013 due to supply chain and operations efficiency improvements implemented during 2014.
Operating Costs and Expenses and Operating (Loss) Income:
Consolidated operating costs and expenses increased $42.7 million, or 14.7%, from $289.6 million, or 27.5% as a percent of net sales in 2013 to $332.3 million, or 33.9% as a percent of net sales, during 2014.
The Company recorded a $56.2 million goodwill impairment charge during the second quarter of 2014 that is reflected in operating expenses for 2014. In addition, a net gain of $3.0 million associated with the Company's restructuring activities was included in operating costs and expenses in 2014. Restructuring activities for 2014 consisted of a gain on the sale of fixed assets in Houston where the Company completed an October 2013 announced plant consolidation partially offset by employee termination and related benefits for the workforce reductions from the organizational changes announced in June 2014, moving costs associated with the plant consolidations announced in October 2013, and lease termination costs related to the restructuring activities announced in January 2013. The Company recorded restructuring charges of $9.0 million in operating costs during 2013 for the January and October 2013 announced restructuring activities related to moving costs associated with the plant consolidations, employee termination and related benefits, lease termination costs and other exit costs.
In addition to the goodwill impairment and restructuring items, all other operating costs decreased by $1.5 million in 2014 compared to 2013 related to the following:
Warehouse, processing and delivery costs decreased by $0.4 million to $140.6 million, or 14.3% as a percent of net sales, primarily as a result of the decrease in sales activity in the Metals segment in 2014 and cost decreases resulting from 2014 restructuring activities, which was partially offset by higher costs from branch consolidations in locations that serve plate and oil and gas end markets and the Company's strategic local inventory deployment initiative.
Sales, general and administrative costs decreased by $0.9 million to $112.5 million, or 11.5% as a percent of net sales, primarily due to lower payroll and benefits costs resulting from restructuring activity workforce reductions.
Depreciation and amortization expense decreased by $0.2 million in 2014.
Consolidated operating loss for 2014, including goodwill impairment charges of $56.2 million and a net gain from restructuring activity of $3.0 million, was $102.9 million compared to an operating loss of $24.6 million, including $9.0 million of restructuring charges, in 2013.
Other Income and Expense, Income Taxes and Net Loss:
Interest expense was $40.5 million in both 2014 and 2013. In 2013, the Company recognized a $2.6 million loss on the extinguishment of debt resulting from the retirement of $15.0 million of the Company’s 12.75% Senior Secured Notes due 2016 in the fourth quarter of 2013. There was no such loss on extinguishment of debt recognized in 2014.
Other expense related to foreign currency transaction losses was $4.3 million in 2014 compared to $1.9 million for 2013. The majority of these transaction losses related to unhedged intercompany financing arrangements between the United States and the United Kingdom and Canada.
The Company recorded an income tax benefit of $20.6 million in 2014 compared to income tax benefit of $23.1 million in 2013. The Company’s effective tax rate is expressed as income tax benefit (expense), which includes tax expense

29




on the Company’s share of joint venture earnings or losses, as a percentage of income (loss) before income taxes and equity in earnings (losses) of joint venture. The effective tax rate for 2014 and 2013 was 14.0% and 33.2%, respectively. The lower effective tax rate for 2014 compared to 2013 results from changes in the geographic mix and timing of income (losses), recording valuation allowances against certain deferred tax assets at certain foreign jurisdictions and the impact of the goodwill impairment charge.
Equity in earnings of the Company’s joint venture was $7.7 million in 2014 compared to $7.0 million in 2013.
Consolidated net loss for 2014 was $119.4 million, or $5.11 per diluted share, compared to net loss of $39.5 million, or $1.70 per diluted share, for 2013.2014.

30




Liquidity and Capital Resources
Cash and cash equivalents increased (decreased) as follows:
Year ended December 31,Year Ended December 31,
2015 2014 2013
Net cash (used in) from operating activities$(22.1) $(75.1) $74.4
(Dollar amounts in millions)

2016 2015 2014
Net cash used in operating activities$(35.0) $(22.1) $(75.1)
Net cash from (used in) investing activities20.4
 (4.9) (10.8)76.9
 20.4
 (4.9)
Net cash from (used in) financing activities5.5
 58.2
 (53.9)
Net cash (used in) from financing activities(16.5) 5.5
 58.2
Effect of exchange rate changes on cash and cash equivalents(1.2) (0.6) (0.5)(0.9) (1.2) (0.6)
Net change in cash and cash equivalents$2.6
 $(22.4) $9.2
$24.5
 $2.6
 $(22.4)
The Company’s principal sourcessource of liquidity areis cash provided by operations and available borrowing capacity to fund working capital needs and growth initiatives.operations. Specific components of the change in working capital are highlighted below:
During 2015,2016, lower accounts receivable balances compared to year-end 20142015 resulted in a $37.16.1 million cash flow source, compared to a $5.834.4 million cash flow usesource for 2014.2015. The lower receivables balance at year-end 2016 was a result of lower sales volume in 20152016 compared to 2014.2015. Average receivable days outstanding was 52.7 for 2015 and 52.154.0 days for 2014.2016 and 53.3 days for 2015.
During 2015,2016, lower inventory levels compared to year-end 20142015 resulted in $64.0a $65.7 million of cash flow source, compared to higher inventory levels that were a cash flow usesource of $23.0$64.0 million in 2014.2015. The cash flow source from inventory in 2016 was partly attributable to the Houston and Edmonton inventory sale previously discussed. Approximately $23.8 million of the improvement in inventory levels during 2015 was related to scrapping restructuring activities. In 2015 theThe Company also successfully decreased inventory during 2016 and 2015 through better alignment and execution of its inventory purchase plans with current market dynamics. Inventory levels increased during 2014 due to certain discrete initiatives as well as forecasting policies and purchase plans not being aligned with unfavorable changes in market dynamics. Average days sales in inventory was 184.9168.1 days for 20152016 as compared to 174.2201.7 days for 2014.2015. The increasedecrease in average days sales in inventory in 20152016 compared to 2014 was largely due to decreases in sales volume in 2015 offset somewhat byresulted primarily from the overall decreaseHouston and Edmonton inventory sale and continued improvement in inventory in 2015.management. As a key component of its inventory reduction plans, the Company has been adjusting theits inventory deployment initiatives to better align inventory at theits facilities with the needs of its customers. Each location is expected to carry a mix of inventory to adequately service theirits customers. Once the Company's current inventory initiatives are fully implemented, including the impactThe Company continues to work toward more normal levels of the sale of inventory at our Houston and Edmonton locations, further reductions in slow-moving and excess inventory and the full alignment and execution of its purchase plans with current market dynamics, it expects days sales in inventory to return to more normal levels of approximately 150 days.
During 2015, decreases in2016, accounts payable, accrued payroll and employee benefits, and accrued liabilities used $4.7$14.7 million of cash compared to the use of $0.9providing $0.7 million of cash in 2014.2015. Accounts payable days outstanding was 38.343.3 for 20152016 and 43.039.0 for 2014.2015.
The Company obtained an extension on its senior secured asset based revolving credit facility (the "Revolving Credit Facility") in December 2014, which extendedNet cash from investing activities of $76.9 million during 2016 is mainly attributable to cash proceeds from the maturity date from December 15, 2015 to December 10, 2019 (or 91 days prior tosale of TPI and the maturity datesale of the Company's Senior Secured Notes or Convertible Notes if they have not been refinanced).50% ownership in Kreher. Cash paid for capital expenditures in 2016 was $3.5 million, a decrease of $3.7 million from 2015. In January 2014, the Company partially exercised the accordion option under the Revolving Credit Facility2016, $8.0 million was paid to increase the aggregate commitments by $25.0 million. As a result, the Company's borrowing capacity increased from $100.0 million to $125.0 million. The Company maintains the option to exercise the accordion for an additional $25.0 millioncash collateralize letters of aggregate commitments in the future, assuming it meets certain thresholds for incurring additional debt. As of December 31, 2015, the Company did not meet the thresholds to exercise the additional $25.0 million accordioncredit that were previously issued under the Revolving Credit Facility.
As noted above,All available proceeds from the Company‘s principal sourcessales of liquidity are cash flows from operationsTPI and available borrowing capacity under its revolving credit facility. The Company currently plans that it will have sufficient cash flows from its operations (including planned inventory reductions)Kreher were used to continue as a going concern, however, these plans rely on certain underlying assumptions and estimates that may differ from actual results. Such assumptions include improvements in operating results and cash flows driven bypay down the restructuring activities taken during 2015 that streamlinedCompany's long-term debt, which along with the Company’s organizational structure, lowered operating$9.8 million of debt restructuring costs and increased liquidity.  The Company’s plans also included the sale for$2.5 million payment of debt issuance costs, resulted in net cash used in financing activities of all of its remaining inventory at its Houston and Edmonton facilities and the sale of its wholly-owned subsidiary, TPI. Both of these actions were completed in$16.5 million during 2016.
In the first quarterhalf of 2016 (see Note

31




15 -Subsequent Events to the consolidated financial statements) and provide liquidity in addition to the planned operating cash flows to meet working capital needs, capital expenditures and debt service obligations for the next twelve months.
In February 2016, the Company completed a private exchange offer and consent solicitation (the “Exchange Offer”) to certain eligible holders to exchange new 12.75% Seniorexchanged $204.5 million aggregate principal amount of its Secured Notes due 2018 (the “New Notes”) in exchange for the Company’s outstanding 12.75% Senior Secured Notes due 2016 (the “Existing Notes”). In connection with the Exchange Offer, the Company issued $203.3$204.5 million aggregate principal amount of New Notes, leaving $6.7Secured Notes. In August 2016, the Company redeemed the remaining $5.5 million aggregate principal amount of ExistingSecured Notes outstanding. The Company maintains a contractual right to exchange approximately $3.0 millionthat had not been exchanged for New Secured Notes.
As part of the remaining ExistingCompany's refinancing of its Secured Notes, withit agreed to make Special Redemptions using Designated Asset Sales Proceeds (as defined by the indenture governing the New Notes prior to their maturity date or the Company may redeem some or all of the Existing Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest. In conjunction with the Exchange Offer, the Company solicited consents to certain proposed amendmentsSecured Notes). Pursuant to the Existingindenture governing the New Secured Notes, and the related indenture (the “Existing Indenture”) providing for, among other things, eliminationSpecial Redemptions of substantially all restrictive covenants and certain eventsnot less than $27.5 million of default in the Existing Indenture and releasing all of the collateral securing the Existing Notes and related guarantees. 
Additionally, the Company has entered into Transaction Support Agreements (the “Support Agreements”) with holders (the “Supporting Holders”) of $51.6 million, or 89.7%, of the aggregate principal amount of the Company’s outstanding 7.00% Convertible SeniorNew Secured Notes due 2017 (the “Existing Convertible Notes”). The Support Agreements provide for the terms of exchanges in whichwere required to be made on or prior to October 31, 2016. On October 31, 2016, the Company has agreed to issue new 5.25% Senior Secured Convertible Notes due 2019 (the “New Convertible Notes”) in exchangeissued an irrevocable notice of redemption for outstanding Existing Convertible Notes (the “Convertible Note Exchange”).
For additional information regarding the terms$27.5 million of aggregate principal amount of the New Secured Notes to satisfy the Special Redemption requirement. The Company used proceeds from the Revolving Credit Facility to make the Special Redemption payment on November 9, 2016.


The Company also completed the Convertible Note Exchange during 2016. Holders of $57.5 million aggregate principal amount of Convertible Notes exchanged their Convertible Notes for an aggregate of 7.9 million shares of the Company's common stock and $23.8 million aggregate principal amount of New Convertible Notes. 
Following the Convertible Note Exchange, the Company had $41 thousand aggregate principal amount of Convertible Notes outstanding at December 31, 2016. Under the indenture governing the Convertible Notes, upon the occurrence of a Fundamental Change, which includes, among other things, the delisting of the Company’s common stock from the New York Stock Exchange ("NYSE"), each holder has the right to require the Company to repurchase for cash all or a portion of such holder’s Convertible Notes. Effective January 17, 2017, the Company’s common stock was delisted from the NYSE. Accordingly, the Company made an offer to purchase its Convertible Notes and, on February 22, 2017, the Company repurchased $16 thousand aggregate principal amount of its Convertible Notes, leaving $25 thousand aggregate principal amount of Convertible Notes outstanding. 
In December 2016, the Company entered into the Credit Facilities with certain financial institutions (the "Financial Institutions") in order to replace and repay outstanding borrowings and support the continuance of letters of credit under the Company's Revolving Credit Facility. The Credit Facilities are in the form of senior secured first-lien term loan facilities in an aggregate principal amount of up to $112.0 million. The Credit Facilities consist of a $75.0 million initial term loan facility funded at closing and a $37.0 million Delayed Draw Facility. Under the Delayed Draw Facility, $24.5 million was available in December 2016 and $12.5 million is expected to be available in June 2017 or thereafter. In December 2016, the Company borrowed the $24.5 million of the Delayed Draw Facility available in accordance with its terms.
The funding of the Credit Facilities was subject to original issue discount in an amount equal to 3.0% of the full principal amount of the Credit Facilities. The Credit Facilities bear interest at a rate per annum equal to 11.0%, payable monthly in arrears. The outstanding principal amount of the Credit Facilities and all accrued and unpaid interest thereon will be due and be payable on September 14, 2018.
At the time of closing of the Credit Facilities, the Financial Institutions were issued warrants (the “Warrants”) to purchase an aggregate of 5.0 million shares of the Company's common stock, pro rata based on the principal amount of each Financial Institution’s commitment in the Credit Facilities. Warrants to purchase 2.5 million shares have an exercise price of $0.50 per share, and Warrants to purchase 2.5 million shares have an exercise price of $0.65 per share. The Warrants expire on June 8, 2018.
In connection with the closing of the Credit Facilities, commitments pursuant to the Revolving Credit Facility were terminated, liens granted to the collateral agent pursuant thereto were released in full, and Revolving Credit Facility borrowings outstanding were repaid by the Company using proceeds from the Credit Facilities.
The Credit Facilities agreement contains numerous covenants that, if breached, could result in a default under the agreement. These covenants include a financial covenant that requires the Company to maintain a minimum amount of consolidated adjusted EBITDA (as defined in the agreement) during various applicable fiscal periods beginning with the fiscal quarter ending March 31, 2017. The Company is also required to maintain specified minimum amounts of net working capital (as defined in the agreement) and consolidated liquidity (as defined in the agreement). The Credit Facilities agreement also provides that a default could result from the occurrence of any condition, act, event or development that results or could be reasonably expected to result in a material adverse effect (as defined in the agreement). In the event of a default, the Financial Institutions could elect to declare all amounts borrowed due and payable, including accrued interest and any other obligations under the Credit Facilities. Any such acceleration would also result in a default under the indentures governing the New Secured Notes and the New Convertible Notes, seeNotes. As of December 31, 2016, the Company was in compliance with all covenants in the Credit Facilities agreement.
On April 6, 2017, the Company entered into an amendment to the Credit Facilities agreement. Under this amendment, the Financial Institutions agreed that the financial covenants related to consolidated adjusted EBITDA and specified minimum amounts of net working capital and consolidated liquidity, all as described in the preceding paragraph, would cease to apply for the period from March 31, 2017 through and including May 31, 2018 (refer to Note 415 - DebtSubsequent Events to the consolidated financial statements.Consolidated Financial Statements).
With this exchange, the Company has positioned itself to extend the maturity of a substantial portion of its long-term debt for up to two years. The Company further plans to reduce its long-term debt through the continued reduction in inventory as well as sales of under-performing and non-core assets. On March 11, 2016, the Company announced that it had entered into an asset purchase agreement for the sale of its wholly-owned subsidiary, TPI. In addition, in February 2016 the Company announced the sale of inventory from its Houston and Edmonton facilities that primarily service the oil and gas industries. With the sale of this inventory, the Company will be closing its Houston and Edmonton facilities and generating further proceeds from the sale of equipment related to the facilities. The Company plans to use the proceeds from the sale of the Houston and Edmonton inventories to pay down its long-term debt. The Company plans to further pay down its long-term debt with the proceeds from the planned sale of the Houston and Edmonton equipment and the sale of TPI, once finalized.
With approximately $40 million in cost improvement expected as a result of the Company's new restructuring plan, the extension of a substantial portion of its long-term debt maturity through 2018, and the reduction in debt through use of proceeds from the sale of inventory at its Houston and Edmonton facilities and the sale of its TPI subsidiary, management believes the Company will be able to generate sufficient cash from operations and planned working capital improvements to fund its ongoing capital expenditure programs and meet its debt obligations for at least the next twelve months. Furthermore, the Company has available borrowing capacity under the asset-based Revolving Credit Facility, as described below, although the borrowing capacity will decrease as a result of the Company’s first quarter 2016 sale of its Edmonton and Houston inventory and TPI subsidiary.
The Company's debt agreements impose significant operating and financial restrictions which may prevent the Company from executing certain business opportunities, such as making acquisitions or paying dividends, among other things. The Revolving
For additional information regarding the terms of the New Secured Notes, the New Convertible Notes and the Credit Facility contains a springing financial maintenance covenant requiringFacilities, refer to Note 5 -Debt to the Consolidated Financial Statements.


Although the Company remains confident that it will have adequate liquidity over the next twelve months to maintain the ratio (as definedoperate its business and meet its cash requirements, further reduction in the Revolving Credit Facility LoanCompany’s long-term debt and Security Agreement)cash interest obligations would strengthen its financial position and flexibility and therefore remains a key near-term financial objective. To achieve this objective, on April 6, 2017, the Company entered into a restructuring support agreement (the “RSA”) with certain of EBITDA to fixed charges of 1.1 to 1.0 when excess availability is less than the greater of 10% of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement) or $12.5 million. In addition, if excess availability is less than the greater of 12.5% of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement) or $15.6 million, the lender has the right to take full dominionits creditors, including certain holders of the Company’s cash collections and apply these proceeds to outstanding(a) term loans under its Credit Facilities agreement, as amended, (b) New Secured Notes, and (c) New Convertible Notes. The RSA contemplates the Revolving Credit Agreement (“Cash Dominion”financial restructuring of the debt and equity of the Company and the subsidiaries (the “Restructuring”) pursuant to a Restructuring Term Sheet attached to the RSA as an exhibit (the “Term Sheet”). The Company's ratioTerm Sheet sets forth the terms and condition of EBITDA to fixed charges was negativethe Restructuring and provides for the year ended December 31, 2015. Atconsummation thereof either as part of out-of-court proceedings or by prepackaged Chapter 11 plan of reorganization (a “Plan”) confirmed by the U.S. Bankruptcy Court for the District of Delaware. If this negative ratio,were consummated through a Plan, the Company's current maximum borrowing capacityPlan would be confirmed following a filing by the Company for voluntary relief under Chapter 11 of the United States Bankruptcy Code. While there is $96.2 million before triggering Cash Dominion. Based onstill uncertainty about whether or not this action will be consummated out-of-court or through the U.S. Bankruptcy Court, this action, or similar actions, would be dilutive to the holders or the Company’s cash projections, it does not anticipate a scenario whereby Cash Dominion would occur duringoutstanding equity securities and could adversely affect the next twelve months.

32

trading prices and values of the Company’s current debt and equity securities.



Additional unrestricted borrowing capacity under the Revolving Credit Facility at December 31, 2015 was as follows:
Maximum borrowing capacity$125.0
Minimum excess availability before triggering Cash Dominion(15.6)
Letters of credit and other reserves(13.2)
Current maximum borrowing capacity$96.2
Borrowings(66.1)
Additional unrestricted borrowing capacity$30.1
Through its ongoing restructuring and refinancing efforts, the Company is committed to achieving a strong financial position while maintaining sufficient levels of available liquidity, managing working capital and monitoring the Company’s overall capitalization. Cash and cash equivalents at December 31, 20152016 were $11.1$35.6 million, with approximately $3.1$26.7 million of the Company’s consolidated cash and cash equivalents balance residing in the United States. As foreign earnings are permanently reinvested, availability under the Company’s Revolving Credit Facility would be used to fund operations in the United States should the need arise in the future.
Working capital, defined as current assets less current liabilities, and the balances of its significant components were as follows:
December 31, Working CapitalDecember 31, Working Capital
2015 2014 Increase (Decrease)
(Dollar amounts in millions)

2016 2015 Increase (Decrease)
Working capital$256.4
 $413.9
 $(157.5)$203.9
 $256.4
 $(52.5)
Inventory235.4
 359.6
 (124.2)146.6
 216.1
 (69.5)
Accounts receivable89.9
 131.0
 (41.1)64.4
 73.2
 (8.8)
Accounts payable56.3
 68.8
 12.5
33.1
 45.6
 12.5
Accrued and other current liabilities17.3
 18.3
 1.0
10.4
 16.8
 6.4
Accrued payroll and employee benefits11.2
 9.3
 (1.9)9.5
 11.2
 1.7
Cash and cash equivalents11.1
 8.5
 2.6
35.6
 11.1
 24.5
As noted previously, the Company‘s principal source of liquidity is cash flows from operations. The Company monitorscurrently plans that it will have sufficient cash flows from its overall capitalization by evaluating total debtoperations to total capitalization. Total debt to total capitalization is definedcontinue as the sum of short-terma going concern, but these plans rely on certain underlying assumptions and long-term debt, dividedestimates that may differ from actual results. Such assumptions include improvements in operating results and cash flows driven by the sum of total debtrestructuring activities taken during 2016 and stockholders’ equity. Total debt to total capitalization was 87.3% as of December 31, 2015 that streamlined the Company’s organizational structure, lowered operating costs and 55.1% as of December 31, 2014, calculated as follows:increased liquidity. 
 December 31, December 31,
 2015 2014
Total debt$321.8
 $310.1
    
Stockholders' equity$47.0
 $252.6
Total debt321.8
 310.1
Total capitalization$368.8
 $562.7
    
Total debt-to-total capitalization87.3% 55.1%
The Company plans to improve its total debt to total capitalization by improving operating results, managing working capital and using cash from operations as well as cash from the sale of under-performing and non-core assets to repay existing debt. As and when permitted by the terms the agreements governing the Company's outstanding indebtedness, depending on market conditions, the Company may decide in the future to refinance, redeem or repurchase its debt and take other steps to reduce its debt or lease obligations or otherwise improve its overall financial position and balance sheet.
With the execution of the Exchange Offer, in February 2016 Standard & Poor's upgraded the Company's debt rating to CCC- from D and affirmed the Company's negative outlook. Also in February 2016, Moody's Investor Services

33




downgraded the Company's debt rating to C from Caa2 and also affirmed the Company's stable outlook. The above ratings are not a recommendation to buy, sell or hold securities. With the completion of the Exchange Offer, both Standard & Poor's and Moody's Investor Services have withdrawn all ratings on the Company.
Capital Expenditures
Cash paid for capital expenditures for 2015in 2016 was $8.3$3.5 million, compared to $12.4$7.2 million in 2014. The expenditures2015. Expenditures during 2015 were comprised of2016 include approximately $2.8$0.7 million for leasehold improvements at the Company's new warehouse in Janesville, Wisconsin $0.6 million for the Company's e-commerce platform, and $0.4$0.3 million related to facility consolidations.software licenses and IT equipment. The balance of the capital expenditures in 20152016 are the result of normal equipment, building improvement and furniture and fixture upgrades throughout the year. Management believes that capital expenditures will be approximately $5.0$6.0 million to $6.0$7.0 million in 2016.2017.

34




Contractual Obligations and Other Commitments
The following table includes information about the Company’s contractual obligations that impact its short-term and long-term liquidity and capital needs. The table includes information about payments due under specified contractual obligations and is aggregated by type of contractual obligation. It includes the maturity profile of the Company’s consolidated long-term debt, operating leases and other long-term liabilities.
At December 31, 20152016, the Company’s contractual obligations, including estimated payments by period, were as follows:follows (amounts in millions):
Payments Due InTotal Less Than  One Year 
One to
Three Years
 
Three to
Five Years
 More Than Five YearsTotal Less Than  One Year 
One to
Three Years
 
Three to
Five Years
 More Than Five Years
Long-term debt obligations (excluding capital lease obligations) (a)$333.6
 $6.7
 $260.8
 $66.1
 $—
$298.9
 $—
 $298.9
 $—
 $—
Interest payments on debt obligations (b)(a)88.5
 30.8
 55.9
 1.8
 —
67.5
 34.8
 32.7
 —
 —
Capital lease obligations0.4
 0.3
 0.1
 —
 —
0.1
 0.1
 —
 —
 —
Operating lease obligations65.7
 12.9
 21.0
 15.6
 16.2
50.0
 8.3
 14.4
 10.8
 16.5
Build-to-suit lease obligation (c)(b)19.1
 0.7
 2.3
 2.4
 13.7
17.3
 —
 2.4
 2.5
 12.4
Purchase obligations (d)(c)199.5
 171.2
 28.3
 —
 —
107.7
 107.7
 —
 —
 —
Other (e)(d)1.6
 1.6
 —
 —
 —
6.2
 1.8
 0.4
 0.5
 3.5
Total$708.4
 $224.3
 $368.4
 $85.9
 $29.9
$547.7
 $152.7
 $348.8
 $13.8
 $32.4
a)
Long-term debt obligation payment schedule shown reflects the Exchange Offer whereby the Company issued $203.3 million aggregate principal amount of New Notes due 2018, leaving a $6.7 million aggregate principal Existing Notes due 2016. The Company maintains the contractual right to exchange approximately $3 million of the remaining Existing Notes due 2016 with New Notes due 2018 prior to their maturity date, although the exchange of this debt is not assumed in the table above. Borrowings outstanding on the Company's Revolving Credit Facility due December 10, 2019 will become due 91 days prior to the maturity date of the Company's $6.7 million Existing Notes due December 15, 2016 or $57.5 million Convertible Notes due December 15, 2017 if they have not been refinanced.
b)Interest payments on debt obligations represent interest on all Company debt outstanding as of December 31, 20152016 including the imputed interest on capital lease payments. The interest payment amounts related to the variable rate componentAll debt outstanding as of the Company's debt assume that interest will be paid at the rates prevailing at December 31, 2015. Future interest rates may change and actual interest payments could differ from those disclosed in the table above.2016 was fixed rate debt.
c)b)The Company entered into a lease agreement in 2015 for its new operating facility in Janesville, Wisconsin. For accounting purposes only, the Company has determined that this is a build-to-suit lease. Amounts represent future rent payments to be made on the lease which are allocated for accounting purposes between a reduction in the build-to-suit liability over the life of the build-to-suit lease obligation and interest expense.
d)c)Purchase obligations consist of raw material purchases made in the normal course of business. The Company has contracts to purchase minimum quantities of material with certain suppliers. For each contractual purchase obligation, the Company generally has a purchase agreement from its customer for the same amount of material over the same time period.
e)d)Other is comprised of deferred revenues that represent commitments to deliver products.products and amounts to be paid to withdraw from a multi-employer pension plan.
The table and corresponding footnotes above do not include $30.8$12.4 million of non-current liabilities recorded on the consolidated balance sheets. These non-current liabilities consist of $18.7$6.4 million of liabilities related to the Company’s non-funded pension and postretirement benefit plans for which payment periods cannot be determined. Non-current liabilities also include $4.2 million of deferred income taxes and $7.9$6.0 million of other non-current liabilities, which were excluded from the table as the amounts due and timing of payments (or receipts) at future contract settlement dates cannot be determined. Included in the $7.9 million of other non-current liabilities is $5.5 million associated with the Company's withdrawal from a multi-employer pension plan for which the payment periods cannot be determined.
Pension Funding
The Company’s funding policy on its defined benefit pension plans is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act (“ERISA”). Future funding requirements are dependent upon various factors outside the Company’s control including, but not limited to, fund asset performance and changes in regulatory or accounting requirements. Based upon factors known and considered as of December 31, 20152016, the Company does not anticipate making significant cash contributions to the pension plans in 2016.2017.
Effective as of December 31, 2016, the Company merged the assets and liabilities of its two Company-sponsored qualified pension plans into a single, qualified pension plan. The merger did not affect the assets or liabilities of the pension plans, but it is expected to reduce the Company's future funding requirements.
The investment target portfolio allocation for the Company-sponsored pension plans and supplemental pension plan focuses primarily on corporate fixed income securities that match the overall duration and term of the Company’s

35




pension liability structure. Refer to “Retirement Plans” within Critical Accounting Policies and Note 910 - Employee Benefit Plans to the consolidated financial statementsConsolidated Financial Statements for additional details regarding other plan assumptions.


Off-Balance Sheet Arrangements
With the exception of letters of credit and operating lease financing on certain equipment used in the operation of the business, it is not the Company’s general practice to use off-balance sheet arrangements, such as third-party special-purpose entities or guarantees of third parties.
As of December 31, 2015, the Company had $10.1 million of irrevocable letters of credit outstanding which primarily consisted of $5.0 million for its new warehouse in Janesville, Wisconsin, $2.0 million for collateral associated with commodity hedges and $1.8 million for compliance with the insurance reserve requirements of its workers’ compensation program.
The Company was party to a multi-employer pension plan in Ohio. In connection with the April 2015 restructuring plan, the Company elected to withdraw from the Ohio multi-employer pension plan. The liability associated with the withdrawal from this plan is estimated by the Company to be $5.5$3.5 million, which is included in the Consolidated Balance Sheet at December 31, 2015 and has been charged to restructuring expense (income) in the Consolidated Statement of Operations for the year ended December 31, 2015.2016. The Company incurredexpects to settle this liability with payments of $0.2 million per year over a withdrawal liability of $0.7 million which was charged to restructuring expense (income) in the Consolidated Statement of Operations for the year ended December 31, 2013 related to its 2013 restructuring activities and subsequent withdrawal from a multi-employer pension plan for employees of a plant closed in California.twenty-year period. With the withdrawal from the Ohio and California multi-employer plans,plan, the Company does not participate in any multi-employer pension plans as of December 31, 2015.2016.
Obligations of the Company associated with its leased equipment are disclosed under the Contractual Obligations and Other Commitments section.
Critical Accounting Policies
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include amounts that are based on management’s estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The following is a description of the Company’s accounting policies that management believes require the most significant judgments and estimates when preparing the Company’s consolidated financial statements:
Revenue Recognition — Revenue from the sale of products is recognized when the earnings process is complete and when the title and risk and rewards of ownership have passed to the customer, which is primarily at the time of shipment. Revenue recognized other than at time of shipment represented less than 2% of the Company’s consolidated net sales for the years ended December 31, 2016, 2015 2014 and 2013.2014. Revenue from shipping and handling charges is recorded in net sales. Provisions for allowances related to sales discounts and rebates are recorded based on terms of the sale in the period that the sale is recorded. Management utilizes historical information and the current sales trends of the business to estimate such provisions. Actual results could differ from these estimates. The provisions related to discounts and rebates due to customers are recorded as a reduction within net sales in the Company’s consolidated statementsConsolidated Statements of operationsOperations and comprehensive loss.Comprehensive Loss.
The Company maintains an allowance for doubtful accounts related to the potential inability of our customers to make required payments. The allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific identification of customer receivable balances for which collection is unlikely. The provision for doubtful accounts is recorded in sales, general and administrative expense in the Company’s consolidated statementsConsolidated Statements of operationsOperations and comprehensive loss.Comprehensive Loss. Estimates of doubtful accounts are based on historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers, which can fluctuate significantly from year to year. The Company cannot be certain that the rate of future credit losses will be similar to past experience.
The Company also maintains an allowance for credit memos for estimated credit memos to be issued against current sales. Estimates of allowance for credit memos are based upon the application of a historical issuance lag period to the average credit memos issued each month. If actual results differ significantly from historical experience, there could be a negative impact on the Company’s operating results.
Income Taxes — The Company accounts for income taxes using the asset and liability method, under which deferred income tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to

36




differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company regularly reviews deferred tax assets to assess whether it is more-likely-than-not that the deferred tax assets will be realized and, if necessary, establish a valuation allowance for portions of such assets to reduce the carrying value.
For purposes of assessing whether it is more-likely-than-not that deferred tax assets will be realized, the Company considers the following four sources of taxable income for each tax jurisdiction: (a) future reversals of existing taxable temporary differences, (b) projected future earnings, (c) taxable income in carryback years, to the extent that carrybacks are permitted under the tax laws of the applicable jurisdiction, and (d) tax planning strategies, which represent prudent and feasible actions that a company ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused. To the extent that evidence about one or more of these sources of taxable income


is sufficient to support a conclusion that a valuation allowance is not necessary, other sources need not be considered. Otherwise, evidence about each of the sources of taxable income is considered in arriving at a conclusion about the need for and amount of a valuation allowance. See Note 1112 - Income Taxes to the consolidated financial statements,Consolidated Financial Statements, for further information about the Company's valuation allowance assessments.
The Company has incurred significant losses in recent years. The Company’s operations in the United States and Canada continue to have cumulative pre-tax losses for the three-year period ended December 31, 2015.2016.  As a result of the Company now being in a net deferred tax asset position as of December 31, 2016 and 2015 in these jurisdictions, coupled with the negative evidence of significant cumulative three-year pre-tax losses, the Company recognizedhas provided a valuation allowance against its net deferred tax assets in the United States and Canada during the second and fourth quarter of 2015, respectively.Canada. The Company continues to maintain valuation allowances against its net deferred tax asset positions in China, France, and the UK due to negative evidence such as historical pre-tax and taxable losses.
The Company is subject to taxation in the United States, various states and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. It is possible that actual results could differ from the estimates that management has used to determine its consolidated income tax expense.
The Company accounts for uncertainty in income taxes by recognizing the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not criteria, the amount recognized in the consolidated financial statementsConsolidated Financial Statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company’s investment in the joint venture is through a 50% interest in a limited liability corporation (LLC) taxed as a partnership. The joint venture has two subsidiaries organized as individually taxed C-Corporations. The Company includes in its income tax provision the income tax liability on its share of the income of the joint venture and its subsidiaries. The income tax liability of the joint venture itself is generally treated as a current income tax expense and the income tax liability associated with the profits of the two subsidiaries of the joint venture is treated as deferred income tax expense. The Company cannot independently cause a dividend to be declared by one of the subsidiaries of the joint venture, therefore no benefit of a dividend received deduction can be recognized in the Company's tax provision until a dividend is declared. If one of the C-Corporation subsidiaries of the joint venture declares a dividend payable to the joint venture, the Company recognizes a benefit for the 80% dividends received deduction on its 50% share of the dividend.
Retirement Plans — The Company values retirement plan liabilities based on assumptions and valuations established by management. Future valuations are subject to market changes, which are not in the control of the Company and could differ materially from the amounts currently reported. The Company evaluates the discount rate and expected return on assets at least annually and evaluates other assumptions involving demographic factors, such as retirement age, mortality and turnover periodically, and updates them to reflect actual experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.
Accumulated and projected benefit obligations are expressed as the present value of future cash payments which are discounted using the weighted average of market-observed yields for high quality fixed income securities with maturities that correspond to the payment of benefits. Lower discount rates increase present values and subsequent-year pension expense; higher discount rates decrease present values and subsequent-year pension expense. Discount rates used for determining the Company’s projected benefit obligation for its pension plans were 4.00% and 3.75%3.70 - 3.83% at December 31, 20152016 and 2014, respectively.4.00% at December 31, 2015.

37




During the fourth quarter of 2015, the Company changed the methodology used to estimate the service and interest cost components of net periodic pension cost and net periodic postretirement benefit cost for the Company’s pension and other postretirement benefit plans. Previously, the Company estimated such cost components utilizing a single weighted-average discount rate derived from the market-observed yield curves of high-quality fixed income securities used to measure the pension benefit obligation and accumulated postretirement benefit obligation. The new methodology utilizes a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. The change does not affect the measurement of the Company’s pension obligation or accumulated postretirement benefit obligation. The Company has accounted for this change as a change in accounting estimate and it will bewas applied prospectively starting in 2016. The adoption of the spot rate approach is expected to decreasedecreased the service cost and interest cost components of net periodic pension and postretirement benefit costs by approximately $1.2 million in 2016.
The Company’s pension plan asset portfolio as of December 31, 20152016 is primarily invested in fixed income securities with a duration of approximately 12 years. The assets generally fall within Level 2 of the fair value hierarchy. Assets in the Company’s pension plans have earned approximately 8% since 2008 when the Company changed its target investment allocation to focus primarily on fixed income securities. In 2015,2016, the pension plan assets lostearned approximately 2%8%.The target investment asset allocation for the pension plans’ funds focuses primarily on corporate fixed income securities that match the overall duration and term of the Company’s pension liability structure. There was a funding surplus of approximately 2% at December 31, 2016 compared to a funding deficit of approximately 5% at both December 31, 2015 and December 31, 20142015.


To determine the expected long-term rate of return on the pension plans’ assets, current and expected asset allocations are considered, as well as historical and expected returns on various categories of plan assets.
The Company used the following weighted average discount rates and expected return on plan assets to determine the net periodic pension cost:
2015 20142016 2015
Discount rate3.50 - 3.75%
 4.50%4.00% 3.50 - 3.75%
Expected long-term rate of return on plan assets5.25% 5.25%5.25% 5.25%
Holding all other assumptions constant, the following table illustrates the sensitivity of changes to the discount rate and long-term rate of return assumptions on the Company’s net periodic pension cost (amounts in millions):
 
Impact on 20152016
Expenses - increase (decrease)Increase (Decrease)
50 basis point decrease in discount rate$1.00.6
50 basis point increase in discount rate$(1.2)(0.7)
50 basis point decrease in expected return on assets$0.90.8
Goodwill and Other Intangible Assets Impairment — The Company tests goodwill for impairment at the reporting unit level on an annual basis and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company assesses, at least quarterly, whether any triggering events have occurred.
A two-step method is used for determining goodwill impairment. The first step is performed to identify whether a potential impairment exists by comparing each reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the next step it to measure the amount of impairment loss, if any.
The determination of the fair value of the reporting unit requires significant estimates and assumptions to be made by management. The fair value of each reporting unit is estimated using a combination of an income approach, which estimates fair value based on a discounted cash flow analysis using historical data, estimates of future cash flows and discount rates based on the view of a market participant, and a market approach, which estimates fair value using market multiples of various financial measures of comparable public companies. In selecting the appropriate assumptions the Company considers: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in the industry in which the Company competes; discount rates; terminal growth rates; long-term

38




projections of future financial performance; and relative weighting of income and market approaches. The long-term projections used in the valuation are developed as part of the Company’s annual long-term planning process. The discount rates used to determine the fair values of the reporting units are those of a hypothetical market participant which are developed based upon an analysis of comparable companies and include adjustments made to account for any individual reporting unit specific attributes such as, size and industry.
The Company completed its December 1, 2015 annual goodwill impairment test for its Plastics reporting unit. No annual goodwill impairment testing was performed for the Metals reporting unit as of December 1, 2015, since the Metals reporting unit goodwill was completely written off as a result of the May 31, 2014 interim goodwill impairment testing and the Metals reporting unit had no indefinite lived intangible assets. As of December 1, 2015, the Plastics reporting unit had a goodwill balance of approximately $13.0 million and no indefinite lived intangible assets. A combination of the income approach and the market approach was utilized to estimate the reporting unit's fair value. The Plastics reporting unit had an estimated fair value that exceeded its carrying value by 24.6%. Under the income approach, the following key assumptions were used in the Plastics reporting unit discounted cash flow analysis:
Discount rate12.0%
5-year revenue CAGR3.2%
Terminal growth rate2.0%
Under the market approach, the Company used a multiple of future earnings before interest, taxes, depreciation and amortization (“EBITDA”) of 5.5 for the Plastics reporting unit. The Company considers several factors in estimating the EBITDA multiple including a reporting unit's market position, gross and operating margins and prospects for growth, among other factors.
If the Plastics reporting unit's carrying value exceeded its fair value, additional valuation procedures would have been required to determine whether the reporting unit's goodwill was impaired, and to the extent goodwill was impaired, the magnitude of the impairment charge.
Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the Plastics reporting unit, the amount of the goodwill impairment charge, or both. Future declines in the overall market value of the Company’s equity may also result in a conclusion that the fair value of the Plastics reporting unit has declined below its carrying value.
The majority of the Company’s recorded intangible assets were acquired as part of the Transtar and Tube Supply acquisitions in September 2006 and December 2011, respectively, and consist of customer relationships, non-compete agreements, trade names and developed technology. The initial values of the intangible assets were based on a discounted cash flow valuation using assumptions made by management as to future revenues from select customers, the level and pace of attrition in such revenues over time and assumed operating income amounts generated from such revenues. The intangible assets are amortized over their useful lives, which are 4 to 12 years for customer relationships, 3 years for non-compete agreements, 1 to 10 years for trade names and 3 years for developed technology. Useful lives are estimated by management and determined based on the timeframe over which a significant portion of the estimated future cash flows are expected to be realized from the respective intangible assets. Furthermore, when certain conditions or certain triggering events occur, a separate test for impairment, which is included in the impairment test for long-lived assets discussed below, is performed. If the intangible asset is deemed to be impaired, such asset will be written down to its fair value. In the fourth quarter of 2015, the Company determined that the customer relationships and trade names intangible assets associated with the Tube Supply acquisition were impaired and the full carrying values of these intangible assets were written down to zero. The non-compete agreements and developed technology intangible assets were fully amortized in the year ended December 31, 2014. See Note 3 - Goodwill and Intangible Assets to the consolidated financial statements for detailed information on goodwill and intangible assets.
Inventories — Inventories consist primarily of finished goods. During the fourth quarter of 2015, the Company elected to change its method of inventory costing for its U.S. metals inventory to the average cost method from the last-in first-out (LIFO) method. The Company's foreign metals operations also determine costs using the average cost method.  The Company decided not to change its method of accounting for the Plastics' segment inventory as the Company is currently marketing its Plastic’s segment for sale. After the sale of the Plastics segment, all of the Company's inventory will be accounted for using the average cost method. Prior to this change in accounting principle, at December 31, 2014, approximately 68% of the Company’s inventories were valued at the lower of LIFO cost or market.  The current

39




replacement cost of inventories at the Company's Plastics segment which are accounted for under the LIFO method exceeded book value by $2,462 and $2,682 at December 31, 2015 and 2014, respectively.
Inventories are stated at the lower of cost or market. The market price of metals is subject to volatility. During periods when open-market prices decline below net book value, we may need to record a provision to reduce the carrying value of our inventory. We analyze the carrying value of inventory for impairment if circumstances indicate impairment may have occurred. If an impairment occurs, the amount of impairment loss is determined by measuring the excess of the carrying value of inventory over the net realizable value of inventory.
The Company maintains an allowance for excess and obsolete inventory. The excess and obsolete inventory allowance is determined through the specific identification of material, adjusted for expected scrap value to be received, based upon product knowledge, estimated future demand, market conditions and an aging analysis of the inventory on hand.  Inventory in excess of our estimated usage requirements is written down to its estimated net realizable value. Although the Company believes its estimates of the inventory allowance are reasonable, actual financial results could differ from those estimates due to inherent uncertainty involved in making such estimates. Changes in assumptions around the estimated future demand, selling price, scrap value, a decision to reduce inventories to increase liquidity, or other underlying assumptions could have a significant impact on the carrying value of inventory, future inventory impairment charges, or both.
Long-Lived Assets — The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to future net cash flows (undiscounted and without interest charges) expected to be generated by the asset or asset group. If future net cash flows are less than the carrying value, the asset or asset group may be impaired. If such assets are impaired, the impairment charge is calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. The Company derives the required undiscounted cash flow estimates from historical experience and internal business plans.
In conjunction with the Company’s plans to reduce its indebtedness and increase liquidity, in the fourth quarter of 2015, the Company made a decision to start exploring opportunities related to certain of its under-performing oil and gas inventory and equipment. In connection with this decision, the Company began marketing for sale the inventory and equipment of its Houston and Edmonton locations. In February 2016, the Company entered into an agreement to sell all of the inventory at the Houston and Edmonton locations as well as the Tube Supply trade name. The Company has further plans to close both of these locations. Given these factors, the Company determined that as of December 31, 2015 certain of its intangible assets including the Tube Supply customer relationships and trade name acquired in connection with the Tube Supply acquisition in 2011, no longer have a remaining useful life and a $33.7 million non-cash impairment charge (none of which is deductible for tax purposes in 2015) was recorded for the year ended December 31, 2015. The non-cash impairment charge removed all the remaining finite-lived intangible assets associated with the Tube Supply acquisition, leaving only customer relationships intangible assets. The majority of the remaining customer relationships intangible assets were acquired as part of the acquisition of Transtar on September 5, 2006.
Due to continued sales declines, net losses and lower than projected cash flows, the Company tested its long-lived assets for impairment during the fourth quarterquarters of 2016 and 2015. Testing of the Company's other long-lived assets indicated that the undiscounted cash flows of those assets exceeded their carrying values, and the Company concluded that no impairment existed at December 31, 2016 and 2015 and the remaining useful lives of its long-lived assets were appropriate. The Company also tested its long-lived assets for impairment at May 31, 2014, the date of the Company's interim goodwill impairment analysis, and in the second quarter of 2015 in conjunction with the announced restructuring activities. Both times, the Company concluded that no impairment existed and the remaining useful lives of its long-lived assets were appropriate. The Company will continue to monitor its long-lived assets for impairment.
Share-Based Compensation — The Company offers share-based compensation to executives, other key employees and directors. Share-based compensation expense is recognized ratably over the vesting period or performance period, as appropriate, based on the grant date fair value of the stock award. The Company may either issue shares from treasury or new shares upon share option exercise or award issuance. Management estimates the probable number of awards which will ultimately vest when calculating the share-based compensation expense for its long-term compensation plans ("LTC Plans") and short-term incentive plans ("STI Plans"). As of December 31, 2015, the Company’s weighted average forfeiture rate is approximately 46%. The actual number of awards that vest may differ from management’s estimate.
Stock options and non-vested shares generally vest in one to three years for executives and employees and three years for directors. Stock options have an exercise price equal to the market price of the Company’s stock on the grant date (options granted in 2015) or the average closing price of the Company’s stock for the ten trading days preceding the grant date (options granted in 2010) and have a contractual life of eight to ten years. Stock options are valued

40




using a Black-Scholes option-pricing model. Non-vested shares are valued based on the market price of the Company's stock on the grant date.
The Company granted non-qualified stock options under its 2015 short-term incentive plan ("2015 STI Plan") and 2015 long-term compensation plan ("2015 LTC plan"). The grant date fair value of these stock option awards were estimated using a Black-Scholes option pricing model with the following assumptions:
 2015 STI Plan 2015 LTC Plan
Expected volatility56.1% 55.7%
Risk-free interest rate1.8% 1.8%
Expected life (in years)6.00
 5.80
Expected dividend yield—
 —
Under the 2015 LTC Plans, the total potential award is comprised of non-qualified stock options and restricted share units ("RSUs"), which are time vested and once vested entitle the participant to receive one share of the Company's common stock. Under the 2014 and 2013 LTC Plans, the total potential award is comprised of restricted share units and performance share units ("PSUs") which are based on the Company's performance compared to target goals. The PSUs awarded are based on two independent conditions, the Company’s relative total shareholder return (“RTSR”), which represents a market condition, and Company-specific target goals for Return on Invested Capital (“ROIC”) as defined in the LTC Plans. RSUs generally vest in three years. RSU and ROIC PSU awards are valued based on the market price of the Company's stock on the grant date, and the value of RTSR PSU awards is estimated using a Monte Carlo simulation model.
No PSUs were awarded under the 2015 LTC plan. The grant date fair value of RTSR PSU awards under the active LTC Plans were estimated using a Monte Carlo simulation with the following assumptions:
 2014 2013
Expected volatility40.8% 59.5%
Risk-free interest rate0.79% 0.38%
Expected life (in years)2.77
 2.82
Expected dividend yield—
 —
RTSR is measured against a group of peer companies either in the metals industry or in the industrial products distribution industry (the "RTSR Peer Group") over a three-year performance period as defined in the LTC Plans. The threshold, target and maximum performance levels for RTSR are the 25th, 50th and 75th percentile, respectively, relative to RTSR Peer Group performance. Compensation expense for RTSR PSU awards is recognized regardless of whether the market condition is achieved to the extent the requisite service period condition is met.
ROIC is measured based on the Company's average actual performance versus Company-specific goals as defined in each of the LTC Plans over a three-year performance period. Compensation expense recognized is based on management's expectation of future performance compared to the pre-established performance goals. If the performance goals are not expected to be met, no compensation expense is recognized for the ROIC PSU awards and any previously recognized compensation expense is reversed.
Final RTSR and ROIC PSU award vesting will occur at the end of the three-year performance period, and distribution of PSU awards granted under the LTC Plans are determined based on the Company’s actual performance versus the target goals for a three-year performance period, as defined in each plan. Partial awards can be earned for performance that is below the target goal, but in excess of threshold goals; and award distributions up to twice the target can be achieved if the target goals are exceeded.
Unless covered by a specific change-in-control or severance arrangement, participants to whom RSUs, PSUs, stock options and non-vested shares have been granted must be employed by the Company on the vesting date or at the end of the performance period, as appropriate, or the award will be forfeited.

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Fair Value of Financial Instruments — The three-tier value hierarchy the Company utilizes, which prioritizes the inputs used in the valuation methodologies, is:
Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
The fair value of cash, accounts receivable and accounts payable approximate their carrying values. The fair value of cash equivalents are determined using the fair value hierarchy described above. Cash equivalents consisting of money market funds are valued based on quoted prices in active markets and as a result are classified as Level 1.
The Company’s pension plan asset portfolio as of December 31, 20152016 and 20142015 is primarily invested in fixed income securities, which generally fall within Level 2 of the fair value hierarchy. Fixed income securities are valued based on evaluated prices provided to the trustee by independent pricing services. Such prices may be determined by factors which include, but are not limited to, market quotations, yields, maturities, call features, ratings, institutional size trading in similar groups of securities and developments related to specific securities.
Fair value disclosures for the SeniorCompany's New Secured Notes are determined based on recent trades of the bonds and fall within Level 2 of the fair value hierarchy. The fair value of the New Convertible Notes, which fallincluding the bifurcated embedded conversion option that is measured at fair value on a recurring basis, falls within Level 3 of the fair value hierarchy, and is determined based onmeasured using a binomial lattice model using the Company's historical volatility over the term corresponding to the remaining contractual term of the New Convertible Notes and observed spreads of similar debt instruments that do not containinclude a conversion feature, as well as other factors related to the callable nature of the notes.feature.
The main inputs and assumptions into the fair value model for the New Convertible Notes and embedded conversion option at December 31, 20152016 were as follows:
Company's stock price at the end of the period$1.59
$0.25
Expected volatility67.80%97.90%
Credit spreads69.21%69.8%
Risk-free interest rate1.05%1.47%
GivenThe fair value of the nature andWarrants to purchase shares of the variable interest rates,Company's common stock issued in connection with the Company has determined thatDecember 2016 closing of the Company's new Credit Facilities falls within Level 3 of the fair value of borrowings underhierarchy, and was estimated using the Revolving Credit Facility approximatesBlack-Scholes option-pricing model with the carrying value.following assumptions:
Expected volatility97.90%
Risk-free interest rate1.03%
Expected life (in years)1.5
Expected dividend yield—
Fair value of commodity hedges is based on information which is representative of readily observable market data. Derivative liabilities associated with commodity hedges are classified as Level 2 in the fair value hierarchy.
Recent Accounting Pronouncements
See Note 1 - Basis of Presentation and Significant Accounting Policies to the consolidated financial statementsConsolidated Financial Statements for detailed information on recent accounting pronouncements.


ITEM 7A — Quantitative and Qualitative Disclosures about Market Risk
(Dollar amounts in millions)
The Company is exposed to interest rate, commodity price, and foreign exchange rate risks that arise in the normal course of business.
Interest Rate Risk — The Company had no variable rate long-term debt outstanding as of December 31, 2016, but it is exposed to market risk related to its fixed rate and variable rate long-term debt. We doThe Company does not utilize derivative instruments to manage exposure to interest rate changes. The market value of the Company’s $267.5$298.9 million of fixed rate long-term debt may be impacted by changes in interest rates.
The Company’s interest rates on borrowings under its $125 million revolving credit facility are subject to changes in the LIBOR and prime interest rates. There were $66.1 million borrowings under the Company’s revolving credit agreement as of December 31, 2015. A hypothetical 100 basis point increase on the Company’s variable rate debt would result in $0.7 million of additional interest expense on an annual basis based on interest expense incurred on the revolving credit facility in 2015.

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Commodity Price Risk — The Company’s raw material costs are comprised primarily of engineered metals and plastics.metals. Market risk arises from changes in the price of steel and other metals and plastics.metals. Although average selling prices generally increase or decrease as material costs increase or decrease, the impact of a change in the purchase price of materials is more immediately reflected in the Company’s cost of materials than in its selling prices. The ability to pass surcharges on to customers immediately can be limited due to contractual provisions with those customers. Therefore, a lag may exist between when the surcharge impacts net sales and cost of materials, respectively, which could result in a higher or lower operating profit.
The Company has a commodity hedging program to mitigate risks associated with certain commodity price fluctuations. IfAt December 31, 2016, the commodity prices hedged were to decrease hypothetically by 100 basis points, the 2015 unrealized loss recorded in cost of materials would have increased by an insignificant amount.Company had no executed forward contracts outstanding.
Foreign Currency Risk — The Company conducts the majority of its business in the United States, but also has operations in Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. The Company’s results of operations historically have not been materially affected by foreign currency transaction gains and losses and, therefore, the Company has no financial instruments in place for managing the exposure to foreign currency exchange rates. The Company recognized $6.3 million of foreign currency transaction losses during the year ended December 31, 2015.
As a result of the financing arrangements entered into during December 2011, the Companyalso has certain outstanding intercompany borrowings denominated in the U.S. dollar at its Canadian and United Kingdom subsidiaries. These intercompany borrowings are not hedged andhedged.
The Company recognized $8.1 million of foreign currency transaction losses during the year ended December 31, 2016, which were primarily related to the unhedged intercompany borrowings at the Company's United Kingdom subsidiary. These intercompany borrowings may cause foreign currency exposure, which could be significant, in future periods if they remain unhedged.

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ITEM 8 — Financial Statements and Supplementary Data
(Amounts in thousands, except par value and per share data)

A.M. Castle & Co.
Consolidated Statements of Operations
and Comprehensive Loss

A.M. Castle & Co.
Consolidated Statements of Operations
and Comprehensive Loss

A.M. Castle & Co.
Consolidated Statements of Operations
and Comprehensive Loss

Year Ended December 31,Year Ended December 31,
2015 2014 As Adjusted (Note 1) 2013 As Adjusted (Note 1)2016 2015 2014
Net sales$770,758
 $979,837
 $1,053,066
$533,150
 $637,937
 $841,672
Costs and expenses:          
Cost of materials (exclusive of depreciation and amortization)674,615
 750,408
 788,126
421,290
 581,210
 652,427
Warehouse, processing and delivery expense114,734
 140,559
 140,934
84,555
 100,904
 126,696
Sales, general and administrative expense95,479
 112,465
 113,405
68,273
 77,851
 94,162
Restructuring expense (income)9,008
 (2,960) 9,003
12,942
 9,008
 (2,960)
Depreciation and amortization expense24,854
 26,044
 26,188
16,378
 23,318
 24,380
Impairment of intangible assets33,742
 —
 —
—
 33,742
 —
Impairment of goodwill—
 56,160
 —
—
 —
 56,160
Total costs and expenses952,432
 1,082,676
 1,077,656
603,438
 826,033
 950,865
Operating loss(181,674) (102,839) (24,590)(70,288) (188,096) (109,193)
Interest expense, net41,980
 40,548
 40,542
36,422
 40,523
 39,836
Loss on extinguishment of debt—
 —
 2,606
Unrealized gain on embedded debt conversion option(10,450) —
 —
Debt restructuring loss, net8,617
 —
 —
Other expense, net6,306
 4,323
 1,924
7,582
 6,306
 4,323
Loss before income taxes and equity in earnings (losses) of joint venture(229,960) (147,710) (69,662)
Loss from continuing operations before income taxes and equity in (losses) earnings of joint venture(112,459) (234,925) (153,352)
Income tax benefit(21,621) (20,631) (23,142)(2,546) (23,570) (22,943)
Loss before equity in earnings (losses) of joint venture(208,339) (127,079) (46,520)
Equity in earnings (losses) of joint venture(1,426) 7,691
 6,987
Loss from continuing operations before equity in (losses) earnings of joint venture(109,913) (211,355) (130,409)
Equity in (losses) earnings of joint venture(4,177) (1,426) 7,691
Loss from continuing operations(114,090) (212,781) (122,718)
Income from discontinued operations, net of income taxes6,108
 3,016
 3,330
Net loss(209,765) (119,388) (39,533)$(107,982) $(209,765) $(119,388)
          
Basic loss per share$(8.91) $(5.11) $(1.70)
Diluted loss per share$(8.91) $(5.11) $(1.70)
Basic and diluted (loss) earnings per common share:     
Continuing operations$(3.93) $(9.04) $(5.25)
Discontinued operations0.21
 0.13
 0.14
Net basic and diluted loss per common share$(3.72) $(8.91) $(5.11)
          
Comprehensive loss:          
Foreign currency translation adjustments$(6,642) $(5,377) $(2,295)$494
 $(6,642) $(5,377)
Change in unrecognized pension and postretirement benefit costs, net of tax effect of $0, $8,449 and $2,9539,937
 (12,996) 4,623
Other comprehensive (loss) income3,295
 (18,373) 2,328
Change in unrecognized pension and postretirement benefit costs, net of tax effect of $(3,669), $0 and $8,4497,388
 9,937
 (12,996)
Other comprehensive income (loss)7,882
 3,295
 (18,373)
Net loss(209,765) (119,388) (39,533)(107,982) (209,765) (119,388)
Comprehensive loss$(206,470) $(137,761) $(37,205)$(100,100) $(206,470) $(137,761)
The accompanying notes are an integral part of these statements.

44





A.M. Castle & Co.
Consolidated Balance Sheets

A.M. Castle & Co.
Consolidated Balance Sheets

A.M. Castle & Co.
Consolidated Balance Sheets

December 31,December 31,
2015 2014 As adjusted (Note 1)2016 2015
Assets      
Current assets:      
Cash and cash equivalents$11,100
 $8,454
$35,624
 $11,100
Accounts receivable, less allowances of $3,440 and $3,375, respectively
89,879
 131,003
Accounts receivable, less allowances of $1,945 and $2,380, respectively
64,385
 73,191
Inventories235,443
 359,630
146,603
 216,090
Prepaid expenses and other current assets11,523
 9,458
10,141
 10,424
Income tax receivable346
 2,886
433
 346
Current assets of discontinued operations—
 37,140
Total current assets348,291
 511,431
257,186
 348,291
Investment in joint venture35,690
 37,443
—
 35,690
Goodwill12,973
 12,973
Intangible assets, net10,250
 56,555
4,101
 10,250
Prepaid pension cost8,422
 7,092
8,501
 8,422
Deferred income taxes378
 685
381
 378
Other non-current assets10,256
 11,660
Other noncurrent assets9,449
 6,109
Property, plant and equipment:      
Land2,869
 4,466
2,070
 2,519
Buildings42,559
 52,821
37,341
 39,778
Machinery and equipment177,803
 183,923
125,836
 153,955
Property, plant and equipment, at cost223,231
 241,210
165,247
 196,252
Accumulated depreciation(151,838) (168,375)(115,537) (131,691)
Property, plant and equipment, net71,393
 72,835
49,710
 64,561
Noncurrent assets of discontinued operations—
 19,805
Total assets$497,653
 $710,674
$329,328
 $493,506
Liabilities and Stockholders’ Equity   
Liabilities and Stockholders’ (Deficit) Equity   
Current liabilities:      
Accounts payable$56,272
 $68,782
$33,083
 $45,606
Accrued payroll and employee benefits11,246
 9,332
9,485
 11,246
Accrued and other current liabilities17,324
 18,338
10,369
 16,832
Income tax payable33
 328
209
 33
Current portion of long-term debt7,012
 737
137
 7,012
Current liabilities of discontinued operations—
 11,158
Total current liabilities91,887
 97,517
53,283
 91,887
Long-term debt, less current portion314,761
 309,377
286,459
 310,614
Deferred income taxes4,169
 28,729
—
 4,169
Build-to-suit liability13,237
 —
12,305
 13,237
Other non-current liabilities7,935
 3,655
Other noncurrent liabilities5,978
 7,935
Pension and postretirement benefit obligations18,676
 18,747
6,430
 18,676
Commitments and contingencies (Note 12)
 
Stockholders’ equity:   
Preferred stock, $0.01 par value—9,988 shares authorized (including 400 Series B Junior Preferred $0.00 par value shares); no shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively—
 —
Common stock, $0.01 par value—60,000 shares authorized and 23,888 shares issued and 23,794 outstanding at December 31, 2015 and 23,630 shares issued and 23,559 outstanding at December 31, 2014238
 236
Commitments and contingencies (Note 13)
 
Stockholders’ (deficit) equity:   
Preferred stock, $0.01 par value—9,988 shares authorized (including 400 Series B Junior Preferred, $0.00 par value); no shares issued and outstanding at December 31, 2016 and December 31, 2015—
 —
Common stock, $0.01 par value—60,000 shares authorized; 32,768 shares issued and 32,566 outstanding at December 31, 2016 and 23,888 shares issued and 23,794 outstanding at December 31, 2015327
 238
Additional paid-in capital226,844
 225,953
244,825
 226,844
(Accumulated deficit) retained earnings(145,309) 64,456
Accumulated deficit(253,291) (145,309)
Accumulated other comprehensive loss(33,821) (37,116)(25,939) (33,821)
Treasury stock, at cost—94 shares at December 31, 2015 and 71 shares at December 31, 2014(964) (880)
Total stockholders’ equity46,988
 252,649
Total liabilities and stockholders’ equity$497,653
 $710,674
Treasury stock, at cost—202 shares at December 31, 2016 and 94 shares at December 31, 2015(1,049) (964)
Total stockholders’ (deficit) equity(35,127) 46,988
Total liabilities and stockholders’ (deficit) equity$329,328
 $493,506
The accompanying notes are an integral part of these statements.

45



A.M. Castle & Co.
Consolidated Statements of Cash Flows

 Year Ended December 31,
 2016 2015 2014
Operating activities:     
Net loss$(107,982) $(209,765) $(119,388)
Less: Income from discontinued operations, net of income taxes6,108
 3,016
 3,330
Loss from continuing operations

(114,090) (212,781) (122,718)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities of continuing operations:
     
Depreciation and amortization16,378
 23,318
 24,380
Amortization of deferred loss (gain)(83) 5
 (261)
Amortization of deferred financing costs and debt discount4,798
 8,355
 8,064
Debt restructuring loss

8,617
 —
 —
Loss from lease termination2,200
 —
 —
Unrealized gain on embedded debt conversion option

(10,450) —
 —
Impairment of intangible assets—
 33,742
 —
Impairment of goodwill—
 —
 56,160
Non-cash write-down of inventory—
 53,971
 —
(Gain) loss on sale of property, plant & equipment1,874
 (21,568) (5,603)
Unrealized (gains) losses on commodity hedges(1,015) (600) (1,256)
Unrealized foreign currency transaction losses4,506
 5,385
 3,540
Equity in losses (earnings) of joint venture4,141
 1,426
 (7,691)
Dividends from joint venture—
 316
 12,127
Pension curtailment—
 2,923
 —
Pension settlement—
 3,915
 —
Deferred income taxes(4,354) (25,789) (21,077)
Share-based compensation expense1,154
 828
 1,972
Excess tax benefits from share-based payment arrangements—
 —
 (76)
Other, net3
 —
 —
Changes in assets and liabilities:     
Accounts receivable6,100
 34,412
 (4,706)
Inventories65,712
 64,019
 (20,013)
Prepaid expenses and other current assets1,358
 (7,818) (491)
Other non-current assets1,993
 (520) 1,686
Prepaid pension costs(59) 2,675
 387
Accounts payable(8,449) (7,072) 2,849
Accrued payroll and employee benefits300
 6,938
 (230)
Income tax payable and receivable(105) 2,083
 (772)
Accrued and other current liabilities(6,514) 845
 (4,080)
Postretirement benefit obligations and other non-current liabilities(3,063) (1,762) (1,002)
Net cash used in operating activities of continuing operations(29,048) (32,754) (78,811)
Net cash (used in) from operating activities of discontinued operations

(5,914) 10,621
 3,734
Net cash used in operating activities

(34,962) (22,133) (75,077)
Investing activities:     
Proceeds from sale of investment in joint venture31,550
 —
 —
Capital expenditures(3,499) (7,171) (11,184)
Proceeds from sale of property, plant and equipment3,265
 28,631
 7,464
Cash collateralization of letters of credit(7,968) —
 —
Net cash from (used in) investing activities of continuing operations23,348
 21,460
 (3,720)
Net cash from (used in) investing activities of discontinued operations

53,570
 (1,079) (1,167)
Net cash from (used in) investing activities

76,918
 20,381
 (4,887)
Financing activities:     
Proceeds from long-term debt722,547
 967,035
 462,404
Repayments of long-term debt(725,821) (960,962) (403,811)
Payments of debt restructuring costs(9,802) —
 —
Payments of debt issue costs(2,472) —
 (627)




A.M. Castle & Co.
Consolidated Statements of Cash Flows

 Year Ended December 31,
 2015 2014 As Adjusted (Note 1) 2013 As Adjusted (Note 1)
Operating activities:     
Net loss$(209,765) $(119,388) $(39,533)
Adjustments to reconcile net loss to net cash (used in) from operating activities:     
Depreciation and amortization24,854
 26,044
 26,188
Amortization of deferred loss (gain)5
 (261) (1,214)
Amortization of deferred financing costs and debt discount8,355
 8,064
 7,914
Impairment of intangible assets33,742
 —
 —
Impairment of goodwill—
 56,160
 —
Non-cash write-down of inventory53,971
 —
 —
(Gain) loss on sale of property, plant & equipment(21,568) (5,603) 42
Unrealized (gains) losses on commodity hedges(600) (1,256) 358
Unrealized foreign currency transaction losses5,385
 3,540
 —
Equity in losses (earnings) of joint venture1,426
 (7,691) (6,987)
Dividends from joint venture316
 12,127
 3,963
Pension curtailment2,923
 —
 —
Pension settlement3,915
 —
 —
Deferred income taxes(23,842) (19,094) (27,436)
Share-based compensation expense828
 1,972
 3,062
Excess tax benefits from share-based payment arrangements—
 (76) (420)
Changes in assets and liabilities:     
Accounts receivable37,063
 (5,785) 9,279
Inventories63,986
 (22,976) 96,234
Prepaid expenses and other current assets(7,884) (60) 1,402
Other non-current assets(520) 1,686
 1,470
Prepaid pension costs2,675
 387
 3,953
Accounts payable(4,461) 2,630
 (434)
Accrued payroll and employee benefits6,938
 (230) (1,892)
Income tax payable and receivable2,083
 (772) 4,388
Accrued and other current liabilities(196) (3,493) (2,854)
Postretirement benefit obligations and other non-current liabilities(1,762) (1,002) (3,098)
Net cash (used in) from operating activities(22,133) (75,077) 74,385
Investing activities:     
Capital expenditures(8,250) (12,351) (11,604)
Proceeds from sale of property, plant and equipment28,631
 7,464
 794
Net cash from (used in) investing activities20,381
 (4,887) (10,810)
Financing activities:     
Short-term debt repayments, net—
 —
 (496)
Proceeds from long-term debt967,035
 462,404
 115,300
Repayments of long-term debt(960,962) (403,811) (170,345)
Payments of build-to-suit liability(500) —
 —
Payment of debt issue costs—
 (627) —
Exercise of stock options—
 158
 1,216
Excess tax benefits from share-based payment arrangements—
 76
 420
Net cash from (used in) financing activities5,573
 58,200
 (53,905)
Effect of exchange rate changes on cash and cash equivalents(1,175) (611) (448)
Net change in cash and cash equivalents2,646
 (22,375) 9,222
Cash and cash equivalents—beginning of year8,454
 30,829
 21,607
Cash and cash equivalents—end of year$11,100
 $8,454
 $30,829

A.M. Castle & Co.
Consolidated Statements of Cash Flows

 Year Ended December 31,
 2016 2015 2014
Payments of build-to-suit liability(932) (500) —
Exercise of stock options—
 —
 158
Excess tax benefits from share-based payment arrangements—
 —
 76
Net cash (used in) from financing activities(16,480) 5,573
 58,200
Effect of exchange rate changes on cash and cash equivalents(952) (1,175) (611)
Net change in cash and cash equivalents24,524
 2,646
 (22,375)
Cash and cash equivalents—beginning of year11,100
 8,454
 30,829
Cash and cash equivalents—end of year$35,624
 $11,100
 $8,454
See Note 1 - Basis of Presentation and Significant Accounting Policies to the consolidated financial statements for supplemental cash flow disclosures.
The accompanying notes are an integral part of these statements.

46





A.M. Castle & Co.
Consolidated Statements of Stockholders' Equity

A.M. Castle & Co.
Consolidated Statements of Stockholders' (Deficit) Equity

A.M. Castle & Co.
Consolidated Statements of Stockholders' (Deficit) Equity

Common
Shares
 
Treasury
Shares
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid-in
Capital
 
(Accumulated Deficit) Retained
Earnings
 
Accumulated Other
Comprehensive
Loss
 Total
Common
Shares
 
Treasury
Shares
 
Preferred
Stock
 
Common
Stock
 
Treasury
Stock
 
Additional
Paid-in
Capital
 
(Accumulated Deficit) Retained
Earnings
 
Accumulated Other
Comprehensive
Loss
 Total
Balance at January 1, 2013, as adjusted (Note 1)23,211
 (59) $—
 $232
 $(679) $219,619
 $223,377
 $(21,071) $421,478
Balance at January 1, 201423,471
 (62) $—
 $234
 $(767) $223,893
 $183,844
 $(18,743) $388,461
Net loss            (39,533)   (39,533)            (119,388)   (119,388)
Foreign currency translation              (2,295) (2,295)              (5,377) (5,377)
Change in unrecognized pension and postretirement benefit costs, net of tax effect of $2,953              4,623
 4,623
Change in unrecognized pension and postretirement benefit costs, net of $8,449 tax effect              (12,996) (12,996)
Long-term incentive plan          2,877
     2,877
          1,456
     1,456
Exercise of stock options and other260
 (3)   2
 (88) 1,397
     1,311
159
 (9)   2
 (113) 604
     493
Balance at December 31, 2013, as adjusted (Note 1)23,471
 (62) $—
 $234
 $(767) $223,893
 $183,844
 $(18,743) $388,461
Net loss            (119,388)   (119,388)
Foreign currency translation              (5,377) (5,377)
Change in unrecognized pension and postretirement benefit costs, $8,449 tax effect              (12,996) (12,996)
Long-term incentive plan          1,456
     1,456
Exercise of stock options and other159
 (9)   2
 (113) 604
     493
Balance at December 31, 2014, as adjusted (Note 1)23,630
 (71) $—
 $236
 $(880) $225,953
 $64,456
 $(37,116) $252,649
Balance at December 31, 2014

23,630
 (71) $—
 $236
 $(880) $225,953
 $64,456
 $(37,116) $252,649
Net loss            (209,765)   (209,765)            (209,765)   (209,765)
Foreign currency translation              (6,642) (6,642)              (6,642) (6,642)
Change in unrecognized pension and postretirement benefit costs, $0 tax effect              9,937
 9,937
              9,937
 9,937
Long-term incentive plan          149
     149
          149
     149
Exercise of stock options and other258
 (23)   2
 (84) 742
     660
258
 (23)   2
 (84) 742
     660
Balance at December 31, 201523,888
 (94) $—
 $238
 $(964) $226,844
 $(145,309) $(33,821) $46,988
23,888
 (94) $—
 $238
 $(964) $226,844
 $(145,309) $(33,821) $46,988
Net loss            (107,982)   (107,982)
Foreign currency translation              494
 494
Change in unrecognized pension and postretirement benefit costs, $(3,669) tax effect              7,388
 7,388
Conversion of convertible notes8,576
     86
   16,543
     16,629
Common stock warrants issued          200
     200
Long-term incentive plan          882
     882
Exercise of stock options and other304
 (108)   3
 (85) 356
     274
Balance at December 31, 201632,768
 (202) $—
 $327
 $(1,049) $244,825
 $(253,291) $(25,939) $(35,127)
The accompanying notes are an integral part of these statements.

47




A. M. Castle & Co.
Notes to Consolidated Financial Statements
(Amounts in thousands except par value and per share data)
(1) Basis of Presentation and Significant Accounting Policies
Nature of operations — A.M. Castle & Co. and its subsidiaries (the “Company”) is a specialty metals and plastics distribution company serving principally the North American market. The Company has operations in the United States, Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. The Company provides a broad range of product inventories as well as value-added processing and supply chain services to a wide array of customers, principally within the producer durable equipment, aerospace, heavy industrial equipment, industrial goods, construction equipment, oil and gas, retail, marine and automotiveretail sectors of the global economy. Particular focus is placed on the aerospace and defense, power generation, mining, heavy industrial equipment, oil and gas, marine, office furniture and fixtures, safety products, life science applications, automotive and general manufacturing industries, as well as general engineering applications.
The Company’s corporate headquarters is located in Oak Brook, Illinois. The Company has 4121 operational service centers located throughout North America (36)(16), Europe (3) and Asia (2).
The Company purchases metals and plastics from many producers. Purchases are made in large lots and held in distribution centers until sold, usually in smaller quantities and often with value-added processing services performed. Orders are primarily filled with materials shipped from Company stock. The materials required to fill the balance of sales are obtained from other sources, such as direct mill shipments to customers or purchases from other distributors. Thousands of customers from a wide array of industries are serviced primarily through the Company’s own sales organization.
Basis of presentation — The consolidated financial statements include the accounts of A. M. Castle & Co. and its subsidiaries over which the Company exhibits a controlling interest. The equity method of accounting iswas used for the Company’s 50% owned joint venture, Kreher Steel Company, LLC (“Kreher”). until the Company sold its investment in Kreher in August 2016. All inter-companyintercompany accounts and transactions have been eliminated.
In March 2016, the Company completed the sale of substantially all the assets of its wholly-owned subsidiary, Total Plastics, Inc. ("TPI"). TPI is reflected in the accompanying consolidated financial statements as a discontinued operation.
The accompanying consolidated financial statements have been prepared on the basis of the Company continuing as a going concern for a reasonable period of time. The Company‘sCompany's principal sourcessource of liquidity areis cash flows from operations, and available borrowing capacity under its revolving credit facility. These have historically been sufficient to meet working capital needs, capital expenditures and debt service obligations.operations. During the year ended December 31, 2015,2016, the Company incurred a net loss from continuing operations of $209,765 (including non-cash charges of $61,472 related to inventory and purchase commitments and $33,742 related to an impairment of intangible assets)$114,090 and used cash from continuing operations of $22,133.$29,048. The Company's plan indicates that it will have sufficient cash flows from its operations to continue as a going concern. The Company's ability to have sufficient cash flows to continue as a going concern is based on plans that rely on certain underlying assumptions and estimates that may differ from actual results. The Company’s plans also included the sale for cash of all of its remaining inventory at its Houston and Edmonton facilities and the sale of its wholly-owned subsidiary, TPI. Both of these actions were completed in the first quarter of 2016 (see Note 15 - Subsequent Events to the consolidated financial statements) and provide liquidity in addition to the forecasted operating cash flows to meet working capital needs, capital expenditures and debt service obligations for the next twelve months.
Use of estimates — The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The principal areas of estimation reflected in the consolidated financial statements are accounts receivable allowances, inventory reserves, goodwill and intangible assets, income taxes, pension and other post-employment benefits and share-based compensation.
Revenue recognition — Revenue from the sale of products is recognized when the earnings process is complete and when the title and risk and rewards of ownership have passed to the customer, which is primarily at the time of shipment. Revenue recognized other than at the time of shipment represented less than 2% of the Company’s consolidated net sales for the years ended December 31, 2016, 2015 2014 and 2013.2014. Provisions for allowances related to sales discounts and rebates are recorded based on terms of the sale in the period that the sale is recorded. Management utilizes historical information and the current sales trends of the business to estimate such provisions. The provisions related

48




to discounts and rebates due to customers are recorded as a reduction within net sales in the Company’s consolidated statementsConsolidated Statements of operationsOperations and comprehensive loss.Comprehensive Loss.
Revenue from shipping and handling charges is recorded in net sales. Costs incurred in connection with shipping and handling the Company’s products, which are related to third-party carriers or performed by Company personnel, are included in warehouse, processing and delivery expenses. For the years ended December 31, 2016, 2015 2014 and 2013,2014, shipping and handling costs included in warehouse, processing and delivery expenses were $28,320, $35,471$26,370, $26,641 and $35,171,$33,598, respectively.


The Company maintains an allowance for doubtful accounts related to the potential inability of customers to make required payments. The allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific identification of customer receivable balances for which collection is unlikely. The provision for doubtful accounts is recorded in sales, general and administrative expense in the Company’s consolidated statementsConsolidated Statements of operationsOperations and comprehensive loss.Comprehensive Loss. Estimates of doubtful accounts are based on historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers.
The Company also maintains an allowance for credit memos for estimated credit memos to be issued against current sales. Estimates of allowance for credit memos are based upon the application of a historical issuance lag period to the average credit memos issued each month.
Accounts receivable allowance for doubtful accounts and credit memos activity is presented in the table below:
2015 2014 20132016 2015 2014
Balance, beginning of year$3,375
 $3,463
 $3,529
$2,380
 $2,471
 $2,744
Add Provision charged to expense805
 465
 484
37
 678
 184
Recoveries117
 139
 173
32
 26
 105
Less Charges against allowance(857) (692) (723)(504) (795) (562)
Balance, end of year$3,440
 $3,375
 $3,463
$1,945
 $2,380
 $2,471
Cost of materials — Cost of materials consists of the costs the Company pays for metals plastics and related inbound freight charges. It excludes depreciation and amortization which are discussed below.
Operating expenses — Operating costs and expenses primarily consist of:
 
Warehouse, processing and delivery expenses, including occupancy costs, compensation and employee benefits for warehouse personnel, processing, shipping and handling costs;
Sales expenses, including compensation and employee benefits for sales personnel;
General and administrative expenses, including compensation for executive officers and general management, expenses for professional services primarily attributable to accounting and legal advisory services, bad debt expenses, data communication costs, computer hardware and maintenance expenses and occupancy costs for non-warehouse locations;
Restructuring activity, including gains on the sale of fixed assets and moving costs related to facility consolidations, employee termination and related benefits associated with salaried and hourly workforce reductions, lease termination costs, professional fees, and other exit costs;
Depreciation and amortization expenses, including depreciation for all owned property and equipment, and amortization of various intangible assets; and
Impairment of intangible assets and goodwill.
Cash equivalents — Cash equivalents are highly liquid, short-term investments that have an original maturity of 90 days or less.

49




Statement of cash flows — Non-cash investing and financing activities and supplemental disclosures of consolidated cash flow information are as follows:
Year ended December 31,Year Ended December 31,
2015 2014 20132016 2015 2014
Non-cash investing and financing activities:          
Capital expenditures financed by accounts payable$667
 $434
 $1,219
$59
 $667
 $434
Capital lease obligations—
 873
 21
—
 —
 873
Property, plant and equipment subject to build-to-suit lease13,735
 —
 —
—
 13,735
 —
Cash paid during the year for:          
Interest32,934
 32,278
 33,266
31,404
 32,934
 32,278
Income taxes1,980
 1,800
 2,417
2,434
 1,980
 1,800
Cash received during the year for:          
Income tax refunds1,798
 2,284
 3,015
500
 1,798
 2,284
Inventories — Inventories consist primarily of finished goods. DuringAll of the fourth quarter of 2015, the Company elected to change its method of inventory costing for its U.S. metals inventory toCompany's continuing operations use the average cost method fromin determining the last-in first-out ("LIFO") method. The Company's foreign metals operations also determine costs using the average cost method. As discussed in Note 15 - Subsequent Events to the consolidated financial statements, the Company has agreed to sell its Plastics segment. As a result, the Company decided not to change its method of accounting for the Plastics' segment inventory. After the sale of the Plastics segment, all of the Company's inventory will be accounted for using the average cost method. Prior to this change in accounting principle, at December 31, 2014, approximately 68% of the Company’s inventories were valued at the lower of LIFO cost or market.
The Company believes that the average cost method is preferable as it results in increased uniformity across the Company’s global operations with respect to the method of inventory accounting, improves financial reporting by better reflecting the current value of inventory on the Consolidated Balance Sheets, more closely aligns the flow of physical inventory with the accounting for the inventory, provides better matching of revenues and expenses, aligns the Company's external reporting of inventory with its internal forecasting and budgeting for inventory, and improves transparency with how the market evaluates performance, including better comparability with many of the Company’s peers. The Company applied this change in method of inventory costing by retrospectively adjusting the prior period financial statements. The cumulative effect of this accounting change resulted in a $84,138 increase in retained earnings as of January 1, 2013.

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As a result of the retrospective adjustment of the change in accounting principle, certain amounts in the Company's Consolidated Statements of Operations and Comprehensive loss for the years ended December 31, 2014 and 2013 were adjusted as follows:
 Year Ended December 31, 2014 Year Ended December 31, 2013
 As originally reported Effect of change As adjusted As originally reported Effect of change As adjusted
Cost of materials (exclusive of depreciation and amortization)$746,443
 $3,965
 $750,408
 $779,208
 $8,918
 $788,126
Operating loss(98,874) (3,965) (102,839) (15,672) (8,918) (24,590)
Loss before income taxes and equity in earnings (losses) of joint venture(143,745) (3,965) (147,710) (60,744) (8,918) (69,662)
Income tax expense (benefit)(1,353) (19,278) (20,631) (19,795) (3,347) (23,142)
Loss before equity in earnings (losses) of joint venture(142,392) 15,313
 (127,079) (40,949) (5,571) (46,520)
Net loss(134,701) 15,313
 (119,388) (33,962) (5,571) (39,533)
Basic and diluted loss per common share$(5.77) $0.66
 $(5.11) $(1.46) $(0.24) $(1.70)
Change in unrecognized pension and postretirement benefit costs(21,445) 8,449
 (12,996) 4,623
 —
 4,623
Other comprehensive (loss) income(26,822) 8,449
 (18,373) 2,328
 —
 2,328
Comprehensive loss(161,523) 23,762
 (137,761) (31,634) (5,571) (37,205)
The Consolidated Balance Sheet at December 31, 2014 was adjusted as follows:
 December 31, 2014
 As originally reported Effect of change As adjusted
Inventories$236,932
 $122,698
 $359,630
Deferred income tax liability8,360
 20,369
 28,729
(Accumulated deficit) retained earnings(29,424) 93,880
 64,456
Accumulated other comprehensive loss(45,565) 8,449
 (37,116)
The consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013 were adjusted as follows:
 Year Ended December 31, 2014 Year Ended December 31, 2013
 As originally reported Effect of change As adjusted As originally reported Effect of change As adjusted
Net loss$(134,701) $15,313
 $(119,388) $(33,962) $(5,571) $(39,533)
Deferred income taxes184
 (19,278) (19,094) (24,089) (3,347) (27,436)
Increase (decrease) from changes in inventories(26,941) 3,965
 (22,976) 87,316
 8,918
 96,234

The current replacement cost of inventories at the Company's Plastics segment which are accounted for under the LIFO method exceeded book value by $2,462 and $2,682 at December 31, 2015 and 2014, respectively.inventory.

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The Company maintains an allowance for excess and obsolete inventory. The excess and obsolete inventory allowance is determined through the specific identification of material, adjusted for expected scrap value to be received, based on previous sales experience.
Excess and obsolete inventory allowance activity is presented in the table below:
2015 2014 20132016 2015 2014
Balance, beginning of year$19,513
 $9,579
 $10,013
$13,075
 $18,852
 $8,991
Add Provision charged to expense29,848
 12,061
 2,331
5,857
 28,903
 11,959
Less Charges against allowance(35,584) (2,127) (2,765)(11,055) (34,680) (2,098)
Balance, end of year$13,777
 $19,513
 $9,579
$7,877
 $13,075
 $18,852
In the fourth quarter of 2015, the Company recognized a non-cash charge of $61,472, primarily related to inventory and purchase commitments of the Company's Houston and Edmonton locations, whichwhere the Company ceased operations at in February 2016. The non-cash charge is reported in cost of materials in the consolidated statementConsolidated Statement of operationsOperations and comprehensive lossComprehensive Loss for the year ended December 31, 2015.
Property, plant and equipment — Property, plant and equipment are stated at cost and include assets held under capital leases. Expenditures for major additions and improvements are capitalized, while maintenance and repair costs that do not substantially improve or extend the useful lives of the respective assets are expensed in the period in which they are incurred. When items are disposed, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is reflected in income.
The Company provides for depreciation of plant and equipment sufficient to amortize the cost over their estimated useful lives as follows:
Buildings and building improvements5 – 40 years
Plant equipment5 – 20 years
Furniture and fixtures2 – 10 years
Vehicles and office equipment3 – 10 years
Leasehold improvements are depreciated over the shorter of their useful lives or the remaining term of the lease. Depreciation is calculated using the straight-line method and depreciation expense for 2016, 2015 and 2014 was $10,252, $12,671 and 2013 was $14,207, $14,414 and $14,397,$12,750, respectively.
Long-lived assets — The Company’s long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be


held and used is measured by a comparison of the carrying amount of an asset or asset group to future net cash flows (undiscounted and without interest charges) expected to be generated by the asset or asset group. If future net cash flows are less than the carrying value, the asset or asset group may be impaired. If such assets are impaired, the impairment charge is calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which undiscounted cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount, and the asset’s residual value, if any. The Company derives the required undiscounted cash flow estimates from historical experience and internal business plans.
Goodwill and intangibleIntangible assets — The Company tests goodwill for impairment at the reporting unit level on an annual basis at December 1 of each year and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company assesses, at least quarterly, whether any triggering events have occurred.
A two-step method is used for determining goodwill impairment. The first step is performed to identify whether a potential impairment exists by comparing each reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the next step is to measure the amount of impairment loss, if any.
The determination of the fair value of the reporting units requires significant estimates and assumptions to be made by management. The fair value of each reporting unit is estimated using a combination of an income approach, which estimates fair value based on a discounted cash flow analysis using historical data, estimates of future cash flows and

52




discount rates based on the view of a market participant, and a market approach, which estimates fair value using market multiples of various financial measures of comparable public companies. In selecting the appropriate assumptions the Company considers: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in the industry in which the Company competes; discount rates; terminal growth rates; long-term projections of future financial performance; and relative weighting of income and market approaches. The long-term projections used in the valuation are developed as part of the Company’s annual long-term planning process. The discount rates used to determine the fair values of the reporting units are those of a hypothetical market participant which are developed based upon an analysis of comparable companies and include adjustments made to account for any individual reporting unit specific attributes such as, size and industry.
The majority of the Company’s recorded intangible assets as of December 31, 20152016 were acquired as part of the Transtar acquisition in September 2006 and consist of customer relationships. Intangible assets related to non-compete agreements and developed technology acquired in the Transtar acquisition and Tube Supply, Inc. (“Tube Supply”) acquisition in 2011 were fully amortized in 2014. In 2015, the Company concluded that the remaining customer relationships and trade name intangible assets acquired in the Tube Supply acquisition were impaired and a $33,742 non-cash impairment charge (none of which iswas deductible for tax purposes in 2015)purposes) was recorded for the year ended December 31, 2015. The non-cash impairment charge recorded removed all the remaining finite-lived intangible assets associated with the Tube Supply acquisition. The initial values of the intangible assets were based on a discounted cash flow valuation using assumptions made by management as to future revenues from select customers, the level and pace of attrition in such revenues over time and assumed operating income amounts generated from such revenues. These intangible assets are amortized over their useful lives, which are 4 to 12 years for customer relationships and 1 to 10 years for trade names. Useful lives are estimated by management and determined based on the timeframe over which a significant portion of the estimated future cash flows are expected to be realized from the respective intangible assets. Furthermore, when certain conditions or certain triggering events occur, a separate test for impairment, which is included in the impairment test for long-lived assets discussed above, is performed. If the intangible asset is deemed to be impaired, such asset will be written down to its fair value.
Income taxes — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and the tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company records valuation allowances against its deferred tax assets when it is more likely than not that the amounts will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and recent results of operations. In the event the Company determines it would not be able to realize its deferred tax assets, a valuation allowance is recorded, which increases the provision for income taxes in the period in which that determination is made.
TheDuring 2016, the Company haspledged its foreign assets as collateral for certain borrowings. This resulted in a foreign income inclusion in the U.S. under Internal Revenue Code ("IRC") Section 956, which was comprised of current and accumulated earnings and profits. There are no remaining undistributed earnings as of foreign subsidiaries of $51,584 at December 31, 2015, for2016 on which the Company would need to record any additional deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiaries. If such earnings were repatriated, additional tax expense may result, although due to the potential availability of foreign tax credits and other items, the calculation of such potential taxes is not practicable.liability.
The Company's 50% ownership interest in Kreher (Note 23 - Joint Venture to the consolidated financial statements) isConsolidated Financial Statements) was through a 50% interest in a limited liability company (LLC) taxed as a partnership. Kreher has two subsidiaries organized as individually taxed C-Corporations. The Company includesincluded in its income tax provision the income tax liability on its share of Kreher income. The income tax liability of Kreher itself is generally treated as a current income tax expense and the income tax liability associated with the profits of the two subsidiaries of Kreher is treated as a deferred income tax expense. The Company cannotcould not independently cause a dividend to be declared by one of Kreher's subsidiaries,subsidiaries; therefore, no benefit of a dividend received deduction cancould be recognized in the Company's tax provision until a dividend iswas declared. If one of Kreher's C-Corporation subsidiaries declaresdeclared a dividend payable to Kreher, the Company recognizesrecognized a benefit for the 80% dividends received deduction on its 50% share of the dividend. In the year ended December 31, 2015, the joint venture recognized a goodwill impairment charge of $3,525 of which the Company recognized 50%, or $1,763.
For uncertain tax positions, the Company applies the provisions of relevant authoritative guidance, which requires application of a “more likely than not” threshold to the recognition and derecognition of tax positions. The Company’s ongoing assessments of the more likely than not outcomes of tax authority examinations and related tax positions

53




require significant judgment and can increase or decrease the Company’s effective tax rate as well as impact operating results. Although the Company believes that the positions taken on previously filed tax returns are reasonable, it has


established tax and interest reserves in recognition that various taxing authorities may challenge the positions taken, which could result in additional liabilities for taxes and interest.
The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets.Consolidated Balance Sheets.
Insurance plans — The Company is a member of a group captive insurance company (the “Captive”) domiciled in Grand Cayman Island. The Captive reinsures losses related to certain of the Company’s workers’ compensation, automobile and general liability risks that occur subsequent to August 2009. Premiums are based on the Company’s loss experience and are accrued as expenses for the period to which the premium relates. Premiums are credited to the Company’s “loss fund” and earn investment income until claims are actually paid. For claims that were incurred prior to August 2009, the Company is self-insured. Self-insurance amounts are capped, for individual claims and in the aggregate, for each policy year by an insurance company. Self-insurance reserves are based on unpaid, known claims (including related administrative fees assessed by the insurance company for claims processing) and a reserve for incurred but not reported claims based on the Company’s historical claims experience and development.
The Company is self-insured up to a retention amount for medical insurance for its domestic operations. Self-insurance reserves are maintained based on incurred but not paid claims based on a historical lag.
Foreign currency — For the majority of the Company’s non-U.S. operations, the functional currency is the local currency. Assets and liabilities of those operations are translated into U.S. dollars using year-end exchange rates, and income and expenses are translated using the average exchange rates for the reporting period. The currency effects of translating financial statements of the Company’s non-U.S. operations which operate in local currency environments are recorded in accumulated other comprehensive (loss) income,loss, a separate component of stockholders’ (deficit) equity. Other than transactionTransaction gains or losses resulting from foreign currency transactions have historically been primarily related to unhedged intercompany financing arrangements between the United States and the United Kingdom and Canada, transaction gains or losses resulting from foreign currency transactions were not material for any of the years presented.Canada.
Loss per share — Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock plus common stock equivalents. Common stock equivalents consist of employee and director stock options, restricted stock awards, other share-based payment awards, and contingently issuable shares related to the Company’s Convertible Senior Notes ("Convertible Notes")convertible senior notes, which are included in the calculation of weighted average shares outstanding using the treasury stock method, if dilutive.


The following table is a reconciliation of the basic and diluted loss per share calculations:
Year ended December 31,Year Ended December 31,
2015 2014 20132016 2015 2014
Numerator:          
Loss from continuing operations

$(114,090) $(212,781) $(122,718)
Income from discontinued operations, net of income taxes

6,108
 3,016
 3,330
Net loss$(209,765) $(119,388) $(39,533)$(107,982) $(209,765) $(119,388)
Denominator:          
Weighted average common shares outstanding23,553
 23,359
 23,214
29,009
 23,553
 23,359
Effect of dilutive securities:          
Outstanding common stock equivalents—
 —
 —
—
 —
 —
Denominator for diluted loss per share23,553
 23,359
 23,214
29,009
 23,553
 23,359
Basic loss per share$(8.91) $(5.11) $(1.70)
Diluted loss per share$(8.91) $(5.11) $(1.70)
     
Basic earnings (loss) per common share:

     
Continuing operations

$(3.93) $(9.04) $(5.25)
Discontinued operations

0.21
 0.13
 0.14
Net basic loss per common share$(3.72) $(8.91) $(5.11)
     
Diluted earnings (loss) per common share:

     
Continuing operations

$(3.93) $(9.04) $(5.25)
Discontinued operations

0.21
 0.13
 0.14
Net diluted loss per common share

$(3.72) $(8.91) $(5.11)
Excluded outstanding share-based awards having an anti-dilutive effect1,071
 388
 717
2,640
 1,071
 388
Excluded "in the money" portion of Convertible Notes having an anti-dilutive effect—
 365
 2,032
Excluded "in the money" portion of convertible notes having an anti-dilutive effect—
 —
 365
Excluded "in the money" portion of common stock warrants having an anti-dilutive effect—
 —
 —
The Convertible Notesnotes and common stock warrants are dilutive to the extent the Company generates net income and the average stock price during the annual period is greater than the conversion priceprices and exercise prices of the Convertible Notes.convertible notes and common stock warrants, respectively. The Convertible Notesconvertible notes and common stock warrants are only dilutive for the “in the money” portion of the Convertible Notesconvertible notes and common stock warrants that could be settled with the Company’s stock.

54




Concentrations — The Company serves a wide range of customers within the producer durable equipment, aerospace, heavy industrial equipment, industrial goods, construction equipment, oil and gas, retail, marine and automotive sectors of the economy. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller sized firms spread across the entire spectrum of metals and plastics usingmetals-using industries. The Company’s customer base is well diversified and, therefore, the Company does not have dependence upon any single customer or a few customers. No single customer represented more than 3%4% of the Company’s 20152016 total net sales. Approximately 72%63% of the Company’s net sales are from locations in the United States.
Share-based compensation — The Company offers share-based compensation awards to executives, other key employees and directors. Share-based compensation expense is recognized ratably over the vesting period or performance period, as appropriate, based on the grant date fair value of the stock award. The Company may either issue shares from treasury or new shares upon share option exercise or award issuance. Management estimates the probable number of awards whichthat will ultimately vest when calculating the share-based compensation expense for its LTCLong-Term Compensation Plans ("LTCP") and STI Plans.Short-Term Incentive Programs ("STIP"). As of December 31, 20152016, the Company’s weighted average forfeiture rate is approximately 46%47%. The actual number of awards that vest may differ from management’s estimate.


Stock options generally vest in one to three years for executives and employees and non-vested shares granted to directors vest in one to three years. Stock options have an exercise price equal to the closing price of the Company’s stock on the date of grant (options granted in 2016 and 2015) or the average closing price of the Company’s stock for the 10 trading days preceding the grant date (options granted in 2010) and have a contractual life of eight to 10 years. Stock options are valued using a Black-Scholes option-pricing model. Non-vested shares are valued based on the market price of the Company's stock on the grant date. The Company granted non-qualified stock options under its short-term incentive planSTIP and long-term compensation planLTCP in 2016 and 2015.
Under the 2015 LTC Plans,LTCP, the total potential award is comprised of non-qualified stock options and RSUs,restricted stock units ("RSUs"), which are time vested and once vested entitle the participant to receive shares of the Company's common stock. Under the 2014 and 2013 LTC Plans,LTCP, the total potential award is comprised of restrictedRSUs and performance share units and PSUs("PSUs"), which are based on the Company's performance compared to target goals. The PSUs awarded are based on two independent conditions, the Company’s RTSR,relative total shareholder return ("RTSR"), which represents a market condition, and Company-specific target goals for ROICreturn on invested capital ("ROIC") as defined in the LTC Plans.LTCP. RSUs generally vest in three years. RSU and ROIC PSU awards are valued based on the market price of the Company's stock on the grant date, and the value of RTSR PSU awards is estimated using a Monte Carlo simulation model. No PSUs were awarded under the 2016 LTCP or 2015 LTC plan.LTCP.
RTSR is measured against a group of peer companies either in the metals industry or in the industrial products distribution industry (the "RTSR Peer Group") over a three-year performance period as defined in the LTC Plans. The threshold, target and maximum performance levels for RTSR are the 25th, 50th and 75th percentile, respectively, relative to RTSR Peer Group performance. Compensation expense for RTSR PSU awards is recognized regardless of whether the market condition is achieved to the extent the requisite service period condition is met.
ROIC is measured based on the Company's average actual performance versus Company-specific goals as defined in each of the LTC Plansyear's LTCP over a three-year performance period. Compensation expense recognized is based on management's expectation of future performance compared to the pre-established performance goals. If the performance goals are not expected to be met, no compensation expense is recognized for the ROIC PSU awards and any previously recognized compensation expense is reversed.
Final RTSR and ROIC PSU award vesting will occur at the end of the three-year performance period, and distribution of PSU awards granted under the LTC PlansLTCP are determined based on the Company’s actual performance versus the target goals for a three-year performance period, as defined in each plan.year's LTCP. Partial awards can be earned for performance that is below the target goal, but in excess of threshold goals;goals, and award distributions up to twice the target can be achieved if the target goals are exceeded.
Unless covered by a specific change-in-control or severance arrangement, participants to whom RSUs, PSUs, stock options and non-vested shares have been granted must be employed by the Company on the vesting date or at the end of the performance period, as appropriate, or the award will be forfeited.
New Accounting Standards Updates
Standards Updates Adopted
Effective December 31, 2015,2016, the Company adopted Financial Accounting Standards Board (“FASB”("FASB") Accounting Standards Update ("ASU") No. 2015-17, "Balance Sheet Classification2014-15, "Disclosure of Deferred Taxes." This ASU requires entitiesUncertainties about an Entity’s Ability to present deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”)Continue as noncurrent in a classified balance sheet.

55




It thus simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current or noncurrent in a classified balance sheet. Netting of DTAs and DTLs by tax jurisdiction is still required under the new guidance. The consolidated balance sheet for the year ended December 31, 2014 has been retrospectively adjusted for the adoption of this ASU.
Concurrent with the Company's change in method of accounting for inventories for U.S. metals operations to the average cost method from the LIFO method, effective December 31, 2015 the Company adopted ASU No. 2015-11, "Simplifying the Measurement of Inventory.Going Concern." This ASU requires entitiesprovides additional guidance surrounding the disclosure of going concern uncertainties in the financial statements and implements requirements for management to measure most inventory at the lowerperform interim and annual assessments of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is definedentity’s ability to continue as a going concern within one of three different measures, one of which is net realizable value). The ASU does not apply to inventories that are measured by using either the LIFO method or the retail inventory method. The Company has prospectively applied this guidance to its consolidated balance sheet as of December 31, 2015 as it believes this change in accounting principle simplifies the measurement and reportingyear of the date the financial statements are issued. The Company's inventory at lowerassessment of cost or market. The consolidated balance sheet forits ability to continue as a going concern is further discussed in the year ended December 31, 2014 has not been retrospectively adjusted for the adoptionBasis of this ASU.
Effective January 1, 2015, the Company adopted ASU No. 2014-08, "Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU No. 2014-08 amends the definition of a discontinued operation, expands disclosure requirements for transactions that meet the definition of a discontinued operation and requires entities to disclose additional information about individually significant components that are disposed of or held for sale and do not qualify as discontinued operations.Presentation above. The adoption of this ASU 2014-15 did not have a material impact on the Company's consolidated financial conditionposition, results of operations, cash flows or disclosures.
Standards Updates Issued Not Yet Effective
In March 2017, the FASB issued ASU 2017-07, "Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." Under the new guidance, employers must present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. The other components of net periodic benefit cost must be reported separately from the line item(s) that includes the service cost component and outside of any subtotal of operating income, if one is presented. Employers will have to disclose the line(s) used to present the other


components of net periodic benefit cost, if the components are not presented separately in the income statement. The guidance on the income statement presentation of the components of net periodic benefit cost must be applied retrospectively, while the guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component must be applied prospectively. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted as of the beginning of an annual period for which interim financial statement presentation.
Effective January 1, 2014,statements have not been issued. The Company is currently evaluating the Company adoptedimpact the adoption of ASU No. 2013-11, “Presentation2017-07 will have on its consolidated financial statements.
In August 2016, the FASB issued ASU No. 2016-15, "Statement of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.”Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to reduce the existing diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230. The amendments in this ASU require an entity2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. ASU 2016-15 must be applied retrospectively to all periods presented with limited exceptions. For public companies, the amendments in ASU 2016-15 are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted, including adoption in an unrecognized tax benefit, or a portion of an unrecognized tax benefit, ininterim period. The Company does not expect the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward except when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available or when the deferred tax asset is not intended for this purpose. The adoption of this ASU did notNo. 2016-15 to have a material impact on its consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions. Under ASU No. 2016-09, a Company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, eliminating the notion of the additional paid-in capital pool and significantly reducing the complexity and cost of accounting for excess tax benefits and tax deficiencies. For interim reporting purposes, excess tax benefits and tax deficiencies are considered discrete items in the reporting period in which they occur and are not included in the estimate of an entity’s annual effective tax rate. ASU No. 2016-09 further eliminates the requirement to defer recognition of an excess tax benefit until the benefit is realized through a reduction to taxes payable. For public companies, the ASU must be prospectively applied, and is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption will be permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance. The Company does not believe that the adoption of ASU No. 2016-09 will have a material impact on its consolidated financial statements; however, the impact is affected by future transactions and changes in the Company's financial condition or financial statement presentation.
Standards Updates Issued Not Yet Effectivestock price.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. ASU No. 2016-02 also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update isprovisions of ASU 2016-02 are to be applied using a modified retrospective approach, and are effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period. Early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU No. 2016-02 will have on its consolidated financial statements.
In April 2015,statements, but the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This new standard requiresCompany expects that debt issuance costsmost existing operating lease commitments will be presented in the balance sheetrecognized as operating lease obligations and right-of-use assets as a direct deduction from the carrying amountresult of debt liability, consistent with debt discounts or premiums. ASU No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements," was subsequently issued by the FASB to clarify the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements, allowing an entity to defer and present debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement. The recognition and measurement guidance for debt issuance costs would not be affected by the amendments in ASU No. 2015-03. ASU No. 2015-03 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the Company would reclassify its deferred debt issuance costs from other assets to long-term debt. If adopted as of December 31, 2015, the Company would have recorded a reduction in both other non-current assets and long-term debt of approximately $5,750 and would have provided additional disclosure.adoption.
In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern," providing additional guidance surrounding the disclosure of going concern uncertainties in the financial statements and implementing requirements for management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The ASU is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2016. The Company will begin performing the periodic assessments required by the ASU on its effective date and is currently assessing whether the adoption of the ASU will result in additional disclosures.

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In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," related to revenue recognition. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in prior accounting guidance. The ASU provides alternative methodspermits the use of initialeither the retrospective or modified retrospective (cumulative-effect) transition method of adoption. ASU No. 2015-14, "Deferral of the Effective Date," was issued in August 2015 to defer the effective date of ASU No. 2014-09 for public companies until annual reporting periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. In 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients," and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which provide supplemental adoption guidance and clarification to ASC No. 2014-09. ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20 must be adopted concurrently with the adoption of ASU No. 2014-09. The Company is currently reviewingcontinues to evaluate the guidance and assessing the potential impact of these ASU's on its consolidated financial statements.statements and disclosures, and plans to adopt these ASU's in the first quarter of 2018 under the modified retrospective transition method.


(2) Discontinued Operation
On March 15, 2016, the Company completed the sale of TPI for $55,070 in cash, subject to customary working capital adjustments. Under the terms of the sale, $1,500 of the purchase price was placed into escrow pending adjustment based upon the final calculation of the working capital at closing. The Company and the buyer agreed to the final working capital adjustment during the third quarter of 2016, which resulted in the full escrowed amount being returned to the buyer. The sale resulted in pre-tax and after-tax gains of $2,003 and $1,306, respectively, for the year ended December 31, 2016.
Prior to the sale of TPI, the Company had two reportable segments consisting of its Plastics segment and its Metals segment. Subsequent to the sale of TPI, which represented the Company's Plastics segment in its entirety, the Company has only one reportable segment.
Summarized results of the discontinued operation were as follows:
 Year Ended December 31,
 2016 2015 2014
Net sales$29,680
 $132,821
 $138,165
Cost of materials21,027
 93,405
 97,981
Operating costs and expenses7,288
 32,994
 33,830
Interest expense(a)
333
 1,457
 712
Income from discontinued operations before income taxes$1,032
 $4,965
 $5,642
Income tax (benefit) expense (b)
(3,770) 1,949
 2,312
Gain on sale of discontinued operations, net of income taxes1,306
 —
 —
Income from discontinued operations, net of income taxes$6,108
 $3,016
 $3,330
(a) Interest expense was allocated to the discontinued operation based on the debt that was required to be paid as a result of the sale of TPI.
(b) Income tax expense for the year ended December 31, 2016 includes $4,207 reversal of valuation allowance resulting from the sale of TPI.
Major classes of assets and liabilities of the discontinued operation at December 31, 2015 were as follows:
 December 31,
2015
Current assets of discontinued operations: 
Accounts receivable$16,688
Inventories19,353
Prepaid expenses and other current assets1,099
Current assets of discontinued operations$37,140
Noncurrent assets of discontinued operations: 
Goodwill$12,973
Property, plant and equipment, at cost26,979
Less: accumulated depreciation(20,147)
Noncurrent assets of discontinued operations$19,805
Current liabilities of discontinued operations: 
Accounts payable$10,666
Accrued and other current liabilities492
Current liabilities of discontinued operations$11,158



(3) Joint Venture
Kreher Steel Company, LLC, is a 50% owned joint venture of the Company. Kreher is a national distributor and processor of carbon and alloy steel bar products, headquartered in Melrose Park, Illinois.Illinois, was a 50% owned joint venture of the Company. In June 2016, the Company received an offer from its joint venture partner to purchase its ownership share in Kreher for an amount that was less than the current carrying value of the Company's investment in Kreher. The Company determined that the offer to purchase its ownership share in Kreher at a purchase price lower than the carrying value indicated that it may not be able to recover the full carrying amount of its investment, and therefore recognized a $4,636 other-than-temporary impairment charge in the second quarter of 2016 to reduce the carrying amount of the investment to the negotiated purchase price. Prior to receiving the purchase offer, the Company had no previous indicators that its investment in Kreher had incurred a loss in value that was other-than-temporary. In August 2016, the Company completed the sale of its ownership share in Kreher to its joint venture partner for aggregate cash proceeds of $31,550, which resulted in a loss on disposal of $5, including selling expenses. The impairment charge and the loss on disposal are reported in equity in earnings (losses) of joint venture in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016. Because the sale of the Company's investment in Kreher is not considered to be a strategic shift that will have a major effect on the Company's operations and financial results, the results of Kreher are reflected within continuing operations in the Consolidated Financial Statements.
The following information summarizes the Company’s participation in the joint venture as of and for the year ended December 31:
2015 2014 20132016 2015 2014
Equity in earnings (losses) of joint venture$(1,426) $7,691
 $6,987
$(4,177) $(1,426) $7,691
Investment in joint venture35,690
 37,443
 41,879
—
 35,690
 37,443
Sales to joint venture284
 188
 198
188
 284
 188
Purchases from joint venture49
 224
 86
4
 49
 224
The following information summarizes financial data for this joint venture as of and for the year ended December 31:
 2015 2014 2013
Revenues$160,104
 $259,487
 $230,351
Net income (loss)(2,876) 15,555
 13,720
Current assets66,645
 93,679
 82,827
Non-current assets22,777
 26,377
 25,615
Current liabilities7,792
 11,896
 10,548
Non-current liabilities11,287
 35,469
 16,103
Members’ equity70,343
 72,691
 81,791
Capital expenditures2,176
 3,042
 1,789
Depreciation and amortization2,390
 2,294
 2,217


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(3)(4) Goodwill and Intangible Assets
The changes in carrying amounts of goodwill during the years ended December 31, 2015 and 2014 were as follows:
 2015 2014
 Metals
Segment		 Plastics
Segment		 Total Metals
Segment		 Plastics
Segment		 Total
Balance as of January 1:           
Goodwill$116,377
 $12,973
 $129,350
 $116,533
 $12,973
 $129,506
Accumulated impairment losses(116,377) —
 (116,377) (60,217) —
 (60,217)
Balance as of January 1—
 12,973
 12,973
 56,316
 12,973
 69,289
Impairment charge—
 —
 —
 (56,160) —
 (56,160)
Currency valuation—
 —
 —
 (156) —
 (156)
Balance as of December 31:           
Goodwill116,377
 12,973
 129,350
 116,377
 12,973
 129,350
Accumulated impairment losses(116,377) —
 (116,377) (116,377) —
 (116,377)
Balance as of December 31$—
 $12,973
 $12,973
 $—
 $12,973
 $12,973
The Company tests goodwill for impairment at the reporting unit level on an annual basis as of December 1 and more often if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company assesses, at least quarterly, whether any triggering events have occurred. A two-step method is used for determining goodwill impairment. The first step is performed to identify whether a potential impairment exists by comparing each reporting unit’s fair value to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the next step is to measure the amount of impairment loss, if any.
During the second quarter of 2014, the Company concluded that under FASB Accounting Standards Codification (“ASC”) 350, "Intangibles - Goodwill and Other," its unfavorable operating results could be indicators of impairment of its Metals reporting unit's goodwill and, therefore, performed an interim impairment analysis as of May 31, 2014 using the two-step quantitative analysis. Under the first step, the Company determined that the carrying value of the Metals reporting unit exceeded its estimated fair value requiring the Company to perform the second step of the analysis. The second step of the analysis included allocating the calculated fair value (determined in the first step) of the Metals reporting unit to its assets and liabilities to determine an implied goodwill value. The result of the second step was that the goodwill of the Metals reporting unit was impaired and a $56,160 non-cash impairment charge ($13,900 of which is deductible for tax purposes) was recorded during the three-month period ended June 30, 2014 to eliminate the Metals reporting unit goodwill. No interim impairment analysis was performed for the Plastics reporting unit as of May 31, 2014 as there were no indicators of impairment for the Plastics reporting unit.
The Company completed its December 1, 2015 annual goodwill impairment test for its Plastics reporting unit and there were no identified impairment charges.
The following summarizes the components of the Company's intangible assets at December 31, 20152016 and 20142015:
 2015 2014
 Gross Carrying
Amount		 Accumulated
Amortization		 Gross Carrying
Amount		 Accumulated
Amortization
Customer relationships$69,425
 $59,175
 $116,268
 $64,922
Trade names378
 378
 7,864
 2,655
Total$69,803
 $59,553
 $124,132
 $67,577
 2016 2015
 Gross Carrying
Amount		 Accumulated
Amortization		 Gross Carrying
Amount		 Accumulated
Amortization
Customer relationships$67,317
 $63,216
 $67,438
 $57,188
In conjunction with the Company’s plans to reduce its indebtedness and increase liquidity, in the fourth quarter of 2015 the Company made a decision to start exploring opportunities related to certain of its under-performing oil and gas inventory and equipment. In connection with this decision, the Company began marketing the sale of the inventory and equipment of its Houston and Edmonton locations. In Februarythe first quarter of 2016, the Company entered into an agreement to sellsold all of the inventory and equipment at the Houston and Edmonton locations, as well as the Tube Supply trade name. The Company has further plans to closesubsequently closed both of these locations. Given these factors, the Company determined that as of December 31, 2015, certain of its intangible assets, including the Tube Supply customer relationships and trade name acquired

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in connection with the Tube Supply acquisition in 2011, no longer havehad a remaining useful life and a $33,742non-cash impairment charge (none of which iswas deductible for tax purposes in 2015)purposes) was recorded for the year ended December 31, 2015. The entire non-cash impairment charge was recorded to the Company's Metals segment. The non-cash impairment charge removed all the remaining finite-lived intangible assets associated with the


Tube Supply acquisition, leaving only customer relationships intangible assets. The majority of the remaining customer relationships intangible assets were acquired as part of the acquisition of Transtar on in September 5, 2006.2006. The weighted average amortization period for the remaining customer relationships intangible assets is 1.70.7 years.
Due to the Company’s continued sales declines, net losses and lower than projected cash flows, the Company tested its remaining long-lived assets for impairment during the fourth quarterquarters of 2016 and 2015. Testing of the Company's other long-lived assets indicated that the undiscounted cash flows of those assets exceeded their carrying values, and the Company concluded that no impairment existed at December 31, 2016 and 2015 and the remaining useful lives of its long-lived assets were appropriate. The Company also tested its long-lived assets for impairment at May 31, 2014, the date of the Company's interim goodwill impairment analysis, and in the second quarter of 2015 in conjunction with the announced restructuring activities. Both times, the Company concluded that no impairment existed and the remaining useful lives of its long-lived assets were appropriate. The Company will continue to monitor its long-lived assets for impairment.
For the years ended December 31, 20152016, 20142015, and 20132014, the aggregate amortization expense was $6,126, $10,647 $11,630 and $11,791,$11,630, respectively.
The following is a summary of the estimated annual amortization expense for each of the next 5 years:
2016$6,137
20174,113
$4,101
2018—
—
2019—
—
2020—
—
2021—
(4)(5) Debt
Short-term and long-termLong-term debt consisted of the following at December 31, 2015 and 2014:following:
2015 2014December 31,
2016		 December 31,
2015
LONG-TERM DEBT      
12.75% Senior Secured Notes due December 15, 2016(a)
$6,681
 $210,000
$—
 $6,681
7.0% Convertible Notes due December 15, 201757,500
 57,500
41
 57,500
11.0% Senior Secured Term Loan Credit Facilities due September 14, 201899,500
 —
12.75% Senior Secured Notes due December 15, 2018203,319
 —
177,019
 203,319
Revolving Credit Facility due December 10, 201966,100
 59,200
—
 66,100
5.25% Convertible Notes due December 30, 201922,323
 —
Other, primarily capital leases428
 1,257
96
 428
Plus: derivative liability for embedded conversion feature403
 —
Less: unamortized discount(12,255) (17,843)(7,587) (12,255)
Total debt$321,773
 $310,114
Less: unamortized debt issuance costs(5,199) (4,147)
Total long-term debt$286,596
 $317,626
Less: current portion(7,012) (737)137
 7,012
Total long-term portion$314,761
 $309,377
$286,459
 $310,614
(a) 2015 balance represents the maximum aggregate principal amount of 12.75% Senior Secured Notes due December 15, 2016 as the Company maintains a contractual right to exchange approximately $3,000 of the remaining 12.75% Senior Secured Notes due December 15, 2016 with new 12.75% Senior Secured Notes due December 15, 2018 prior to their maturity date.
During December 2011 the Company issued $225,000 aggregate principal amount of 12.75% Senior Secured Notes due 2016, $57,500 aggregate principal amount of 7.0% Convertible Senior Notes due 2017 (the “Convertible Notes”) and entered into a $100,000 senior secured asset based revolving credit facility (the “Revolving Credit Facility”). The Company incurred debt origination fees of $18,136 associated with the debt transactions which are primarily being amortized using the effective interest method.

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Secured Notes
In July 2012, the Company completed the exchange of $225,000 principal amount of 12.75% Senior Secured Notes due 2016 (the "Secured Notes"), which are registered under the Securities Act of 1933, as amended (the "Securities Act”), for $225,000 principal amount of outstanding 12.75% Senior Secured Notes due 2016, which had not been registered under the Securities Act. The Company did not receive any proceeds from the exchange offer. In November 2013, the Company purchased $15,000 aggregate principal amount of its Secured Notes in the open market with available cash. The Secured Notes that were purchased by the Company were subsequently retired. The purchase of the Secured Notes resulted in a pre-tax loss on debt extinguishment of $2,606 consisting of tender premiums, write off of unamortized debt issuance costs and tender expenses.
The Secured Notes have a maturity date of December 15, 2016. In February 2016, the Company completed a private exchange offer and consent solicitation (the “Exchange Offer”) to certain eligible holders to exchange new 12.75% Senior Secured Notes due 2018 (the “New Secured Notes”) for the Company’s outstanding 12.75% Senior Secured Notes.Notes due 2016 (the "Secured Notes"). In connection with the Exchange Offer, the Company issued $203,319 aggregate principal amount of New Secured Notes, leaving $6,681 aggregate principal amount of Secured Notes outstanding.Notes. In conjunction with the Exchange Offer, the Company solicited consents to certain proposed amendments to the Secured Notes and the related indenture (the “Existing Indenture”) providing for, among other things, elimination of substantially all restrictive covenants and certain events of default in the Existing Indenture and releasing all of the collateral securing


the Secured Notes and related guarantees.
TheIn May 2016, the Company maintainsentered into an agreement providing for the contractual rightexchange of $1,200 aggregate principal amount of Secured Notes for $1,200 aggregate principal amount of New Secured Notes. On August 1, 2016, the Company issued a notice of redemption with respect to exchange the remaining outstanding Secured Notes and deposited $5,629 with New Secured Notes prior to their maturity date or the Company may redeem some or all oftrustee (representing the Secured Notes at a redemption price of 100% of theaggregate principal amount plus accrued and unpaid interest. interest to the August 31, 2016 redemption date) to effect a satisfaction and discharge of the indenture governing the Secured Notes. There is no principal amount of Secured Notes outstanding at December 31, 2016.
The New Secured Notes have substantially the same terms as the Secured Notes except for the following principal differencesdifferences: (i) the New Secured Notes were offered pursuant to an exemption from the registration requirements of the Securities Act, and do not have the benefit of any exchange offer or other registration rights, (ii) the New Secured Notes effectively extend the maturity date of the Secured Notes to December 15, 2018, unless the Company is unable to both (a) complete the exchange of a portion of its 7.0% Convertible Senior Notes due 2017 (the "Convertible Notes") on or prior to June 30, 2016, and (b) redeem, on one or more occasions (each, a “Special Redemption”), an aggregate of not less than $27,500 of aggregate principal amount of the New Secured Notes on or prior to October 31, 2016, using cash available to the Company and/or net proceeds from sales of assets of the Company or a Restricted Subsidiary outside the ordinary course of business (other than net proceeds derived from the sale of accounts receivable and inventory (the “Designated Asset Sale Proceeds”)), subject to a penalty equal to 4.00% of the outstanding principal, payable in cash and/or stock, in the Company’s sole discretion (the “Special Redemption Condition”), in which case the maturity date of the New Secured Notes will be September 14, 2017, (iii) the New Secured Notes provide that, whether or not the Special Redemption Condition is satisfied, the Company will have an obligation to effect Special Redemptions using Designated Asset Sale Proceeds or other permissible funds until such time as the aggregate amount of Special Redemptions equals $40,000, (iv) the New Secured Notes contain modifications to the asset sale covenant providing that the Company shall not use any net proceeds from asset sales outside the ordinary course of business to redeem, repay or prepay the SecuredConvertible Notes, or the Convertible Notes,and (v) the granting of a third-priority lien on the collateral securing the New Secured Notes for the benefit of new Convertible Notes is a permitted lien under the indentureindenture. The Company completed the exchange of a portion of its Convertible Notes prior to June 30, 2016, and (vi)satisfied the Special Redemption Condition by issuing an irrevocable notice of redemption for $27,500 of aggregate principal amount of New Secured Notes include an event of default if the Company does not complete the Private Convertible Note Exchanges (as defined below) by June 30, 2016, subject to certain exceptions.
Theon October 31, 2016. Those New Secured Notes and thewere subsequently redeemed on November 9, 2016.
The New Secured Notes are fully and unconditionally guaranteed, jointly and severally, by certain 100% owned domestic subsidiaries of the Company (the “Note Guarantors”“Guarantors”). The New Secured Notes and the related guarantees are secured by a lien on substantially all of the Company's and the Note Guarantors' assets, subject to certain exceptions and permitted liens pursuant to a pledge and security agreement. The terms of the New Secured Notes contain numerous covenants imposing financial and operating restrictions on the Company's business. These covenants place restrictions on the Company's ability and the ability of its subsidiaries to, among other things, pay dividends, redeem stock or make other distributions or restricted payments; incur indebtedness or issue common stock; make certain investments; create liens; agree to payment restrictions affecting certain subsidiaries; consolidate or merge; sell or otherwise transfer or dispose of assets, including equity interests of certain subsidiaries; enter into transactions with affiliates,affiliates; enter into sale and leaseback transactions; and use the proceeds of permitted sales of the Company's assets. Refer to Note 14 - Guarantor Financial Information to the consolidated financial statements.
The Company may redeem some or all of the New Secured Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest.
The New Secured Notes also contain a provision that allows holders of the New Secured Notes to require the Company to repurchase all or any part of the New Secured Notes if a change of control triggering event occurs. Under this

60




provision, the repurchase of the New Secured Notes will occur at a purchase price of 101% of the outstanding principal amount, plus accrued and unpaid interest, if any, on such New Secured Notes to the date of repurchase. In addition, upon certain asset sales, the Company may be required to offer to use the net proceeds thereof to purchase some of the New Secured Notes at 100% of the principal amount thereof, plus accrued and unpaid interest.
The New Secured Notes require that the Company must make, subject to certain conditions and within 95 days of the end of each fiscal year beginning with the fiscal year ending December 31, 2016, an offer to purchase the New Secured Notes with i)(i) 75% of excess cash flow (as defined in the New Secured Notes indenture) until the Company has offered to purchase up to $50,000 in aggregate principal amount of the notes, ii)(ii) 50% of excess cash flow until the Company has offered to purchase up to $75,000 in aggregate principal amount of the notes, iii)(iii) 25% of the excess cash flow until the Company has offered to purchase up to $100,000 in aggregate principal amount of the notes and iv)(iv) 0% thereafter, in each case, at 103% of the principal amount, thereof, plus accrued and unpaid interest.


The Company determined that the Exchange Offer was considered to be a troubled debt restructuring within the scope of ASC No. 470-60, "Debt-Troubled Debt Restructurings", as the Company was determined to be experiencing financial difficulties and was granted a concession by the eligible holders. Accordingly, for the year ended December 31, 2016, the Company has expensed the eligible holder consent fees and related legal and other direct costs incurred in conjunction with the Exchange Offer in debt restructuring loss, net in the Consolidated Statements of Operations and Comprehensive Loss.
The Company pays interest on the New Secured Notes and the Secured Notes at a rate of 12.75% per annum in cash semi-annually.
Secured Term Loan Credit Facilities
On December 8, 2016, the Company entered into new secured credit facilities (the “Credit Facilities”) with certain financial institutions (the "Financial Institutions") in order to replace and repay outstanding borrowings and support the continuance of letters of credit under the Company's senior secured asset-based revolving credit facility (the “Revolving Credit Facility”). The Company paid interestCredit Facilities are in the form of $26,775, $26,775 and $28,548 onsenior secured first-lien term loan facilities in an aggregate principal amount of up to $112,000. In connection with the Secured Notes duringclosing of the years ended December 31, 2015, 2014 and 2013, respectively.
Convertible Notes
The $57,500 Convertible Notes were issuedCredit Facilities, commitments pursuant to an indenture, dated as of December 15, 2011, among the Company,Revolving Credit Facility were terminated, liens granted to the Note Guarantorscollateral agent pursuant thereto were released in full, and U.S. Bank National Association, as trustee. The Convertible NotesRevolving Credit Facility borrowings outstanding were issuedrepaid by the Company using proceeds from the Credit Facilities. Letters of credit previously issued under the Revolving Credit Facility were cash collateralized, resulting in $7,968 of restricted cash that is reflected in other noncurrent assets in the Consolidated Balance Sheet at December 31, 2016.
The Credit Facilities consist of a $75,000 initial term loan facility funded at closing and a $37,000 delayed-draw term loan facility (the “Delayed Draw Facility”). Under the Delayed Draw Facility, $24,500 was available in December 2016 and $12,500 is expected to be available in June 2017 or thereafter. In December 2016, the Company borrowed the $24,500 of the Delayed Draw Facility available in accordance with its terms.
The funding of the Credit Facilities was subject to original issue discount in an amount equal to 3.0% of the full principal amount of the Credit Facilities. The Credit Facilities bear interest at a rate per annum equal to 11.0%, payable monthly in arrears. The outstanding principal amount of the Credit Facilities and all accrued and unpaid interest thereon will be due and be payable on September 14, 2018.
In connection with the closing of the Credit Facilities, the Financial Institutions were issued warrants (the “Warrants”) to purchase an aggregate of 5,000 shares of the Company's common stock, pro rata based on the principal amount of each Financial Institution’s commitment in the Credit Facilities. Warrants to purchase 2,500 shares have an exercise price of $0.50 per share, and Warrants to purchase 2,500 shares have an exercise price of $0.65 per share. The Warrants were exercisable upon issuance and expire on June 8, 2018.
The Company determined that the Warrants are freestanding contracts that are indexed to the Company's common stock and meet the criteria for classification as equity under the authoritative accounting guidance. Accordingly, the Company separately recognized and valued the Warrants at an initial offering price equalcarrying value of $200, which was recorded as an increase to 100%additional paid-in capital, with a corresponding increase in the discount to the Credit Facilities proceeds. The initial carrying amount of the principal amount. 
The Convertible Notes will mature on December 15, 2017. The Company pays interest on the Convertible Notes at a rate of 7.0% per annum in cash semi-annually. The Company paid interest of $4,025, $4,025 and $4,025 on the Convertible Notes during the years ended December 31, 2015, 2014 and 2013, respectively. The Convertible Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Note Guarantors. The initial conversion rate for the Convertible Notes is 97.2384 shares of the Company’s common stock per $1 principal amount of Convertible Notes, equivalent to an initial conversion price of approximately $10.28 per share of common stock. The conversion rate will be subject to adjustment, butWarrants will not be adjusted to fair value in future periods unless they no longer qualify for accrued and unpaid interest,equity classification.
The shares of the Company's common stock issuable upon exercise of the Warrants are subject to registration rights under a customary registration rights agreement, dated December 8, 2016, which provides for the filing of a registration statement on Form S-3 (or another appropriate form, if any. In addition, if an event constituting a fundamental change occurs,Form S-3 is unavailable) to register the resale of such common stock. Under the terms of the registration rights agreement, the Company will in some cases increasehas agreed to use its best efforts to effect the conversion rate for a holder that elects to convert its Convertible Notes in connection with such fundamental change. Upon conversion,registration of the shares of the Company's common stock issuable upon exercise of the Warrants, but the Company will pay and/is not subject to any penalty if its efforts are unsuccessful.
All obligations of the Company under the Credit Facilities are guaranteed on a senior-secured basis by each direct and indirect, existing and future, domestic or deliver, asCanadian subsidiary of the case may be, cash, shares of common stock or a combination of cashCompany (the “Subsidiary Guarantors” and shares of common stock, at the Company’s election, together with cash in lieu of fractional shares.
Holders may convert their Convertible Notes at their option on any day prior to the close of business onCompany, the scheduled trading day immediately preceding June 15, 2017 only“Credit Parties”). All obligations under the following circumstances: (1) during the five business-day period after any five consecutive trading-day period (the “measurement period”)Credit Facilities are secured on a first-priority basis by a perfected security interest in which the trading price per note for each day of that measurement period was less than 98%substantially all assets of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such day; (2) during any calendar quarter (and only during such calendar quarter) after the calendar quarter ended December 31, 2011, if the last reported sale price of the Company’s common stockCredit Parties (subject to certain exceptions for 20 or more trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is equal to or greater than 130% of the applicable conversion price in effect for each applicable trading day; (3) upon the occurrence of specified corporate events, including certain dividends and distributions; or (4) if the Company calls the Convertible Notes for redemption on or after December 20, 2015permitted liens). The Convertible Notes will be convertible, regardlessCompany agreed to add its foreign subsidiaries as guarantors and to direct such subsidiaries to grant a security interest in substantially all of the foregoing circumstances, at any time from, and including, June 15, 2017 through the second scheduled trading day immediately preceding the maturity date.
Upon a fundamental change andtheir respective assets, subject to certain exceptions, as soon as possible after closing.
The Credit Facilities agreement contains numerous covenants that, if breached, could result in a default under the agreement. These covenants include a financial covenant that requires the Company to maintain a minimum amount of consolidated adjusted EBITDA (as defined in the Convertible Notes indenture, holders may require the Company to repurchase some or all of their Convertible Notes for cash at a repurchase price equal to 100% of the principal amount of the Convertible Notes being repurchased, plus any accrued and unpaid interest.
The Company could redeem the Convertible Notes prior to December 20, 2015. On or after December 20, 2015, the Company may redeem all or part of the Convertible Notes (except for the Convertible Notes that the Company is required to repurchase as described above) if the last reported sale price of the Company’s common stock exceeds 135% of theagreement) during various applicable conversion price for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day immediately prior to the date of the redemption notice. The redemption price will equal the sum of 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, plus a “make-whole premium” payment. The Company must make the "make-whole" premium payments on all Convertible Notesfiscal periods beginning with

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called for redemptionthe fiscal quarter ending March 31, 2017. The Company is also required to maintain specified minimum amounts of net working capital (as defined in the agreement) and consolidated liquidity (as defined in the agreement) of at least $20,000. While not legally restricted, a compensating balance of $7,500 was required to be maintained by the Company as of December 31, 2016 to satisfy the consolidated liquidity requirement. The remaining minimum liquidity requirement was met with the $12,500 undrawn amount under the Delayed Draw Facility. The Credit Facilities agreement also provides that a default could result from the occurrence of any condition, act, event or development that results or could be reasonably expected to result in a material adverse effect (as defined in the agreement). In the event of a default, the Financial Institutions could elect to declare all amounts borrowed due and payable, including accrued interest and any other obligations under the Credit Facilities. Any such acceleration would also result in a default under the indentures governing the New Secured Notes and the Senior Secured Convertible Notes converted afterdue 2019. As of December 31, 2016, the date we deliveredCompany was in compliance with all financial covenants relating to the noticeCredit Facilities.
On April 6, 2017, the Company entered into an amendment to the Credit Facilities agreement. Under this amendment, the Financial Institutions agreed that the financial covenants related to consolidated adjusted EBITDA and specified minimum amounts of redemption. The Company will paynet working capital and consolidated liquidity, all as described in the redemption price in cash exceptpreceding paragraph, would cease to apply for any non-cash portion of the "make-whole" premium.period from March 31, 2017 through and including May 31, 2018 (refer to Note 15 -Subsequent Events).
Convertible Notes
In January 2016, the Company entered into Transaction Support Agreements (the(as amended, supplemented or modified, the “Support Agreements”) with certain holders (the “Supporting Holders”) of $51,600, or 89.7%, of the aggregate principal amount of the Convertible Notes. The Support Agreements provideprovided for the terms of exchanges in which the Company has agreed to issue new 5.25% Senior Secured Convertible Notes due 2019 (the “New Convertible Notes”) in exchange for outstanding Convertible Notes (the “Convertible Note Exchange”). For each $1 principal amount of Convertible Notes validly exchanged in the Convertible Note Exchange, an exchanging holder of Convertible Notes was entitled to receive $0.7 principal amount of New Convertible Notes, plus accrued and unpaid interest. On March 22, 2016, the Company filed a registration statement on Form S-3, as later amended, to register the resale of the common stock underlying the New Convertible Notes. On May 6, 2016, the Company held a special meeting of stockholders to consider a proposal to approve, as required pursuant to Rule 312 of the NYSE Listed Company Manual, the issuance of the Company’s common stock upon conversion of the New Convertible Notes. The proposal was approved by the Company’s stockholders with the affirmative vote of approximately 73% of the outstanding shares of common stock entitled to vote thereon, which represented approximately 99% of the total votes cast.
PursuantIn May 2016, the Company entered into amendments to the Support Agreements that, among other things, permitted the Supporting Holders to elect to exchange some or all of the Convertible Notes directly into shares of the Company’s common stock on the same economic terms as would be applicable had they exchanged their Convertible Notes for New Convertible Notes and then converted those New Convertible Notes into common stock.
Supporting Holders holding $23,443 in aggregate principal amount of Convertible Notes exchanged their Convertible Notes for an aggregate of 7,863 shares of the Company’s common stock, which had a fair value of $15,332 at the time of the Convertible Note Exchange. This resulted in a $1,526 extinguishment gain that is included in debt restructuring loss, net in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2016. Supporting Holders holding $34,016 in aggregate principal amount of Convertible Notes exchanged their Convertible Notes for $23,806 in aggregate principal amount of New Convertible Notes, which included (i) $20,866 in aggregate principal amount of New Convertible Notes issued pursuant to exchange agreements between the Company and certain non-affiliate noteholders and (ii) $2,940 in aggregate principal amount of New Convertible Notes issued pursuant to an exchange agreement with an affiliate of the Company.
As further described below, the New Convertible Notes are convertible into common stock at the option of the holder. The Company determined that the conversion option is not clearly and closely related to the economic characteristics of the New Convertible Notes, nor does it meet the criteria to be considered indexed to the Company’s common stock. As a result, the Company concluded that the embedded conversion option must be bifurcated from the New Convertible Notes, separately valued, and accounted for as a derivative liability that partially settled the Convertible Notes. The initial value allocated to the derivative liability was $11,574, with a corresponding discount recorded to the New Convertible Notes. During each reporting period, the derivative liability, which is classified in long-term debt, will be marked to fair value through earnings.
The Convertible Note Exchange was considered to be a troubled debt restructuring, as the Company was experiencing financial difficulties and was granted a concession by the Supporting Holders. As a result, the Company expensed


legal and other direct costs incurred in conjunction with the Convertible Note Exchange, which are included in debt restructuring loss, net in the Consolidated Statements of Operations and Comprehensive Loss.
Subsequent to the Convertible Note Exchange, $1,483 in aggregate principal amount of New Convertible Notes was converted to 713 shares of the Company’s common stock. This resulted in a $589 extinguishment gain from the conversion of the New Convertible Notes and the settlement of a related portion of the derivative liability. The gain has been included in debt restructuring loss, net in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2016. As of December 31, 2016, the Company had $22,323 aggregate principal amount of New Convertible Notes outstanding, and the derivative liability had a fair value of $403.
The New Convertible Notes mature on December 31,30, 2019, and will bear interest at a rate of 5.25% per annum, payable semi-annually in cash. For each $1 principal amount of existing Convertible Notes validly exchanged in the Convertible Note Exchange, an exchanging holder of existing Convertible Notes will receive $0.7 principal amount of New Convertible Notes, plus accrued and unpaid interest. The New Convertible Notes shallare initially be convertible into shares of the Company's common stock at any time at a conversion price per share equal to $2.25 and shall beare subject to adjustment in accordance with the same adjustment provisions contained in the existingNew Convertible Notes.Notes indenture. All current and future guarantors of the New Secured Notes, the Secured Notes, the Revolving Credit Facility,Facilities, and any other material indebtedness of the Company will guarantee the New Convertible Notes, subject to certain exceptions. The New Convertible Notes will beare secured on a “silent” third-priority basis by the same collateral that secures the New Secured Notes. Upon conversion, the Company will pay and/or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, together with cash in lieu of fractional shares. The value of shares of the Company's common stock for purposes of the settlement of the conversion right will be calculated as provided in the indenture, for the existing Convertible Notes, using a 20 trading day period rather than a 40 trading day period for the observation period. Upon such conversion, the holder shall be entitled to receive an amount equal to the "make-whole" premium, payable in the form of cash, shares of the Company's common stock, or a combination of both, inat the Company's sole discretion. The value of shares of Company common stock for purposes of calculating the "make-whole" premium will be based inon the greater of (i) 130% of the conversion price then in effect and (ii) the volume weighted average price ("VWAP") of such shares for the observation period (using a 20 trading day period)observation period as provided in the indenture for the existing Convertible Notes.indenture.
If the VWAP of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which such notice of redemption is provided, the Company shall have the right to redeem any or all of the New Convertible Notes at a price equal to (i) 100.0% of the aggregate principal amount thereof plus (ii) the "make-whole" premium. The redemption price can be paid in the form of cash, shares of the Company's common stock or a combination of both, at the Company's sole discretion. The value of shares of Company Common Stockthe Company's common stock will be based on the VWAP of such shares for the 20 trading days immediately preceding the date of redemption. Prior to the third trading day prior to the date of any such redemption, any New Convertible Notes called for redemption may be converted by the holder into shares of Company Common Stockthe Company's common stock at the Conversion Priceconversion price then in effect.
Revolving Credit Facility
The Revolving Credit Facility consists of a $125,000 senior secured asset-based revolving credit facility (subject to adjustment pursuant to a borrowing base described below), of which (a) up to anFollowing the Convertible Note Exchange, the Company had $41 aggregate principal amount of $20,000 will be available for a Canadian subfacility, (b) upConvertible Notes outstanding at December 31, 2016.
Revolving Credit Facility
In June 2016, the Company entered into an amendment (the “Amendment”) to an aggregate principal amount of $20,000 will be available for letters of creditthe Loan and (c) up to an aggregate principal amount of $10,000 will be available for swingline loans. Loans underSecurity Agreement governing the Revolving Credit Facility, will be made available toby and among the Company and certain domestic subsidiaries, (the “U.S. Borrowers”) in U.S. dollars and the Canadian Borrowers in U.S. dollars and Canadian dollars. In December 2014, the Company obtained an extension on its revolving credit facility, which extended the maturity datefinancial institutions from December 15, 2015time to December 10, 2019 (or 91 days priortime party to the maturity date ofLoan and Security Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent. The Amendment reduced the Company's Secured Notes or Convertible Notes if they have not been refinanced).
All obligations of the U.S. Borrowersaggregate commitments under the Revolving Credit Facility are guaranteed on a senior secured basis by each directfrom $125,000 to $100,000, and indirect, existing and future, domestic subsidiaryalso decreased aggregate commitments under (i) the Canadian portion of the U.S. Borrowers (the “U.S. Subsidiary Guarantors”Revolving Credit Facility from $20,000 to $16,000 and together with(ii) the U.S. Borrowers, the “U.S. Credit Parties”), subject to certain exceptions for immaterial subsidiaries. All obligationsletter of credit facility portion of the Canadian BorrowersRevolving Credit Facility from $20,000 to $16,000. The Amendment also imposed an availability block that decreased availability under the Revolving Credit Facility are guaranteed on a senior secured basis by (a) each U.S.$17,500 initially, which was subject to adjustment.
Previously, the Revolving Credit PartyFacility restricted the Company’s ability to repay the New Secured Notes and (b) each direct and indirect, existing and future, Canadian subsidiarythe Secured Notes unless the Company was able to satisfy certain financial testing conditions. Pursuant to the terms of the Amendment, the Company (the “Canadian Subsidiary Guarantors”was permitted to repay up to $27,500 of the New Secured Notes and together withup to $6,000 of the Canadian Borrowers, the “Canadian Credit Parties”; and the U.S. Credit Parties together with the Canadian Credit Parties, the “Credit Parties”),Secured Notes, subject to certain exceptions.

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satisfaction of revised financial testing conditions.



All obligationsThe Amendment also increased the interest rate charged in connection with loans advanced under the Revolving Credit Facility are secured on a first-priority basis by a perfected security interest in substantially all assets of the Credit Parties (subject to certain exceptions for permitted liens). The Revolving Credit Facility will rank pari passu in right of payment with the Secured Notes, but, pursuant to the intercreditor agreement, the Secured Notes will be effectively subordinated to the indebtedness under the Revolving Credit Facility with respect to the collateral.
Facility. At the Company’s election, borrowings under the Revolving Credit Facility willwould bear interest at variable rates based on (a) a customary base rate plus an applicable margin of between 0.50% and 1.00% (depending on quarterly average undrawn availability under the Revolving Credit Facility)1.75% or (b) an adjusted LIBOR rate plus an applicable margin of between 2.75%, with such applicable margins subject to adjustment if the Fixed Charge Coverage Ratio is at least 1.0 to 1.01.50%. T and 2.00% (depending on quarterlyhe weighted average undrawn availabilityinterest rate for borrowings under the Revolving Credit Facility). The weighted average interest rate on borrowings outstanding under the revolving credit facilities were Facility was 3.65%,


2.70%, 3.08% and 2.71%3.08% for the years ended December 31, 2016, 2015, 2014 and 2013,2014, respectively. The Company will paypaid certain customary recurring fees with respect to the Revolving Credit Facility.
The Revolving Credit Facility permitswas scheduled to mature on December 10, 2019. As previously discussed, in connection with the Company to increase the aggregate amountclosing of the Credit Facilities in December 2016, commitments underpursuant to the Revolving Credit Facility were terminated, liens granted to the collateral agent pursuant thereto were released in full, and Revolving Credit Facility borrowings outstanding were repaid by the Company using proceeds from time to time in an aggregate amount for all such increases not to exceed $50,000, subject to certain conditions. The existing lenders underthe Credit Facilities. With the termination of the Revolving Credit Facility, are not obligated to provide the incremental commitments. In January 2014, the Company partially exercised the accordion option under its revolving credit facility to increase the aggregate commitments by $25,000. As a result, the Company's borrowing capacity increased from $100,000 to $125,000. The Company maintains the option to exercise the accordion for an additional $25,000 of aggregate commitmentsexpensed unamortized Revolving Credit Facility debt issuance costs, which are included in debt restructuring loss, net in the future, assuming it meets certain thresholds for incurring additional debt. AsConsolidated Statements of December 31, 2015, the Company did not meet the thresholds to exercise the additional $25,000 accordion under the Revolving Credit Facility.Operations and Comprehensive Loss.
The Revolving Credit facility contains a springing financial maintenance covenant requiring the Company to maintain the ratio of EBITDA (as defined in the agreement) to fixed charges of 1.1 to 1.0 when excess availability is less than the greater of 10% of the calculated borrowing base (as defined in the agreement) or $12,500. In addition, if excess availability is less than the greater of 12.5% of the calculated borrowing base (as defined in the agreement) or $15,625, the lender has the right to take full dominion of the Company’s cash collections and apply these proceeds to outstanding loans under the Revolving Credit Agreement. The Company's ratio of EBITDA to fixed charges was negative for the twelve months ended December 31, 2015. At this negative ratio, the Company's current maximum borrowing capacity would be $96,239 before triggering full dominion of the Company's cash collections. As of December 31, 2015, the Company had $30,139 of additional unrestricted borrowing capacity available under the Revolving Credit Facility.
Net interest expense reported on the consolidated statements of operations was reduced by interest income from investment of excess cash balances of $10 in 2015, $81 in 2014 and $35 in 2013.
(5)(6) Fair Value Measurements
The three-tier value hierarchy the Company utilizes, which prioritizes the inputs used in the valuation methodologies, is:
Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
The fair value of cash, accounts receivable and accounts payable approximate their carrying values. The fair value of cash equivalents are determined using the fair value hierarchy described above. Cash equivalents consisting of money market funds are valued based on quoted prices in active markets and as a result are classified as Level 1.
The Company’s pension plan asset portfolio as of December 31, 20152016 and 20142015 is primarily invested in fixed income securities, which generally fall within Level 2 of the fair value hierarchy. Fixed income securities in the pension plan asset portfolio are valued based on evaluated prices provided to the trustee by independent pricing services. Such prices may be determined by factors which include, but are not limited to, market quotations, yields, maturities, call features, ratings, institutional size trading in similar groups of securities and developments related to specific securities. Refer to Note 910 - Employee Benefit Plans to the consolidated financial statementsConsolidated Financial Statements for pension fair value disclosures.

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Fair Value Measurements of Debt
The fair value of the Company's New Secured Notes as of December 31, 2016 was estimated to be $116,833 compared to a carrying value of $177,019. The fair value of the Company’s Secured Notes existing as of December 31, 2015 was estimated to be $160,662 compared to a carrying value of $210,000. The fair valuevalues for both the Secured Notes isand New Secured Notes were determined based on recent trades of the bonds on the open market and fall within Level 2 of the fair value hierarchy.
Because it entered into the new Credit Facilities in December 2016, the Company determined that the fair value of borrowings outstanding under the Credit Facilities approximated carrying value at December 31, 2016.
The fair value of the Convertible Notes, as of December 31, 20152016 was estimated to be approximately $25 compared to a carrying value of $41. The fair value of the Convertible Notes as of December 31, 2015 was approximately $21,966 compared to a carrying value of $57,500. The fair value of the Company's New Convertible Notes as of December 31, 2016, including the bifurcated embedded conversion option, was estimated to be $5,369 compared to a carrying value of $22,323. The fair values for both the Convertible Notes and New Convertible Notes, which fall within Level 3 of the fair value hierarchy, iswere determined based on similar debt instruments that do not contain a conversion feature, as well as other factors related to the callable nature of the notes.Convertible Notes and New Convertible Notes.
The main inputs and assumptions into the fair value model for the New Convertible Notes at December 31, 20152016 were as follows:
Company's stock price at the end of the period$1.59
$0.25
Expected volatility67.80%97.90%
Credit spreads69.21%69.8%
Risk-free interest rate1.05%1.47%


Given the nature and the variable interest rates, the Company has determined that the fair value of borrowings under the Revolving Credit Facility approximatesat December 31, 2015 approximated the carrying value.
Fair Value Measurement of Common Stock Warrants
The fair value of the Warrants to purchase shares of the Company's common stock issued in connection with the closing of the Company's new Credit Facilities in December 2016, which falls within Level 3 of the fair value hierarchy, was estimated using the Black-Scholes option-pricing model with the following assumptions:
Expected volatility97.90%
Risk-free interest rate1.03%
Expected life (in years)1.5
Expected dividend yield—
Fair Value Measurements of Embedded Conversion Feature
The fair value of the derivative liability for the embedded conversion feature of the New Convertible Notes was estimated to be $403 as of December 31, 2016. The estimated fair value of the derivative liability for the embedded conversion feature of the New Convertible Notes, which falls within Level 3 of the fair value hierarchy, is measured on a recurring basis using a binomial lattice model using the Company's historical volatility over the term corresponding to the remaining contractual term of the New Convertible Notes and observed spreads of similar debt instruments that do not include a conversion feature. The following reconciliation represents the change in fair value of the embedded conversion feature of the New Convertible Notes between December 31, 2015 and December 31, 2016:
 Derivative liability for embedded conversion feature
Fair value as of December 31, 2015$—
Fair value at issuance date11,574
Settlement upon conversion into common stock(721)
Mark-to-market adjustment on conversion feature(a)
(10,450)
Fair value as of December 31, 2016$403
(a) Mark-to-market adjustment is recognized in unrealized gain on embedded debt conversion option in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2016.
Fair Value Measurements of Commodity Hedges
The Company has a commodity hedging program to mitigate risks associated with certain commodity price fluctuations. At December 31, 20152016, the Company had no executed forward contracts that extend into 2016.outstanding. The counterparty to theseforward contracts into which the Company enters is not considered a credit risk by the Company. At December 31, 20152016 and 20142015, the notional value associated with forward contracts was $3,080$0 and $7,486,$3,080, respectively. The Company recorded, through cost of materials, realized and unrealized net losses of $49, $852 $288 and $2,141$288 during the years ended December 31, 20152016, 20142015 and 2013,2014, respectively, as a result of the decline in the fair value of the contracts. As of December 31, 2015, and 2014, all commodity hedge contracts were in a liability position. As of December 31, 2015, the Company had a letter of credit outstanding for $2,000 as collateral associated with commodity hedge contracts.
The Company uses information which is representative of readily observable market data when valuing derivative liabilities associated with commodity hedges. The derivative liabilities are classified as Level 2 in the table below.
The liabilities measured at fair value on a recurring basis were as follows:
Level 1 Level 2 Level 3 
Total (a)
Level 1 Level 2 Level 3 
Total (a)
As of December 31, 2016       
Derivative liability for commodity hedges$—
 $—
 $—
 $—
As of December 31, 2015              
Derivative liability for commodity hedges$—
 $1,015
 $—
 $1,015
$—
 $1,015
 $—
 $1,015
As of December 31, 2014       
Derivative liability for commodity hedges$—
 $1,615
 $—
 $1,615


(a) As of December 31, 2015, the entire derivative liability for commodity hedges balance of $1,015 is short-term and is included in accrued and other current liabilities in the Consolidated Balance Sheets. As of December 31, 2014, the short-term portion of the derivative liability for commodity hedges of $1,137 is included in accrued and other current liabilities and the long-term portion of $478 is included in other non-current liabilities in the Consolidated Balance Sheets.Sheet.
(6)(7) Lease Agreements
The Company has operating and capital leases covering certain warehouse and office facilities, equipment, automobiles and trucks, with the lapse of time as the basis for all rental payments.
The Company has determined that for accounting purposes its lease of its new operating facility in Janesville, Wisconsin is a build-to-suit lease. During the construction of this facility, which concluded in the fourth quarter of 2015, the Company assumed certain risks of certain construction cost overages and was, therefore, deemed to be the owner of the facility during the construction period. All costs of construction related to this facility are recognized as property, plant and equipment, with a related build-to-suit liability.
Subsequent to the completion of construction, the Company did not qualify for sale-leaseback accounting because of provisions in the lease which constituted prohibited continuing involvement. As a result, the Company will amortize

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the build-to-suit liability over the lease term and depreciate the building over the lease term. As of December 31, 2015, theThe Company has reflected $12,305 and $13,237 as build-to-suit liability in the Consolidated Balance Sheets.Sheets as of December 31, 2016 and 2015, respectively.
Total gross value of property, plant and equipment under capital leases was $524 and $2,109 in 2016 and $2,452 in 2015, and 2014, respectively.
Future minimum rental payments under leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 20152016 are as follows:
Capital Leases Operating Leases Built-to-Suit LeaseCapital Leases Operating Leases Built-to-Suit Lease
2016$330
 $12,936
 $687
201795
 11,313
 1,156
$96
 $8,291
 $—
20181
 9,645
 1,180
—
 8,073
 1,180
2019—
 8,056
 1,203
—
 6,295
 1,203
2020—
 7,500
 1,227
—
 5,545
 1,227
2021—
 5,224
 1,252
Later years—
 16,246
 13,644
—
 16,545
 12,392
Total future minimum rental payments$426
 $65,696
 $19,097
$96
 $49,973
 $17,254
Total rental payments charged to expense were $13,9109,175 in 2016, $11,812 in 2015, and $14,17312,037 in 2014, and $15,062 in 2013. Lease extrication charges of $6,038, $444 $186 and $1,448$186 associated with restructuring activities in the Metals segment were charged to expense in 20152016, 20142015 and 2013,2014, respectively, within restructuring expense (income) in the Consolidated Statements of Operations and Comprehensive Loss.
(7)(8) Stockholders' Equity
Convertible Note Exchange and Conversions of New Convertible Notes
The Company issued 7,863 shares of common stock in May 2016 in connection with the Convertible Note Exchange, and issued an additional 713 shares in June 2016 when New Convertible Notes were converted to common stock. The issuance of these shares was recorded using the fair value of the Company's common stock on the dates the shares were issued, and resulted in an increase in the par value of common stock and additional paid-in capital of $86 and $16,543, respectively. The Company received no cash proceeds from issuing these shares.
Accumulated Comprehensive Loss
Accumulated other comprehensive loss as reported in the consolidated balance sheets as of December 31, 20152016 and 20142015 was comprised of the following:
2015 20142016 2015
Unrecognized pension and postretirement benefit costs, net of tax$(17,185) $(27,122)$(9,797) $(17,185)
Foreign currency translation losses(16,636) (9,994)(16,142) (16,636)
Total accumulated other comprehensive loss$(33,821) $(37,116)$(25,939) $(33,821)



Changes in accumulated other comprehensive loss by component for the years ended December 31, 20152016 and 20142015 are as follows:
Defined Benefit Pension and Postretirement Items Foreign Currency Items TotalDefined Benefit Pension and Postretirement Items Foreign Currency Items Total
2015 2014 2015 2014 2015 20142016 2015 2016 2015 2016 2015
Balance as of January 1,$(27,122) $(14,126) $(9,994) $(4,617) $(37,116) $(18,743)$(17,185) $(27,122) $(16,636) $(9,994) $(33,821) $(37,116)
Other comprehensive loss before reclassifications(966) (14,004) (6,642) (5,377) (7,608) (19,381)
Other comprehensive income (loss) before reclassifications5,565
 (966) 494
 (6,642) 6,059
 (7,608)
Amounts reclassified from accumulated other comprehensive loss, net of tax (a)
10,903
 1,008
 —
 —
 10,903
 1,008
1,823
 10,903
 —
 —
 1,823
 10,903
Net current period other comprehensive income (loss)9,937
 (12,996) (6,642) (5,377) 3,295
 (18,373)7,388
 9,937
 494
 (6,642) 7,882
 3,295
Balance as of December 31,$(17,185) $(27,122) $(16,636) $(9,994) $(33,821) $(37,116)$(9,797) $(17,185) $(16,142) $(16,636) $(25,939) $(33,821)
(a) See reclassifications from accumulated other comprehensive loss table for details of reclassificationreclassifications from accumulated other comprehensive loss for the yearyears ended December 31, 2016 and 2015.

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Reclassifications from accumulated other comprehensive loss for the years ended December 31, 20152016 and 20142015 are as follows:
 Year ended December 31, Year Ended December 31,
 2015 2014 2016 2015
Unrecognized pension and postretirement benefit items:        
Prior service cost (b)
 $(244) $(282) $(200) $(244)
Actuarial loss (b)
 (3,821) (1,381) (1,623) (3,821)
Recognition of curtailment loss (b)
 (2,923) —
 —
 (2,923)
Recognition of settlement loss (b)
 (3,915) —
 —
 (3,915)
Total before Tax (10,903) (1,663) (1,823) (10,903)
Tax effect —
 655
 —
 —
Total reclassifications for the period, net of tax $(10,903) $(1,008) $(1,823) $(10,903)
(b) The prior service cost and actuarial loss components of accumulated other comprehensive loss are included in the computation of net periodic pension and postretirement benefit cost included in sales, general and administrative expense. The pension curtailment and settlement prior service cost components recognized are shown as restructuring expense (income) in the Consolidated Statements of Operations and Comprehensive lossLoss for the year ended December 31, 2015.
(8)(9) Share-based Compensation (stock option
The Company maintains the 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and share units amounts below arerestated as of July 27, 2016, for the benefit of officers, directors and other key management employees. In 2016, the Company's stockholders approved an increase in thousands)the number of shares available for grants of awards under the plan of 2,000 shares. As a result, there is an aggregate amount of 5,350 authorized shares under the plan.
The consolidated compensation cost recorded for the Company’s share-based compensation arrangements was $1,154, $828 $1,972 and $3,062$1,972 for 20152016, 20142015 and 20132014, respectively. The total income tax benefit recognized in the consolidated statementsConsolidated Statements of operationsOperations and Comprehensive Loss for share-based compensation arrangements was $0, $189$0 and $1,141$189 in 20152016, 20142015 and 20132014, respectively. All compensation expense related to share-based compensation arrangements is recorded in sales, general and administrative expense. The unrecognized compensation cost as of December 31, 20152016 associated with all share-based payment arrangements is $2,088$1,659 and the weighted average period over which it is to be expensed is 1.51.2 years.
2015 Short-Term Incentive PlanSTIP
On July 24, 2015, the Board of Directors of the Company approved certain revisions to the Company's 2015 STI Plan.STIP. Along with providing cash bonus opportunities, the revisions awarded 124 stock options to executive officers and other select personnel, which were granted under the Company's 2008 Omnibus Incentive Plan. The stock options vest in three equal installments over three years from the grant date and are exercisable immediately upon vesting. The strike


exercise price was equal to the closing price of the Company's stock on the date of grant. The term of the options is 10 years from the date of grant.
The weighted average grant date fair value of $2.10 per share for the options granted under the 2015 STI PlanSTIP was estimated using the Black-Scholes option-pricing model with the following assumptions:
Expected volatility56.1%
Risk-free interest rate1.8%
Expected life (in years)6.0
Expected dividend yield—
Restricted Stock, Stock Option and Equity Compensation Plans – The Company maintains the 2008 A.M. Castle & Co. Omnibus Incentive Plan (amended and restated as of April 25, 2013) for the benefit of officers, directors and other key management employees. There is an aggregate amount of 3,350 authorized shares under this plan.

66




Long-Term Compensation and Incentive Plans
The Board of Directors of the Company approved equity awards under the Company's 2016 LTCP for executive officers and other select personnel on February 25, 2016 and October 25, 2016, respectively. The 2016 LTCP awards included non-qualified stock options.
On July 24, 2015, the Board of Directors of the Company approved equity awards under the Company's 2015 LTC PlanLTCP for executive officers and other select personnel. The 2015 LTC PlanLTCP awards included RSUs and non-qualified stock options.
On March 26, 2014, the Board of Directors of the Company approved equity awards under the Company’s 2014 Long-Term Compensation Plan (“2014 LTC Plan”)LTCP for executive officers and other select personnel. On March 6, 2013, the Board of Directors of the Company approved equity awards under the Company’s 2013 Long-Term Compensation Plan (“2013 LTC Plan”) for executive officers and other select personnel. Both theThe 2014 LTC Plan and the 2013 LTC PlanLTCP included RSUs and PSUs.
Each of the respective LTC PlansLTCPs for 2016, 2015 2014 and 20132014 are subject to the terms of the Company's 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and restated as of April 25, 2013.July 27, 2016.
Restricted Share Units and Non-Vested Shares
The RSUs granted under the 2015 and 2014 LTC PlansLTCP will cliff vest on December 31, 2017 and December 31, 2016, respectively.2017. Approximately 2321 RSUs granted under the 2013 LTC Plan2014 LTCP cliff vested on December 31, 2015.2016. Each RSU that becomes vested entitles the participant to receive one share of the Company’s common stock. The number of shares delivered may be reduced by the number of shares required to be withheld for federal and state withholding tax requirements (determined at the market price of Company shares at the time of payout).
The outstanding non-vested share balance consists of shares issued to the Board of Directors. Non-vested shares were issued to the directors during the third quarter of 2016, and will cliff vest on the first anniversary of the date of grant. Non-vested shares issued to the directors in the second quarter of 2015 2014 and 2013, respectively, and2014 will cliff vest after three years in the second quarter of 2018 2017 and 2016,2017, respectively.
The grant date fair value of the RSUs and non-vested shares is established using the market price of the Company’s stock on the date of grant.
A summary of the non-vested share and RSU activity is as follows:
Non-Vested Shares Restricted Share UnitsNon-Vested Shares Restricted Share Units
Shares Weighted-Average Grant
Date Fair Value		 Units Weighted-
Average Grant
Date Fair Value		Shares Weighted-Average Grant
Date Fair Value		 Units Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2015107
 $14.21
 199
 $14.67
Outstanding at January 1, 2016170
 $10.08
 210
 $5.91
Granted149
 $3.74
 188
 $3.92
304
 $1.47
 —
 $—
Forfeited—
 $—
 (98) $12.96
(125) $1.82
 (48) $6.88
Vested(86) $13.01
 (79) $14.53
(85) $7.83
 (21) $14.35
Outstanding at December 31, 2015170
 $10.08
 210
 $5.91
Expected to vest at December 31, 2015170
 $10.08
 106
 $5.30
Outstanding at December 31, 2016264
 $2.40
 141
 $4.31
Expected to vest at December 31, 2016264
 $2.40
 78
 $4.62
The unrecognized compensation cost as of December 31, 20152016 associated with RSU and non-vested share awards was $1,051.$437. The total fair value of shares vested during the years ended December 31, 2016, 2015 and 2014 was $158, $1,762 and 2013 was $1,762, $938, and $1,106, respectively.


Performance Shares
PSU awards are based on two independent conditions, the Company’s relative total shareholder return (“RTSR”), which represents a market condition, and Company-specific target goals for Return on Invested Capital (“ROIC”) as defined in the LTC Plans.LTCPs.

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There were no PSUs awarded by the Company under the 2016 LTCP and 2015 LTC Plan.LTCP. The status of PSUs that have beenwere awarded as part of the active LTC Plans2014 LTCP is summarized below as of December 31, 2015:2016:
Plan YearGrant Date  Fair Value Estimated Number of
Performance Shares  to be Issued		 Maximum Number of
Performance Shares that
Could Potentially be Issued		Grant Date  Fair Value Estimated Number of
Performance Shares  to be Issued
2014 LTC Plan     
2014 LTCP   
RTSR performance condition$20.16
 —
 69
$20.16
 —
ROIC performance condition$14.35
 —
 69
$14.35
 —
2013 LTC Plan     
RTSR performance condition$24.74
 —
 46
ROIC performance condition$16.29
 —
 46
The grant date fair valuesvalue of PSU awards containing the RTSR performance condition werewas estimated using a Monte Carlo simulation with the following assumptions:
 2014 2013
Grant Date Fair Value per Share Unit$20.16
 $24.74
Expected volatility40.8% 59.5%
Risk-free interest rate0.79% 0.38%
Expected life (in years)2.77
 2.82
Expected dividend yield—
 —
Expected volatility40.8%
Risk-free interest rate0.79%
Expected life (in years)2.77
Expected dividend yield—
The grant date fair valuesvalue for PSU awards subject to the ROIC performance condition werewas established using the market price of the Company's common stock on the date of grant.
Final award vesting and distribution of performance awards at December 31, 20152016 that were granted under the 2013 LTC Plan2014 LTCP was determined based on the Company's actual performance versus the target goals for a three-year consecutive period (as defined in the 2013 Plan)2014 LTCP). Refer to the table above for the number of shares expected to be issued under 2013 LTC Plan. Thethe 2014 LTCP. There was no unrecognized compensation cost associated with the 2014 LTCP PSUs as of December 31, 2015 associated with the 2014 LTC Plan performance share units is $219.2016.
Stock Options
The Company granted 1,668 stock options under the 2016 LTCP that vest ratably during 2017, 2018 and 2019.
In addition to the stock options granted under the 2015 STI Plan,STIP, the Company granted 583 stock options under the 2015 LTC Plan whichLTCP that vest in three equal installments during 2016, 2017 and 2018. The first installment will be exercisable 12 months after the date of grant and the remaining installments will be exercisable on February 25, 2017 and February 25, 2018, except for awards granted to the Company's President and Chief Executive Officer which become exercisable on April 17, 2017 and April 18, 2018. The strike
For stock options granted under the 2016 LTCP and 2015 LTCP, the exercise price wasis equal to the closing price of the Company's stock on the date of grant. Thegrant, and the term of the options is 10 years from the date of grant.
The weighted average grant date fair valuevalues of $0.90 per share and $2.05 per share for the options granted under the 2016 LTCP and 2015 LTC Plan wasLTCP, respectively, were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:
Expected volatility55.7%
Risk-free interest rate1.8%
Expected life (in years)5.8
Expected dividend yield—

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 2016 2015
Expected volatility63.8% 55.7%
Risk-free interest rate1.3% 1.8%
Expected life (in years)6.0
 5.8
Expected dividend yield—
 —




A summary of stock option activity under all stock-based compensation plans is as follows:
Shares Weighted
Average
Exercise Price		 Intrinsic
Value		 Weighted Average
Remaining
Contractual Life		Shares Weighted
Average
Exercise Price		 Intrinsic
Value		 Weighted Average
Remaining
Contractual Life
Stock options outstanding at January 1, 201582
 $13.62
   
Stock options outstanding at January 1, 2016691
 $4.43
   
Granted707
 $3.92
   1,668
 $1.58
   
Exercised—
 $—
   —
 $—
   
Forfeited(64) $5.03
   (124) $5.24
   
Expired(34) $14.77
   —
 $—
   
Stock options outstanding at December 31, 2015691
 $4.43
 $—
 9.2 years
Stock options exercisable at December 31, 201540
 $12.79
 $—
 2.2 years
Stock options vested or expected to vest as of December 31, 2015530
 $4.59
 $—
 9.0 years
Stock options outstanding at December 31, 20162,235
 $2.26
 $—
 9.1 years
Stock options exercisable at December 31, 2016211
 $4.82
 $—
 7.8 years
Stock options vested or expected to vest as of December 31, 20161,726
 $2.46
 $—
 9.0 years
No options were exercised during the years ended December 31, 2016 and 2015. The total intrinsic value of options exercised during the yearsyear ended December 31, 2014 and 2013 was $56 and $914, respectively. There were no options exercised during the year ended December 31, 2015.$56. The unrecognized compensation cost associated with stock options as of December 31, 20152016 was $818.$1,222.
(9)(10) Employee Benefit Plans
Pension Plans
Certain employees of the Company are covered by Company-sponsored qualified pension plans and a supplemental non-qualified, unfunded pension plan (collectively, the “pension plans”). These pension plans are defined benefit, noncontributory plans. Benefits paid to retirees are based upon age at retirement, years of credited service and average earnings. The Company also has a supplemental pension plan, which is a non-qualified, unfunded plan. The Company uses a December 31 measurement date for the pension plans.
Effective as of December 31, 2016, the Company merged the assets and liabilities of the Company-sponsored qualified pension plans into a single, qualified pension plan. The merger did not affect the assets or liabilities of the pension plans.
The Company-sponsored pension plans are frozen for all employees except for employees represented by the United Steelworkers of America. The assets of the Company-sponsored qualified pension plansplan are maintained in a single trust account.
The Company’s funding policy is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act of 1974, commonly called ERISA.
In conjunction with the restructuring activities in the second quarter of 2015, the Company recorded a pension curtailment charge of $2,923 and a pension settlement charge of $3,915 in the year ended December 31, 2015 related to the company-sponsoredCompany-sponsored defined benefit plans.
Components of net periodic pension plans (benefit) cost were as follows:
2015 2014 20132016 2015 2014
Service cost$549
 $453
 $699
$377
 $549
 $453
Interest cost6,938
 6,885
 6,327
5,182
 6,938
 6,885
Expected return on assets(9,395) (8,381) (9,278)(8,139) (9,395) (8,381)
Amortization of prior service cost244
 282
 322
200
 244
 282
Amortization of actuarial loss4,018
 1,717
 1,942
1,832
 4,018
 1,717
Settlement charge3,915
 —
 —
—
 3,915
 —
Curtailment charge2,923
 —
 —
—
 2,923
 —
Net periodic pension plans cost$9,192
 $956
 $12
Net periodic pension plans (benefit) cost$(548) $9,192
 $956
The expected amortization of pension prior service cost and actuarial loss for the next fiscal year are $200199 and $1,832947, respectively.

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The status of the pension plans at December 31, 20152016 and 20142015 were as follows:
2015 20142016 2015
Change in projected benefit obligation:      
Projected benefit obligation at beginning of year$193,322
 $156,989
$162,941
 $193,322
Service cost549
 453
377
 549
Interest cost6,938
 6,885
5,182
 6,938
Settlement gain(2,162) —
—
 (2,162)
Curtailment loss2,154
 —
—
 2,154
Plan change—
 719
Benefit payments(25,383) (7,587)(9,459) (25,383)
Actuarial (gain) loss(12,477) 35,863
Actuarial gain(4,361) (12,477)
Projected benefit obligation at end of year$162,941
 $193,322
$154,680
 $162,941
Change in plan assets:      
Fair value of plan assets at beginning of year$183,671
 $168,408
$154,506
 $183,671
Actual (loss) return on assets(4,140) 22,521
Actual return (loss) on assets12,253
 (4,140)
Employer contributions358
 329
414
 358
Benefit payments(25,383) (7,587)(9,459) (25,383)
Fair value of plan assets at end of year$154,506
 $183,671
$157,714
 $154,506
Funded status – net liability$(8,435) $(9,651)
Funded status – net asset (liability)$3,034
 $(8,435)
Amounts recognized in the consolidated balance sheets consist of:      
Prepaid pension cost$8,422
 $7,092
$8,501
 $8,422
Accrued liabilities(362) (322)(367) (362)
Pension benefit obligations(16,495) (16,421)(5,100) (16,495)
Net amount recognized$(8,435) $(9,651)$3,034
 $(8,435)
Pre-tax components of accumulated other comprehensive loss:      
Unrecognized actuarial loss$(35,972) $(45,009)$(25,665) $(35,972)
Unrecognized prior service cost(717) (1,731)(517) (717)
Total$(36,689) $(46,740)$(26,182) $(36,689)
Accumulated benefit obligation$162,290
 $192,638
$154,044
 $162,290
For the plans with an accumulated benefit obligation in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of plan assets were $5,467, $5,467 and $0, respectively, at December 31, 2016 and $62,953, $62,302 and $46,096, respectively, at December 31, 2015 and $66,341, $65,657 and $49,598, respectively,2015. The decrease in the amounts at December 31, 2014.2016 compared to the amounts at December 31, 2015 is attributable to the merger of the Company-sponsored qualified pension plans effective as of December 31, 2016.
The assumptions used to measure the projected benefit obligations for the Company’s defined benefit pension plans were as follows:
2015 20142016 2015
Discount rate4.00% 3.75%3.70 - 3.83% 4.00%
Projected annual salary increases0 - 3.00% 0 - 3.00%0 - 3.00% 0 - 3.00%
The assumptions used to determine net periodic pension cost were as follows: 
 2015 2014 2013
Discount rate3.50 - 3.75% 4.50% 3.50 - 3.75%
Expected long-term rate of return on plan assets5.25% 5.25% 5.25%
Projected annual salary increases0 - 3.00% 0 - 3.00% 0 - 3.00%

70

 2016 2015 2014
Discount rate4.00% 3.50 - 3.75% 4.50%
Expected long-term rate of return on plan assets5.25% 5.25% 5.25%
Projected annual salary increases0 - 3.00% 0 - 3.00% 0 - 3.00%



During the fourth quarter of 2015, the Company changed the methodology used to estimate the service and interest cost components of net periodic pension cost and net periodic postretirement benefit cost for the Company’s pension and other postretirement benefit plans. Previously, the Company estimated such cost components utilizing a single weighted-average discount rate derived from the market-observed yield curves of high-quality fixed income securities used to measure the pension benefit obligation and accumulated postretirement benefit obligation. The new methodology utilizes a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. The change does not affect the measurement of the Company’s pension obligation or accumulated postretirement benefit obligation. The Company has accounted for this change as a change in accounting estimate and it will bewas applied prospectively starting in 2016. The adoption of the spot rate approach is expected to decreasereduced the service cost and interest cost components of net periodic pension and postretirement benefit costs by approximately $1,200$1,206 in 2016.
The Company’s expected long-term rate of return on plan assets is derived from reviews of asset allocation strategies and historical and anticipated future long-term performance of individual asset classes. The Company’s analysis gives consideration to historical returns and long-term, prospective rates of return.
The Company’s pension plan assets are allocated entirely to fixed income securities at December 31, 20152016 and 20142015.
The Company’s pension plans’ funds are managed in accordance with investment policies recommended by its investment advisor and approved by the Human Resources Committee of the Board of Directors. The overall target portfolio allocation is 100% fixed income securities. These funds’ conformance with style profiles and performance is monitored regularly by management, with the assistance of the Company’s investment advisor. Adjustments are typically made in the subsequent quarters when investment allocations deviate from the target range. The investment advisor provides quarterly reports to management and the Human Resources Committee of the Board of Directors.
In May 2015, the FASB issued ASU No. 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)," which removes the requirement to include investments in the fair value hierarchy for which fair value is measured using the net asset value per share practical expedient under Accounting Standards Codification 820. The Company adopted ASU No. 2015-07 in 2016, and the presentation of the Company's pension plan assets by level within the fair value hierarchy, as of December 31, 2015, has been retrospectively adjusted.
The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2016:
 Level 1 Level 2 Level 3 Total
Fixed income securities (a)
$16,427
 $142,486
 $—
 $158,913
Investments measured at net asset value (a)
      5,455
Accounts payable – pending trades      (6,654)
Total      $157,714
(a) Fixed income securities are comprised of corporate bonds (87%), government bonds (4%), government agency securities (2%) and other fixed income securities (7%).
The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2015:
 Level 1 Level 2 Level 3 Total
Fixed income securities (a)
$16,028
 $137,943
 $—
 $153,971
Accounts receivable – pending trades      535
Total      $154,506
(a) Fixed income securities are comprised of corporate bonds (96%), government agencies securities (2%) and other fixed income securities (2%).
The fair values of the Company’s pension plan assets fall within the following levels of the fair value hierarchy as of December 31, 2014:
Level 1 Level 2 Level 3 TotalLevel 1 Level 2 Level 3 Total
Fixed income securities (b)
$15,839
 $167,882
 $—
 $183,721
$16,028
 $134,514
 $—
 $150,542
Accounts payable – pending trades      (50)
Investments measured at net asset value (b)
      3,429
Accounts receivable – pending trades      535
Total      $183,671
      $154,506
(b) Fixed income securities are comprised of corporate bonds (75%(96%), government bonds (17%), government agenciesagency securities (4%(2%) and other fixed income securities (4%(2%).


The estimated future pension benefit payments are:
2016$8,193
20178,554
$9,078
20188,786
9,183
20198,974
9,235
20209,181
9,324
2021 — 202548,380
20219,522
2022 — 202647,219

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The Company was party to a multi-employer pension plan in Ohio. In connection with the April 2015 restructuring plan, the Company has stated its intention to withdraw from the Ohio multi-employer pension plan. The liability associated with the withdrawal from this plan iswas initially estimated by the Company to be $5,500 at December 31, 20152015. Based on additional information obtained by the Company during the year ended December 31, 2016, the estimated withdrawal obligation was reduced by $1,973, resulting in an estimated liability to withdraw from the plan of $3,527 at December 31, 2016. The initial estimate of the withdrawal obligation and has been charged tothe subsequent reduction are included in restructuring expense (income) in the Consolidated Statements of Operations and Comprehensive Loss for the yearyears ended December 31, 2015. The Company incurred a withdrawal liability of $720 which was charged to restructuring expense (income) in the Consolidated Statement of Operations for the year ended December 31, 2013 related to its 2013 restructuring activities2015 and subsequent withdrawal from a multi-employer pension plan for employees of a plant closed in California.2016, respectively.
Postretirement Plan
The Company also provides declining value life insurance to its retirees and a maximum of three years of medical coverage to qualified individuals who retire between the ages of 62 and 65. The Company does not fund these benefits in advance, and uses a December 31 measurement date.
Components of net periodic postretirement plan (benefit) costbenefit for 20152016, 20142015 and 20132014 were as follows:
2015 2014 20132016 2015 2014
Service cost$83
 $56
 $153
$71
 $83
 $56
Interest cost79
 76
 148
65
 79
 76
Amortization of actuarial gain(197) (336) (23)(209) (197) (336)
Net periodic postretirement plan (benefit) cost$(35) $(204) $278
Net periodic postretirement plan benefit$(73) $(35) $(204)
The expected amortization of actuarial gain for the next fiscal year is insignificant.
The status of the postretirement plan at December 31, 20152016 and 20142015 was as follows:
2015 20142016 2015
Change in accumulated postretirement benefit obligations:      
Accumulated postretirement benefit obligation at beginning of year$2,552
 $1,977
$2,427
 $2,552
Service cost83
 56
71
 83
Interest cost79
 76
65
 79
Benefit payments(202) (224)(240) (202)
Actuarial loss (gain)(85) 667
Actuarial gain(759) (85)
Accumulated postretirement benefit obligation at end of year$2,427
 $2,552
$1,564
 $2,427
Funded status – net liability$(2,427) $(2,552)$(1,564) $(2,427)
Amounts recognized in the consolidated balance sheets consist of:      
Accrued liabilities$(246) $(226)$(234) $(246)
Postretirement benefit obligations(2,181) (2,326)(1,330) (2,181)
Net amount recognized$(2,427) $(2,552)$(1,564) $(2,427)
Pre-tax components of accumulated other comprehensive loss:      
Unrecognized actuarial gain$2,024
 $2,137
$2,574
 $2,024
Total$2,024
 $2,137
$2,574
 $2,024


The assumed health care cost trend rates for medical plans at December 31 were as follows:
2015 2014 20132016 2015 2014
Medical cost trend rate6.50% 7.00% 7.50%6.00% 6.50% 7.00%
Ultimate medical cost trend rate5.00% 5.00% 5.00%5.00% 5.00% 5.00%
Year ultimate medical cost trend rate will be reached2019 2019 20192019 2019 2019
A 1% increase in the health care cost trend rate assumptions would have increased the accumulated postretirement benefit obligation at December 31, 20152016 by $103$47 with no significant impact on the annual periodic postretirement benefit cost. A 1% decrease in the health care cost trend rate assumptions would have decreased the accumulated

72




postretirement benefit obligation at December 31, 20152016 by $95$44 with no significant impact on the annual periodic postretirement benefit cost.
The weighted average discount rate used to determine the net periodic postretirement benefit costs and the accumulated postretirement benefit obligations were as follows:
2015 2014 20132016 2015 2014
Net periodic postretirement benefit costs3.25% 4.00% 3.50%3.50% 3.25% 4.00%
Accumulated postretirement benefit obligations3.50% 3.25% 4.00%3.61% 3.50% 3.25%
Retirement Savings Plans
The Company’s retirement savings plan for U.S. employees includes features under Section 401(k) of the Internal Revenue Code. The Company provides a 401(k) matching contribution of 100% of each dollar on eligible employee contributions up to the first 6% of the employee’s pre-tax compensation. Company contributions cliff vest after two years of employment.
Effective July 1, 2012, the Company's 401(k) plan was amended to include the U.S. employees of Tube Supply. Employees were eligible to participate in the Company's 401(k) plan immediately. Tube Supply's existing plan assets were rolled over into the Company's 401(k) plan during 2012 as a result of this amendment.
The amounts expensed by the Company relating to its 401(k) plan and other international retirement plans were $3,866, $3,743$2,725, $3,386 and $4,265$3,296 for the years ended December 31, 20152016, 20142015 and 20132014, respectively.
(10)(11) Restructuring Activity
The Company has implemented several restructuring plans over the last several years in an effort to adapt operations to market conditions. In the second quarter of 2015, the Company announced furtherThese restructuring plans included organizational changes, including further workforce reductions, and the consolidation of more facilities in locations deemed to have redundant operations. Similar to the restructuring activities of 2013 and 2014, the consolidations andThe organizational changes announced in 2015 areand consolidations were part of the Company's overall plan to streamline the organizational structure, lower structural operating costs, and increase liquidity. Restructuring activity is included in the Company's Metals segment. There was not any restructuring activity in the Company's Plastic segment.
The Company incurred the following restructuring expense (income) during the years ended December 31, 2016, 2015 2014 and 2013:2014:
 Year Ended December 31, Year Ended December 31,
 2015 2014 2013 2016 2015 2014
Employee termination and related benefits (a)
 $17,012
 $937
 $2,702
 $(854) $17,012
 $937
Lease termination costs 444
 186
 1,448
 6,038
 444
 186
Moving costs associated with plant consolidations 5,711
 1,450
 4,487
 4,558
 5,711
 1,450
Professional fees 1,804
 —
 —
 1,839
 1,804
 —
Gain on sale of fixed assets (15,963) (5,533) —
Other exit costs —
 —
 366
Loss (gain) on disposal of fixed assets 1,361
 (15,963) (5,533)
Total expense (income) $9,008
 $(2,960) $9,003
 $12,942
 $9,008
 $(2,960)
(a) Employee termination and related benefits primarily consists of severance and pension related costs. Included in the year ended December 31, 2016 was income of $(1,973), which resulted from a reduction in an estimated pension withdrawal liability of$5,500 recorded in 2015. Included in the year ended December 31, 2015 was a pension curtailment charge of $2,923, a pension settlement charge of $3,915, and an estimated pension withdrawal liability charge of $5,500 associated with the Company’s withdrawal from a multi-employer plan. Included in


In the year ended December 31, 20132016, the Company incurred additional costs associated with the April 2015 restructuring plan that consisted of employee termination and related benefits, moving costs, professional fees and losses on the disposal of fixed assets. In addition, the Company recorded charges of $452 for inventory moved from consolidated plants that was a multi-employer pension withdrawal liabilitysubsequently identified to be scrapped. The inventory charge is reported in cost of $720.

73

materials in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016.

In the first quarter of 2016, the Company closed its Houston and Edmonton facilities and sold all the equipment at these facilities to an unrelated third party. Restructuring activities associated with the strategic decision to close these facilities included employee termination and related benefits, lease termination costs, moving costs associated with exit from the closed facilities, and professional fees at the closed facilities.


Restructuring activity during the year ended December 31, 2015 that was associated with the April 2015 restructuring plan included employee termination and related benefits related to workforce reductions, lease termination costs, moving costs associated with plant consolidations, a gain on the sale of buildings and equipment, and professional fees. Also, in conjunction with the April 2015 plan, the Company recorded charges of $25,656 for inventory whichthat was identified to be scrapped or written down. Management decided it was more economically feasible to scrap aged material as opposed to expending the time and effort to sell such material in the normal course. The charge includesincluded a provision for small pieces of inventory at closing branches which willthat would not be moved, as well as provisions for excess inventory levels based on estimates of current and future market demand. The inventory charge is reported in cost of materials in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2015.
Restructuring activity during the year ended December 31, 2014 consisted of a gain on the sale of fixed assets in Houston where the Company completed a plant consolidation, partially offset by employee termination and related benefits for the workforce reductions announced in June 2014, moving costs associated with plant consolidations announced in October 2013 and lease termination costs related to the restructuring activities announced in January 2013. All
Substantially all of the June 2014previously announced restructuring activities are complete.
Restructuring activity during the year ended December 31, 2013 consisted of moving costs, employee termination and related benefits related to workforce reductions, lease termination costs, and other exit costs associated with the plant consolidations announced in January 2013 and October 2013. Included in the 2013 restructuring activity was a charge of $1,236 for the write-off of small pieces of inventory at closing branches which could not be moved. The inventory charge is reported in cost of materials in the Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2013. The January 2013 and October 2013 announced restructuring activities are complete.
For the year ended December 31, 2015, the Company recognized cumulative charges of $50,627 related to restructuring activity under its 2015 restructuring plan which is consistent with expectations.

74




Restructuring reserve activity for the years ended December 31, 2016, 2015 2014 and 20132014 is summarized below:
   Period Activity     Period Activity  
 Balance January 1 Costs (gains) Cash (payments) receipts 
Impairment and non-cash settlements(c)
 
Balance December 31 (a)
 Balance January 1 Charges (gains) Cash (payments) receipts 
Impairment and non-cash activity(c)
 
Balance December 31 (a)
2015 Activity:          
Employee termination and related benefits (a) (c)
 $—
 $17,012
 $(1,873) $(6,838) $8,301
2016 Activity:          
Employee termination and related benefits (a)
 $8,301
 $(854) $(3,820) $—
 $3,627
Lease termination costs (b)(c)
 636
 444
 (848) —
 232
 232
 6,038
 (3,160) (2,287) 823
Moving costs associated with plant consolidations —
 5,711
 (5,711) —
 —
 —
 4,558
 (4,558) —
 —
Professional Fees —
 1,804
 (1,804) —
 —
Gain on sale of fixed assets —
 (15,963) 15,963
 —
 —
Professional fees —
 1,839
 (1,839) —
 —
Disposal of fixed assets —
 1,361
 2,703
 (4,064) —
Inventory adjustment —
 452
 —
 (452) —
Total 2016 Activity $8,533
 $13,394
 $(10,674) $(6,803) $4,450
2015 Activity:          
Employee termination and related benefits (d)
 $—
 $17,012
 $(1,873) $(6,838) $8,301
Lease termination costs 636
 444
 (848) —
 232
Moving costs associated with plant consolidations —
 5,711
 (5,711) —
 —
Professional fees

 —
 1,804
 (1,804) —
 —
Disposal of fixed assets —
 (15,963) 15,963
 —
 —
Inventory adjustment —
 25,656
 —
 (25,656) —
 —
 25,656
 —
 (25,656) —
Total 2015 Activity $636
 $34,664
 $5,727
 $(32,494) $8,533
 $636
 $34,664
 $5,727
 $(32,494) $8,533
2014 Activity:                    
Employee termination and related benefits $129
 $937
 $(1,066) $—
 $—
 $129
 $937
 $(1,066) $—
 $—
Lease termination costs 921
 186
 (471) —
 636
 921
 186
 (471) —
 636
Moving costs associated with plant consolidations —
 1,450
 (1,450) —
 —
 —
 1,450
 (1,450) —
 —
Gain on sale of fixed assets —
 (5,533) 5,533
 —
 —
Disposal of fixed assets —
 (5,533) 5,533
 —
 —
Total 2014 Activity $1,050
 $(2,960) $2,546
 $—
 $636
 $1,050
 $(2,960) $2,546
 $—
 $636
2013 Activity:          
Employee termination and related benefits $—
 $2,702
 $(2,573) $—
 $129
Lease termination costs —
 1,448
 (527) —
 921
Moving costs associated with plant consolidations —
 4,487
 (4,318) (169) —
Inventory adjustment —
 1,236
 —
 (1,236) —
Other exit costs —
 366
 (366) —
 —
Total 2013 Activity $—
 $10,239
 $(7,784) $(1,405) $1,050
(a) Included in charges (gains) for 2016 is income of $(1,973) that resulted from a reduction in an estimated pension withdrawal liability of $5,500 recorded in 2015. As of December 31, 2015,2016, the short-term employee termination and related benefits of $2,801$340 is included in accrued payroll and employee benefits in the Condensed Consolidated Balance SheetsSheet and the long-term portion associated liability of $3,287 associated with the Company's withdrawal from a multi-employer pension plan of $5,500 is included in other non-current liabilities in the Condensed Consolidated Balance Sheets.Sheet.
(b)In connection with the closure of the Company's Houston and Edmonton facilities, the Company agreed to sell its fixed assets and to a reduction in future proceeds from the sale of inventory in exchange for the assignment of its remaining lease obligations at its Houston facility resulting in a non-cash charge of $2,287 during the year ended December 31, 2016.
(c) Payments on certain of the lease obligations are scheduled to continue until 2016.2020. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charge related to the lease obligations. Any potential recoveries or additional charges could affect amounts reported in the consolidated financial statements of future periods. As of December 31, 2015,2016, the short-term portion of the lease termination costs restructuring liability of $232$292 is included in accrued and other current liabilities and the long-term portion of the lease termination costs of $531 is included in other noncurrent liabilities in the Consolidated Balance Sheets.Sheet.
(c)(d) Included in costscharges (gains) and non-cash settlementsactivity for 2015 restructuring activity are charges for pension curtailment and pension settlement of $2,923 and $3,915, respectively. Also included in charges (gains) for 2015 is an estimated withdrawal liability charge of $5,500 associated with the Company’s withdrawal from a multi-employer pension plan.

75




(11)(12) Income Taxes
The components of loss from continuing operations before income taxes and equity in earnings (losses) of joint venture for the years ended December 31, 2016, 2015 2014 and 20132014 were as follows:
2015 2014 20132016 2015 2014
Domestic$(196,410) $(116,869) $(64,529)$(104,524) $(201,375) $(122,511)
Non-U.S.(33,550) (30,841) (5,133)(7,935) (33,550) (30,841)
The provision (benefit) for income taxes for the years ending December 31, 2016, 2015 2014 and 20132014 consisted of the following components:
2015 2014 20132016 2015 2014
Federal          
current$—
 $—
 $(260)$—
 $—
 $—
deferred(19,975) (23,040) (21,679)(4,231) (21,700) (25,023)
State          
current72
 361
 1,312
25
 70
 32
deferred(705) (3,959) (1,530)(114) (927) (3,959)
Foreign          
current2,149
 (1,898) 3,242
1,783
 2,149
 (1,898)
deferred(3,162) 7,905
 (4,227)(9) (3,162) 7,905
$(21,621) $(20,631) $(23,142)$(2,546) $(23,570) $(22,943)

The items accounting for differences between the income tax provision (benefit)benefit computed at the federal statutory rate and the provision for income taxes for the years ended December 31, 2016, 2015 2014 and 20132014 were as follows:
 2015 2014 2013
Federal income tax at statutory rates$(80,488) $(51,699) $(24,382)
State income taxes, net of federal income tax benefits(8,834) (322) (2,012)
Permanent items:     
Dividends received deductions—
 —
 (766)
Goodwill impairment—
 10,454
 —
Other permanent differences2,380
 285
 (124)
Federal and state income tax on joint venture(558) 2,912
 2,670
Rate differential on foreign income3,305
 11,512
 812
Valuation allowance63,511
 4,888
 —
Audit settlements171
 99
 —
Other(1,108) 1,240
 660
Income tax (benefit) expense$(21,621) $(20,631) $(23,142)
Effective income tax expense rate9.4% 14.0% 33.2%

76

 2016 2015 2014
Federal income tax at statutory rates$(39,361) $(82,226) $(53,673)
State income taxes, net of federal income tax benefits(5,118) (8,784) (651)
Permanent items:     
Section 956 inclusions13,132
 —
 —
Convertible debt – non-deductible3,024
 —
 —
Goodwill impairment—
 —
 10,454
Other permanent differences2,719
 2,369
 285
Federal and state income tax on joint venture(1,660) (558) 2,912
Rate differential on foreign income795
 3,305
 11,512
Valuation allowance23,746
 63,511
 4,888
Audit settlements—
 171
 99
Other177
 (1,358) 1,231
Income tax (benefit)$(2,546) $(23,570) $(22,943)
Effective income tax (benefit) rate2.3% 10.0% 15.0%



Significant components of deferred tax assets and liabilities of December 31, 20152016 and 20142015 are as follows:
2015 20142016 2015
Deferred tax assets:      
Pension and postretirement benefits$4,139
 $4,714
$809
 $4,139
Deferred compensation1,357
 2,109
595
 1,357
Restructuring related and other reserves842
 943
4
 842
Alternative minimum tax and net operating loss carryforward66,709
 40,787
91,769
 66,709
Intangible assets and goodwill5,993
 —
11,647
 5,993
Other, net3,399
 1,833
2,818
 3,399
Deferred tax assets before valuation allowance82,439
 50,386
107,642
 82,439
Valuation allowance(63,955) (4,888)(79,908) (63,955)
Total deferred tax assets$18,484
 $45,498
$27,734
 $18,484
Deferred tax liabilities:      
Depreciation$8,147
 $9,857
$5,006
 $8,147
Inventory6,071
 43,285
20,172
 6,071
Intangible assets and goodwill—
 9,129
Convertible debt discount4,075
 5,644
1,883
 4,075
Other, net3,982
 5,627
292
 3,982
Total deferred tax liabilities22,275
 73,542
27,353
 22,275
Net deferred tax liabilities$3,791
 $28,044
Net deferred tax assets (liabilities)$381
 $(3,791)

As of December 31, 2015,2016, the Company had $144,542$197,930 of federal and $131,680$232,759 of state net operating loss carryforwards which will begin expiring in 2032 and 2017, respectively, $2,010 of federal credits which will carry forward for an indefinite period and $546 of state credit carryforwards which will begin expiring in 2024. The future utilization of a portion of the Company’s federal and state net operating losses is expected to be limited by Internal Revenue Service (“IRS”)IRC Section 382 due to ownership changes in 2016 and 2015; however, at this time that amount has not been quantified. As of December 31, 2015,2016, the Company had $39,934 of $28,769 foreign net operating loss carryforwards, of which a significant portion of which carry forward for an indefinite period.

The Company has incurred significant losses in recent years. The Company’s operations in the United States and Canada continue to have cumulative pre-tax losses for the three-year period ended December 31, 2015. As a result of the Company now being in a net deferred tax asset position as of December 31, 2015 in these jurisdictions, coupled with the negative evidence of significant cumulative three-year pre-tax losses, the Company recognized a valuation allowance against its net deferred tax assets in the United States and Canada during the second and fourth quarter of 2015, respectively.

The Company continues to maintain valuation allowances against substantially all U.S. and foreign deferred tax assets to reduce those deferred tax assets to amounts that are realizable either through future reversals of existing taxable temporary differences or through taxable income in carryback years for the applicable jurisdictions.


77




Activity in the Company's valuation allowances for the U.S. and non-U.S. operations were as follows for the years ended December 31, 2016, 2015 2014 and 2013:2014:
2015 2014 20132016 2015 2014
Domestic          
Balance, beginning of year$—
 $—
 $—
$55,474
 $—
 $—
Provision charged to expense55,474
 —
 —
18,906
 55,474
 —
Provision charged to discontinued operations and other comprehensive income(4,697) —
 —
Balance, end of year$55,474
 $—
 $—
$69,683
 $55,474
 $—
Foreign          
Balance, beginning of year$4,888
 $—
 $—
$8,481
 $4,888
 $—
Impact of foreign exchange on beginning of year balance(553) —
 —
(702) (553) —
Provision charged to expense4,146
 4,888
 —
2,446
 4,146
 4,888
Balance, end of year$8,481
 $4,888
 $—
$10,225
 $8,481
 $4,888

The Company is subject to taxation in the United States, state jurisdictions and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. The Company recognizes the financial statement benefit of a tax position only after determining that the


relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not criterion, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

In the ordinary course of business, the Company is subject to review by domestic and foreign taxing authorities, including the IRS. In general, the Company is no longer subject to audit by the IRS for tax years through 20112012 and state, local or foreign taxing authorities for tax years through 2010.2011. Various other taxing authorities are in the process of auditing income tax returns of the Company and its subsidiaries. The Company does not anticipate that any adjustments from the audits would have a material impact on its consolidated financial position, results of operations or cash flows.

In general, it is the practice and intention ofDuring 2016, the Company to reinvestpledged its foreign assets as collateral for the Credit Facilities. This resulted in a foreign income inclusion in the U.S. under IRC Section 956, which was comprised of current and accumulated earnings of its non-U.S. subsidiaries in those operations. Asand profits. There are no remaining undistributed earnings as of December 31, 2015, no provision has been made for U.S. income taxes and foreign withholding taxes related2016 on which the Company would need to the undistributed earnings of the Company's foreign subsidiaries of $51,584 because those undistributed earnings are indefinitely reinvested outside the United States. The actual U.S. tax cost would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized U.S.record any additional deferred tax liability related to the undistributed earnings of the Company's foreign subsidiaries is not practical due to the complexities associated with the calculation.liability.

(12)(13) Commitments and Contingent Liabilities
As of December 31, 2015, the Company had $10,092 of irrevocable letters of credit outstanding which primarily consisted of $5,000 for its new warehouse in Janesville, Wisconsin, $2,000 for collateral associated with commodity hedges and $1,842 for compliance with the insurance reserve requirements of its workers’ compensation insurance program.
As of December 31, 2015, the Company recognized a $7,500 non-cash charge for losses on firm purchase commitments related to inventory on order to its Edmonton and Houston facilities. The non-cash loss has been recorded to cost of materials in the Consolidated Statements of Operations and Comprehensive Loss.
The Company is party to a variety of legal proceedings, claims, and other claims,inquiries, including proceedings or inquiries by governmentgovernmental authorities, which arise from the operation of its business. These proceedings, claims, and inquiries are incidental to and occur in the normal course of the Company's business affairs. The majority of these proceedings, claims, and proceedingsinquiries relate to commercial disputes with customers, suppliers, and others; employment including benefit matters;and employee benefits-related disputes; product quality;quality disputes with vendors and/or customers; and environmental, health and safety claims. It is the opinion of management that the currently expected outcome of these proceedings, claims, and claims,inquiries, after taking into account recorded accruals and the availability and limits of our insurance coverage, will not have a material adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

78




(13)(14) Segment Reporting
ThePrior to the sale of TPI in March 2016, the Company distributes and performs processing on both metals and plastics. Although the distribution processes are similar, the customer markets, supplier bases and types of products are different. Additionally, the Company’s Chief Executive Officer, the chief operating decision-maker, reviews and manages thesehad two businesses separately. As such, these businesses are considered reportable segments and are reported accordingly. Neitherconsisting of the Company’s reportable segments has any unusual working capital requirements.
Inits Plastics segment and its Metals segment. Subsequent to the sale of TPI, which represented the Company's Plastics segment in its entirety, the Company has only one reportable segment, Metals. TPI is reflected in the accompanying Consolidated Financial Statements as a discontinued operation.
The Company’s marketing strategy focuses on distributing highly engineered specialty grades and alloys of metals as well as providing specialized processing services designed to meet very precise specifications. Core products include alloy, aluminum, stainless, nickel, titanium and carbon. Inventories of these products assume many forms such as plate, sheet, extrusions, round bar, hexagon bar, square and flat bar, tubing and coil. Depending on the size of the facility and the nature of the markets it serves, service centers are equipped as needed with bar saws, plate saws, oxygen and plasma arc flame cutting machinery, trepanning machinery, boring machinery, honing equipment, water-jet cutting, stress relieving and annealing furnaces, surface grinding equipment, CNC machinery and sheet shearing equipment. This segment also performs various specialized fabrications for its customers through pre-qualified subcontractors that thermally process, turn, polish, cut-to-length and straighten alloy and carbon bar.
The Company’s Plastics segment consists exclusively of a wholly-owned subsidiary, TPI. The Plastics segment stocks and distributes a wide variety of plastics in forms that include plate, rod, tube, clear sheet, tape, gaskets and fittings. Processing activities within this segment include cut-to-length, cut-to-shape, bending and forming according to customer specifications. The Plastics segment’s diverse customer base consists of companies in the retail (point-of-purchase), automotive, marine, office furniture and fixtures, safety products, life sciences applications, and general manufacturing industries. TPI has locations throughout the upper northeast and midwest regions of the U.S. and one facility in Florida from which it services a wide variety of users of industrial plastics.
On March 11, 2016, the Company entered into an asset purchase agreement with an unrelated third-party for the sale of TPI. TPI represents the entirety of the the Company's Plastics segment and therefore, the Company will only have one reporting segment, the Metals segment, going forward. As of December 31, 2015, TPI did not meet the criteria to be classified as held for sale and accordingly its results are presented with continuing operations and the segment information presented below. The terms of the sale are discussed fully in Note 15 - Subsequent Events to the consolidated financial statements.
The accounting policies of all segments are the same as described in Note 1 - Basis of Presentation and Significant Accounting Policies to the consolidated financial statements. Management evaluates the performance of its business segments based on operating income.
The Company operates primarily in North America. No activity from any individual country outside the United States is material, and therefore, foreign activity is reported on an aggregate basis. Net sales are attributed to countries based on the location of the Company’s subsidiary that is selling direct to the customer. Company-wide geographic data as of and for the years ended December 31, 2016, 2015 2014 and 20132014 are as follows:
2015 2014 20132016 2015 2014
Net sales          
United States$554,943
 $736,236
 $817,714
$336,495
 $422,122
 $598,071
Canada40,107
 54,389
 83,577
Mexico49,968
 50,186
 43,121
All other countries215,815
 243,601
 235,352
106,580
 111,240
 116,903
Total$770,758
 $979,837
 $1,053,066
$533,150
 $637,937
 $841,672
Long-lived assets          
United States$59,603
 $58,278
 63,667
$40,253
 $52,771
 $50,986
Canada2,937
 3,579
 4,908
Mexico3,198
 3,545
 4,202
All other countries11,790
 14,557
 13,027
3,322
 4,666
 5,447
Total$71,393
 $72,835
 76,694
$49,710
 $64,561
 $65,543

79




Segment information as of and for the years ended December 31, 2015, 2014 and 2013 is as follows:
 
Net
Sales
 
Operating
(Loss)
     Income (b)
 
Total
     Assets (b)
 
Capital
Expenditures
 
Depreciation &
Amortization
2015         
Metals segment$637,936
 $(177,087) $404,936
 $7,171
 $23,317
Plastics segment132,822
 6,422
 57,027
 1,079
 1,537
Other (a)
—
 (11,009) 35,690
 —
 —
Consolidated$770,758
 $(181,674) $497,653
 $8,250
 $24,854
2014         
Metals segment$841,672
 $(98,673) $612,261
 $11,184
 $24,380
Plastics segment138,165
 6,354
 60,970
 1,167
 1,664
Other (a)
—
 (10,520) 37,443
 —
 —
Consolidated$979,837
 $(102,839) $710,674
 $12,351
 $26,044
2013         
Metals segment$918,298
 $(20,489) $707,233
 $10,181
 $24,579
Plastics segment134,768
 4,278
 57,373
 1,423
 1,609
Other (a)
—
 (8,379) 41,879
 —
 —
Consolidated$1,053,066
 $(24,590) $806,485
 $11,604
 $26,188
(a) “Other” – Operating loss includes the costs of executive, legal and elements of the finance department, which are shared by both the Metals and Plastics segments. The “Other” category’s total assets consist of the Company’s investment in joint venture.
(b) During the fourth quarter of 2015, the Company changed its method of accounting for U.S metals inventories, which were previously accounted for under LIFO method, to the average cost method. The change was applied retrospectively to the prior year financial information presented. See Note 1 for discussion of this accounting change and its related impact.

Below are reconciliations of segment data to the consolidated loss before income taxes:
 2015 2014 2013
Operating loss (a)
$(181,674) $(102,839) $(24,590)
Interest expense, net41,980
 40,548
 40,542
Loss on extinguishment of debt—
 —
 2,606
Other expense, net6,306
 4,323
 1,924
Loss before income taxes and equity in earnings (losses) of joint venture (a)
(229,960) (147,710) (69,662)
Equity in earnings (losses) of joint venture(1,426) 7,691
 6,987
Consolidated loss before income taxes (a)
$(231,386) $(140,019) $(62,675)
(a) During the fourth quarter of 2015, the Company changed its method of accounting for U.S metals inventories, which were previously accounted for under LIFO method, to the average cost method. The change was applied retrospectively to the prior year financial information presented. See Note 1 for discussion of this accounting change and its related impact.
(14) Guarantor Financial Information
The Company's Senior Secured Notes are guaranteed by certain 100% directly owned subsidiaries of the Company (the "Guarantors"). As of December 31, 2015, the Guarantors included Total Plastics, Inc., Advanced Fabricating Technology, LLC, Keystone Tube Company, LLC and Paramont Machine Company, LLC, each of which fully and unconditionally guarantee the Senior Secured Notes on a joint and several basis.
The accompanying financial statements have been prepared and presented pursuant to Rule 3-10 of SEC Regulation S-X “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The financial statements present condensed consolidating financial information for A. M. Castle & Co. (the "Parent"), the Guarantors, the non-guarantor subsidiaries (all other subsidiaries) and an elimination column for adjustments to arrive at the information for the Parent, Guarantors, and non-guarantors on a consolidated basis. The condensed consolidating

80




financial information has been prepared on the same basis as the consolidated statements of the Parent. The equity method of accounting is followed within this financial information.
During the fourth quarter of 2015, the Company changed its method of accounting for U.S metals inventories, which were previously accounted for under LIFO method, to the average cost method. The change was applied retrospectively to the prior year financial information presented. See Note 1 - Basis of Presentation and Significant Accounting Policies in the consolidated financial statements for discussion of this accounting change and its related impact.
Condensed Consolidating Balance Sheet
As of December 31, 2015

 Parent Guarantors Non-Guarantors Eliminations Consolidated
Assets         
Current assets:         
Cash and cash equivalents$1,220
 $46
 $9,834
 $—
 $11,100
Accounts receivable, less allowance for doubtful accounts39,448
 16,697
 33,734
 —
 89,879
Receivables from affiliates759
 36
 —
 (795) —
Inventories150,809
 19,353
 65,349
 (68) 235,443
Prepaid expenses and other current assets3,996
 1,099
 6,774
 —
 11,869
Total current assets196,232
 37,231
 115,691
 (863) 348,291
Investment in joint venture35,690
 —
 —
 —
 35,690
Goodwill—
 12,973
 —
 —
 12,973
Intangible assets, net10,116
 —
 134
 —
 10,250
Other non-current assets15,789
 —
 4,622
 (1,355) 19,056
Investment in subsidiaries33,941
 —
 —
 (33,941) —
Receivables from affiliates118,478
 69,359
 —
 (187,837) —
Property, plant and equipment, net52,770
 6,833
 11,790
 —
 71,393
Total assets$463,016
 $126,396
 $132,237
 $(223,996) $497,653
Liabilities and Stockholders’ Equity         
Current liabilities:         
Accounts payable$32,707
 $10,666
 $12,899
 $—
 $56,272
Payables due to affiliates759
 —
 36
 (795) —
Other current liabilities21,121
 1,904
 5,578
 —
 28,603
Current portion of long-term debt6,980
 —
 32
 —
 7,012
Total current liabilities61,567
 12,570
 18,545
 (795) 91,887
Long-term debt, less current portion314,746
 —
 15
 —
 314,761
Payables due to affiliates—
 14,123
 173,715
 (187,838) —
Deferred income taxes—
 5,524
 —
 (1,355) 4,169
Other non-current liabilities39,715
 —
 133
 —
 39,848
Stockholders’ equity (deficit)46,988
 94,179
 (60,171) (34,008) 46,988
Total liabilities and stockholders’ equity$463,016
 $126,396
 $132,237
 $(223,996) $497,653


81




Condensed Consolidating Balance Sheet
As of December 31, 2014 (as adjusted)
 
 Parent Guarantors Non-Guarantors Eliminations Consolidated
Assets         
Current assets:         
Cash and cash equivalents$511
 $977
 $6,966
 $—
 $8,454
Accounts receivable, less allowance for doubtful accounts66,178
 19,303
 45,522
 —
 131,003
Receivables from affiliates2,071
 81
 —
 (2,152) —
Inventories265,012
 19,320
 75,366
 (68) 359,630
Prepaid expenses and other current assets2,805
 1,033
 8,506
 —
 12,344
Total current assets336,577
 40,714
 136,360
 (2,220) 511,431
Investment in joint venture37,443
 —
 —
 —
 37,443
Goodwill—
 12,973
 —
 —
 12,973
Intangible assets, net42,772
 —
 13,783
 —
 56,555
Other non-current assets18,441
 —
 996
 —
 19,437
Investment in subsidiaries70,274
 —
 —
 (70,274) —
Receivables from affiliates113,188
 36,607
 2,157
 (151,952) —
Property, plant and equipment, net46,094
 12,184
 14,557
 —
 72,835
Total assets$664,789
 $102,478
 $167,853
 $(224,446) $710,674
Liabilities and Stockholders’ Equity         
Current liabilities:         
Accounts payable$41,613
 $8,055
 $19,114
 $—
 $68,782
Payables due to affiliates2,071
 —
 81
 (2,152) —
Other current liabilities18,841
 3,065
 6,092
 —
 27,998
Current portion of long-term debt691
 —
 46
 —
 737
Total current liabilities63,216
 11,120
 25,333
 (2,152) 97,517
Long-term debt, less current portion307,327
 —
 2,050
 —
 309,377
Payables due to affiliates—
 5,581
 146,371
 (151,952) —
Deferred income taxes19,359
 5,524
 3,846
 —
 28,729
Other non-current liabilities22,238
 —
 164
 —
 22,402
Stockholders’ equity252,649
 80,253
 (9,911) (70,342) 252,649
Total liabilities and stockholders’ equity$664,789
 $102,478
 $167,853
 $(224,446) $710,674


82




Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
For the year ended December 31, 2015
 
 Parent Guarantors Non-Guarantors Eliminations Consolidated
Net Sales$435,736
 $132,821
 $215,815
 $(13,614) $770,758
Costs and expenses:         
Cost of materials (exclusive of depreciation and amortization)408,400
 93,405
 186,424
 (13,614) 674,615
Warehouse, processing and delivery expense77,283
 11,838
 25,613
 —
 114,734
Sales, general and administrative expense64,112
 17,629
 13,738
 —
 95,479
Restructuring expense (income)21,953
 (14,325) 1,380
 —
 9,008
Depreciation and amortization expense19,035
 1,812
 4,007
 —
 24,854
Impairment of intangible assets23,491
 —
 10,251
 —
 33,742
Total costs and expenses614,274
 110,359
 241,413
 (13,614) 952,432
Operating (loss) income(178,538) 22,462
 (25,598) —
 (181,674)
Interest expense, net25,712
 —
 16,268
 —
 41,980
Other expense, net—
 —
 6,306
 —
 6,306
(Loss) income before income taxes and equity in earnings (losses) of subsidiaries and joint venture(204,250) 22,462
 (48,172) —
 (229,960)
Income tax (benefit) expense(25,594) 8,535
 (4,562) —
 (21,621)
Equity in losses of subsidiaries(29,683) —
 —
 29,683
 —
Equity in losses of joint venture(1,426) —
 —
 —
 (1,426)
Net (loss) income(209,765) 13,927
 (43,610) 29,683
 (209,765)
          
Comprehensive (loss) income:         
Foreign currency translation adjustments(6,642) —
 (6,642) 6,642
 (6,642)
Change in unrecognized pension and postretirement benefit costs, net of tax9,937
 —
 —
 —
 9,937
Other comprehensive (loss) income3,295
 —
 (6,642) 6,642
 3,295
Net (loss) income(209,765) 13,927
 (43,610) 29,683
 (209,765)
Comprehensive (loss) income$(206,470) $13,927
 $(50,252) $36,325
 $(206,470)

83




Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
For the year ended December 31, 2014 (as adjusted)
 
 Parent Guarantors Non-Guarantors Eliminations Consolidated
Net Sales$609,507
 $138,165
 $243,658
 $(11,493) $979,837
Costs and expenses:         
Cost of materials (exclusive of depreciation and amortization)464,069
 97,981
 199,851
 (11,493) 750,408
Warehouse, processing and delivery expense101,473
 11,772
 27,314
 —
 140,559
Sales, general and administrative expense71,659
 18,303
 22,503
 —
 112,465
Restructuring expense (income)(3,184) —
 224
 —
 (2,960)
Depreciation and amortization expense19,592
 2,201
 4,251
 —
 26,044
Impairment of goodwill41,308
 —
 14,852
 —
 56,160
Total costs and expenses694,917
 130,257
 268,995
 (11,493) 1,082,676
Operating (loss) income(85,410) 7,908
 (25,337) —
 (102,839)
Interest expense, net25,658
 —
 14,890
 —
 40,548
Other expense, net—
 —
 4,323
 —
 4,323
(Loss) income before income taxes and equity in earnings (losses) of subsidiaries and joint venture(111,068) 7,908
 (44,550) —
 (147,710)
Income tax (benefit) expense(27,411) 2,662
 4,323
 (205) (20,631)
Equity in losses of subsidiaries(43,422) —
 —
 43,422
 —
Equity in earnings of joint venture7,691
 —
 —
 —
 7,691
Net (loss) income(119,388) 5,246
 (48,873) 43,627
 (119,388)
          
Comprehensive (loss) income:         
Foreign currency translation adjustments(5,377) —
 (5,377) 5,377
 (5,377)
Change in unrecognized pension and postretirement benefit costs, net of tax(12,996) —
 —
 —
 (12,996)
Other comprehensive loss(18,373) —
 (5,377) 5,377
 (18,373)
Net (loss) income(119,388) 5,246
 (48,873) 43,627
 (119,388)
Comprehensive (loss) income$(137,761) $5,246
 $(54,250) $49,004
 $(137,761)

84




Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
For the year ended December 31, 2013 (as adjusted)

 Parent Guarantors Non-Guarantors Eliminations Consolidated
Net Sales$711,942
 $134,768
 $236,714
 $(30,358) $1,053,066
Costs and expenses:         
Cost of materials (exclusive of depreciation and amortization)536,926
 95,953
 185,605
 (30,358) 788,126
Warehouse, processing and delivery expense104,897
 12,104
 23,933
 —
 140,934
Sales, general and administrative expense72,060
 18,195
 23,150
 —
 113,405
Restructuring expense (income)7,006
 —
 1,997
 —
 9,003
Depreciation and amortization expense19,977
 2,154
 4,057
 —
 26,188
Total costs and expenses740,866
 128,406
 238,742
 (30,358) 1,077,656
Operating income (loss)(28,924) 6,362
 (2,028) —
 (24,590)
Interest expense, net25,760
 —
 14,782
 —
 40,542
Loss on extinguishment of debt2,606
 —
 —
 —
 2,606
Other expense, net—
 —
 1,924
 —
 1,924
(Loss) income before income taxes and equity in earnings (losses) of subsidiaries and joint venture(57,290) 6,362
 (18,734) —
 (69,662)
Income tax (benefit) expense(19,708) 2,349
 (5,783) —
 (23,142)
Equity in losses of subsidiaries(8,938) —
 —
 8,938
 —
Equity in earnings of joint venture6,987
 —
 —
 —
 6,987
Net (loss) income(39,533) 4,013
 (12,951) 8,938
 (39,533)
          
Comprehensive (loss) income:         
Foreign currency translation adjustments(2,295) —
 (2,295) 2,295
 (2,295)
Change in unrecognized pension and postretirement benefit costs, net of tax4,623
 —
 —
 —
 4,623
Other comprehensive (loss) income2,328
 —
 (2,295) 2,295
 2,328
Net (loss) income(39,533) 4,013
 (12,951) 8,938
 (39,533)
Comprehensive (loss) income$(37,205) $4,013
 $(15,246) $11,233
 $(37,205)



85




Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2015

 Parent Guarantors Non-Guarantors Eliminations Consolidated
Operating activities:         
Net (loss) income$(209,765) $13,927
 $(43,610) $29,683
 $(209,765)
Equity in losses of subsidiaries29,683
 —
 —
 (29,683) —
Adjustments to reconcile net (loss) income to cash (used in) from operating activities174,217
 (8,590) 22,005
 —
 187,632
Net cash (used in) from operating activities(5,865) 5,337
 (21,605) —
 (22,133)
Investing activities:         
Capital expenditures(4,274) (2,158) (1,818) —
 (8,250)
Proceeds from sale of property, plant and equipment8,520
 20,100
 11
 —
 28,631
Net advances to subsidiaries(5,291) —
 —
 5,291
 —
Net cash from (used in) investing activities(1,045) 17,942
 (1,807) 5,291
 20,381
Financing activities:         
Proceeds from long-term debt967,035
 —
 —
 —
 967,035
Repayments of long-term debt(958,916) —
 (2,046) —
 (960,962)
Net intercompany (repayments) borrowings—
 (24,210) 29,501
 (5,291) —
Other financing activities, net(500) —
 —
 —
 (500)
Net cash from (used in) financing activities7,619
 (24,210) 27,455
 (5,291) 5,573
Effect of exchange rate changes on cash and cash equivalents—
 —
 (1,175) —
 (1,175)
Net change in cash and cash equivalents709
 (931) 2,868
 —
 2,646
Cash and cash equivalents - beginning of year511
 977
 6,966
 —
 8,454
Cash and cash equivalents - end of year$1,220
 $46
 $9,834
 $—
 $11,100

86




Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2014 (as adjusted)

 Parent Guarantors Non-Guarantors Eliminations Consolidated
Operating activities:         
Net (loss) income$(119,388) $5,246
 $(48,873) $43,627
 $(119,388)
Equity in losses of subsidiaries43,422
 —
 —
 (43,422) —
Adjustments to reconcile net (loss) income to cash from (used in) operating activities35,682
 (266) 9,100
 (205) 44,311
Net cash (used in) from operating activities(40,284) 4,980
 (39,773) —
 (75,077)
Investing activities:         
Capital expenditures(5,642) (1,530) (5,179) —
 (12,351)
Proceeds from sale of property, plant and equipment7,464
 —
 —
 —
 7,464
Net advances to subsidiaries(25,941) —
 —
 25,941
 —
Net cash used in investing activities(24,119) (1,530) (5,179) 25,941
 (4,887)
Financing activities:         
Proceeds from long-term debt459,406
 —
 2,998
 —
 462,404
Repayments of long-term debt(402,774) —
 (1,037) —
 (403,811)
Net intercompany (repayments) borrowings—
 (2,968) 28,909
 (25,941) —
Other financing activities, net(393) —
 —
 —
 (393)
Net cash from (used in) financing activities56,239
 (2,968) 30,870
 (25,941) 58,200
Effect of exchange rate changes on cash and cash equivalents—
 —
 (611) —
 (611)
Net change in cash and cash equivalents(8,164) 482
 (14,693) —
 (22,375)
Cash and cash equivalents - beginning of year8,675
 495
 21,659
 —
 30,829
Cash and cash equivalents - end of year$511
 $977
 $6,966
 $—
 $8,454

87




Condensed Consolidating Statement of Cash Flows
For the year ended December 31, 2013 (as adjusted)

 Parent Guarantors Non-Guarantors Eliminations Consolidated
Operating activities:         
Net (loss) income$(39,533) $4,013
 $(12,951) $8,938
 $(39,533)
Equity in earnings of subsidiaries8,938
 —
 —
 (8,938) —
Adjustments to reconcile net (loss) income to cash from operating activities92,236
 1,298
 20,384
 —
 113,918
Net cash from operating activities61,641
 5,311
 7,433
 —
 74,385
Investing activities:         
Capital expenditures(6,700) (1,466) (3,438) —
 (11,604)
Proceeds from sale of property, plant and equipment778
 9
 7
 —
 794
Net cash used in investing activities(5,922) (1,457) (3,431) —
 (10,810)
Financing activities:         
Proceeds from long-term debt115,300
 —
 —
 —
 115,300
Repayments of long-term debt(166,190) —
 (4,155) —
 (170,345)
Net intercompany (repayments) borrowings(1,896) (4,262) 6,158
 —
 —
Other financing activities, net1,636
 —
 (496) —
 1,140
Net cash from (used in) financing activities(51,150) (4,262) 1,507
 —
 (53,905)
Effect of exchange rate changes on cash and cash equivalents—
 —
 (448) —
 (448)
Net change in cash and cash equivalents4,569
 (408) 5,061
 —
 9,222
Cash and cash equivalents - beginning of year4,106
 903
 16,598
 —
 21,607
Cash and cash equivalents - end of year$8,675
 $495
 $21,659
 $—
 $30,829


88




(15) Subsequent Events
On February 22, 2016,March 31, 2017, the Company announced the sale inventory atand certain of its Houston and Edmonton facilities that primarily service the oil and gas industries to an unrelated third party. Net proceeds of the transaction were $27,500, with 90% of the gross consideration paid at closing, and the remainder, subject to certain adjustments, payable by December 31, 2016. The Company has further plans to sell the equipment at the Houston and Edmonton facilities and then close the these facilities in 2016. As part of the transaction, the buyer will also purchase the trade name rights to the Tube Supply brand.
On March 11, 2016, the Companysubsidiaries entered into an asset purchaseamendment to the Credit Facilities agreement dated as of December 8, 2016. Under the amendment, the Financial Institutions party to the agreement and Cantor Fitzgerald Securities, in its capacity as Administrative Agent and Collateral Agent (the “Agent”), agreed that the Company would be permitted to deliver its 2016 audited financial statements after March 31, 2016.
On April 6, 2017, the Company and certain of its subsidiaries entered into an additional amendment to the Credit Facilities agreement. Under this amendment, the Financial Institutions and the Agent agreed that the financial covenants of the Company and its subsidiaries with an unrelated third-partyrespect to maintaining a minimum amount of consolidated adjusted EBITDA (as defined in the agreement) and maintaining specified minimum amounts of net working capital (as defined in the agreement) and consolidated liquidity (as defined in the agreement) would cease to apply for the saleperiod from March 31, 2017 through and including May 31, 2018.
On April 6, 2017, the Company and certain of its wholly-owned subsidiary, TPI. The aggregate sales pricesubsidiaries entered into a restructuring support agreement (the “RSA”) with certain of their creditors, including certain holders of the transaction, which is subjectCompany’s (a) term loans under its Credit Facilities agreement, as amended, (b) New Secured Notes issued pursuant to its indenture dated as of February 8, 2016, as amended, and (c) New Convertible Notes issued pursuant to its indenture dated as of May 19, 2016, as amended. The RSA contemplates the financial restructuring of the debt and equity of the Company and the subsidiaries (the “Restructuring”) pursuant to a typical working capital adjustment, is approximately $55,000. AsRestructuring Term Sheet attached to the RSA as an exhibit (the “Term Sheet”). The Term Sheet sets forth the terms and condition of December 31, 2015, TPI did not meet the criteria toRestructuring and provides for the consummation thereof either as part of out-of-court proceedings or by prepackaged Chapter 11 plan of reorganization (a “Plan”) confirmed by the U.S. Bankruptcy Court for the District of Delaware. If this were consummated through a Plan, the Plan would be classified as heldconfirmed following a filing by the Company for sale and accordingly its results are presented with continuing operations.voluntary relief under Chapter 11 of the United States Bankruptcy Code.


(16) Selected Quarterly Data (Unaudited)
During the fourth quarter of 2015, the Company changed its method of accounting for U.S metals inventories, which were previously accounted for under LIFO method, to the average cost method. The change was applied retrospectively to the prior year and prior quarter financial information presented. See Note 1 - Basis of Presentation and Significant Accounting Policies in the consolidated financial statements for discussion of this accounting change and its related impact.
First
Quarter		 Second
Quarter		 Third
Quarter		 Fourth
Quarter		First
Quarter		 Second
Quarter		 Third
Quarter		 Fourth
Quarter
2016       
Net sales$163,848
 $130,692
 $124,893
 $113,717
Gross profit (a)
2,294
 7,980
 9,081
 (8,428)
Loss from continuing operations(44,804) (21,270) (18,298) (29,718)
Income (loss) from discontinued operations, net of income taxes7,934
 —
 (1,688) (138)
Net loss (b)
(36,870) (21,270) (19,986) (29,856)
Basic and diluted earnings (loss) per common share:

       
Continuing operations

$(1.90) $(0.77) $(0.57) $(0.92)
Discontinued operations

0.34
 —
 (0.05) —
Net basic and diluted loss per common share

$(1.56) $(0.77) $(0.62) $(0.92)
2015              
Net sales$222,228
 $199,703
 $184,676
 $164,151
$188,540
 $166,328
 $150,571
 $132,498
Gross profit (a)
20,497
 (12,996) 10,020
 (60,966)14,700
 (19,080) 3,712
 (66,827)
Loss from continuing operations(15,662) (47,095) (28,772) (121,252)
Income (loss) from discontinued operations, net of income taxes535
 843
 955
 683
Net loss (b)
(15,440) (46,808) (27,800) (119,717)(15,127) (46,252) (27,817) (120,569)
Basic loss per share$(0.66) $(1.99) $(1.18) $(5.08)
Diluted loss per share$(0.66) $(1.99) $(1.18) $(5.08)
2014       
Net sales$253,410
 $249,492
 $245,469
 $231,466
Gross profit (a)
21,791
 14,822
 20,613
 5,600
Net loss (b)
(14,610) (67,066) (8,028) (29,684)
Basic loss per share$(0.63) $(2.87) $(0.34) $(1.27)
Diluted loss per share$(0.63) $(2.87) $(0.34) $(1.27)
Basic and diluted earnings (loss) per common share:

       
Continuing operations

$(0.67) $(2.00) $(1.22) $(5.14)
Discontinued operations

0.02
 0.04
 0.04
 0.03
Net basic and diluted loss per common share

$(0.65) $(1.96) $(1.18) $(5.11)
(a) Gross profit equals net sales less cost of materials, warehouse, processing, and delivery costs and depreciation and amortization expense.
(b) Results include restructuring expense (income) for all quarters presented (see Note 1011 - Restructuring Activity), and a $33,742 impairment of intangible assets charge and a $61,472 charge for the write-down of inventory and purchase commitments in the fourth quarter of 2015, and a $56,160 goodwill impairment charge for second quarter of 2014.2015.

89




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of A.M. Castle & Co.

Oak Brook, Illinois

We have audited the accompanying consolidated balance sheets of A.M. Castle & Co. and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Kreher Steel Company, LLC, a 50% owned joint venture, the Company’s investment in which is accounted for by use of the equity method. The accompanying consolidated financial statements of the Company include its equity investment in Kreher Steel Company, LLC of $35,690 and $37,443 as of December 31, 2015 and 2014, respectively, and its equity earnings (loss) in Kreher steel Company, LLC of ($1,426), $7,691, and $6,987 for each of the three years in the period ended December 31, 2015. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Kreher Steel Company, LLC, is based solely on the report of the other auditors.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of A.M. Castle & Co. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the consolidated financial statements, the Company has elected to change its method of inventory costing for its United States metals inventory from the last-in first-out method to the average cost method in 2015. Such change has been applied retrospectively to all periods presented.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2016 expressed an unqualified opinion on the Company's internal control over financial reporting.



/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Chicago, Illinois
March 15, 2016

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Kreher Steel Company, LLC and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31,
 2015 2014
ASSETS   
Current assets   
Cash and cash equivalents$786,236
 $1,091,123
Accounts receivable (net of allowance for doubtful accounts of $496,141 in 2015 and $485,172 in 2014)13,370,464
 25,686,268
Inventory, net48,999,247
 64,513,673
Deferred income taxes1,902,878
 1,153,708
Prepaid income taxes941,317
 566,087
Prepaid expenses and other current assets644,708
 667,768
Total current assets66,644,850
 93,678,627
    
Property and equipment   
Land and building14,786,040
 14,785,593
Machinery and equipment21,057,256
 20,217,761
Furniture, fixtures and office equipment2,119,716
 2,160,436
Automobiles and trucks1,112,225
 1,106,946
Leasehold improvements3,325,169
 2,700,101
Construction in progress769,113
 345,996
 43,169,519
 41,316,833
Less accumulated depreciation and amortization20,504,836
 18,620,949
Property and equipment, net22,664,683
 22,695,884
Deferred financing costs, net of amortization69,672
 76,290
Goodwill—
 3,525,247
Intangible assets, net—
 30,624
Other assets42,730
 49,633
Total assets$89,421,935
 $120,056,305
    
LIABILITIES AND MEMBER'S CAPITAL   
Current liabilities   
Current portion of capital lease obligations$29,181
 $17,816
Accounts payable6,064,851
 9,489,017
Accrued expenses1,697,866
 2,389,143
Total current liabilities7,791,898
 11,895,976
Revolving line of credit9,000,000
 33,100,000
Deferred income taxes, non-current2,181,598
 2,330,923
Long-term portion of capital lease obligations105,205
 38,741
Commitments and contingencies   
Member's capital70,343,234
 72,690,665
Total liabilities and member's capital$89,421,935
 $120,056,305


The accompanying notes are an integral part of these statements.

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Kreher Steel Company, LLC and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Years ended December 31,
 2015 2014 2013
Net revenues$160,103,637
 $259,486,523
 $230,350,590
Cost of sales136,665,061
 216,093,492
 192,600,138
Gross profit23,438,576
 43,393,031
 37,750,452
Operating expenses     
Selling11,533,549
 13,670,360
 12,466,985
General and administrative11,583,469
 10,263,243
 8,956,275
Non cash goodwill impairment charge3,525,247
 —
 —
Total operating expenses26,642,265
 23,933,603
 21,423,260
(Loss) income from operations(3,203,689) 19,459,428
 16,327,192
Other (income) expense     
Interest expense433,323
 343,640
 397,256
Interest income(104) (2,985) (155)
Other income, net(40,028) (191,268) (190,593)
Net (loss) income before taxes(3,596,880) 19,310,041
 16,120,684
Income tax (benefit) provision(720,690) 3,755,450
 2,401,060
NET (LOSS) INCOME(2,876,190) 15,554,591
 13,719,624
      
Other comprehensive (loss) income     
Foreign currency translation adjustment1,191,356
 (397,812) (362,989)
COMPREHENSIVE (LOSS) INCOME$(1,684,834) $15,156,779
 $13,356,635


























The accompanying notes are an integral part of these statements.


92




Kreher Steel Company, LLC and Subsidiaries
CONSOLIDATED STATEMENTS OF MEMBERS’ CAPITAL
Three years ended December 31, 2015
       Accumulated  
       other Total
 Member's Retained Accumulated comprehensive member's
 contribution earnings distributions income (loss) capital
Balance at January 1, 2013, 400 units1,802,319
 116,660,961
 (42,118,753) 15,544
 76,360,071
Net income—
 13,719,624
 —
 —
 13,719,624
Distributions—
 —
 (7,925,562) —
 (7,925,562)
Foreign currency translation adjustment—
 —
 —
 (362,989) (362,989)
Balance at December 31, 2013, 400 units1,802,319
 130,380,585
 (50,044,315) (347,445) 81,791,144
Net income—
 15,554,591
 —
 —
 15,554,591
Distributions—
 —
 (24,257,258) —
 (24,257,258)
Foreign currency translation adjustment—
 —
 —
 (397,812) (397,812)
Balance at December 31, 2014, 400 units1,802,319
 145,935,176
 (74,301,573) (745,257) 72,690,665
Net loss—
 (2,876,190) —
 —
 (2,876,190)
Distributions—
 —
 (662,597) —
 (662,597)
Foreign currency translation adjustment—
 —
 —
 1,191,356
 1,191,356
Balance at December 31, 2015, 400 units$1,802,319
 $143,058,986
 $(74,964,170) $446,099
 $70,343,234



























The accompanying notes are an integral part of these statements.

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Kreher Steel Company, LLC and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31,
 2015 2014 2013
Cash flows from operating activities     
Net (loss) income$(2,876,190) $15,554,591
 $13,719,624
Adjustments to reconcile net (loss) income to net cash provided by operating activities     
Depreciation and amortization2,389,751
 2,293,664
 2,216,894
Deferred taxes(898,495) (137,968) (390,537)
Non cash goodwill impairment charge3,525,247
 —
 —
Bad debt expense (adjustment)54,497
 48,602
 (607,635)
(Gain) loss on sale of property and equipment(11,020) 20,487
 9,635
Changes in assets and liabilities     
Accounts receivable12,197,484
 (1,835,526) (5,400,225)
Inventory14,828,506
 (11,766,966) 13,591,901
Prepaid expenses and other assets(363,953) 340,740
 608,511
Accounts payable(1,524,282) 891,895
 (1,344,931)
Accrued expenses(673,964) 553,598
 (723,252)
Net cash provided by operating activities26,647,581
 5,963,117
 21,679,985
Cash flows from investing activities     
Purchases of property and equipment(2,176,204) (3,042,371) (1,788,559)
Proceeds from sale of property and equipment22,200
 54,963
 89,467
Net cash used in investing activities(2,154,004) (2,987,408) (1,699,092)
Cash flows from financing activities     
Repayment on revolving lines of credit(27,300,060) (7,700,000) (25,100,000)
Borrowings on revolving lines of credit3,200,000
 28,500,000
 13,400,000
Repayment on capital lease obligations and other debt(33,513) (1,858,365) (211,648)
Distributions to member(662,597) (24,257,258) (7,925,562)
Net cash used in financing activities(24,796,170) (5,315,623) (19,837,210)
Effect of exchange rate changes on cash and cash equivalents(2,294) (68,313) (17,688)
Net (decrease) increase in cash and cash equivalents(304,887) (2,408,227) 125,995
Cash and cash equivalents at beginning of year1,091,123
 3,499,350
 3,373,355
Cash and cash equivalents at end of year$786,236
 $1,091,123
 $3,499,350
Supplemental disclosures of cash flow information     
Cash paid during the year for     
Interest$413,697
 $243,487
 $346,089
Income taxes, net of refunds609,425
 3,770,000
 1,994,098
Supplemental disclosures of non-cash investing and financing activities     
Acquisition of machinery and equipment through capital leases$111,342
 $—
 $46,969
Acquisition of property and equipment through accounts payable$31,823
 $165,594
 $19,320


The accompanying notes are an integral part of these statements.


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NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Company

Kreher Steel Company, LLC and Subsidiaries (the Company) was formed as a limited liability company (LLC) on January 11, 1996, and commenced business on May 1, 1996. The LLC member’s initial contribution consisted of the net assets of Kreher Steel Co., Inc.

The Company is a national distributor and processor ofcarbon and alloy steel bar products. The Company has locations throughout the United States and in Edmonton, Canada, and primarily sells in the vicinity of these locations.

Principles of Consolidation

The Company’s financial statements are presented on a consolidated basis and include its wholly owned subsidiaries, Kreher Wire Processing, Inc. and Special Metals, Inc., as well as a branch of Kreher Steel Company, LLC located in Edmonton, Canada. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions in the United States of America that are insured by the Federal Deposit Insurance Corporation (FDIC). At December 31, 2015 and 2014, the Company had approximately $700,000 and $909,000, respectively, in excess of FDIC insured limits. The Company has not experienced any losses related to these balances, and management believes its credit risk to be minimal. At December 31, 2015 and 2014, the Company had approximately $163,000 and $339,000, respectively, of cash in foreign bank accounts. The Company’s cash in foreign bank accounts is insured up to $100,000.

Shipping and Handling Fees

For the years ended December 31, 2015, 2014 and 2013, shipping and handling costs billed to customers amounted to approximately $881,000, $1,859,000, and $1,174,000, respectively, and were included in selling expenses.

Financial Instruments and Risk Management

Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising the Company’s customer base and their dispersion across different businesses and geographic areas. At December 31, 2015, 2014 and 2013, there were no individual customers that made up more than 10% of consolidated sales.

The Company’s financial instruments include cash equivalents, accounts receivable, accounts payable and notes payable. The carrying amounts of cash equivalents, accounts receivable, accounts payable and notes payable approximate fair value due to their short-term nature and variable interest rates paid.


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The Financial Accounting Standards Board has established a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which give the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

Prices for steel fluctuate based on worldwide production and, as a result, the Company is subject to the risk of future changing market prices. Furthermore, the Company purchased approximately 10%, 9%, and 7% of its inventory from foreign suppliers for the years ended December 31, 2015, 2014 and 2013, respectively.

  Fair value measures at
  December 31, 2015
  Significant unobservable inputs (Level 3) Total losses
Nonrecurring fair value measurements    
Goodwill (a) $—
 $3,523,247

(a) In accordance with Subtopic 350-20, goodwill with a carrying amount of $3,525,247 was written down to its implied fair value of $0, resulting in a full impairment charge, which was included in earnings for the year ended December 31, 2015.

Inventory

Inventory is valued at the lower of cost or market. Cost is determined by the specific identification method. The Company provides a reserve for obsolete and slow-moving inventory.

Changes in the Company’s inventory reserve are as follows at December 31:

 2015 2014
    
Beginning balance$1,773,961
 $1,828,606
(Adjustment) Provision(76,504) 106,663
Write-offs(15,813) (161,308)
    
Total inventory reserve$1,681,644
 $1,773,961

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is based on the straight-line method and the estimated useful lives of the property and equipment. Depreciation of leasehold improvements is based on the estimated useful life or the term of the lease, whichever is shorter. The Company uses an accelerated

96




method of depreciation for tax purposes. Depreciation expense for December 31, 2015, 2014 and 2013, was approximately $2,359,000, $2,177,000, and $2,098,000, respectively.

Depreciable lives by asset classification are as follows:

Asset descriptionLife
Furniture and fixtures5 - 7 years
Office equipment5 - 7 years
Machinery and equipment7 - 10 years
Automobiles and trucks3 - 5 years
Building and leasehold improvements7 - 40 years

Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized. Upon sale or retirement, the related cost and accumulated depreciation or amortization are removed from the respective accounts, and any resulting gain or loss is included in operations.

Long-lived Assets

The Company reviews the carrying values of its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair value less cost to sell. There was a triggering event identified during the year ended December 31, 2015, which required an impairment analysis at Special Metals, Inc. Long-lived assets were determined to be not impaired at December 31, 2015. No triggering events were identified during the year ended December 31, 2014, that would require an impairment analysis. Additionally, no assets were held for disposal as of December 31, 2015 or 2014.

Goodwill and Intangible Assets

Goodwill represents the excess of purchase price paid over the fair values of net assets acquired and liabilities assumed in the Company’s acquisitions.

The carrying value of the Company's goodwill was $0 and $3,525,247 at December 31, 2015 and 2014 respectively. The Company reviews goodwill to assess recoverability from future operations on December 31 of each annual reporting period, and whenever events and circumstances indicate that the carrying values may not be recoverable. At the time of the review, the Company determines if it will first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC 350.

When the two-step goodwill impairment test is performed, the Company evaluates the recoverability of goodwill by estimating the future reporting unit discounted cash flows. In determining the estimated future cash flows, the Company considers current and projected future levels of income as well as business trends and economic conditions. When the Company’s estimated fair value of the reporting unit is less than the carrying value, a second step of the impairment analysis is performed. In this second step, the implied fair value of goodwill is calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities. If the implied fair value of goodwill is less than the carrying value of the reporting unit’s goodwill, the difference is recognized as an impairment loss.

The Company determined that a triggering event had occurred between December 31, 2014 and 2015 which required goodwill to be evaluated for impairment. As of September 30, 2015, the recoverability of all goodwill was evaluated by estimating future discounted cash flows. The Company recorded a noncash charge for the impairment of goodwill in the amount of $3,525,247 on both a pre-tax and after-tax basis. This impairment charge is classified as an operating expense in the statement of comprehensive (loss) income.

The key factor leading to the impairment of the Company’s goodwill was the continued downturn in the oil market due to overproduction in the world. The price of West Texas crude oil decreased from $93 per barrel to $45 per barrel at

97




September 30, 2014 and 2015, respectively. The extended downturn led to changes in assumptions regarding future cash flows which culminated in the goodwill impairment.

Intangible Assets

Intangible assets include non-competition agreements and non-contractual customer relationships. The fair value of identifiable intangible assets was estimated based on discounted future cash flow projections. Intangible assets are amortized on a straight-line basis over their estimated economic lives.

The Company evaluates the recoverability of identifiable assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, a significant decrease in the market value of the asset, a significant adverse change in the extent or manner in which an asset is used or an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. All intangible assets were fully amortized as of December 31, 2015.

Revenue Recognition

Revenue from the sale of goods is recognized at the time of shipment, except for revenue from sales of products to certain customers whose contractual terms specify FOB destination. Revenue from sales of products to these customers is recognized at the time of receipt by the customer when title and risk of loss pass to the customer.

Accounts Receivable

Credit is extended based on an evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are generally due within 30 days of the negotiated terms and are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company maintains reserves for potential losses on receivables and credits from its customers, and these losses have not exceeded management’s expectations. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts.

Economic Dependency - Major Suppliers

During the years ended December 31, 2015, 2014 and 2013, the Company purchased approximately 53%, 46% and 51%, respectively, of its materials from five suppliers.

Deferred Financing Costs

Deferred financing costs are amortized over the life of the underlying credit agreement or the expected remaining life of the underlying credit agreement.

Income Taxes

As an LLC, the Company is not subject to federal and state income taxes, and its income or loss is allocated to and reported in the tax returns of its member. Accordingly, no liability or provision for federal and state income taxes attributable to the LLC’s operations is included in the accompanying financial statements. The Company provides for income taxes for its wholly owned subsidiaries, Kreher Wire Processing, Inc. and Special Metals, Inc., which are subject to federal and state income taxes as they are structured as C corporations. Special Metals Canada, which is structured as a foreign branch of a domestic company, will pay federal and provincial taxes in Canada. The taxes paid will be reported to the member in order to claim foreign tax credits.

The Company applies a comprehensive model for the financial statement recognition, measurement, classification and disclosure of uncertain tax positions. In the first step of the two-step process, the Company evaluates the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. In the second step, the Company measures the tax benefit as the largest amount that is more than 50% likely of being

98




realized upon settlement. As of December 31, 2015 and 2014, the Company determined that there are no uncertain tax positions with a more than 50% likelihood of being realized upon settlement.

Advertising Costs

Advertising costs are charged to expense when the advertisement is first run. The Company expensed advertising costs of approximately $107,000, $140,000, and $158,000 in 2015, 2014 and 2013, respectively.

Reclassifications

Certain amounts from prior years have been reclassified to conform to the current year’s presentation. These reclassifications include netting member's contributions and treasury stock into a single line item in the statement of member's capital.


NOTE B - INTANGIBLE ASSETS

Intangible assets are amortized using the straight-line method, using the remaining useful life. At December 31, 2015, these intangible assets were fully amortized.

The following is a summary of intangible assets at December 31:

 2015 2014
Intangible assets   
Finite life   
Non-compete agreements$220,000
 $220,000
Non-contractual customer relationships980,000
 980,000
    
 1,200,000
 1,200,000
    
Less accumulated amortization1,200,000
 1,169,376
    
Net intangible assets$—
 $30,624

Amortization expense related to identifiable intangible assets was $30,624, $122,496, and $122,496 for the years ended December 31, 2015, 2014 and 2013, respectively. The intangible assets related to the non-compete agreements and non-contractual customer relationships which became fully amortized during 2011 and 2015, respectively.

NOTE C - TRANSACTIONS WITH AFFILIATES

Included in accounts receivables at December 31, 2015 was approximately $1,000 due from companies related through common ownership. There were no accounts receivables from companies related through common ownership at December 31, 2014.

Included in accounts payable at December 31, 2015 and 2014, was approximately $49,000 and $17,000, respectively, due to companies related through common ownership.

Sales to and purchases from companies related through common ownership for the year ended December 31, 2015, were approximately $51,000 and $1,837,000,respectively, for the year ended December 31, 2014, were approximately $364,000 and $4,178,000, respectively, and for the year ended December 31, 2013, were approximately $118,000 and $1,226,000, respectively.



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NOTE D - ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the Company’s allowance for doubtful accounts are as follows at December 31:

 2015 2014
    
Beginning balance$485,172
 $475,000
Bad debt expense54,497
 48,602
Recoveries—
 1,250
Accounts written off(43,528) (39,680)
    
Total allowance for doubtful accounts$496,141
 $485,172


NOTE E - DEBT

Debt as of December 31, 2015 and 2014, is as follows:

 2015 2014
    
Revolving line of credit$9,000,000
 $33,100,000

In April 2012, the Company entered into a new loan agreement. The loan named both the Company and its subsidiary, Special Metals, Inc., as co-borrowers. In June 2014, the Company amended the agreement to include Kreher Wire Processing, Inc. as a co-borrower. The loan is for $50,000,000, which can be increased to $65,000,000 in $5,000,000 increments. The interest charged on the loan is divided into the LIBOR portion and the prime rate portion. The outstanding balance on the LIBOR portion at a rate of 1.67% was $9,000,000 at December 31, 2015. There was no outstanding balance on the prime rate portion at December 31, 2015. The outstanding balance on the LIBOR portion at a rate of 1.42% was $29,000,000 at December 31, 2014. The outstanding balance on the prime rate portion at a rate of 3.25% was $4,100,000 at December 31, 2014. The loan is secured by the Company’s receivables, inventory and fixed assets. As of December 31, 2015, the Company’s debt of $9,000,000 is set to mature during the year ending December 31, 2019. The carrying value of debt approximates fair value given the variable nature of the interest rates.

The Company is in compliance with all covenants related to the revolving credit agreements and all other notes payable.

NOTE F - INCOME TAXES

As an LLC, the Company is not subject to federal and state income taxes, and its income or loss is allocated to and reported in the tax returns of its member. The Company provides for income taxes for its wholly owned subsidiaries, Kreher Wire Processing, Inc. and Special Metals, Inc., which are subject to federal and state income taxes. The Company also provides for federal and provincial taxes at Special Metals Canada, which is structured as a foreign branch of a domestic company. The taxes paid will be reported to the member in order to claim foreign tax credits.


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The tax effect of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2015 and 2014, are as follows:

 2015 2014
Deferred tax assets   
UNICAP$1,524,318
 $762,845
Accounts receivable and inventory reserves and other378,560
 390,863
Foreign currency unrealized loss543,749
 —
    
Total gross deferred tax assets2,446,627
 1,153,708
    
Valuation allowance(543,749) —
    
Total net deferred tax assets1,902,878
 1,153,708
    
Deferred tax liabilities   
Amortization of intangibles—
 (12,250)
Depreciation and other(2,181,598) (2,318,673)
    
Total deferred tax liabilities(2,181,598) (2,330,923)
    
Net deferred tax liabilities$(278,720) $(1,177,215)

A valuation allowance is recoded when it is more likely than not that some or all deferred tax assets in a given jurisdiction will not be realized. Each year, the Company analyzes its deferred tax assets to determine if future recognition of the assets will be attained. This analysis considers all available positive and negative evidence, including past operating results, the existence of cumulative losses, and estimates of future taxable income. In estimating future taxable income, management develops assumptions, including the estimated amount of future pretax operating income, the reversal of temporary differences, the utilization of net operating losses carryforwards to offset taxable income, and the implementation of strategic initiatives. These assumptions require significant judgement involving estimates of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying business. Based on the available objective evidence per ASC 740 accounting standards, including the Company’s history of losses at their Edmonton Canada branch, it is more likely than not that the net deferred tax assets at the Company’s Canada branch will not be fully realizable. Accordingly, as prescribed by ASC 740, the Company provided for a full valuation allowance against the net deferred tax assets at the Company’s Canada branch as of December 31, 2015. As a results of this analysis, the Company recorded a valuation allowance of $543,749 at December 31, 2015.

The net current and non-current components of the deferred income taxes recognized in the balance sheets at December 31, 2015 and 2014, are as follows:

 2015 2014
    
Net current assets$1,902,878
 $1,153,708
Net long-term liabilities(2,181,598) (2,330,923)
    
Total net deferred tax liabilities$(278,720) $(1,177,215)


101




Income tax expense consists of the following components as of December 31:

 2015 2014 2013
Current     
Federal$308,379
 $3,289,892
 $2,553,576
State107,995
 593,421
 212,006
Foreign(238,569) 10,105
 26,015
Deferred(898,495) (137,968) (390,537)
      
Total income tax (benefit) expense$(720,690) $3,755,450
 $2,401,060

The differences between the federal statutory rate of 34% and the effective rate are due to state income taxes, permanent deductions and the fact that no tax provisions are recorded for operations attributable to Kreher Steel Company, LLC in the accompanying financial statements. Tax years dated back to December 31, 2011, are open for federal and state tax audit purposes. The total effective rate of the subsidiaries at December 31, 2015, 2014 and 2013, was 20.0% 19.4%, and 14.9%, respectively.

A reconciliation of the effective income tax rate to the U.S. statutory tax rate is as follows:

 2015 2014 2013
      
U.S. statutory tax rate34.0 % 34.0 % 34.0 %
Non-taxable LLC income30.3
 (16.2) (19.8)
Valuation allowance(14.0) —
 —
State and local taxes - net of federal tax expense(3.0) 3.1
 1.6
Differences in foreign taxes2.4
 (0.1) (0.1)
Goodwill impairment(33.3) —
 —
Permanent and other3.6
 (1.4) (0.8)
      
Effective tax rate20.0 % 19.4 % 14.9 %


NOTE G - COMMITMENTS

Operating Lease Commitments

The Company leases certain equipment and warehouse space under operating lease obligations with rent escalation clauses for the warehouse space only. Accordingly, the Company has recorded these lease obligations on a straight-line basis and recorded a deferred rent liability of approximately $31,000 and $28,000 for the years ended December 31, 2015 and 2014, respectively. Rent expense, net of sublease income for the years ended December 31, 2015, 2014 and 2013, was approximately $1,154,000, $1,220,000, and $1,335,000, respectively. The following shows minimum future rental payments for the next five years under these obligations:

Years ending December 31,  
   
2016 $726,524
2017 545,329
2018 493,038
2019 240,945
2020 and thereafter 19,213

102






Capital Lease Commitments

In 2010, 2013 and 2015, Special Metals, Inc. entered into several lease agreements that met the criteria for capitalization. At December 31, 2015 and 2014, the gross amount of cost related to capital leases included in machinery and equipment was approximately $308,000 and $197,000, respectively. Related accumulated amortization at December 31, 2015 and 2014 was approximately $182,000 and $154,000, respectively. The total rental payments incurred for the years ended December 31, 2015, 2014 and 2013, were approximately $62,000, $44,000, and $57,000, respectively.

Total future capital lease obligations relating to the leases are as follows:

Years ending December 31,  
2016 $52,189
2017 52,189
2018 43,086
2019 24,879
2020 5,569
Total future capital lease obligation payments 177,912
Less amounts representing interest (43,526)
Present value of future capital lease obligation payments $134,386

Health Insurance

The Company and its wholly owned subsidiary maintained a fully insured health insurance plan. On January 1, 2014, the Company and the wholly owned subsidiary changed to a partially self-funded plan under which the Company is self-insured to a maximum of $65,000 per individual per year. The maximum Company liability is approximately $2,556,000 for the group as a whole. Approximately $2,077,000, $1,977,000, and $2,060,000 was expensed in 2015, 2014 and 2013, respectively, under these plans. The Company has accrued approximately $298,000 and $306,000 for health insurance claims not processed at December 31, 2015 and December 31, 2014, respectively.


NOTE H - EMPLOYEE BENEFIT PLAN

The Company maintains a qualified plan under Section 401(k) of the Internal Revenue Code. This plan is available for all employees who have completed one year or more of continuous service. The plan allows employees to contribute an annual limit of the lesser of 60% of eligible compensation or $18,000 and $17,500 (the federal limit for 2015 and 2014, respectively). The Company has a non-discretionary match of 100%, up to 4% of what employees elect. The Company also has a profit-sharing match of $500 per participant, which is discretionary. This discretionary match was paid in 2015, 2014 and 2013. Participants are fully vested at all times in their contributions and become fully vested in the Company’s contributions over a defined period. Approximately $295,000, $301,000 and $276,000 was charged to expense for the years ended December 31, 2015, 2014 and 2013, respectively. The plan is responsible for costs associated with its administration.

The Company also maintains a qualified plan under Section 401(k) of the Internal Revenue Code at a wholly owned subsidiary. This plan is available for all employees who have completed one year or more of continuous service. The plan allows employees to contribute an annual limit of $18,000 and $17,500 (the federal limit for 2015 and 2014, respectively). The Company will match contributions at the discretion of management. The Company also has a discretionary profit-sharing contribution. Participants are fully vested in all contributions. During 2015, 2014 and 2013, approximately $5,000, $420,000 and $360,000, respectively, was charged to expense. The plan is responsible for costs associated with its administration.



103




NOTE I - CONTINGENCIES

The Company is subject to various legal proceedings that have arisen in the normal course of business. In the opinion of management, these actions, when concluded and determined, will not have a material adverse effect on the financial position or operations of the Company.

NOTE J - MEMBER’S CAPITAL

The Company is a single-member LLC and shall continue until December 31, 2045.

NOTE K - SUBSEQUENT EVENTS

The Company evaluated its December 31, 2015 financial statements for subsequent events through February 19, 2016, the date the financial statements were available to be issued. The Company is not aware of any subsequent events that would require recognition or disclosure in the financial statements.

104




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of A.M. Castle & Co.
Oak Brook, Illinois

We have audited the accompanying consolidated balance sheets of A.M. Castle & Co. and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive loss, stockholders’ (deficit) equity, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of Kreher Steel Company, LLC, (a joint venture), in which the Company’s investment was accounted for by use of the equity method, for the years ended December 31, 2015 and 2014. The accompanying consolidated financial statements of the Company include its equity investment in Kreher Steel Company, LLC of $35,690 as of December 31, 2015, and its equity earnings (loss) in Kreher Steel Company, LLC of ($1,426) and $7,691 for the years ended December 31, 2015 and December 31,2014, respectively. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Kreher Steel Company, LLC, for the years ended December 31, 2015 and 2014, is based solely on the report of the other auditors.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of A.M. Castle & Co. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 7, 2017 expressed an unqualified opinion on the Company's internal control over financial reporting.



/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Chicago, Illinois
April 7, 2017


















REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Kreher Steel Company, LLC

We have audited the accompanying consolidated balance sheets of Kreher Steel Company, LLC (a Delaware limited liability corporation) and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive (loss) income, member’s capital, and cash flows for each of the threetwo years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Kreher Steel Company, LLC and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the threetwo years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.


/s/ Grant Thornton LLP
Grant Thornton LLP

Chicago, Illinois
February 19, 2016



105




ITEM 9 — Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
None.
ITEM 9A — Controls & Procedures

Disclosure Controls and Procedures

A review and evaluation was performed by the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Security Exchange Act of 1934). Based upon that review and evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2015.2016.

(a) Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in the Securities Exchange Act of 1934 rule 240.13a-15(f). The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Internal control over financial reporting, no matter how well designed, has inherent limitations and may not prevent or detect misstatements. Therefore, even effective internal control over financial reporting can only provide reasonable assurance with respect to the financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company, under the direction of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 20152016 based upon the framework published by the Committee of Sponsoring Organizations of the Treadway Commission, referred to as the Internal Control—Control - Integrated Framework (2013).

Based on our evaluation under the framework in Internal Control — Integrated Framework (2013), the Company’s management has concluded that our internal control over financial reporting was effective as of December 31, 2015.2016.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 20152016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report included in Item 9A of this annual report.

(b) Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
A.M. Castle & Co.
Oak Brook, Illinois

We have audited the internal control over financial reporting of A.M. Castle & Co. and subsidiaries (the "Company") as of December 31, 2015,2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

106




A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015,2016, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 20152016 of the Company and our report dated March 15, 2016April 7, 2017 expressed an unqualified opinion on those financial statements and includes an explanatory paragraph relating to the Company’s election to change its method of accounting for its United States metals inventory from the last-in first-out method to the average cost method.statements.

/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP

Chicago, Illinois
March 15, 2016April 7, 2017

(c) Change in Internal Control Over Financial Reporting

An evaluation was performed by the Company’s management, including the CEO and CFO, of any changes in internal controls over financial reporting that occurred during the last fiscal quarter and that materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting. The evaluation did not identify any change in the Company’s internal control over financial reporting that occurred during the latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Item 9B — Other Information
None.

107




PART III
ITEM 10 — Directors, Executive Officers and Corporate Governance

Executive Officers

Information with respect to our executive officers is set forth in Part I of this Annual Report under the caption “Executive Officers of the Registrant.”

Directors

Information with respect to our directors is set forth below. Information with respect to Mr. Scheinkman is set forth in Part I of this Annual Report under the caption “Executive Officers of the Registrant.”

Brian P. AndersonJonathan B. MellinDirector since 2005October 2014Age 65
Board Chairman

Committees:

Governance
Chairperson

Audit
Member

Human Resources Interim Chairperson





Non-executive Chairman of the Board of the Company since 2010. Former Executive Vice President/CFO of OfficeMax, Incorporated, a distributor of business to business and retail office products, from 2004 to 2005. Mr. Anderson was also Senior Vice President and Chief Financial Officer of Baxter International, Inc., a medical products and services company, from 1998 to 2004. Mr. Anderson also serves on the board of directors of W.W. Grainger, Inc., a global broad line supplier of maintenance, repair, and operating products, since 1999, PulteGroup, Inc., a homebuilding company, since 2005, and James Hardie Industries, Plc, a global manufacturer of fiber cement siding and backerboard, since 2006.

Mr. Anderson served as the chief financial officer of two publicly-traded companies, held finance positions including corporate controller and vice president of audit, and was an audit partner at an international public accounting firm. As a result, he has in-depth knowledge of accounting and finance as well as familiarity in risk management and risk assessment and the application of the Committee of Sponsoring Organizations of the Treadway Commission internal controls framework. In addition, while serving as a chief financial officer, Mr. Anderson had primary responsibility for the supply chain and logistics of that company, experience that is very valuable to companies in Castle’s industry. Mr. Anderson presently serves on the compensation committee of one public company, the governance committee of three, and the audit committee of four, including Castle.

Reuben S. DonnelleyDirector since 2011Age 5753
  
Committees:


General Partner at W.B. & Co., a nominee partnership, since 2013. Mr. Donnelley served as a broker at Cassandra Trading Group, L.L.C., a registered broker-dealer and market maker, from 2005 to 2013. He is also a director of Simpson Estates, Inc., a private asset management firm, since 1996.

Mr. Donnelley’s years of experience with capital market transactions and private equity investments, including extensive experience with investments in both public and private companies, provides valuable financial expertise to the Board.




108




Pamela Forbes LiebermanDirector since 2007Age 61
Committees:

Audit Chairperson

Governance
Member

Human Resources Member
Interim Chief Operating Officer of Entertainment Resource, Inc., a video distributor, from March 2006 to August 2006. Ms. Forbes Lieberman was Director, President, and Chief Executive Officer of TruServ Corporation (now known as True Value Company), a member owned wholesaler of hardware and related merchandise, and provider of marketing, merchandising and other value added services, from 2001 to 2004. Ms. Forbes Lieberman is also a director of Standard Motor Products, Inc., a leading manufacturer, distributor, and marketer of replacement parts for motor vehicles, since 2007, and VWR Corporation, a provider of laboratory products, services, and solutions, since 2009. She is also a member of the Board of Directors of the Company’s Kreher Steel joint venture, and has served as Chairperson of the Company’s Audit Committee since 2012.

Ms. Forbes Lieberman’s service as Chief Executive Officer of True Value Company brings to the Board senior executive experience leading a publicly traded wholesale/distribution business, with expertise in turnaround management, communications, culture change, and distribution and supply chain strategies. Ms. Forbes Lieberman also possesses valuable financial expertise, including extensive experience as chief financial officer of various distribution and manufacturing businesses, both public and private, where she was directly responsible for financial and accounting issues, acquisitions and divestitures and information systems. She also possesses public accounting expertise as a former senior manager at PricewaterhouseCoopers LLP. Through her service on the boards described above, she has valuable experience in governance, executive compensation, and finance, including private equity, and audit issues.

Gary A. MasseDirector since 2012Age 54
Committees:

Audit
Member

Human Resources Member

Finance Member

Chief Executive Officer of Coveris Holdings Corp., a global plastics packaging company, since April 2014. Mr. Masse previously served as Chief Executive Officer of Precision Holding, LLC, a leading global manufacturing and engineering services company, from 2010 to April 2014. Mr. Masse served as Group President - Cooper Tools & Hardware, a business unit of Cooper Industries Plc, a diversified manufacturer of electrical products, tools and hardware, from 2006 to 2010. Mr. Masse joined Cooper after nine years with Danaher Corporation, a global designer, manufacturer and marketer of a wide variety of industrial products, where he most recently served as Vice President and Group Executive of its Gilbarco/Veeder-Root business, a leading provider of equipment and integrated technology solutions to the retail petroleum and commercial fueling industry, from 2003 to 2005.

Mr. Masse’s service as Chief Executive Officer of Coveris Holdings Corp. and previously of Precision Holding, LLC and his other executive and management experience well qualifies him to serve on our Board. His expertise in leading complex global organizations, as well as strong background and experience in engineering, manufacturing (domestic and international), and business development contributes greatly to the Board’s composition.

Jonathan B. MellinDirector since 2014Age 52
Committees:

Finance
Chairperson

Governance
Member

Human Resources Member
President and Chief Executive Officer of Simpson Estates, Inc., a private asset management firm, since 2013. Mr. Mellin became President of Simpson Estates, Inc. in 2012, prior to being appointed as Chief Executive Officer. Prior to joining Simpson Estates, Inc., Mr. Mellin served as the Chief Financial Officer for the Connors Family group of companies, from 2005 to 2012.

Mr. Mellin’s years of experience as the Chief Financial Officer of large private companies and subsidiaries of publicly-held companies provides valuable financial expertise to the Board, including extensive experience in annual business planning, forecasting, and expense reduction. His expertise in leading complex finance functions as well as strong background and experience with strategic acquisitions and major restructuring projects contributes greatly to the Board’s composition. Mr. Mellin is also a Certified Public Accountant.





Howard Brod BrownsteinDirector since September 2016Age 66
Committees:

Audit
Member

Human Resources
Member


Mr. Brownstein is the Founder and President of The Brownstein Corporation, a nationally-known management advisory firm. Mr. Brownstein serves on the Board of Directors of PICO Holdings (Nasdaq: PICO), and chairs its Audit Committee and is its “Financial Expert” for Sarbanes-Oxley purposes, and also serves on its Nominating & Governance Committee. He also serves on the Board of Directors of P & F Industries, Inc. (Nasdaq: PFIN), and chairs its Nominating & Governance and its Strategic Planning & Risk Assessment Committees, and serves on its Audit Committee. Mr. Brownstein also serves on the Board of Directors of NHS Human Services, a large nonprofit which provides healthcare and education services in Pennsylvania and several other states. Mr. Brownstein is a Board Leadership Fellow of the National Association of Corporate Directors (“NACD”), and serves as President of NACD’s Philadelphia Chapter.

Mr. Brownstein has served as an independent corporate board member for publicly-held and privately-owned companies for over forty years and is qualified as a "Financial Expert" for Sarbanes-Oxley purposes. Mr. Brownstein spent thirteen years in the steel industry and visited steel production facilities around the world as part of the United Nations Economic Commission for Europe Steel Committee. His past board experience includes two metals related companies: Special Metals Co., a leading producer of nickel alloys that is a current supplier to A.M. Castle, and Magnatrax Corp., a producer of pre-engineered steel buildings (now a part of Nucor Corp.). Mr. Brownstein’s broad financial and management consulting background, including his extensive experience in finance, restructurings and turnarounds, strategic planning, valuing and selling businesses and corporate governance, as well as his public company board experience makes him a valuable member of our Board of Directors.



109




Kenneth H. TraubPamela Forbes LiebermanDirector since 20152007Age 5463
  
Board
Chairperson


Committees:

Finance Audit Chairperson

Governance
Member

Human Resources Member
Managing Partner at Raging Capital Management, LLC, an investment management firm, since 2015. Mr. Traub previously served asInterim Chief Operating Officer of Entertainment Resource, Inc., a video distributor, from March 2006 to August 2006. Ms. Forbes Lieberman was Director, President, and Chief Executive Officer of Ethos Management, LLC, an investment advisory company,TruServ Corporation (now known as True Value Company), a member owned wholesaler of hardware and related merchandise, and provider of marketing, merchandising and other value added services, from 20092001 to 20152004. Ms. Forbes Lieberman is also a director of Standard Motor Products, Inc., a leading manufacturer, distributor, and marketer of replacement parts for motor vehicles, since 2007, and VWR Corporation, a provider of laboratory products, services, and solutions, since 2009. She was also a member of the General PartnerBoard of Rosemark Capital, a private equity firm, from 2013 to 2015. Mr. TraubDirectors of the Company's Kreher Steel joint venture until its sale in August 2016, and has also previously served as PresidentBoard Chairperson since February 2017 and Chair of the Company’s Audit Committee since 2012.

Ms. Forbes Lieberman’s service as Chief Executive Officer of American Bank Note Holographics, Inc.,True Value Company brings to the Board senior executive experience leading a global supplierpublic reporting wholesale/distribution business, with expertise in turnaround management, communications, culture change, and distribution and supply chain strategies. Ms. Forbes Lieberman also possesses valuable financial expertise, including extensive experience as chief financial officer of optical security devices, from 1999 until its acquisition by JDS Uniphase Corp. in 2008. Mr. Traub is currently a director of the followingvarious distribution and manufacturing businesses, both public companies: (i) Vitesse Semiconductor Corporation, a leading supplier of integrated circuit solutions for next-generation carrier and enterprise networks, since 2013, (ii) MRV Communications, Inc., a leading provider of optical communications network equipment and integration, since 2011, (iii) DSP Group, Inc., a leading global provider of wireless chipset solutions for converged communications, since 2012, and (iv) Athersys, Inc., a biotechnology company engaged in the discovery and development of therapeutic product candidates, since 2012.
Mr. Traub’s more than 20 years of senior management, corporate governance, turnaround and transactional experience with various publicreporting and private, companies qualifies him to servewhere she was directly responsible for financial and accounting issues, acquisitions and divestitures and information systems. She also possesses public accounting expertise as a former senior manager at Price Waterhouse (now known as PricewaterhouseCoopers LLP). Through her service on our Board. His wealth of boardthe boards described above, she has valuable experience will allow him to provide valuable advicein governance, executive compensation, and guidance to our Board.finance, including private equity, and audit issues.

AllanMichael J. YoungSheehanDirector since 2015July 2016Age 5956
   
Committees:

FinanceHuman Resources
MemberChairperson

Governance
Member

Audit
Member
Managing PartnerMichael Sheehan is the former Chief Executive Officer of Boston Globe Media Partners. Prior to joining the Globe in January 2014, he spent 20 years at Raging Capital Management, LLC, an investment management firm, since 2006. Mr. Young previouslyHill Holliday, where he served as aChairman, Chief Executive Officer, President, and Chief Creative Officer. He has also served as Executive Vice President and Executive Creative Director of Research at RateFinancials, Inc., an independent securities research firm, from 2003 to 2006, and as a director of SMG Indium Resources Ltd., a company that stockpiles indium for consumer electronics manufacturing applications, from 2013 to 2015.DDB Chicago, another large advertising agency.

Mr. Young’sSheehan has served on the Board of Directors of BJ’s Wholesale Club where he chaired the Compensation Committee and was a member of the Governance Committee. He has also served on the Board of the American Association of Advertising Agencies, and has chaired the Board of Trustees of his alma mater, Saint Anselm College. He currently serves on the Boards of ChoiceStream, a leading programmatic advertising firm, as well as the American Repertory Theater and Catholic Charities of the Archdiocese of Boston. He attended the United States Naval Academy and graduated from Saint Anselm College in 1982 with a B.A. in English. His extensive experience in financial analysis, accounting,managing large public company reporting, and corporate governance well qualifiesprivate companies, and in sales and marketing leadership makes him to serve ona valuable member of our Board. His strong financial background and experience with investment analysis provides the Board with valuable financial expertise.
2016 Board Membership Changes
Mr. Brian P. Anderson and Mr. Reuben S. Donnelly chose not to stand for re-election as Class III Directors at our 2016 Annual Meeting on July 27, 2016. Two new directors were therefore elected to the Company’s Board at the Annual Meeting: Mr. Richard Burger and Mr. Michael Sheehan.
On September 2, 2016, Mr. Allan J. Young resigned from his position as a Class II Director. Mr. Howard Brod Brownstein was nominated by Raging Capital pursuant to the May 27, 2016, Settlement Agreement between the Raging Capital Group (as defined below) and the Company, and was appointed to fill the resulting vacancy.
On November 4, 2016, Mr. Richard Burger and Mr. Kenneth H. Traub resigned from their positions as Class III and Class II Directors, respectively, in connection with the November 2016 Settlement Agreement with Raging Capital described below.
On February 3, 2017, Mr. Gary Masse resigned from his position as a Class III director in connection with a change in his primary employment.


Settlement Agreement with Raging Capital
On November 3, 2016, the Company entered into a Settlement Agreement (the “November 2016 Settlement Agreement”) with Raging Capital Management, LLC (“Raging Capital”) and certain of its affiliates (the “Raging Capital Group”), and Messrs. Scheinkman, Traub, Young, and Burger. The Settlement Agreement supersedes the two prior settlement agreements (as amended) by and among the Company and the Raging Capital Group dated March 17, 2015, and May 27, 2016.
In connection with the November 2016 Settlement Agreement, effective November 4, 2016, Kenneth H. Traub and Richard N. Burger each resigned from their respective positions as members of the Board and all committees of the Board on which they served. Neither Mr. Traub’s nor Mr. Burger’s resignations were because of a disagreement with the Company on any matters relating to the Company’s operations, policies, or practices.
For additional information regarding the November 2016 Settlement Agreement, see “Related Parties—Related Party Transactions and Relationships” and the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2016.
Family Relationships

There are no family relationships among any of the directors or executive officers of the Company.

Committees of the Board of Directors

The Board has fourthree standing committees: the Audit Committee, the Finance Committee, the Governance Committee, and the Human Resources Committee. Each committee has a written charter adopted by the Board, copies of which are posted under the “Corporate Governance” section of the Company’s website at https://www.castlemetals.com/investors/corporate-governance.


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Each Committeecommittee reviews the appropriateness of its charter and performs a self-evaluation at least annually. The Board will review the composition of each committee in light of the expected changes to the Board’s composition as a result of the Annual Meeting.



The following table summarizes the current membership and responsibilities of each of our fourthree standing Board Committees:committees:
 ResponsibilitiesCurrent Committee
Members
AUDIT

COMMITTEE
•    Oversight of the quality and integrity of the company’sCompany’s financial statements and internal controls.controls
•    Monitors the Company’s compliance with legal and regulatory requirements.requirements
•    Reviews the qualifications, performance, and independence of the Company’s independent auditors.auditors
•    Reviews the performance of the Company’s internal audit function.function
•    Oversight of annual risk management assessments.assessments
•    Monitors reports received on the Company’s incident reporting hotline.hotline
•    Oversight of compliance program, including an annual review of the CodeCodes of Conduct.Conduct
•    Prepares the “Report of the Audit Committee” for our stockholders included in the Company's annual meeting proxy.proxy

Ms.Pamela Forbes Lieberman (Chair)(Chairperson)
Mr. AndersonHoward Brod Brownstein
Mr. MasseMichael J. Sheehan
FINANCE COMMITTEE
Reviews, evaluates, and makes recommendations to the Board regarding the Company’s capital structure, working capital management, and other financial strategies.
Assists the Board in oversight of share redemption and purchase activities.
Reviews financial risk management, including interest rates, foreign exchange, etc.
Mr. Mellin (Chair)
Mr. Masse
Mr. Traub
Mr. Young
GOVERNANCE COMMITTEE
•    Oversight of governance policies and practices.practices
•    Reviews governance-related legal and regulatory matters that could impact the Company.Company
•    Reviews and makes recommendations on the overall size and composition of the Board and its Committees.Committees
•    Oversight of Board recruitment, including identification of potential director candidates, evaluating candidates, and recommending nominees for membership to the full Board.Board
•    Leads the annual self-evaluation of the Board and its Committees and reports the results.results
Mr. Anderson (Chair)Jonathan B. Mellin (Chairperson)
Ms.Pamela Forbes Lieberman
Mr. MellinMichael J. Sheehan
Mr. Young
HUMAN
RESOURCES
COMMITTEE
•    Determines the composition and value of non-CEO executive officer compensation and makes recommendations with respect to CEO compensation to the independent members of the Board who collectively have final approval authority.authority
•    Reviews the compensation philosophy, selection of compensation elements to balance risk, reward, and retention objectives and the alignment of incentive compensation to the Company’s strategy.strategy
•    Oversight of compensation plans and policies.policies
•    Retains authority to retainemploy and terminate a compensation consultant.consultant
•    Reviews and recommends changes to the Board regarding Director compensation.
Prepares the Human Resources Committee’s report to stockholders as provided below in the section titled “Report of the Human Resources Committee”.

compensation

Mr. Anderson (Interim Chair1)Michael J. Sheehan (Chairperson)
Ms.Howard Brod Brownstein
Pamela Forbes Lieberman
Mr. Masse

(1) As a result of the related party transactions in February 2016 with W.B. & Co. and FOM Corporation described below in the section entitled “Related Party Transactions and Relationships”, certain members of the Human Resources Committee were rendered no longer eligible to serve under our governance documents. To correct this, on March 9, 2016, the Board of Directors unanimously approved reconstitution of the Human Resources Committee to include the above-referenced Directors, for an interim

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period until such time as the Company’s director elections at its annual meeting for 2016 are completed and the then-current Board can re-assess its committee membership.

Director Candidates

Membership Criteria
Any stockholder who wishes to recommend individuals for nomination to the Board may do so in accordance with our Bylaws, which require advance notice to the Company and certain other information. If you are interested in recommending a director candidate, you should request a copy of the Bylaw provisions by writing to our Corporate Secretary at 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523.

The Governance Committee identifies nominees for directors from various sources, including suggestions from Board members and management, and in the past has used third party consultants to assist in identifying and evaluating potential nominees. The Governance Committee will generally consider persons recommended by the stockholders in the same manner as a committee-recommended nominee.

The current membership of the Board represents a diverse mix of directors in terms of background, and expertise. In considering whether to recommend persons to be nominated for directors, the Governance Committee will apply the criteria set forth in the Company’s Corporate Governance Guidelines, which include:

Business experience
Integrity
Absence of conflict or potential conflict of interest
Ability to make independent analytical inquiries
Understanding of the Company’s business environment
Willingness to devote adequate time to Board duties

While our Corporate Governance Guidelines do not prescribe specific diversity standards, they do provide that the Board will seek a diversified membership for the Board as a whole, in terms of both the personal characteristics of individuals involved and their various experiences and areas of expertise. When identifying and evaluating candidates, the Governance Committee, as a matter of practice, also considers whether there are any evolving needs of the Board that require experience in a particular field, and may consider additional factors it deems appropriate. The Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The Governance Committee also conducts regular reviews of current directors whose terms are nearing expiration, but who may be proposed for re-election, in light of the considerations described above and their past contributions to the Board.

Under the Company’s Corporate Governance Guidelines, no director may be nominated for re-election following his or her 72nd birthday. On the recommendation of the Governance Committee, the Board may waive this requirement as to any director if it deems a waiver to be in the best interests of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires the Company’s executive officers and directors and beneficial owners of more than 10% of the Company’s common stock to file reports of ownership of the Company’s common stock with the SEC and to furnish the Company with a copy of those reports.

Based on our review of the reports and upon the written confirmation that we received from each of our Executive Officers and Directors, we believe that all Section 16(a) reports were timely filed in 2015.2016.

Code of Conduct

The Board has adopted a specific Code of Conduct for Directors and a specific Code of Conduct for Officers. The Company has also adopted a general Code of Conduct applicable to all employees. A copy of our Code of Conduct policies can be found on the “Corporate Governance” section of the Company’s website at https://www.castlemetals.com/investors/corporate-governancecorporate-governance..

Every DirectorCompany director and Officerofficer is required to read and follow the Code that is applicable to their role. Any waiver of eitherany Code of Conduct policy requires the approval of the Governance Committee, and must be promptly disclosed to our stockholders. We intend to disclose on the “Corporate Governance” section of our website any amendments to, or waivers from, theany of our Code of Conduct.Conduct policies.

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ITEM 11 — Executive Compensation

Explanatory Note
Beginning in 2017, we are a “smaller reporting company,” as defined in Item 10 of Regulation S-K promulgated under the Exchange Act, and have elected to provide in this Proxy Statement certain scaled disclosures permitted under the Exchange Act for smaller reporting companies. As a result of being a smaller reporting company, we do not provide compensation and risk disclosures, compensation committee interlocks disclosures, a compensation discussion and analysis or a compensation committee report, among other disclosures. We will remain a “smaller reporting company” until such time as our public float as of the last business day of our most recently completed second fiscal quarter is at least $75 million.
Executive Compensation
Summary Compensation DiscussionTable
The table below includes the total compensation paid to or earned by each of the Chief Executive Officer (our principal executive officer, or “PEO”) and Analysis
Namedthe two other most highly compensated current executive officers other than the PEO who were serving as executive officers at the end of the last completed fiscal year for the fiscal years ended December 31, 2016, and 2015 (collectively, the “Named Executive Officers for 2015Officers”).
NamePositionNotes
Steven ScheinkmanPresident and Chief Executive OfficerAppointed to current role on April 16, 2015.
Patrick AndersonExecutive Vice President, Chief Financial Officer and TreasurerAppointed to current expanded CFO role on May 27, 2015.
Marec EdgarExecutive Vice President, General Counsel, Secretary & Chief Administrative OfficerAppointed to current expanded CAO role on May 27, 2015.
Thomas GarrettVice President, President, Total PlasticsAppointed to current role on March 28, 1988.
Ronald KnoppExecutive Vice President, Chief Operating OfficerAppointed to current expanded COO role on May 27, 2015.
Scott DolanFormer President and Chief Executive OfficerResigned on April 16, 2015.
Stephen LetnichFormer Chief Commercial OfficerSeparated from employment on June 24, 2015.
NameYearSalary
($)		Bonus
($)(1)		Stock
Awards
($)(2)		Option
Award
(3)		Non-Equity
Incentive Plan
Compensation
($)(4)		Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)		All Other
Compensation
($)(6)		Total
($)
Steven Scheinkman,
President and
Chief Executive
Officer		2016650,000——814,2401,218,750—187,8482,870,838
2015455,000—254,800474,000230,459—132,0401,546,299
Patrick Anderson,
EVP, Chief
Financial Officer
& Treasurer		2016300,000——170,240247,500—43,890761,630
2015282,938119,00028,984104,44566,000—36,257637,624
Marec Edgar,
EVP, General
Counsel,
Secretary & CAO		2016340,000——192,640280,500—47,376860,516
2015331,077162,20044,900118,20574,800—38,671769,853
 
(1) The amounts in this column include the following: for 2015 - discretionary bonuses for Mr. Anderson ($20,000); Mr. Edgar ($50,000); and the portion of the 2015 STIP bonuses for Messrs. Anderson and Edgar in excess of their target bonuses.
(2) The amounts in this column for 2015 reflect the aggregate grant date fair value of stock-based awards (other than stock options) granted in the year computed in accordance with FASB ASC Topic 718. These amounts are not paid or realized by the officer. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(3) The amounts reported in this column reflect the aggregate grant date fair value of stock options granted under the 2016-2018 LTCP, 2015 STIP, and 2015-2017 LTCP, computed in accordance with ASC Topic 718. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(4) Reflects the cash awards under the Company’s STIP (amounts earned during the applicable fiscal year but paid after the end of that fiscal year).
(5) Reflects the actuarial change in the present value of the Named Executive Officer’s benefits under the Salaried Pension Plan determined using assumptions consistent with those used in the Company’s financial statements. Pension accruals ceased for all Named Executive Officers in 2008, and Named Executive Officers hired after that date are not eligible for coverage under any pension plan. Accordingly, the amounts reported for the Named Executive Officers do not reflect additional accruals but reflect the fact that each of them is one year closer to “normal retirement age” as defined under the terms of the Salaried Pension Plan as well as changes to other actuarial assumptions. For 2016, there was an actuarial decrease in the present value of the benefits under the Salaried Pension Plan for Mr. Anderson in the amount of $(10,899). Because this amount is negative, it is not reported in this column or in the Total Compensation column in the Summary Compensation Table.
(6) The amounts shown are detailed in the supplemental “All Other Compensation Table – Fiscal Year 2016” below.
 

Executive
All Other Compensation OverviewTable – Fiscal Year 2016
The table below provides additional information about the amounts that appear in the “All Other Compensation” column in the Summary Compensation Table above:
Name 401(k) Plan
Company
Matching
Contributions
($)		 Deferred Plan
Company
Matching
Contributions
($)		  Housing
Reimbursement
($)		 Miscellaneous
($)(1)		 Total All Other
Compensation
($)
Steven Scheinkman 15,900
 35,428
  130,350 6,170
 187,848
Patrick Anderson 12,669
 15,231
  — 15,990
 43,890
Marec Edgar 14,358
 17,262
  — 15,756
 47,376
            
Checklist(1)Includes the cost, including insurance, fuel and lease payments, of Compensation Practices
WHAT WE DOWHAT WE DON’T DO
ü Stringent stock ownership guidelines
ü Align executive compensation with stockholder returns through long-term incentives
ü Include “double-trigger” change in control provisions in change-in-control agreements
ü Balance of short-a Company-provided automobile or vehicle stipend, a cellular telephone allowance and long-term incentives
ü Clawback provisions in all compensation programs
ü Annual stockholder “say-on-pay” advisory vote
ü Condition grants of long-term incentive awards on execution of appropriate restrictive covenants
û Generally do not utilize employment contracts
û No repricing underwater options
û No tax gross-ups
û No excessive perquisites
û No hedging of Company stock
û No pledging of Company stock
personal excess liability insurance premiums paid by the Company.

ElementsNarrative Discussion of Executive Compensation Recent Enhancements and Link to Strategy

We have three elements of total direct compensation: base salary, annual incentives, and long-term incentives, which are described in the following table.incentives. We also provide our Named Executive Officers with limited perquisites and standard retirement and benefit plans (see the sections below entitled "Retirement Benefits" and "Perquisites and Other Personal Benefits").plans.

CEO 2015 Target Total Direct Compensation
Base Salary44%
Cash Annual Incentive15%
Long-Term Incentive41%

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Other Named Executive Officers' 2015 Target Total Direct Compensation*
Base Salary63%
Cash Annual Incentive16%
Long-Term Incentive21%
*represents average opportunity for Messrs, Anderson, Edgar, Garrett and Knopp in 2015


In the past year, we have made significant enhancements to our compensation program to further align leadership performance by focusing on future stock price appreciation to increase value to our stockholders.

Pay ElementDescription and PurposeActions and Recent EnhancementsLink to Business and Talent
Base Salary
Fixed compensation recognizes individual performance, seniority, scope of responsibilities, leadership skills and experience.
Reviewed annually.
Salary increases implemented under new consolidated management structure in May 2015 to recognize enhanced roles and responsibilities.
Competitive base salaries help attract and retain executive talent.
Increases are not automatic or guaranteed.
Annual Incentives
Variable compensation based on performance against annually established targets and individual performance.
Designed to reward executives for annual performance on key operational and financial measures, as well as individual performance.
Reduced number of participants eligible to participate to align with short-term Company objectives; for 2015, our main focus was to effectuate immediate improvements to our capital structure.
Metrics and targets are evaluated each year for alignment with business strategy.
Consistent with strategy to focus on capital structure improvements, incentive was based on the executive management team’s individual efforts in successfully refinancing the Company’s long-term public debt.
Long-Term Incentives
Variable equity compensation; payable in the form of restricted stock units and stock options.
Designed to drive sustainable performance that delivers long-term value to stockholders and directly ties the interests of executives to those of stockholders.
The Human Resources Committee reviews the equity metrics annually.
For 2015, the mix of equity was changed to 2/3 stock options and 1/3 restricted stock units.
Our long-term incentive program is designed to focus on stock price appreciation.
Awards vest over multi-year periods to help encourage retention of talent.

Executive Compensation Philosophy
Each year, the Human Resources Committee reviews and approves the Company's overall Compensation Philosophy and Strategy. Pay for performance is an essential element of the Company's executive compensation philosophy. The Company’s executive compensation programs are designed so that a significant portion of an executive’s compensation is dependent upon the performance of the Company. Measures of financial performance for short-term and long-term incentive programs, and the use of equity, are intended to align compensation with the creation of stockholder value. Threshold, target, and maximum performance goals under

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incentive programs are selected so as to generate minimum, target, or maximum payouts, commensurate with performance, respectively.
These programs are designed to provide a total compensation opportunity for the Named Executive Officers that is competitive with the total compensation opportunity offered to executives with similar responsibilities at comparable companies, also known as the “market median guideline.” Actual compensation will differ from the targeted opportunity based on actual Company performance. Total compensation is the aggregate of the following categories: (i) base salary; (ii) short-term incentive compensation; and (iii) long-term incentive compensation. In reviewing the Named Executive Officers’ target total cash compensation and total direct compensation opportunities, the Human Resources Committee uses the fiftieth percentile of the competitive market data (“market median,” as described below) as a guideline. In 2015, based on Company performance and corresponding incentive plan achievement, the actual total cash compensation and actual total direct compensation of the Named Executive Officers was below market median. Other factors considered by the Human Resources Committee in setting each Named Executive Officer’s opportunity are experience, internal equity (rational linkage between job responsibilities and total compensation opportunities across all jobs within the Company), individual executive performance, and the alignment between Company performance and executive pay.
Benchmarking
In order to establish the market median guideline, the Human Resources Committee reviews competitive market compensation data on a biennial basis, including the compensation practices of selected similar companies (the “Compensation Peer Group”), and broader industry compensation data provided by its executive compensation consultant.
The Compensation Peer Group consists of publicly-traded corporations that operate either in the metals industry or in the distribution of industrial products, with a focus on those that have similar business models to Castle. The Compensation Peer Group for 2015 remained the same as 2014, and consisted of the following 13 companies:
Applied Industrial Tech, Inc.Olympic Steel Inc.
Carpenter Technology Corp.Quanex Building Products Corporation
Gibraltar Industries, Inc.Schnitzer Steel Industries, Inc.
Global Brass and Copper HoldingsShiloh Industries, Inc.
Haynes International, Inc.The Timken Company
Kaman CorporationWorthington Industries, Inc.
Lawson Products, Inc.
Executive Compensation Process
Oversight of the Executive Compensation Programs
The Human Resources Committee oversees our executive compensation programs, operating under a charter that is reviewed annually and approved by the Board. All members of the Human Resources Committee are required to be independent and non-employee directors under the applicable NYSE and SEC rules. The Human Resources Committee operates with the assistance of an executive compensation consultant, who is engaged on an annual basis and is also independent of the Company and management.
Process for Executives other than the CEO
We utilize a formal performance management process to establish goals for our executive officers, including the Named Executive Officers, and to evaluate management performance. The Human Resources Committee annually reviews the performance of the executive officers with the CEO, and the CEO's recommendation for any changes in the executive officers' compensation.
The CEO's performance review of the executive officers addresses each executive's performance relative to established financial and personal objectives and specific project assignments, and includes a review of the following leadership competencies:
Strategic leadership
Driving execution
Cross-functional alignment and collaboration
Decision making

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Talent management
Engaging and influencing others
Business, financial, and other relevant subject matter acumen

In addition to the reviews of individual executive performance, the Human Resources Committee takes into account the overall performance of the Company (as related to the short term and long term incentive plans), as well as the analysis and findings of its executive compensation consultant regarding market pay levels and practices.

The Human Resources Committee also reviews and approves the material terms of any employment, severance, and change-in-control agreements with the Named Executive Officers, with a view to approving terms that are competitive in the marketplace and that serve to attract, motivate and retain executives.

Process for the CEO

Early each year, the Board meets in executive session with the CEO to discuss the CEO's prior year performance, and to identify tentative goals for the upcoming year.

As with the process for the other Named Executive Officers, the Human Resources Committee considers individual performance, Company performance, and the analysis of its compensation consultant when setting the CEO’s compensation. The Human Resources Committee develops recommendations for CEO compensation for the upcoming year for consideration by the Board.
The Board meets annually, without the CEO present, to consider the recommendations of the Human Resources Committee, determine any compensation adjustments applicable to the CEO, and finalize the CEO's goals and objectives for the upcoming year. The independent members of the Board then meet with the CEO.
Base Salary
With the exception of the CEO, whose compensation was reviewed and recommended by the Human Resources Committee and approved by the independent members of the Board, the Human Resources Committee reviewed and approved the base salaries of the Named Executive Officers.Officers in 2016. In each case, the Human Resources Committee took into account the CEO’s recommendation, as well as experience, internal equity, the performance of each Named Executive Officer during the year, and external competitive compensation data.data, among other factors. Fixed compensation recognizes individual performance, seniority, scope of responsibilities, leadership skills, and experience. The Human Resources Committee made the following decisions regardingBoard did not recommend any increases in the base paysalaries of the Named Executive Officers in 2015:
No changes were made2016 as compared to Mr. Scheinkman’s salary due to his April 16, 2015, hire date.
Mr. Patrick Anderson received an increase of 29% on May 27, 2015, in connection with his permanent appointment as Executive Vice President, Chief Financial Officer and Treasurer and expanded responsibilities.
Mr. Edgar received an increase of 18% on May 27, 2015, in connection with his expanded role as Executive Vice President, General Counsel, Secretary and Chief Administrative Officer.
No changes were made to Mr. Garrett’s salary.
Mr. Knopp received an increase of 30% on May 27, 2015, in connection with his expanded role as Executive Vice President, Chief Operating Officer.2015.
Annual Incentives
Annual incentives are awarded under the Company’s Short-Term Incentive Program (“STIP”).
Reduction of 2015 STIP Targets
In July 2015, and are subject to the Board voted to substantially redesign the STIP to focus on the Company’s immediate priorities-the completionterms of the Company’s refinancing and wholesale improvements to the financial condition2008 Omnibus Incentive Plan, as amended (the “Omnibus Plan”). The purpose of the Company. Accordingly,STIP is to provide variable compensation based on Company performance against annually established key operational and financial measures, as previously disclosed, the Board reduced each Named Executive Officer’s cash STIP opportunity (other than Mr. Garrett’s opportunity, which related to the performance of a Company subsidiary, Total Plastics, Inc. (“TPI”),well as individual performance. Metrics and which remained unchanged) to 40% of the original target cash award. The Board also approved stock option awardstargets under the STIP are evaluated each year for each Named Executive Officer (other than Mr. Garrett)alignment with a grant date fair value equal to approximately 18% of the original target cash award.

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business strategy.



The original and modified 2015 STIP award opportunities for the Named Executive Officers who were actively employed at the time of grant are shown belowAs previously disclosed, in detail (Messrs. Dolan and Letnich did not receive 2015 STIP awards because their employment with the Company terminated before such awards were granted, and thus, they are not included in the summary below):
     
NameOriginal Target Bonus OpportunityJuly 2015 Target Cash Bonus Opportunity

July 2015
Stock Option Award (#)
Stock Option Award Grant Date Value
Steven Scheinkman(1)
$576,148$230,45950,000$105,000
Patrick Anderson$165,000$66,00014,100$29,610
Marec Edgar$187,000$74,80015,900$33,390
Thomas Garrett(2)
$99,502$99,502——
Ronald Knopp$165,000$66,00014,100$29,610
     

(1)Mr. Scheinkman’s target cash award opportunity under the 2015 STIP was prorated based on his April 16, 2015 start date as President and Chief Executive Officer.
(2)The performance measures applicable to Mr. Garrett’s 2015 STIP opportunity were EBITDA, On-Time Delivery, and Days’ Sales in Inventory for TPI for the year.
2015 STIP Payouts
In February 2016, following the successful results of the Company’s refinancing efforts, the Board approved generally enhanced payouts under the 2015 STIP, in recognition of the significant achievements made by our Named Executive Officers in improving the Company’s overall financial health and the substantial advancements made with respect to the operational restructuring of the Company and the divestiture of various Company business segments (both completed and currently in progress). The cash payouts ultimately approved by the Board under the 2015 STIP are provided in the table below:
NameActual 2015 STIP Cash Payout
Steven Scheinkman (1)
$230,459
Patrick Anderson$165,000
Marec Edgar$187,000
Thomas Garrett (2)
—
Ronald Knopp$165,000

(1)The Board determined to pay Mr. Scheinkman’s 2015 STIP award at his July 2015 target amount.
(2)In lieu of a payout under the 2015 STIP and pursuant to the retention agreement entered into on February 15, 2016 (described in more detail in the section below entitled, “Retention Agreements”), Mr. Garrett will receive a $100,000 cash bonus, provided that he remains employed by the Company through the earlier of April 1, 2016, or a sale of TPI.

In order to illustrate the Company’s historical performance against STIP performance measures, the following is a summary of the actual overall corporate STIP payout percentages achieved for the Named Executive Officers as a group (other than Mr. Garrett), expressed as a percentage of target opportunity, for the last three years:

31% in 2013
0% in 2014
59% in 2015

Changes to the STIP for 2016
To align the efforts of the Named Executive Officers (other than Mr. Garrett, who is not expected to be employed by the Company following the completion of the previously announced sale of TPI in 2016) with the Company’s current goals, in February 2016, the Board approved the 2016 STIP with performance measures tied directly to: (1) de-leveraging the Company’s balance sheet and reducing interest expense through strategic asset sales completed at maximized value; and (2) improving the near-term profitability of the Company by ensuring cash-positive operating performance. Specifically, half60% of the Named Executive Officers’ 2016 STIP opportunity will bewas based on the total gross value delivered to the Company (and subsequently used for debt reduction)

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via the sale of pre-defined strategic assets; the other halfremaining 40% of the Named Executive Officers’ 2016 STIP opportunity will bewas based on the Company’s achievement of cash-positive operating performance in 2016.

The target opportunities under the 2016 STIP for our Named Executive Officers, as a percentage of base salary, were as follows: Mr. Scheinkman, 125%; Mr. Anderson, 55%; and Mr. Edgar, 55%. In January 2017, the Board approved the following payouts under the 2016 STIP: Mr. Scheinkman, $1,218,750; Mr. Anderson, $247,500; and Mr. Edgar, $280,500.
Long-Term Incentives

Overview
We grant long-term incentive awards under our Long-Term Compensation Plan (“LTCP”) to our executive officers, including the Named Executive Officers and select members of management, to reward performance over a three-year time period. Equity-based compensation remains an important component of the Company’s overall compensation strategy to align the interests of our Named Executive Officers with the interests of our shareholdersstockholders and serves as an important tool for the Company with respect to attracting and retaining executive talent.
Under the LTCP, awards are granted annually at the discretion of the Human Resources Committee (or, in the case of the CEO, the Board). The Human Resources Committee approves a specific LTCP award opportunity for each


executive officer (with the exception of the CEO, whose specific opportunity under the LTCP is reviewed and recommended by the Human Resources Committee and approved by the independent members of the Board). All LTCP awards described belowunder the LTCP are subject to the terms of the Company’s 2008 Omnibus Incentive Plan, which was previously approved by the Company’s shareholders.Plan.

Grant of 2016-2018 LTCP
2015 Long-Term Incentive Award
The LTCP was updated in 2015 to replace grantsOur Named Executive Officers received awards of performance stock units, which used to be a component of the LTCP, with non-qualified stock options in addition to time-based restricted stock units. Accordingly, our 2015-2017 LTCP was comprised of one-third restricted stock units and two-thirds non-qualified stock options. Approximately 50 employees were granted awards under the 2015-2017 LTCP.2016-2018 LTCP, which generally will vest in ratable installments on the first, second, and third anniversaries of the grant date (with an exercise price of $1.98 per share, the closing price of the Company’s stock on the grant date): Mr. Scheinkman, options to purchase 727,000 shares; Mr. Anderson, options to purchase 152,000 shares; and Mr. Edgar, options to purchase 172,000 shares.
The numberCompletion of restricted stock units and stock options granted to our Named Executive Officers who were actively employed at the time of grant is provided below (Messrs. Dolan and Letnich did not receive 2015-20172014-2016 LTCP awards because their employment with the Company terminated before such awards were granted, and thus, they are not included in the summary below):
    
NameRestricted Stock Units AwardStock Option AwardStock Option Award Grant Price
Steven Scheinkman65,000180,000$3.92
Patrick Anderson7,39436,505$3.92
Marec Edgar11,45441,373$3.92
Thomas Garrett7,91424,216$3.92
Ronald Knopp9,14736,505$3.92
    

2014 Long-Term Incentive Award
The 2014-2016 LTCP remains outstanding and will vestconcluded on December 31, 2016. The 2014-2016 LTCP consists of two-thirds performance shares2016, and one-third time-based restricted stock units.
2014 Performance Measures
As previously disclosed, the performance measures under the 2014-2016 LTCP consist of 50% relative total shareholder return (“RTSR”) and 50% return on invested capital (“ROIC”). Payout of the performance shares is based on the attainment of the following goals over a three-year period.

•RTSR threshold is the 25th percentile    
•RTSR target is the 50th percentile
•RTSR maximum is the 75th percentile
•ROIC threshold is 4.5%
•ROIC target is 6.0%
•ROIC maximum is 7.5%


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The Human Resources Committee approves the performance measures, weightings, performance goals, and calibration of shares earned over the payout range between threshold, target and maximum opportunities. The RTSR peer group was previously disclosed in our 2015 Proxy Statement.

2014 Outstanding Awards
The outstanding awards under the 2014-2016 LTCP granted to each Named Executive Officer, other than Mr. Scheinkman, who joined the Company in April 2015, is shown below:
     
  Performance Shares
NameRestricted Stock UnitsThresholdTargetMaximum
Patrick Anderson3,0023,0076,01312,026
Marec Edgar4,9374,9449,88819,776
Thomas Garrett3,3743,3806,75913,518
Ronald Knopp3,6323,6387,27514,550
Scott Dolan(1)
29,97930,02560,049120,098
Stephen Letnich(1)
8,1188,13016,25932,518
     
(1)Outstanding awards forfeited upon departure from the Company.

2013 Long-Term Incentive Award
The 2013-2015 LTCP vested on December 31, 2015. The 2013-2015 LTCP consisted of two-thirds performance shares and one-third time-based restricted stock units.
2013 Performance Measures
As previously disclosed, the performance measures under the 2013-2015 LTCP consisted of 50% RTSR and 50% Three-Year Modified ROIC. Payout of the performance shares was based on the attainment of the following goals over a three-year period.
•RTSR threshold is the 25th percentile    
•RTSR target is the 50th percentile
•RTSR maximum is the 75th percentile
•ROIC threshold is 10%
•ROIC target is 11.5%
•ROIC maximum is 13.5%

The RTSR Peer Group was previously disclosed in our 2015 Proxy Statement.

2013 Payout
Upon vesting and following the Human Resources Committee’s review ofCommittee reviewed the attainment of the performance goals under the 2013-20152014-2016 LTCP (as previously disclosed, 50% relative total shareholder return ("RTSR") and 50% return on invested capital (“ROIC”)) and determined that the following awardsperformance results were below the threshold goals. Accordingly, no performance shares were earned or paid out to the Named Executive Officers, other than Mr. Scheinkman and Mr. Edgar, who both joined the Company after the grant date for such awards.
NameRestricted Stock Units
Performance Shares(1)
Patrick Anderson2,300—
Thomas Garrett2,900—
Ronald Knopp2,700—
Scott Dolan (2)
17,342—
Stephen Letnich (3)
——
(1)
The Human Resources Committee reviewed the extent to which the performance measures were met and determined that the Company’s RTSR performance was below the 25th percentile and the Modified ROIC was below 10%. As the results were below the threshold goals, there were no performance shares paid out under the 2013-2015 LTCP.

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(2)Represents a prorated payout of the 2013-2015 LTCP RSUs, paid out pursuant to Mr. Dolan’s Separation Agreement.

(3)Shares were forfeited upon Mr. Letnich’s departure from the Company.

Other Awards and Agreements
The Company primarily relies on the established long-term and short-term incentives for our executive officers. In limited circumstances, the Company uses awards of restricted stock, restricted stock units, and discretionary cash awards in connection with executive recruitment, for retention purposes, or in recognition of executive promotions or performance. A description of each of the outstanding awards or awards granted during 2015 under these limited circumstances is below.
Garrett Retention Agreement
On February 15, 2016, the Board entered into a retention agreement with Mr. Garrett to incentivize his assistance and ongoing performance in effectuating the sale of TPI. The retention agreement provides Mr. Garrett with the following benefits:

A retention bonus equal to 75% of his annual base salary, payable within 30 days following the closing of a transaction or series of transactions in which all or substantially all of the assets or common stock of TPI are sold, transferred, or otherwise disposed of (a “Sale of TPI”) before the first anniversary of the effective date of the agreement. Mr. Garrett must remain employed by TPI or an affiliate thereof through such a sale in order to receive the retention bonus (he will also be entitled to receive the retention bonus in the event that his employment is terminated without “cause” or for “good reason,” as such terms are defined therein, during the term of the agreement and before a Sale of TPI).
A lump sum “enterprise value escalator” if the gross sale price at the closing of a Sale of TPI exceeds the target price established by the Human Resources Committee. Such enterprise value escalator will be equal to $1.25 for every $100 by which the sale price realized on a Sale of TPI exceeds the target price, provided that Mr. Garrett has remained continuously employed by TPI and the successor thereto for at least 180 days following the Sale of TPI (he will also be entitled to receive the enterprise value escalator in the event that his employment is terminated without cause or for good reason after the Sale of TPI, but before 180 days following the Sale of TPI).
Enhanced severance benefits if Mr. Garrett’s employment is terminated (by TPI or its successor) within 24 months following the Sale of TPI without cause or for good reason, equal to the sum of: (i) 1.5 times Mr. Garrett’s annualized base salary, and (ii) the grossed-up cost of 18 months of COBRA continuation coverage at the same level of coverage that Mr. Garrett had elected prior to his termination, payable within 30 days following his termination of employment. Any severance benefits payable under the retention agreement would be reduced by base salary amounts and COBRA benefits payable under Mr. Garrett’s severance and/or change in control agreements. Mr. Garrett would be required to timely execute and not revoke a waiver and release of all claims against TPI and its affiliates.2014-2016 LTCP.
A $100,000 cash payment in lieu of any amount payable to Mr. Garrett under the Company’s 2015 STIP (as noted above) on the earlier of April 1, 2016 or a Sale of TPI, provided that Mr. Garrett has remained continuously employed by TPI or an affiliate thereof until the earlier of such dates.
New CEO Arrangements
As previously disclosed, the Company entered into an employment offer letter dated April 16, 2015, with Mr. Scheinkman, and on April 17, 2015, the Board appointed Mr. Scheinkman to the position of President and Chief Executive Officer. In accordance with the offer letter, Mr. Scheinkman receives an annual base salary of $650,000 and is eligible for the annual and long-term awards described above. The Company also entered into severance and change in control agreements with Mr. Scheinkman. Such agreements are described below in the section entitled, "Potential Payments Upon Termination or Change in Control."
Mr. Dolan Resignation
As previously disclosed, in connection with the resignation of Mr. Dolan, the Company entered into a Separation Agreement and General Release with Mr. Dolan, dated April 16, 2015. For more information on this agreement, please see the description in the section below entitled, “Potential Payments Upon Termination or Change in Control.”
Other Cash Awards
In February 2015, Mr. Anderson received a $20,000 cash bonus in connection with his assumption of the Interim Chief Financial Officer role. In May 2015, Mr. Edgar received a $50,000 cash bonus in connection with his performance with respect to preparing

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for the 2015 Annual Meeting of Stockholders. Also in May 2015, Mr. Knopp received a $26,929 cash bonus in recognition of his promotion to Executive Vice President, Chief Operating Officer.
Severance and Change in Control Benefits
In order to attract and retain an appropriate caliber of talent, we provide our executive officers with the opportunity to be protected under severance and change in control agreements. Such severance and change in control agreements are summarized starting on page below in the section entitled, "Potential Payments Upon Termination or Change in Control."

Retirement BenefitsSummary Compensation Table
We currently maintainThe table below includes the following retirement plans for ourtotal compensation paid to or earned by each of the Chief Executive Officer (our principal executive officer, or “PEO”) and the two other most highly compensated current executive officers that are generally available to all non-union, salaried employees.other than the PEO who were serving as executive officers at the end of the last completed fiscal year for the fiscal years ended December 31, 2016, and 2015 (collectively, the “Named Executive Officers”).
NameYearSalary
($)		Bonus
($)(1)		Stock
Awards
($)(2)		Option
Award
(3)		Non-Equity
Incentive Plan
Compensation
($)(4)		Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)		All Other
Compensation
($)(6)		Total
($)
Steven Scheinkman,
President and
Chief Executive
Officer		2016650,000——814,2401,218,750—187,8482,870,838
2015455,000—254,800474,000230,459—132,0401,546,299
Patrick Anderson,
EVP, Chief
Financial Officer
& Treasurer		2016300,000——170,240247,500—43,890761,630
2015282,938119,00028,984104,44566,000—36,257637,624
Marec Edgar,
EVP, General
Counsel,
Secretary & CAO		2016340,000——192,640280,500—47,376860,516
2015331,077162,20044,900118,20574,800—38,671769,853
 
(1) The amounts in this column include the following: for 2015 - discretionary bonuses for Mr. Anderson ($20,000); Mr. Edgar ($50,000); and the portion of the 2015 STIP bonuses for Messrs. Anderson and Edgar in excess of their target bonuses.
(2) The amounts in this column for 2015 reflect the aggregate grant date fair value of stock-based awards (other than stock options) granted in the year computed in accordance with FASB ASC Topic 718. These amounts are not paid or realized by the officer. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(3) The amounts reported in this column reflect the aggregate grant date fair value of stock options granted under the 2016-2018 LTCP, 2015 STIP, and 2015-2017 LTCP, computed in accordance with ASC Topic 718. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(4) Reflects the cash awards under the Company’s STIP (amounts earned during the applicable fiscal year but paid after the end of that fiscal year).
(5) Reflects the actuarial change in the present value of the Named Executive Officer’s benefits under the Salaried Pension Plan determined using assumptions consistent with those used in the Company’s financial statements. Pension accruals ceased for all Named Executive Officers in 2008, and Named Executive Officers hired after that date are not eligible for coverage under any pension plan. Accordingly, the amounts reported for the Named Executive Officers do not reflect additional accruals but reflect the fact that each of them is one year closer to “normal retirement age” as defined under the terms of the Salaried Pension Plan as well as changes to other actuarial assumptions. For 2016, there was an actuarial decrease in the present value of the benefits under the Salaried Pension Plan for Mr. Anderson in the amount of $(10,899). Because this amount is negative, it is not reported in this column or in the Total Compensation column in the Summary Compensation Table.
(6) The amounts shown are detailed in the supplemental “All Other Compensation Table – Fiscal Year 2016” below.
 

Salaried Pension Plan and Supplemental Pension Plan
We maintain the Salaried Employees Pension Plan (the “Salaried Pension Plan”), a qualified, noncontributory defined benefit pension plan covering eligible salaried employees who meet certain age and service requirements. We also maintain an unfunded supplemental employee retirement plan (the “Supplemental Pension Plan”) for our executives and senior management, which restores benefits lost due to compensation and benefits limitation imposed by the IRS on deferrals under the Salaried Pension Plan. As of June 30, 2008, the benefits under the Salaried Pension Plan and the Supplemental Pension Plan were frozen. There are no enhanced pension formulas or benefits available to the Named Executive Officers. Refer to the Pension Benefits table below for the value of accumulated pension benefits for the Named Executive Officers.

401(k) Savings and Retirement Plan
We maintain the 401(k) Savings and Retirement Plan (the “401(k) Plan”), a qualified defined contribution plan, for our employees in the United States who work full-time. There are no enhanced 401(k) benefits available to the Named Executive Officers. Refer to the All Other Compensation Table below for the Company’s contributions to each Named Executive Officer under the 401(k) Plan.

Supplemental 401(k) Savings and Retirement Plan
We maintain an unfunded, nonqualified, deferred compensation plan, the Supplemental 401(k) Plan (the “Supplemental 401(k) Plan”), for our executive officers and senior management. The Supplemental 401(k) Plan has investment options that mirror our 401(k) Plan and provide participants with the ability to save for retirement with additional tax-deferred funds that otherwise would have been limited due to IRS compensation and benefit limitations. Refer to the All Other Compensation Table below for the Company’s contributions to each participating Named Executive Officer under the Supplemental 401(k) Plan.

Perquisites and Other Personal Benefits
We provide the following limited perquisites to our executive officers:

Automobile usage or stipends.
Phone allowances.
Personal Excess Liability Coverage policy.
Reimbursement of spousal travel expenses on Company business.
Medical, dental, life insurance, short-term, and long-term disability coverage (standard benefits available to most of our employees).

– Fiscal Year 2016
The amount of perquisites and personal benefits paid in 2015 are showntable below provides additional information about the amounts that appear in the footnotes to“All Other Compensation” column in the Summary Compensation Table below.
Additional Executive Compensation Information and Policies
Stock Ownership Guidelines
Similar to the stock ownership guidelines for directors, we maintain an executive stock ownership guideline for ownership of our stock by our Named Executive Officers. The program is designed to further strengthen alignment between the interests of executive management and those of our stockholders. The guidelines currently provide the following:

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Executive officers must reach stock ownership levels (provided in table below) within five years of their appointment as an officer.
Until the executive officer meets the stock ownership requirement, the executive officer must retain 100% of the after-tax shares of vested restricted stock and 100% of the net after-tax shares of an option exercise.
After the executive officer meets the stock ownership requirement, the executive officer must retain at least 50% of the after-tax shares of vested restricted stock and 100% of the net after-tax shares of an option exercise for a period of six months.
Compliance reports are presented to the Human Resources Committee on an annual basis.
Shares owned outright and beneficially, shares held in nonqualified retirement plans, performance-based shares earned but not yet paid, time-based restricted stock and restricted stock units, and vested stock options count toward satisfaction of the ownership guidelines. Unexercised, vested stock options are valued at the amount recognized by the Company for financial statement reporting purposes.
Unvested stock options and unearned performance shares do not help satisfy ownership requirements.
The table below describes the ownership guidelines for each Named Executive Officer actively employed as of December 31, 2015.above:
 
NameOwnership Requirement as a % of Base Salary
Number of Shares Required(1)
Number of Shares Owned 
Date to Meet Requirements 401(k) Plan
Company
Matching
Contributions
($)		 Deferred Plan
Company
Matching
Contributions
($)		 Housing
Reimbursement
($)		 Miscellaneous
($)(1)		 Total All Other
Compensation
($)
Steven Scheinkman500%883,15272,50004/16/2018 15,900
 35,428
 130,350 6,170
 187,848
Patrick Anderson300%244,56547,96109/26/2019 12,669
 15,231
 — 15,990
 43,890
Marec Edgar100%92,39121,47904/01/2019 14,358
 17,262
 — 15,756
 47,376
Thomas Garrett100%67,59757,78403/05/2014
Ronald Knopp100%81,52229,12307/02/2018
         
(1)The ownership value will be calculated based onIncludes the executive’s base salarycost, including insurance, fuel and the “fair market value”lease payments, of the stock at the time that the ownership value is measured, rather than at the time of the initial acquisition of the stock. For purposes of this valuation, “fair market value” of the stock shall equal the average stock price of the Company’s common stock for the 200-day period prior to the measurement date,a Company-provided automobile or vehicle stipend, a cellular telephone allowance and in the case of vested unexercised stock options the “fair market value” shall equal the dollar value of those awards recognizedpersonal excess liability insurance premiums paid by the Company for financial statement reporting purposes.Company.

Narrative Discussion of Executive Compensation
Compensation Recovery PolicyWe have three elements of total direct compensation: base salary, annual incentives, and long-term incentives. We also provide our Named Executive Officers with limited perquisites and standard retirement and benefit plans.
The Company has adopted aBase Salary
With the exception of the CEO, whose compensation recovery (or “clawback”) policy that requires paid incentive compensation to be recoveredwas reviewed and recommended by the Company to the extent such compensation would have been lower due to restated financial results. The Human Resources Committee hasand approved by the authority to calculate the amount of any overpayment and, in its sole discretion, to seek to recover amounts determined to have been inappropriately received by any current or former executiveindependent members of the Company.

The clawback policy provides that overpayments of compensation should be recovered within twelve months after an applicable restatement of financial results.
Anti-HedgingBoard, the Human Resources Committee reviewed and Anti-Pledging Policy
Under our Insider Trading Policy, our directors and executive officers are prohibited from (i) hedgingapproved the economic interest in our securities, and (ii) purchasing securities on margin, holding Company securities in a margin account, or pledging Company securities as collateral for a loan.

Tax and Accounting Implications of Executive Compensation
Code 162(m)base salaries of the Internal Revenue CodeNamed Executive Officers in 2016. In each case, the Human Resources Committee took into account the CEO’s recommendation, as well as experience, internal equity, the performance of 1986,each Named Executive Officer during the year, and external competitive compensation data, among other factors. Fixed compensation recognizes individual performance, seniority, scope of responsibilities, leadership skills, and experience. The Board did not recommend any increases in the base salaries of the Named Executive Officers in 2016 as compared to 2015.
Annual Incentives
Annual incentives are awarded under the Company’s Short-Term Incentive Program (“STIP”) and are subject to the terms of the Company’s 2008 Omnibus Incentive Plan, as amended (the “Code”“Omnibus Plan”), places a limit. The purpose of $1,000,000the STIP is to provide variable compensation based on Company performance against annually established key operational and financial measures, as well as individual performance. Metrics and targets under the STIP are evaluated each year for alignment with business strategy.
As previously disclosed, in February 2016, to align the efforts of the Named Executive Officers with the Company’s current goals, the Board approved the 2016 STIP with performance measures tied directly to: (1) de-leveraging the Company’s balance sheet and reducing interest expense through strategic asset sales completed at maximized value; and (2) improving the near-term profitability of the Company by ensuring cash-positive operating performance. Specifically, 60% of the Named Executive Officers’ 2016 STIP opportunity was based on the amount of compensation thattotal gross value delivered to the Company may deduct(and subsequently used for debt reduction) via the sale of pre-defined strategic assets; the remaining 40% of the Named Executive Officers’ 2016 STIP opportunity was based on the Company’s achievement of cash-positive operating performance in any one year with respect2016. The target opportunities under the 2016 STIP for our Named Executive Officers, as a percentage of base salary, were as follows: Mr. Scheinkman, 125%; Mr. Anderson, 55%; and Mr. Edgar, 55%. In January 2017, the Board approved the following payouts under the 2016 STIP: Mr. Scheinkman, $1,218,750; Mr. Anderson, $247,500; and Mr. Edgar, $280,500.
Long-Term Incentives
We grant long-term incentive awards under our Long-Term Compensation Plan (“LTCP”) to eachour Named Executive Officers to reward performance over a three-year time period. Equity-based compensation remains an important component of the Company’s overall compensation strategy to align the interests of our Named Executive Officers with the interests of our stockholders and serves as an important tool for the Company with respect to attracting and retaining executive talent.
Under the LTCP, awards are granted annually at the discretion of the Human Resources Committee (or, in the case of the CEO, the Board). The Human Resources Committee approves a specific LTCP award opportunity for each


executive officer (with the exception of our Chief Financial Officer. Therethe CEO, whose specific opportunity under the LTCP is an exception to the $1,000,000 limitation for performance-based compensation that meets certain requirements. To the extent deemed necessaryreviewed and appropriaterecommended by the Human Resources Committee our short- and long-term incentive plan awards may be designed to be performance-based to meetapproved by the requirements of Section 162(m)independent members of the Code, so that such amounts may be excluded fromBoard). All awards under the $1,000,000 cap on compensation for deductibility purposes. The following

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types of compensation generally do not meetLTCP are subject to the requirements of performance-based compensation under Section 162(m)terms of the Code:Omnibus Plan.

Grant of 2016-2018 LTCP
Base salary
Discretionary bonuses
RestrictedOur Named Executive Officers received awards of non-qualified stock awards

Alloptions under the 2016-2018 LTCP, which generally will vest in ratable installments on the first, second, and third anniversaries of the grant date (with an exercise price of $1.98 per share, the closing price of the Company’s incentive awardsstock on the grant date): Mr. Scheinkman, options to purchase 727,000 shares; Mr. Anderson, options to purchase 152,000 shares; and individual incentive awards are subjectMr. Edgar, options to Federal income, FICA,purchase 172,000 shares.
Completion of 2014-2016 LTCP
The 2014-2016 LTCP concluded on December 31, 2016, and other tax withholding as required by applicable law.consisted of two-thirds performance shares and one-third time-based restricted stock units. The Human Resources Committee hasreviewed the discretion to adjust STIP and LTCP award payments. In doing so, the Human Resources Committee historically considers the requirements of Section 162(m)attainment of the Code. Whileperformance goals under the Human Resources Committee generally intends to provide incentive compensation opportunities to the Company’s executives in as tax-efficient a manner as possible, we recognize that from time to time it may be in the best interests of stockholders to provide non-deductible incentive compensation. The Company accounts for stock-based payments, including stock options, restricted stock2014-2016 LTCP (as previously disclosed, 50% relative total shareholder return ("RTSR") and the performance share awards in accordance with the requirements of ASC Topic 718.

Compensation Consultant
The Human Resources Committee engaged Pearl Meyer & Partners as our compensation consultant for the first three quarters of 2015. In September 2015, we transitioned to a new compensation consultant, Lockton Companies. Prior to the retention of any compensation consultant, the Human Resources Committee reviews relevant NYSE independence factors and any potential conflicts of interest.

The Human Resources Committee conducted this review regarding its engagement of Lockton and concluded that Lockton is independent.

Our compensation consultant provides advice to our Human Resources Committee as follows:

Review of the Company's executive compensation program designs and levels, including the mix of total compensation elements, compared to industry peer groups and broader market practices.
Information50% return on emerging trends and legislative developments in executive compensation and implications for the Company.
Review of the Company's executive and director stock ownership guidelines, compared to industry peer groups and broader market practices.
Review of the Company's director compensation program compared to industry peer groups and broader market practices.
Compensation Risk
At the direction of the Human Resources Committee, management, in coordination with its advisors, annually conducts a comprehensive risk assessment of the Company’s compensation policies and practices, which included the following actions:

Completed an inventory of the Company’s compensation programs, with input from the Company’s outside legal counsel as to a framework for assessing compensation risk;

Reviewed both business and compensation risk to ensure that the Company’s compensation plans appropriately take into account key business risks and do not have design flaws which motivate inappropriate or excessive risk taking; and

Reported its findings to the Human Resources Committee.

Management conducted this assessment of all compensation policies and practices for all employees, including the Named Executive Officers,invested capital (“ROIC”)) and determined that the compensation programs are not reasonably likely to have a material adverse effect onperformance results were below the Company. This process included a review ofthreshold goals. Accordingly, no performance shares were earned or paid out under the Company’s executive and non-executive incentive compensation programs. Management reviewed the results of this risk assessment with the Human Resources Committee. During the review, several risk mitigating factors inherent in the Company’s compensation practices were noted, including: (i) the Human Resources Committee’s discretion in approving executive compensation and establishing performance goals for short-term and long-term compensation plans; (ii) the Company’s use of a balanced array of performance measures in its short term incentive plan; (iii) stock ownership guidelines for executive officers; and (iv) the Company’s compensation recovery policy.2014-2016 LTCP.

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Compensation tables
Summary Compensation Table

The table below includes the total compensation paid to or earned by each of the Chief Executive Officer (our principal executive officer, or “PEO”) and the Chief Financial Officer, the threetwo other most highly compensated current executive officers and any formerother than the PEO who were serving as executive officers at the end of the Companylast completed fiscal year for the fiscal years ended December 31, 2016, and 2015 2014, and 2013. Compensation from 2013 or 2014 is only included if(collectively, the officer was a Named“Named Executive Officer in such prior year(s)Officers”).

Mr. Scott Dolan and Mr. Stephen Letnich are included in the following table as former Named Executive Officers.
          
Name and
Principal
Position
Year
Salary
($)(1)
Bonus
($)(2)
Stock Awards
($)(3)
Option Award
(4)
Non-Equity Incentive Plan Compensation
($)(5)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)(6)
All Other Compensation
($)(7)
Total
($)
Steven Scheinkman, President and Chief Executive Officer2015455,000—254,800474,000230,459—132,0401,546,299
         
         
         
Scott Dolan,
Former President and Chief Executive Officer(8)
2015278,750—————1,006,7791,285,529
2014650,000—1,466,362———66,7872,183,149
2013650,000—1,492,372—201,500—32,9562,376,828
         
Patrick Anderson,
EVP, Chief Financial Officer & Treasurer
2015282,938119,00028,984104,44566,000—36,257637,624
2014212,51320,000146,851——1,13325,210405,707
         
         
Marec Edgar,
EVP, General Counsel, Secretary & CAO
2015331,077162,20044,900118,20574,800—38,671769,853
2014203,815100,000316,463———69,299689,577
Thomas Garrett, Vice President, President, Total Plastics2015258,324—31,02349,643——50,604389,594
2014247,256—165,061—94,764101,73733,494642,312
2013243,878—168,280—81,748—29,575523,481
         
Ronald Knopp, EVP, Chief Operating Officer2015281,920125,92935,856104,44566,000—17,713631,863
         
         
Stephen Letnich,
Former Chief Commercial Officer(9)
2015194,986—————355,480550,466
2014323,478—397,059———30,737751,274
2013141,53925,000438,188—44,000—8,527657,254
           
           
NameYearSalary
($)		Bonus
($)(1)		Stock
Awards
($)(2)		Option
Award
(3)		Non-Equity
Incentive Plan
Compensation
($)(4)		Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)		All Other
Compensation
($)(6)		Total
($)
Steven Scheinkman,
President and
Chief Executive
Officer		2016650,000——814,2401,218,750—187,8482,870,838
2015455,000—254,800474,000230,459—132,0401,546,299
Patrick Anderson,
EVP, Chief
Financial Officer
& Treasurer		2016300,000——170,240247,500—43,890761,630
2015282,938119,00028,984104,44566,000—36,257637,624
Marec Edgar,
EVP, General
Counsel,
Secretary & CAO		2016340,000——192,640280,500—47,376860,516
2015331,077162,20044,900118,20574,800—38,671769,853
 
(1) The amounts in this column include the following: for 2015 - discretionary bonuses for Mr. Anderson ($20,000); Mr. Edgar ($50,000); and the portion of the 2015 STIP bonuses for Messrs. Anderson and Edgar in excess of their target bonuses.
(2) The amounts in this column for 2015 reflect the aggregate grant date fair value of stock-based awards (other than stock options) granted in the year computed in accordance with FASB ASC Topic 718. These amounts are not paid or realized by the officer. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(3) The amounts reported in this column reflect the aggregate grant date fair value of stock options granted under the 2016-2018 LTCP, 2015 STIP, and 2015-2017 LTCP, computed in accordance with ASC Topic 718. Additional information about these values is included in Note 9 to our audited consolidated financial statements contained in this Annual Report on Form 10-K for the year ended December 31, 2016.
(4) Reflects the cash awards under the Company’s STIP (amounts earned during the applicable fiscal year but paid after the end of that fiscal year).
(5) Reflects the actuarial change in the present value of the Named Executive Officer’s benefits under the Salaried Pension Plan determined using assumptions consistent with those used in the Company’s financial statements. Pension accruals ceased for all Named Executive Officers in 2008, and Named Executive Officers hired after that date are not eligible for coverage under any pension plan. Accordingly, the amounts reported for the Named Executive Officers do not reflect additional accruals but reflect the fact that each of them is one year closer to “normal retirement age” as defined under the terms of the Salaried Pension Plan as well as changes to other actuarial assumptions. For 2016, there was an actuarial decrease in the present value of the benefits under the Salaried Pension Plan for Mr. Anderson in the amount of $(10,899). Because this amount is negative, it is not reported in this column or in the Total Compensation column in the Summary Compensation Table.
(6) The amounts shown are detailed in the supplemental “All Other Compensation Table – Fiscal Year 2016” below.
 

(1)Salary and bonus represents approximately 29.4%, 21.7%, 62.3%, 64.1%, 66.3%, 64.5%, and 35.4% of total compensation for the year 2015 for Messrs. Scheinkman, Dolan, Anderson, Edgar, Garrett, Knopp, and Letnich, respectively. The amount in this column for Mr. Scheinkman does not include the fee ($2,500) that he received for his service as a non-employee director on the Board for a portion of 2015 prior to becoming Chief Executive Officer (such amount is instead reported in the Director Compensation Table).
(2)The amounts in this column include the following: for 2015 - discretionary bonuses for Mr. Anderson ($20,000); Mr. Edgar ($50,000); and Mr. Knopp ($26,929); and the portion of the 2015 STIP bonuses for Messrs. Anderson, Edgar, and Knopp in excess of their target bonuses; for 2014 - a discretionary bonus for Mr. Anderson and a sign-on bonus for Mr. Edgar; and for 2013 - a sign-on bonus for Mr. Letnich.
(3)The amounts reported in this column reflect the aggregate grant date fair value of stock-based awards (other than stock options) granted in the year computed in accordance with FASB ASC Topic 718, except that in compliance with SEC requirements, for awards that are subject to performance conditions, we reported the value at the grant date based upon the probable outcome of such conditions. These amounts are not paid or realized by the officer. Additional information about these values is included in Note 8 to our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015.


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The amounts in this column for 2015 reflect the grant date fair value of restricted stock unit awards under the 2015-2017 LTCP.

For Mr. Edgar, the amounts in this column for 2014 include an award of 5,088 shares of restricted stock upon commencement of his employment with the Company.
For Mr. Letnich, the amounts in this column for 2013 include an award of 6,281 shares of restricted stock upon commencement of his employment with the Company.

(4)The amounts reported in this column reflect the aggregate grant date fair value of stock options granted under the 2015 STIP and under the 2015-2017 LTCP, computed in accordance with ASC Topic 718. Additional information about these values is included in Note 8 to our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015.

(5)Reflects the cash awards under the Company’s STIP (amounts earned during the applicable fiscal year but paid after the end of that fiscal year).

(6)Reflects the actuarial decrease in the present value of the Named Executive Officer’s benefits under the Salaried Pension Plan and the Supplemental Pension Plan determined using assumptions consistent with those used in the Company’s financial statements. As described in more detail below under “Pension Benefits - Fiscal Year 2015,” pension accruals ceased for all Named Executive Officers in 2008, and Named Executive Officers hired after that date are not eligible for coverage under any pension plan. Accordingly, the amounts reported for the Named Executive Officers do not reflect additional accruals but reflect the fact that each of them is one year closer to “normal retirement age” as defined under the terms of the Salaried Pension Plan and the Supplemental Pension Plan as well as changes to other actuarial assumptions. For 2015, there was an actuarial decrease in the present value of the benefits under the Salaried Pension Plan for Mr. Anderson in the amount of $(461), for Mr. Garrett in the amount of $(8,289) and for Mr. Knopp of $(275); and under the Supplemental Pension Plan for Mr. Garrett in the amount of $(2,139). Because these amounts are negative, they are not reported in this column or in the Total Compensation column in the Summary Compensation Table.

(7)The amounts shown are detailed in the supplemental “All Other Compensation Table - Fiscal Year 2015” below.

(8)Mr. Dolan resigned on April 16, 2015.

(9)Mr. Letnich separated from employment with the Company on June 24, 2015.

All Other Compensation Table -– Fiscal Year 20152016
The table below provides additional information about the amounts that appear in the “All Other Compensation” column in the Summary Compensation Table above:

        
 401(k) Plan Company Matching Contributions ($)Deferred Plan Company Matching Contributions ($)Severance Payments (1)($) 




Relocation
Expense
Reimbursement
($)
Miscellaneous ($)(2)Total All Other Compensation ($)
Steven Scheinkman12,60011,400
—
 102,334
5,706132,040
Scott Dolan15,900825
975,000
 —
15,0541,006,779
Patrick Anderson7,35111,077
—
 —
17,82936,257
Marec Edgar15,9006,965
—
 —
15,80638,671
Thomas Garrett27,5137,287
—
 —
15,80450,604
Ronald Knopp13,669—
—
 —
4,04417,713
Stephen Letnich11,699—
325,024
 —
18,757355,480
        

Name 401(k) Plan
Company
Matching
Contributions
($)		 Deferred Plan
Company
Matching
Contributions
($)		  Housing
Reimbursement
($)		 Miscellaneous
($)(1)		 Total All Other
Compensation
($)
Steven Scheinkman 15,900
 35,428
  130,350 6,170
 187,848
Patrick Anderson 12,669
 15,231
  — 15,990
 43,890
Marec Edgar 14,358
 17,262
  — 15,756
 47,376
            
(1)Severance payments were made to Messrs. Dolan and Letnich pursuant to their then-existing agreements.


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(2)Includes the cost, including insurance, fuel and lease payments, of a Company-provided automobile or vehicle stipend, and a cellular telephone allowance. Also includes, for Messrs. Scheinkmanallowance and Letnich, reimbursement of travel and other event related expenses associated with attendance at Company and industry events to which family members were invited.personal excess liability insurance premiums paid by the Company.
GrantsNarrative Discussion of Plan-Based Awards - Fiscal Year 2015Executive Compensation
The following table sets forth plan-based awards granted toWe have three elements of total direct compensation: base salary, annual incentives, and long-term incentives. We also provide our Named Executive Officers with limited perquisites and standard retirement and benefit plans.
Base Salary
With the exception of the CEO, whose compensation was reviewed and recommended by the Human Resources Committee and approved by the independent members of the Board, the Human Resources Committee reviewed and approved the base salaries of the Named Executive Officers in 2015. Messrs. Dolan2016. In each case, the Human Resources Committee took into account the CEO’s recommendation, as well as experience, internal equity, the performance of each Named Executive Officer during the year, and Letnichexternal competitive compensation data, among other factors. Fixed compensation recognizes individual performance, seniority, scope of responsibilities, leadership skills, and experience. The Board did not recommend any increases in the base salaries of the Named Executive Officers in 2016 as compared to 2015.
Annual Incentives
Annual incentives are not includedawarded under the Company’s Short-Term Incentive Program (“STIP”) and are subject to the terms of the Company’s 2008 Omnibus Incentive Plan, as amended (the “Omnibus Plan”). The purpose of the STIP is to provide variable compensation based on Company performance against annually established key operational and financial measures, as well as individual performance. Metrics and targets under the STIP are evaluated each year for alignment with business strategy.
As previously disclosed, in this table because their employmentFebruary 2016, to align the efforts of the Named Executive Officers with the Company’s current goals, the Board approved the 2016 STIP with performance measures tied directly to: (1) de-leveraging the Company’s balance sheet and reducing interest expense through strategic asset sales completed at maximized value; and (2) improving the near-term profitability of the Company terminated before any suchby ensuring cash-positive operating performance. Specifically, 60% of the Named Executive Officers’ 2016 STIP opportunity was based on the total gross value delivered to the Company (and subsequently used for debt reduction) via the sale of pre-defined strategic assets; the remaining 40% of the Named Executive Officers’ 2016 STIP opportunity was based on the Company’s achievement of cash-positive operating performance in 2016. The target opportunities under the 2016 STIP for our Named Executive Officers, as a percentage of base salary, were as follows: Mr. Scheinkman, 125%; Mr. Anderson, 55%; and Mr. Edgar, 55%. In January 2017, the Board approved the following payouts under the 2016 STIP: Mr. Scheinkman, $1,218,750; Mr. Anderson, $247,500; and Mr. Edgar, $280,500.
Long-Term Incentives
We grant long-term incentive awards wereunder our Long-Term Compensation Plan (“LTCP”) to our Named Executive Officers to reward performance over a three-year time period. Equity-based compensation remains an important component of the Company’s overall compensation strategy to align the interests of our Named Executive Officers with the interests of our stockholders and serves as an important tool for the Company with respect to attracting and retaining executive talent.
Under the LTCP, awards are granted and thus, they did not receive 2015 STIP awards or 2015-2017annually at the discretion of the Human Resources Committee (or, in the case of the CEO, the Board). The Human Resources Committee approves a specific LTCP awards.award opportunity for each
       


 
Estimated Possible Payouts Under Non-Equity Incentive Plan
Awards (1)
All Other Stock Awards: Number
of Shares of Stock or Units (2)
($)
All Other Option Awards: Number of Securities Underlying Options ($)(3)(4)Exercise or Base Price of Option Awards ($/Sh)



Grant Date Fair Value of Stock Awards
($)(4)
NameGrant Date
Threshold
($)
Target
($)
Maximum
($)
Steven Scheinkman——230,459—    
7/24/15   65,000  254,800
7/24/15    50,0003.92105,000
7/24/15    180,0003.92369,000
Patrick Anderson——66,000—    
7/24/15   7,394  28,984
7/24/15    14,1003.9229,610
7/24/15    36,5053.9274,835
Marec Edgar——74,800—    
7/24/15   11,454  44,900
7/24/15    15,9003.9233,390
7/24/15    41,3733.9284,815
Thomas Garrett——99,502199,005    
7/24/15   7,914  31,023
7/24/15    24,2163.9249,643
Ronald Knopp——66,000—    
7/24/15   9,147  35,856
7/24/15    14,1003.9229,610
7/24/15    36,5053.9274,835
         

(1)These columns show the potential cash payouts under the Company’s 2015 STIP, which is described above in the section entitled, "Annual Incentives."
(2)Reflects the award of restricted stock units under the 2015-2017 LTCP, which is described above in the section entitled, "2015 Long-Term Incentive Award." The restricted stock unit awards vest in full on December 31, 2017, provided that the Named Executive Officer remains employed by the Company as of such date.
(3)Reflects the award of stock options under the 2015 STIP. A description of the 2015 STIP is described above in the section entitled, "Annual Incentives." The shares underlying the option awards are subject to the following vesting schedules, provided that the Named Executive Officer remains employed by the Company as of each vesting date:
Mr. Scheinkman: 16,666 shares will vest and become exercisable on July 24, 2016, and 16,667 shares will vest and become exercisable on each of July 24, 2017, and July 24, 2018.
Mr. Anderson: 4,700 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018.
Mr. Edgar: 5,300 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018.
Mr. Knopp: 4,700 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018.

(4)Reflects the award of restricted stock units under the 2015-2017 LTCP, which is described above in the section entitled, "2015 Long-Term Incentive Award." The shares underlying the option awards are subject to the following vesting schedules, provided that the Named Executive Officer remains employed by the Company as of each vesting date:
Mr. Scheinkman: 60,000 shares will vest on April 17, 2016 and become exercisable on July 24, 2016, and 60,000 shares will vest and become exercisable on each of April 17, 2017, and April 17, 2018.

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executive officer (with the exception of the CEO, whose specific opportunity under the LTCP is reviewed and recommended by the Human Resources Committee and approved by the independent members of the Board). All awards under the LTCP are subject to the terms of the Omnibus Plan.
Grant of 2016-2018 LTCP

Mr. Anderson: 12,168 sharesOur Named Executive Officers received awards of non-qualified stock options under the 2016-2018 LTCP, which generally will vest in ratable installments on February 25,the first, second, and third anniversaries of the grant date (with an exercise price of $1.98 per share, the closing price of the Company’s stock on the grant date): Mr. Scheinkman, options to purchase 727,000 shares; Mr. Anderson, options to purchase 152,000 shares; and Mr. Edgar, options to purchase 172,000 shares.
Completion of 2014-2016 LTCP
The 2014-2016 LTCP concluded on December 31, 2016, and become exercisableconsisted of two-thirds performance shares and one-third time-based restricted stock units. The Human Resources Committee reviewed the attainment of the performance goals under the 2014-2016 LTCP (as previously disclosed, 50% relative total shareholder return ("RTSR") and 50% return on July 24, 2016, 12,168invested capital (“ROIC”)) and determined that the performance results were below the threshold goals. Accordingly, no performance shares will vestwere earned or paid out under the 2014-2016 LTCP.
Retirement Benefits
We currently maintain the following retirement plans for our Named Executive Officers that are generally available to all non-union, salaried employees:
Salaried Pension Plan. We maintain the Salaried Employees Pension Plan (the “Salaried Pension Plan”), a qualified, noncontributory defined benefit pension plan covering eligible salaried employees who meet certain age and become exercisable on February 25, 2017, and 12,169 shares will vest and become exercisable on February 25, 2018.service requirements. As of June 30, 2008, the benefits under the Salaried Pension Plan were frozen. There are no enhanced pension formulas or benefits available to the Named Executive Officers. Of our current Named Executive Officers, only Mr. Anderson is eligible to receive benefits under the Salaried Pension Plan.
401(k) Savings and Retirement Plan. We maintain the 401(k) Savings and Retirement Plan (the “401(k) Plan”), a qualified defined contribution plan, for our employees in the United States who work full-time. There are no enhanced 401(k) benefits available to the Named Executive Officers. Refer to the All Other Compensation Table above for the Company’s contributions to each Named Executive Officer under the 401(k) Plan.
We also maintain the following plan that is available to a limited number of senior management employees, including the Named Executive Officers:
Supplemental 401(k) Savings and Retirement Plan. We maintain an unfunded, nonqualified, deferred compensation plan, the Supplemental 401(k) Plan (the “Supplemental 401(k) Plan”), for our executive officers and senior management. The Supplemental 401(k) Plan has investment options that mirror our 401(k) Plan and provide participants with the ability to save for retirement with additional tax-deferred funds that otherwise would have been limited due to IRS compensation and benefit limitations. Refer to the All Other Compensation Table above for the Company’s contributions to each participating Named Executive Officer under the Supplemental 401(k) Plan.
Perquisites and Other Personal Benefits
We provide the following limited perquisites to our Named Executive Officers: automobile usage or stipends; phone allowances; personal excess liability coverage policy; and medical, dental, life insurance, short-term, and long-term disability coverage (standard benefits available to most of our employees). We also provide reimbursement of certain housing costs to Mr. Edgar: 13,791 shares will vest on February 25, 2016Scheinkman, who was required to maintain a residence in the Chicago area when he was appointed CEO.
Employment-Related Agreements
To assure stability and become exercisable on July 24, 2016,continuity of management, we have entered into severance and 13,791 shares will vest and become exercisable onchange in control agreements with each of February 25, 2017,our Named Executive Officers, including Mr. Scheinkman. In addition, as previously disclosed, the Company entered into an employment offer letter, dated April 16, 2015, with Mr. Scheinkman regarding his service as President and February 25, 2018.
Chief Executive Officer of the Company. In accordance with the offer letter, Mr. Garrett: 8,072 shares will vest on February 25, 2016Scheinkman receives an annual base salary of $650,000 and become exercisable on July 24, 2016,is eligible for the annual and 8,072 shares will vest and become exercisable on each of February 25, 2017, and February 25, 2018.
Mr. Knopp: 12,168 shares will vest on February 25, 2016 and become exercisable on July 24, 2016, 12,168 shares will vest and become exercisable on February 25, 2017, and 12,169 shares will vest and become exercisable on February 25, 2018.
long-term incentive awards described above.

(5)The amounts shown do not reflect realized compensation by the Named Executive Officers. The amounts shown represent the value of the stock options and restricted stock units granted to the Named Executive Officers based on the grant date fair value of the awards as determined in accordance with FASB ASC Topic 718.

See the summary below under the heading, “Potential Payments Upon Termination or Change in Control” for information regarding the severance and change in control agreements with our Named Executive Officers.



Outstanding Equity Awards at 20152016 Fiscal Year-End
The following table sets forth information on the holdings of stock options and stock awards by our Named Executive Officers as of the end of 2015.2016.
     Stock Awards
 Option AwardsNumber
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#) (2)		Market
Value
of Shares
or Units
of Stock
That
Have
Not
Vested
($) (3)		Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)		Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)
NameNumber
of
Securities
Underlying
Un‑exercised
Options (#)
Exercisable		Number
of
Securities
Underlying
Un‑exercised
Options (#)
Unexercisable
(1)		Option
Exercise
Price
($)		Option
Expiration
Date
Steven Scheinkman60,000 120,000 3.927/23/25    
 16,667 33,333 3.927/23/25    
 — 727,000 1.982/25/2665,000
16,250
—
—
Patrick Anderson4,800 - 12.753/17/18    
 12,169 24,336 3.927/23/15    
 4,700 9,400 3.927/23/15    
 — 152,000 1.982/25/267,394
1,849
  
       —
—
Marec Edgar13,791 27,582 3.927/23/25    
 5,300 10,600 3.927/23/25    
 — 172,000 1.982/25/2616,542
4,136
  
       —
—
         
(1) The vesting schedule for the shares underlying the options included in this column for each of the Named Executive Officers is as follows:
 
•    Mr. Scheinkman:
o 16,667 shares will vest and become exercisable on July 24, 2017;
o 16,666 shares will vest and become exercisable on July 24, 2018;
o 60,000 shares will vest and become exercisable on each of April 17, 2017, and April 17, 2018;
o 242,333 shares vested and became exercisable on February 25, 2017;
o 242,333 shares will vest and become exercisable on February 25, 2018; and
o 242,334 shares will vest and become exercisable on February 25, 2019.
 
•    Mr. Anderson:
o 4,700 shares will vest and become exercisable on each of July 24, 2017, and July 24, 2018;
o 12,168 shares vested and became exercisable on February 25, 2017;
o 12,168 shares will vest and become exercisable on February 25, 2018;
o 50,666 shares vested and became exercisable on February 25, 2017; and
o 50,667 shares will vest and become exercisable on each of February 25, 2018, and February 25, 2019.
 
•    Mr. Edgar:
o 5,300 shares will vest and become exercisable on each of July 24, 2017 and July 24, 2018;
o 13,791 shares vested and became exercisable on February 25, 2017;
o 13,791 shares will vest and become exercisable on February 25, 2018;
o 57,333 shares vested and became exercisable on February 25, 2017;
o 57,333 shares will vest and become exercisable on February 25, 2018; and
o 57,334 shares will vest and become exercisable on February 25, 2019.

 
(2) The vesting schedule for the restricted stock units included in this column for each of the Named Executive Officers is as follows:
 
•    Mr. Scheinkman:
o 65,000 restricted stock units will vest on December 31, 2017.


NameOption AwardsStock Awards
Number of Shares or Units of Stock That Have Not Vested (#)(2)Market Value of Shares or Units of Stock That Have Not Vested ($)(3)Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4)Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5)
Number of Securities Underlying Un-exercised Options (#) Exercisable
Number of Securities Underlying Un-exercised Options (#) Unexercisable
(1)


Option Exercise Price
($)
Option Expiration Date
Steven Scheinkman—
50,000
3.92
7/23/25
    
 —
180,000
3.92
7/23/25
    
     65,000
103,350
  
Scott Dolan(6)—
—
—
—
—
—
—
—
Patrick Anderson4,800
—
12.79
3/17/18
    
  14,100
3.92
7/23/25
    
  36,505
3.92
7/23/25
    
     10,396
16,530
  
       3,007
4,781
Marec Edgar—
15,900
3.92
7/23/25
    
 —
41,373
3.92
7/23/25
    
     21,479
34,152
  
       4,944
7,861
Thomas Garrett6,300
—
12.79
3/17/18
    
 —
24,216
3.92
7/23/25
    
     11,288
17,948
  
       3,380
5,374
Ronald Knopp—
14,100
3.92
7/23/25
    
 —
36,505
3.92
7/23/25
    
     12,779
20,319
  
       3,638
5,784
Stephen Letnich(7)—
—
—
—
—
—
—
—
  

(1)The vesting schedule for the shares included in this column for each of the Named Executive Officers is as follows:
Mr. Scheinkman:
•Mr. Anderson:
◦16,666 shares will vest and become exercisable July 24, 2016;
◦16,667 shares will vest and become exercisable on each of July 24, 2017 and July 24, 2018;
◦60,000 shares will vest on April 17, 2016, and become exercisable on July 24, 2016; and

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◦60,000 shares will vest and become exercisable on each of April 17, 2017, and April 17, 2018.

Mr. Anderson:
◦4,700 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018;
◦12,168 shares will vest on February 25, 2016, and become exercisable on July 24, 2016;
◦12,168 shares will vest and become exercisable on February 25, 2017; and
◦12,169 shares will vest and become exercisable on February 25, 2018.

Mr. Edgar:
◦5,300 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018;
◦13,791 shares will vest on February 25, 2016, and become exercisable on July 24, 2016; and
◦13,791 shares will vest and become exercisable on each of February 25, 2017, and February 25, 2018.

Mr. Garrett:
◦8,072 shares will vest on February 25, 2016, and become exercisable on July 24, 2016; and
◦8,072 shares will vest and become exercisable on each of February 25, 2017, and February 25, 2018.

Mr. Knopp:
◦4,700 shares will vest and become exercisable on each of July 24, 2016, July 24, 2017, and July 24, 2018;
◦12,168 shares will vest on February 25, 2016, and become exercisable on July 24, 2016;
◦12,168 shares will vest and become exercisable on February 25, 2017; and
◦12,169 shares will vest and become exercisable on February 25, 2018.

(2)The vesting schedule for the shares included in this column for each of the Named Executive Officers is as follows:

Mr. Scheinkman:
◦65,000
o 7,394 restricted stock units will vest on December 31, 2017.
Mr. Anderson:2017
◦3,002
•Mr. Edgar:
o 5,088 restricted stock units vested on April 1, 2017, and
o 11,454 restricted stock units will vest on December 31, 2016, and
2017.
◦7,394 will vest on December 31, 2017.
Mr. Edgar:
◦4,937 will vest on December 31, 2016,
◦5,088 will vest on April 1, 2017, and
◦11,454 will vest on December 31, 2017.
Mr. Garrett:
◦3,374 will vest on December 31, 2016, and
◦7,914 will vest on December 31, 2017.
Mr. Knopp:
◦3,632 will vest on December 31, 2016, and
◦9,147 will vest on December 31, 2017.

(3)Market value has been computed by multiplying $0.25, the closing price of the Company’s common stock on December 31, 2015,2016, by the number of shares of stock.

(4)Reflects performance shares at the threshold payout level under the 2014-2016 LTCP, which is described above in the section entitled, "2014 Long-Term Incentive Award."

(5)Market value has been computed by multiplying the closing price of the Company’s common stock on December 31, 2015, $1.59, by the number of performance shares.

(6)Pursuant to Mr. Dolan’s resignation of employment from the Company, 56,588 shares of his restricted stock units were vested on an accelerated basis as of April 16, 2015. All other outstanding stock awards were forfeited.

(7)Upon Mr. Letnich’s departure from the Company, all outstanding, unvested stock awards were forfeited.

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Option Exercises and Stock Vested - Fiscal Year 2015Potential Payments Upon Termination or Change in Control
The table below describes for eachshows the benefits that our current Named Executive Officer the amount of stock options exercised during 2015, including the number of shares acquired upon exercise and the value realized, and the number of shares acquired upon the vesting of performance shares and restricted stock units and the value realized by the executive before the payment of any applicable withholding taxOfficers would receive if their employment were terminated under various circumstances, based on the fair market value (or closing market price) of our common stock on the dateterms of the exercise or vesting,plans and agreements that were in effect as applicable.

    
 Option Awards Stock Awards
Name
Number of Shares Acquired on Exercise
(#)
Value Realized on Exercise
($)
 
Number of Shares Acquired on Vesting
(#)(1)
Value Realized on Vesting
($)
Steven Scheinkman— — — — 
Scott Dolan— — 56,588 225,220 
Patrick Anderson— — 2,300(2)3,657 
Marec Edgar— — — — 
Thomas Garrett— — 2,900(3)4,611 
Ronald Knopp— — 2,700(4)4,293 
Stephen Letnich— — — — 
 

(1)Amounts in this column include restricted stock units that vested and/or were surrendered to the Company in satisfaction of tax withholdings due upon receipt of restricted stock units that vested in 2015. The shares reported vested on December 31, 2015, other than for Mr. Dolan, whose shares vested on April 16, 2015.

No performance shares were earned with respect to the 2013-2015 LTCP.

The market price of our common stock was $1.59 on December 31, 2015, and $3.98 on April 16, 2015.

(2)Includes 715 shares withheld from Mr. Anderson to satisfy tax withholdings at a value of $1,137. Mr. Anderson has not sold any of the remaining shares he acquired upon this vesting.

(3)Includes 916 shares withheld from Mr. Garrett to satisfy tax withholdings at a value of $1,456. Mr. Garrett has not sold any of the remaining shares he acquired upon this vesting.

(4)Includes 839 shares withheld from Mr. Knopp to satisfy tax withholdings at a value of $1,334. Mr. Garrett has not sold any of the remaining shares he acquired upon this vesting.


Pension Benefits - Fiscal Year 2015
The table below describes for each Named Executive Officer the number of years of credited service and the estimated present value of the accumulated benefit under the Salaried Pension Plan and the Supplemental Pension Plan. Contributions and benefits under the Company’s Salaried Pension Plan and Supplemental Pension Plan were frozen as of June 30, 2008.
Only Messrs. Anderson, Garrett, and Knopp are eligible to receive benefits under the Salaried Pension Plan, and only Mr. Garrett is eligible to receive benefits under the Supplemental Pension Plan, as the Company ceased benefit accruals under these plans prior to the commencement of employment with the Company by the other current Named Executive Officers.

Under the Salaried Pension Plan and the Supplemental Pension Plan, the benefits are computed on the basis of straight-life annuity amounts. No payments of pension benefits were made to any of the Named Executive Officers in 2015. The Company does not

129




have a policy of granting extra pension service. For a description of the Company’s Salaried Pension Plan and Supplemental Pension Plan, see the section above entitled, "Retirement Benefits."

    
NamePlan Name
Number of Years Credited Service
(#)
Present Value of Accumulated Benefit
($)(1)
Patrick AndersonSalaried Employees Pension Plan0.758,955
Thomas GarrettSalaried Employees Pension Plan12.5349,297
 Supplemental Pension Plan12.590,157
Ronald KnoppSalaried Employees Pension Plan0.755,780
    

(1)The material assumptions used for this calculation are as described in Note 9 to the Company’s audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015.

Nonqualified Deferred Compensation - Fiscal Year 2015
The table below provides information on the Supplemental 401(k) Plan, the nonqualified deferred compensation plan in which our Named Executive Officers, other than Mr. Knopp, participated during 2015. For a description of the Company’s Supplemental 401(k) Plan, see the section above entitled, "Retirement Benefits."

       
Name
Executive Contributions in Last Fiscal Year
($)(1)
Company Contributions in Last Fiscal Year
($)(2)
 
Aggregate Earnings in Last Fiscal Year
($)
Aggregate Withdrawals / Distributions
($)
Aggregate Balance at Last Fiscal Year End
($)(3)
Steven Scheinkman11,40011,400 (891)—22,625
Scott Dolan825825 4,093(78,001)—
Patrick Anderson27,44111,077 (18,423)—174,894
Marec Edgar6,9656,965 (911)—19,099
Thomas Garrett11,3057,287 (20,479)—186,929
Stephen Letnich—— 512(6,905)—
       

(1)Executive contributions represent deferral of base salary and bonus paid during 2015, which amounts are also disclosed in the 2015 Salary column and the 2015 Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.
(2)All Company contributions to the Deferred Plan in 2015 are included as compensation in the 2015 Other Compensation column of the Summary Compensation Table.
(3)Represents vested balance as of December 31, 2015.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

General

To assure stability and continuity of management, we entered into severance and change in control agreements with each of our executive officers. In consideration of the payments that the executive officers may be entitled to receive under these agreements, the executive officers agree to comply with restrictive covenants, such as confidentiality, non-disparagement, non-compete, and non-solicit, during employment and for 12 months following any termination (five years with respect to confidentiality). In addition, the executive officers are required to sign a waiver and release at the time of termination in order to receive any separation benefits.


130




Voluntary/Involuntary For Cause Termination

An executive officer may terminate his or her employment at any time and we may terminate an executive officer’s employment at any time pursuant to our “at will” employment arrangements. We are not obligated to provide any special benefits or compensation upon a voluntary termination by the executive or upon an involuntary termination by the Company for “Cause.” The table below summarizes the termination benefits in either such termination:

2016.
BenefitDeathDisabilityFor
Cause/
Voluntary		Without
Cause/Good
Reason		Change in
Control Plus
Termination Provision		Change in
Control (No
Termination)
SalaryCash
Severance		Base—(1)—1x base salary paid through1x base salary (2x base salary for Messrs. Scheinkman and Edgar)—
Annual
Incentive		Paid (pro rata, based on actual results)ForfeitedForfeitedPaid (pro rata, based on actual results)Paid (pro rata, based on actual results)—
Unvested Restricted Stock and RSUsForfeitedForfeitedForfeitedForfeitedAccelerated vesting of outstanding and unvested restricted stock and RSUsAccelerated vesting of outstanding and unvested restricted stock and RSUs, if such awards are not assumed by the acquirer
Unvested OptionsForfeitedForfeitedForfeitedForfeitedAccelerated vesting of unvested optionsAccelerated vesting of outstanding and unvested options, if such awards are not assumed by the acquirer
Performance EquityForfeitedForfeitedForfeitedFor unvested performance shares for which the date of termination precedes end of performance period by less than one year, pro-rata payout based on actual resultsAccelerated vesting of unvested performance shares and the valuepro-rata payout upon change in control; payment to be made in cashAccelerated vesting of any accrued but unused vacation.unvested performance shares and pro-rata payout upon change in control; payment to be made in cash
Short-Term Incentive Plan:
Stock Options
Health & Welfare		Forfeiture of unvested stock options, and the right———Company-paid COBRA continuation coverage up to exercise vested stock options for three12 months following termination.Company-paid COBRA continuation coverage up to 12 months—
Short-Term Incentive Plan:
Cash Bonus
Outplacement		Not eligible for payment.———Assistance provided, up to $12,500Assistance provided, up to $12,500—
Long-Term Incentive Plan:
Stock Options
Company Auto		Forfeiture of unvested stock options, and the right to exercise vested stock options———Car or auto allowance continued for three12 months following termination.Car or auto allowance continued for 12 months—
Long-Term Incentive Plan:
Restricted Stock/Stock Units
Forfeiture of unvested time-based restricted stock and stock units.
Long-Term Incentive Plan: Performance Shares/UnitsForfeit any unvested performance shares.
(1) No cash severance due but a long-term disability policy provides salary continuation equal to 60% of salary.

As defined in the executive severance agreements “Cause”with the Named Executive Officers:
“Cause” generally means the reason for the executive’sNamed Executive Officer’s involuntary termination of employment was: (i) conviction of, or entry of a plea of guilty or nolo contendere to, a felony; (ii) engagement in egregious


misconduct involving serious moral turpitude to the extent that, in the reasonable judgment of the Company, the executive’sNamed Executive Officer’s credibility and reputation no longer conform to the standard of the Company’s executives; (iii) willful misconduct that, in the reasonable judgment of the Company, results in a demonstrable and material injury to the Company or its affiliates; (iv) willful and continued failure (other than a failure due to mental or physical illness) to perform assigned duties, provided that such assigned duties are consistent with the job duties of the executiveNamed Executive Officer and such failure is not cured within 30 days after notice from the Company; or (v) material breach of the Named Executive Officer’s severance agreement, provided that such breach is not cured within 30 days after notice of such breach from the Company.

Involuntary (Not for Cause or for “Good Reason)

If the employment of an executive officer is terminated due to either an involuntary termination by the Company without Cause or by the executive for “Good Reason,” then the executive would generally be eligible to receive the following:


131




BenefitTermination Provision
SalaryAn amount equal to one-hundred percent (100%) of the executive’s annual base salary in effect at the time of termination.
Short-Term Incentive Plan:
Stock Options
Forfeiture of unvested stock options, and the right to exercise vested stock options for three months following termination.
Short-Term Incentive Plan:
Cash Bonus
Pro-rata annual award for the number of days of the fiscal year of eligible participation, based on actual results, which will only be paid if and at the same time that the Company pays awards to active employees.
Long-Term Incentive Plan:
Stock Options
Forfeiture of unvested stock options, and the right to exercise vested stock options for three months following termination.
Long-Term Incentive Plan:
Restricted Stock/Stock Units
Forfeiture of unvested time-based restricted stock and stock units. No effect on vested restricted stock or restricted stock units.
Long-Term Incentive Plan: Performance Shares/UnitsFor unvested performance shares for which the date of termination precedes the end of the performance period by less than one year, pro-rata payout for the number of days of performance period eligible participation, based on actual results and will only be paid if and at the same time that the Company pays LTCP awards to active employees. No effect on vested performance shares.
Auto BenefitContinued use of the Company-owned or leased automobile or payment of any alternative automobile stipend for the 12-month period following termination.
Outplacement ServicesCompany-paid outplacement services for a 6-month period following termination (not to exceed $12,500 in total value).
Health and Welfare BenefitsCompany-paid health insurance continuation coverage for the 12-month period following termination.

As defined in the executive severance agreement, “Good Reason” generally means the executive officer’sNamed Executive Officer’s termination of his or hertheir employment as a result of any of the following events: (i) the Company reduces the executive officer’sNamed Executive Officer’s base salary by ten percent (10%) or more (either upon one reduction or during a series of reductions over a period of time); provided, that such reduction neither comprises a part of a general reduction for all of the Company’s executive officers as a group (determined as of the date immediately before the date on which the executive officerNamed Executive Officer becomes subject to such material reduction) nor results from a deferral of the executive officer’sNamed Executive Officer’s base salary; (ii) a material diminution in the executive’sNamed Executive Officer’s authority (including, but not limited to, the budget over which the executiveNamed Executive Officer retains authority), duties, or responsibilities within the Company; (iii) a material change by more than fifty (50) miles in the geographic location at which the executive must perform services for the Company; or (iv) any other action or inaction that constitutes a material breach by the Company of the executiveNamed Executive Officer’s severance agreement.

Change in Control Termination

If the employment of an executive officer is involuntarily terminated for any reason other than for Cause or if a “Good Reason termination occurs after a change in control, the executive officer would generally be eligible to receive the following:


132




BenefitTermination Provision
SalaryAn amount equal to one-hundred percent (100%) (or two-hundred percent (200%), for Messrs. Scheinkman and Edgar) of the executive’s annual base salary in effect at the time of termination.
Short-Term Incentive Plan:
Stock Options
Accelerated vesting of unvested stock options, and the right to exercise vested stock options for three months following termination.
Short-Term Incentive Plan:
Cash Bonus
Pro-rata annual award for the number of days of the fiscal year of eligible participation, based on actual results, which will only be paid if and at the same time that the Company pays awards to active employees.
Long-Term Incentive Plan:
Stock Options
Accelerated vesting of unvested stock options, and the right to exercise vested stock options for three months following termination.
Long-Term Incentive Plan:
Restricted Stock/Stock Units
Accelerated vesting of unvested time-based restricted stock and stock units.
Long-Term Incentive Plan: Performance Shares/UnitsAcceleration of the vesting of unvested performance shares under the LTCP, and pro-rata payout immediately upon a change in control for the number of days of performance period eligible participation which is based upon actual results as of the end of the completed calendar month immediately preceding the change in control, and payment to be made in cash.
Auto BenefitContinued use of the Company-owned or leased automobile or payment of any alternative automobile stipend for the 12-month period following termination.
Outplacement ServicesCompany-paid outplacement services for a 6-month period following termination (not to exceed $12,500 in total value).
Health and Welfare BenefitsCompany-paid health insurance continuation coverage for the 12-month period following termination.

As defined in the executive severance agreement, “Good Reason” in connection with a termination related to a change in control generally means the executive officer’sNamed Executive Officer’s termination of his or her employment as a result of any of the events noted in the preceding bullet point, or any of the following events: (i) the Company reduces the executive officer’sNamed Executive Officer’s base salary by ten percent (10%) or more (either upon one reduction or during a series of reductions over a period of time); provided, that such reduction neither comprises a part of a general reduction for all of the Company’s executive officers as a group (determined as of the date immediately before the date on which the executive officerNamed Executive Officer becomes subject to such material reduction) nor results from a deferral of the executive officer’sNamed Executive Officer’s base; (ii) the Company fails to continue in effect any plan in which the executiveNamed Executive Officer participates immediately prior to the change in control which is material to the executive’sNamed Executive Officer’s total compensation, unless an applicable arrangement (embodied in an ongoing substitute plan) has been made, or the Company fails to continue the executive’sNamed Executive Officer’s participation therein (or in such substitute plan) on a basis no less favorable to the executive’sNamed Executive Officer’s then-current peers as a group (determined as of the date immediately prior to the change in control); (iii) a demotion in position (including a decrease in organizational level) or a material diminution in the executive’sNamed Executive Officer’s authority (including, but not limited to, the budget over which the executiveNamed Executive Officer retains authority), duties, or responsibilities within the Company; (iv) a material change by more than fifty (50) miles in the geographic location at which the executiveNamed Executive Officer must perform services for the Company; or (v) any other action or inaction that constitutes a material breach by the Company of the executiveNamed Executive Officer’s severance agreement.

Change in Control Without Termination

UponNon‑Employee Director Compensation
Director Compensation Table – Fiscal Year 2016
The following table summarizes the compensation paid to or earned by the non‑employee directors for 2016. Employees of the Company who serve as directors receive no additional compensation for service as a change in control, without termination of employment, an executive officer would generally be eligible to receive the following:

director.
NameFees
Earned
or
Paid in
Cash
($)		 
Stock
Awards
($)(1)
 Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)		 
All
Other
Compensation
($)(2)
 Total
($)
Brian Anderson(3)
$82,375
 $—
-$—
 $640
 $83,015
Howard Brod Brownstein(4)
 19,728
  44,256
  —
  192
  64,176
Richard Burger(5)
 16,467
  52,278
  —
  294
  69,039
Reuben Donnelley(6)
 50,901
  —
  9,819
  640
  61,360
Pamela Forbes Lieberman(7)
 117,500
  52,278
  —
  640
  170,418
Gary Masse(8)
 98,846
  89,621
  —
  640
  189,107
Jonathan Mellin 80,416
  52,278
  —
  640
  133,334
Michael Sheehan(9)
 30,326
  52,278
  —
  294
  82,898
Kenneth Traub(10)
 67,341
  52,278
  —
  640
  120,259
Allan Young(11)
 55,272
  52,278
  —
  640
  108,190
Benefit(1)Payment
Stock Awards. On July 27, 2016, each director received an annual restricted stock award of 35,323 shares of our common stock. In addition to his annual grant, Mr. Masse also received a restricted stock award of 25,232 shares of our common stock in recognition of his election to chairpersonship of the Board and his increased responsibility. The amounts shown reflect the grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC Topic 718”). As of December 31, 2016, each director held the following number of shares subject to outstanding unvested stock awards:
•Mr. Brownstein – 31,839 shares;
•Ms. Forbes Lieberman – 58,844 shares;
•Mr. Mellin – 53,990 shares; and
•Mr. Sheehan. – 35,323 shares.
Retention Awards(2)Accelerated vesting of retention awards, subject
All Other Compensation. This column includes premium payments made by the Company in 2016 for personal excess liability insurance coverage.
(3)
Mr. Brian Anderson did not stand for reelection to the termsBoard on July 27, 2016. In recognition of such awards.his service to the Company, the Board approved the acceleration of Mr. Anderson’s unvested restricted stock awards, in the amount of 23,521 shares.
Stock Options; Time-Based Restricted Stock/Stock Units(4)Accelerated vesting of unvested stock options
Mr. Howard Brod Brownstein was appointed to the Board on September 2, 2016, and time-basedreceived a prorated restricted stock award of 31,839 shares.
(5)
Mr. Richard Burger was elected to the Board on July 27, 2016. Mr. Burger subsequently resigned on November 4, 2016, and forfeited all unvested equity awards.
(6)
Mr. Reuben Donnelley did not stand for reelection to the Board on July 27, 2016. In recognition of his service to the Company, the Board approved the acceleration of Mr. Donnelley’s unvested restricted stock unit awards, ifin the amount of 23,521 shares.
(7)
Ms. Pamela Forbes Lieberman's Board fees earned include $30,000 compensation received for being a member of Kreher Steel Company's Board of Directors. She was subsequently elected chairperson of the Board on February 9, 2017.
(8)
Mr. Gary Masse resigned from the Board on February 9, 2017 and forfeited all unvested equity awards.
(9)
Mr. Michael Sheehan was elected to the extent such awards are not converted into common stock of the acquirer (or if such common stock of the acquirer is not listedBoard on a national securities exchange). Payment in respect of the awards will be made in cash, based on the value of the Company’s common stock provided to shareholders generally in connection with the change in control.July 27, 2016.
Performance Shares/Units(10)Accelerated vesting of
Mr. Kenneth Traub resigned from the Board on November 4, 2016, and forfeited all unvested performance shares under the LTCP, and pro-rata payout immediately upon a change in control for the number of days of the performance period eligible participation, which is based upon actual results as of the end of the completed calendar month immediately preceding the change in control, to be paid in cash.equity awards.


133
(11)
Mr. Allan Young resigned from the Board on September 2, 2016. In recognition of his service to the Company, the Board approved the acceleration of 18,667 shares of Mr. Young’s 53,990 unvested restricted stock awards.




Death, Disability and RetirementNarrative Discussion of Non-Employee Director Compensation

Cash Compensation
If an executive officer terminates employment dueOur director compensation program provides that the cash compensation paid to, retirement, death, or disability, then the officer would generallyearned by, our non-employee directors will be entitled tocomprised of the following benefits.

components:
EventRoleBenefitTermination ProvisionAnnual Retainers*
RetirementDirectorSalaryPaid through termination date.
Annual IncentiveUnvested awards are forfeited.
Equity AwardsUnvested awards are forfeited. Vested options are exercisable for three years following retirement.
DeathSalaryPayment to beneficiary through termination date.
Annual IncentiveBeneficiary will be eligible to receive a pro-rata annual STIP award for the number of days of fiscal year eligible participation, based on actual results, which will be paid only if and at the same time that the Company pays STIP awards to active employees.
Equity AwardsVested and outstanding options would be exercisable by beneficiary through the normal expiration of such option.
DisabilitySalary60% of salary, reduced by other sources of income, up to a maximum payment of $10,000 per month.
Annual IncentiveForfeited.
Equity AwardsAll unvested restricted stock and performance stock are forfeited. Vested and outstanding incentive options can be exercised within one year after becoming disabled, and non-qualified options can be exercised within three years after becoming disabled.

Former CEO Departure
In connection with the resignation of Mr. Dolan, the Company entered into a Separation Agreement and General Release with Mr. Dolan dated April 16, 2015. In accordance with the Separation Agreement, Mr. Dolan received the following:
$1.3 million in cash with $650,000 to be paid within 14 days after the effective date of the Separation Agreement and the remaining $650,000 to be paid in four equal installments of $162,500 each on July 1, 2015, October 1, 2015, January 1, 2016, and March 1, 2016.
Immediate vesting of 56,588 outstanding restricted stock units.
Up to 12 months of health, dental and vision coverage for himself and his eligible dependent.
Up to $30,000 for executive outplacement services for up to 18 months following the date of the Separation Agreement.
Continued use of a Company issued vehicle for up to one year following the date of the Separation Agreement.

Former Chief Commercial Officer Departure

Mr. Letnich separated from employment with the Company in June 2015. In connection with his separation of employment, and pursuant to an existing severance agreement, Mr. Letnich received a severance payment of $325,024.

Payments Upon Termination or Change in Control Tables
The tables below show the estimated payments that our current Named Executive Officers would receive if their employment were terminated under various circumstances, based on the terms of the plans and agreements that were in effect as of December 31, 2015.

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BenefitSteven Scheinkman
DeathDisability
For
Cause/
Voluntary
Without Cause / Good Reason
Change
in
Control Termination
Change in Control (No Termination (1))
Cash Severance—$120,000—$650,000$1,300,000—
Annual Incentive$230,459——$230,459$230,459—
Unvested Equity
RSUs————$103,350$103,350
Options (2)
——————
Performance Equity (3)
——————
Subtotal$230,459$120,000—$880,459$1,633,809$103,350
Other Benefits:
Health & Welfare———$21,232$21,232—
Outplacement———$12,500$12,500—
Company Auto———$10,920$10,920—
Subtotal———$44,652$44,652—
Total$230,459$120,000—$925,111$1,678,461$103,350
       

   
BenefitPATRICK ANDERSON
DeathDisability
For
Cause/
Voluntary
Without Cause /
Good
Reason
Change
in
Control Termination
Change in Control (No Termination (1))
Cash Severance—$120,000—$300,000$300,000—
Annual Incentive$165,000——$165,000$165,000—
Unvested Equity
RSUs————$20,187$20,187
Options (2)
——————
Performance Equity (3)
——————
Subtotal$165,000$120,000—$465,000$485,187$20,187
Other Benefits:
Health & Welfare———$21,016$21,016—
Outplacement———$12,500$12,500—
Company Auto———$14,400$14,400—
Subtotal———$47,916$47,916—
Total$165,000$120,000—$512,916$533,103$23,125
       


135




   
BenefitMAREC EDGAR
DeathDisability
For
Cause/
Voluntary
Without Cause /
Good
Reason
Change
in
Control Termination
Change in Control (No Termination(1))
Cash Severance—$120,000—$340,000$680,000—
Annual Incentive$187,000——$187,000$187,000—
Unvested Equity
RSUs————$34,152$34,152
Options (2)
——————
Performance Equity (3)
——————
Subtotal$187,000$120,000—$527,000$901,152$34,152
Other Benefits:
Health & Welfare———$13,142$13,142—
Outplacement———$12,500$12,500—
Company Auto———$14,402$14,402—
Subtotal———$40,044$40,044—
Total$187,000$120,000—$567,044$941,196$34,152
       

   
BenefitTHOMAS GARRETT
DeathDisability
For Cause/
Voluntary
Without Cause /
Good Reason
Change in Control Termination
Change in Control (No Termination(1))
Cash Severance—$120,000—$248,756$248,756—
Annual Incentive——————
Unvested Equity
RSUs————$22,559$22,559
Options (2)
——————
Performance Equity (3)
——————
Subtotal—$120,000—$248,756$271,315$22,559
Other Benefits:
Health & Welfare (4)
——————
Outplacement———$12,500$12,500—
Company Auto———$14,400$14,400—
Subtotal———$26,900$26,900—
Total—$120,000—$275,656$298,215$22,559
       


136




   
BenefitRONALD KNOPP
DeathDisability
For Cause/
Voluntary
Without Cause /
Good
Reason
Change
in
Control Termination
Change in Control (No Termination(1))
Cash Severance—$120,000—$300,000$300,000—
Annual Incentive$165,000——$165,000$165,000—
Unvested Equity
RSUs————$24,612$24,612
Options (2)
——————
Performance Equity (3)
——————
Subtotal$165,000$120,000—$465,000$489,612$24,612
Other Benefits:
Health & Welfare———$21,232$21,232—
Outplacement———$12,500$12,500—
Company Auto———$17,016$17,016—
Subtotal———$50,748$50,748—
Total$165,000$120,000—$515,748$540,360$24,612
       

(1)The amounts in this column attributable to accelerated vesting of outstanding and unvested RSUs assume that such awards were not assumed by the acquirer in a change in control.
(2)The exercise price of the outstanding and unvested stock options held by our Named Executive Officers as of December 31, 2015 ($3.92 per share) was greater than the closing price of a share our common stock as of such date ($1.59 per share); thus, no amount attributable to the acceleration of unvested stock options upon certain terminations of employment is shown in these tables.
(3)Based on performance to date and the Company’s projected payout levels as of December 31, 2015, these tables assume payouts of $0 for the 2014-2016 LTCP performance share awards.
(4)Mr. Garrett did not participate in our health and welfare benefit plans as of December 31, 2015 and thus, no amount attributable to Company-paid health insurance continuation coverage is shown in this table.

NON-EMPLOYEE DIRECTOR COMPENSATION

Directors who are not employees of the Company receive an annual $60,000 cash retainer, paid in quarterly installments. Additional annual retainers are paid to our Board Leadership, as shown below:

RoleAdditional Annual Retainers$60,000
Board Chairperson$40,000
Audit Committee Chairperson*Chairperson$40,000
Finance Committee Chairperson$5,00010,000
Governance Committee Chairperson$5,000
Human Resources Committee Chairperson$7,500
*Includes service as a director of the Company’s Kreher Steel joint venture.Retainers are paid in quarterly installments.


Equity-Based Compensation
In addition, ourOur non-employee director compensation program also includes the following components:

Annualan annual restricted stock award in an amount valued at $70,000, based upon the 60-day60‑day trailing average stock price on the date of grant. The 2016 restricted stock vestsgrants vest upon the expiration of three yearsone year from the date of grant, and the 2017 restricted stock grants also are expected to vest upon the expiration of one year from the date of grant.

Other Compensation
Reimbursement is made for travel and accommodation expenses incurred to attend meetings and participate in other corporate functions.

Reimbursementfunctions and for the cost of attending one director continuing education program annually.

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Company-paid For each director, the Company pays and maintains coverage for personal excess liability, business travel accident, and director and officer liability insurance policies covering each of our directors.policies.

Directors Deferred Compensation Plan
The Company also maintains a Directors Deferred Compensation Plan (the “Directors Plan”), under which a director may elect to defer receipt of up to 100% of his or her board compensation for the following year. A director may elect to defer board compensation into either an interest or a stock equivalent investment option. Compensation held in the interest account is credited with interest at the rate of 6% per year compounded annually. Compensation deferred in the stock equivalent accounts are divided by the closing price of the Company’s common stock on the day as of which such compensation would otherwise have been paid to the director to yield a number of stock equivalent units.

Disbursement of the interest account and the stock equivalent unit account can be made only upon a director’s resignation, retirement, or death as a lump sum or in installments on one or more distribution dates at the director’s election made at the time of the election to defer compensation.

Director Compensation Table - Fiscal Year 2015

The following table summarizes the compensation paid to or earned by the non-employee directors for 2015. Employees of the Company who serve as directors receive no additional compensation for service as a director.

      
Name
Fees Earned or
Paid in Cash
($)
Stock Awards
($)(1)
Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)(2)
All Other Compensation
($)
Total
($)
Brian Anderson104,68869,815
—
—
174,503
Reuben Donnelley60,00069,815
7,076
—
136,891
Terrence Keating(3)
27,667—
—
—
27,667
James Kelly(4) 
69,11569,815
—
—
138,930
Pamela Forbes Lieberman(5)
100,00069,815
—
—
169,815
Gary Masse60,00069,815
—
—
129,815
John McCartney(6)
27,667—
—
—
27,667
Jonathan Mellin62,70869,815
—
—
132,523
Steven Scheinkman(7) 
2,500—
—
—
2,500
 35,79669,815
—
—
105,611
Allan Young32,50069,815
—
—
102,315
      

(1)
Stock Awards. On April 23, 2015, each director received an annual restricted stock award of 18,667 shares of our common stock. The amounts shown reflect the grant date fair value computed in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC Topic 718”). As of December 31, 2015, each director held the following number of shares subject to outstanding unvested stock awards:

Mr. Anderson - 30,629 shares;
Mr. Donnelley - 27,667 shares;
Ms. Forbes Lieberman - 27,667 shares;
Mr. Masse - 27,667 shares;
Mr. Mellin - 18,667 shares;
Mr. Traub - 18,667 shares; and
Mr. Young - 18,667 shares.

(2)
Change in Pension Value and Nonqualified Deferred Compensation Earnings.Nonqualified deferred compensation plan interest account balances earn interest at the rate of 6% per year. The amount shown in the table above reflects that portion of the earnings that exceeds 120% of the long-term applicable federal rate (based on the average 120% rate of 3.01% for 2015). In 2015, Mr. Donnelley deferred 100% of his annual cash retainer into an interest bearing account.

138





(3)
Mr. Terrence Keating resigned from the Board on March 17, 2015. In recognition of his service to the Company, the Board approved the acceleration of Mr. Keating’s unvested restricted stock awards, in the amount of 14,804 shares. Pursuant to his deferred compensation election, Mr. Keating also received payouts of the cash and stock equivalent units held in his account of $98,001.55 and 9,680 shares, respectively.

(4)
Mr. James Kellyresigned from the Board on October 30, 2015. In recognition of his service to the Company, the Board approved the acceleration of Mr. Kelly’s unvested restricted stock awards, in the aggregate amount of 27,667 shares.

(5)
Ms. Pamela Forbes Lieberman's Board fees earned include $30,000 compensation received for being a member of Kreher Steel Company's Board of Directors.

(6)
Mr. John McCartney resigned from the Board on March 17, 2015. In recognition of his service to the Company, the Board approved the acceleration of Mr. McCartney’s unvested restricted stock awards, in the aggregate amount of 14,804 shares. Pursuant to his deferred compensation election, Mr. McCartney also received payouts of the cash and stock equivalent units held in his account of $56,944.48 and 3,006 shares, respectively.

(7)
Mr. Steven Scheinkmanwas elected to the Company’s Board on March 17, 2015, and served as a non-employee director until his election as Chief Executive Officer on April 16, 2015. The compensation he received for his service as Chief Executive Officer in 2015 is set forth in the Summary Compensation Table.

Director Stock Ownership Guidelines

Director stock ownership guidelines require each director to beneficially own Company common stock with a value equivalent to four times the annual cash retainer (not including any chairperson retainer(s)). Directors have five years from the date they are initially elected as a director in which to accumulate the required amount. The equity components that are used to meet the director stock ownership guidelines are as follows:

Shares owned outright and beneficiallybeneficially;
Restricted stockstock;
Stock equivalent unitsunits; and
Unexercised, vested stock optionsoptions.

Please see
Oversight of Risk Management
The Board is actively involved in oversight of risks that could affect the “Stock Ownership” section below for additional detail onCompany. The Board implements its risk oversight function as a whole and through delegation to Board committees, which meet regularly and report back to the stock holdingsfull Board. The risk management role of each of our directors.
Notwithstanding anything to the contrary set forth in any of the Company’s filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act that might incorporate future filings, in whole or in part, the Report of the Human Resources Committee shall not be deemed to be “Soliciting Material,” are not deemed “filed” with the SEC and shall not be incorporated by reference into any filings under the Securities Act or Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in such filing, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.

Board committees is detailed further below:
REPORT OF THE HUMAN RESOURCES COMMITTEEBoard of Directors
Audit CommitteeGovernance CommitteeHuman Resources Committee
•    Oversees risk related to the Company’s financial statements, financial reporting process and accounting and legal matters, internal audit function, and the Company’s Code of Conduct program
•    Monitors the Company’s cyber security action plans
•    Reviews outcome of the Company’s periodic Enterprise Risk Assessment, which identifies and evaluates potential material risks that could affect the Company and identifies appropriate mitigation measures
•    Oversees governance-related risk, including development of the Company’s policies and practices, and Board succession planning
•    Oversees risks associated with the Company’s compensation programs

•    Reviews and approves compensation features that mitigate risk and align pay to performance with the interests of our executives and our stockholders

The Human Resources Committeefull Board retains responsibility for general oversight of risks. Key risks to the Company’s business strategy are considered by the Board as party of the Company's Board of Directors has reviewed and discussed with managementCompany’s annual strategy review. Additional information regarding the disclosures contained inrisks faced by the section entitled “Compensation Discussion and Analysis” of this Proxy Statement. Based upon their review and discussion, the applicable current and former members of the Human Resources Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” beCompany are included in this Annual Report on Form 10‑K for the Company's Proxy Statement relating to the 2016 Annual Meeting of Stockholders.year ended December 31, 2016.

Human Resources Committee,

/s/ Reuben S. Donnelley/s/ Pamela Forbes Lieberman/s/ Jonathan B. Mellin

Reuben S. Donnelley, Chairman         Pamela Forbes Lieberman         Jonathan B. Mellin

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ITEM 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized For Issuance Under Equity Compensation Plan

This table provides information regarding the equity authorized for issuance under our equity compensation plans as of December 31, 2015.2016. Note that our equity authorized for issuance under our 401(k) Plan is not included below.
      
          
Plan Category

(a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights
 


(b)
Weighted-average exercise price of outstanding options, warrants and rights
 
(c)
Number of securities remaining
available for
future issuances under equity compensation
plans
(excluding
securities
reflected in
column (a))

(a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights
 


(b)
Weighted-average exercise price of outstanding options, warrants and rights
 
(c)
Number of securities remaining
available for
future issuances under equity compensation
plans
(excluding
securities
reflected in
column (a))
Equity compensation plans approved by security holders1,131,238
(1)$4.43
(2)1,339,540
2,360,369
 (1) 
$2.25
 (2)2,989,631
 

Equity compensation plans not approved by security holders(3)
0
 N/A
(4)N/A (5)

Equity compensation plans not approved by security holders(3)
—
 N/A  (4)N/A (5)
 
Total1,131,238
 N/A
 1,339,540
2,360,369
 N/A  2,989,631
 
          

(1)
This number represents the gross number of underlying shares of common stock associated with outstanding stock options, restricted stock units and equity performance share award units granted under the Company’s 2008 Omnibus Incentive Plan. This does not include 169,631264,072 shares of non-vested restricted stock issued under the 2008 Omnibus Incentive Plan and outstanding as of December 31, 2015.2016. As of December 31, 2015,2016, the following equity remains outstanding and reserved for issuance:
•2,221,512 stock options
•138,857 restricted stock units
•0 equity performance shares

691,246 stock options
210,290 restricted stock units
229,702 equity performance shares

The number of equity performance shares outstanding represents the maximum number of shares to be awarded under the Company’s Long-Term Compensation Plans for the 2013-2015 and 2014-2016 performance periods.

(2)Equity performance share awards and restricted stock units granted under the 2008 Plan do not have an exercise price and are settled for shares of the Company’s common stock on a one-for-one basis based on actual performance compared to target goals or upon vesting. These awards have been disregarded for purposes of computing the weighted-average exercise price.

(3)The 1986 Directors Deferred Compensation Plan (“Directors Plan”) was not approved by the stockholders. A brief description of the material features of the Directors Plan is included above in the section entitled, "Non-Employee Director Compensation." As of December 31, 2015, there were no shares subject to outstanding deferrals under the Directors Plan.

The Company also granted 78,492 restricted stock units to Mr. Scott Dolan upon his appointment as President and Chief Executive Officer of the Company on October 15, 2012. As of December 31, 2015, all of Mr. Dolan’s 78,492 restricted stock units had vested. These restricted stock units were a non-plan grant made under NYSE inducement grant rules.


140




(4) The stock equivalent units granted under the Directors Plan do not have an exercise price and are settled for shares of the Company’s common stock on a one-for-one basis or in cash. These awards have been disregarded for purposes of computing the weighted-average exercise price.

(5)There is no limit on the number of securities representing stock equivalent units remaining available for issuance under the Directors Plan.

(2) Equity performance share awards and restricted stock units granted under the 2008 Plan do not have an exercise price and are settled for shares of the Company’s common stock on a one-for-one basis based on actual performance compared to target goals or upon vesting. These awards have been disregarded for purposes of computing the weighted-average exercise price.
(3) The 1986 Directors Deferred Compensation Plan (“Directors Plan”) was not approved by the stockholders. A brief description of the material features of the Directors Plan is included above in the section entitled, "Non-Employee Director Compensation." As of December 31, 2016, there were no shares subject to outstanding deferrals under the Directors Plan.
(4)The stock equivalent units granted under the Directors Plan do not have an exercise price and are settled for shares of the Company’s common stock on a one-for-one basis or in cash. These awards have been disregarded for purposes of computing the weighted-average exercise price.
(5) There is no limit on the number of securities representing stock equivalent units remaining available for issuance under the Directors Plan.
Security Ownership of Certain Beneficial Owners and Management

Directors and Management
The following table sets forth the number of shares and percentage of the Company’s common stock that was owned beneficially as of March 10,December 31, 2016, by each of the Company’s directors and each current or former named executive officer (“Named Executive Officer”)Officer set forth in the Summary Compensation Table, and by all directors, director nominees and executive officers as a group, with each person having sole voting and dispositive power except as indicated. Unless otherwise indicated, the address of each beneficial owner listed below is c/o A.M. Castle & Co., 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523.indicated:
    
Beneficial Owner
Shares of Common
Stock Beneficially
Owned (1)
Percentage of Common StockAdditional Information
Directors   
Brian Anderson69,894
*
 
Reuben Donnelley4,288,652
18.8%See note 2 under “Principal Stockholders” table below.
Pamela Forbes Lieberman50,017
               *
 
Gary Masse35,471
*
 
Jonathan Mellin5,151,938
22.6%See note 2 under “Principal Stockholders” table below.
Kenneth Traub37,555
*
See note 4 under “Principal Stockholders” table below.
Allan Young18,667
*
See note 4 under “Principal Stockholders” table below.
Named Executive Officers   
Steven Scheinkman7,500
*
 
Patrick Anderson25,682
*
Includes 4,800 vested, unexercised stock options.
Marec Edgar0
*
 
Thomas Garrett30,900
*
Includes 6,300 vested, unexercised stock options.
Ronald Knopp16,344
*
 
Former Named Executive Officers   
Scott Dolan238,265
*
 
Stephen Letnich0
*
 
All directors and executive officers as a group (13 persons)...7,186,503
31.5%Includes 11,100 vested, unexercised stock options.
    
* Percentage of shares owned equals less than 1%.


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Beneficial OwnerShares of
Common
Stock
Beneficially
Owned(1)		Percentage
of Common
Stock		Additional Information
Directors and Director Nominees   
Pamela Forbes Lieberman85,340*
 
Jonathan Mellin10,568,05632.45%See “Principal Stockholders” table, note 2.
Michael Sheehan135,323*
 
Howard Brod Brownstein31,839*
 
Named Executive Officers   
Steven Scheinkman149,167*
Includes 76,667 vested, unexercised stock options.
Patrick Anderson52,014*
Includes 21,669 vested, unexercised stock options.
Marec Edgar40,570*
Includes 19,091 vested, unexercised stock options.
All directors, director nominees
and executive officers as a group
(7 persons)		11,062,30933.97% 
    
* Percentage of shares owned equals less than 1%.

Principal Stockholders
The only persons who held of record or, to our knowledge (based on our review of Schedules 13D, 13F and 13G, and amendments thereto), owned beneficially more than 5% of the outstanding shares of our common stock as of March 10,December 31, 2016, are set forth below, with each person having sole voting and dispositive power except as indicated:
    
Name and Address of Beneficial Owner
Shares of Common
Stock Beneficially
Owned
 Percentage of Common Stock (1)
    
Jonathan B. Mellin
Reuben S. Donnelley
W.B. & Co.
FOM Corporation
     30 North LaSalle Street, Suite 1232
     Chicago, Illinois 60602-2504
6,789,269(2)29.8%
Stone House Capital Management, LLC
SH Capital Partners, L.P.
Mark Cohen
       950 Third Avenue, 17th Floor
       New York, New York 10022

          4,000,000 (3)17.5%
Raging Capital Master Fund, Ltd.
 c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY 1-9007, Cayman Islands
Raging Capital Management, LLC
William C. Martin
Kenneth H. Traub
Allan J. Young
Robert L. Lerner
       Ten Princeton Avenue, P.O. Box 228
       Rocky Hill, New Jersey 08553
Richard N. Burger
4,687,017 (4)20.6%
Dimensional Fund Advisors LP
       Building One
       6300 Bee Cave Road
       Austin, Texas, 78746
1,386,065(5)6.1%
Royce & Associates, LLC
       745 Fifth Avenue
       New York, New York 10151   
2,719,632(6)11.9%
    

Name and Address of Beneficial OwnerShares of
Common
Stock Beneficially
Owned		 Percentage of
Common Stock (1)
Jonathan B. Mellin
W.B. & Co.
FOM Corporation
30 North LaSalle Street, Suite 1232
Chicago, Illinois 60602-2504		10,568,056(2)32.45%
Osterweis Capital Management, Inc.
One Maritime Plaza, Suite 800
San Francisco, CA 94111

2,247,119(3)6.9%
Royce & Associates, LLC
745 Fifth Avenue
New York, New York 10151		1,977,004(4)6.1%
(1)Applicable percentage ownership is based upon 22,794,39032,566,609 shares of common Stockstock outstanding as of March 10,December 31, 2016.
(2)Based on a Schedule 13D/A filed with the SEC on February 19, 2016.December 21, 2016 by W.B. & Co. shares(“WB”), Jonathan B. Mellin, Reuben S. Donnelley, and FOM Corporation (“FOM”). The general partners of WB are Mr. Mellin and Mr. Donnelley, who share voting power with respect to 4,228,281 shares of common stock. Mr. Mellin has sole voting power over 54,323beneficially owned by WB. FOM is a trustee and custodian, as applicable, with respect to certain trusts and custodial accounts for which WB holds shares of common stock shared voting power over 5,097,615 shares of common stock, sole dispositive power over 109,791 shares of common stock and shared dispositive power over 869,334 shares of common stock. Mr. Donnelley has sole voting and dispositive power over 33,471 shares of common stock and shared voting power over 4,228,281 shares of common stock. FOM Corporation has sole voting power over 1,594,372 shares of common stock, shared voting and dispositive power over 572,688 shares of common stock and shared dispositive power over 572,688 shares of common stock.the Company.
W.B. & Co. shares voting power with respect to 8,759,076 shares of common stock no sole voting power and no sole or shared dispositive power. Mr. Mellin has sole voting power over 939,646 shares of common stock, shared voting power over 9,628,410 shares of common stock, sole dispositive power over 280,377 shares of common stock and shared dispositive power over 1,619,334 shares of common stock. Mr. Mellin expressly disclaims beneficial ownership of these shares, except with respect to Mr. Mellin’s pecuniary interest therein and these shares include the shares owned by WB. Mr. Donnelley has sole voting power over 33,471 shares of common stock, shared voting power over 8,759,076 shares of common stock, sole dispositive power over 33,471 shares of common stock and shared dispositive power over no shares of common stock. Mr. Donnelly expressly disclaims beneficial ownership of these shares, except with respect to Mr. Donnelly’s pecuniary interest therein and these shares include the shares owned by WB. FOM Corporation has sole voting power over 1,594,372 shares of common stock, sole dispositive power over 8,988,611, and shared voting and dispositive power over 572,688 shares of common stock.
(3)Based on a Schedule 13D/A filed with the SEC on March 1, 2016. Each of Stone House Capital Management, LLC, SH Capital Partners, L.P. and Mark Cohen share voting and dispositive power with respect to the 4,000,000 shares of common stock beneficially owned by them.
(4)Based on a Schedule 13D/13G/A filed with the SEC on February 26, 2016. Each of Raging Capital Management, LLC and William C. Martin share voting and dispositive power with respect to 4,630,795 shares of common stock. Mr. Traub has sole voting power over 37,555 shares of common stock and sole dispositive power over 18,888 shares of common stock. Mr. Young has sole voting power over 18,667 shares of common stock.14, 2017.
(5)Based on a Schedule 13G/A filed on February 9, 2016.

142(4) Based on a Schedule 13G/A filed with the SEC on January 6, 2017.




(6)Based on a Schedule 13G/A filed on January 12, 2016.

ITEM 13 — Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Party Transactions
Our Related Party Transactions Policy governs the review, approval, and ratification of transactions involving the Company and related persons where the amount involved exceeds $120,000. Related persons include:

Directors
Director nominees
Executive officers
5% stockholders
Immediate family members of the above persons
Entities in which the above persons have a direct or indirect material interest

Potential related party transactions are reviewed by the General Counsel, and if the General Counsel determines that the proposed transaction is a related-party transaction for such purposes, the proposed transaction is then submitted to the Governance Committee for review.

The Governance Committee considers all of the relevant facts and circumstances available, including but not limited to:

whether the proposed transaction is on terms that are fair to the Company and no less favorable to the Company than terms that could have been reached with an unrelated third party;
the purpose of, and the potential benefits to, the Company;
the impact on a director’s independence, in the event such person is a director; and
whether the proposed transaction would present an improper conflict of interest.
In the event that the Company becomes aware of a related-party transaction that has not been previously approved or ratified by the Governance Committee, a similar process will be undertaken by the Governance Committee in order to determine if the existing transaction should continue or be terminated.

A copy of our Related Party Transactions Policy can be found on the “Corporate Governance” section of our website at https://www.castlemetals.com/investors/corporate-governance.

Related Party Transactions and Relationships

Raging Capital Management, LLC

May 2016 Settlement Agreement
On March 17, 2015,May 27, 2016, the Company entered into a Settlement Agreement (the “May 2016 Settlement Agreement”) with the Raging Capital Management, LLCGroup and certain of its affiliates (the “Raging Capital Group”),Messrs. Traub, Young and Mr. Steven W. Scheinkman, Mr. Kenneth Traub, and Mr. Allan Young.

Burger.
Pursuant to the terms of the May 2016 Settlement Agreement, the size of the Board of Directors was expanded from 9 to 10 members, andof the Company agreed to nominate three Raging Capital Group director nomineesfor election at the Company’s 2016 Annual Meeting of Stockholders: (a) Richard N. Burger, (b) Michael Sheehan and (c) Gary A. Masse to our Board. Theserve as Class III directors (with a term expiring at the Company’s 2019 Annual Meeting of Stockholders). In addition, the Board also formed aagreed to (i) disband the Finance Committee to review, evaluate and make recommendations to the Board regarding the Company’s capital structure, working capital management, and other financial policies.

If the members of Raging Capital Group cease collectively to beneficially own less than 1,762,835 shares of the Company’s common stock, then one Raging Capital Group nominee selected byit had previously formed in connection with a prior settlement agreement entered into with the Raging Capital Group (initially, Mr. Young) will promptly tender his resignation from the Boardin March 2015, and any committee(ii) hold its 2016 Annual Meeting of Stockholders no later than July 27, 2016.
The members of the BoardRaging Capital Group and Messrs. Burger, Traub and Young, also agreed to customary standstill restrictions during the standstill period beginning on which he isthe date of execution of the May 2016 Settlement Agreement and ending on the date that was to be one day after the Company’s 2018 Annual Meeting of Stockholders, including specified prohibitions against solicitation of proxies, submission of stockholder proposals, nomination of director candidates, formation of a member; provided,group, calling a special meeting and engaging in extraordinary transactions with or involving the Company.
The standstill also restricted the members of the Raging Capital Group from acquiring beneficial ownership of in excess of 22.5% of the Company’s total outstanding common stock or beneficial ownership of any of the Company’s 12.75% Senior Secured Notes due 2016 (the “Old Secured Notes”), 12.75% Senior Secured Notes due 2018 (the “New Secured Notes”), 7.0% Convertible Senior Notes due 2017 (the “Old Convertible Notes”), 5.25% Convertible Senior Secured Notes due 2019 (the “New Convertible Notes”) or any other interests in the Company’s indebtedness such that the Board may, but is not obligated, to accept anyaggregate principal amount of all such resignation.indebtedness exceeds $40,000,000.

Following Mr. Dolan’s resignation
November 2016 Settlement Agreement
On November 3, 2016, the Company entered into a Settlement Agreement (the “November 2016 Settlement Agreement”) with the Raging Capital Group, and Messrs. Scheinkman, Traub, Young, and Burger. The November 2016 Settlement Agreement superseded the appointment of Mr. Scheinkman as Presidenttwo prior settlement agreements (as amended) by and Chief Executive Officer of the Company,among the Company and the Raging Capital Group entered into a First Amendmentdated March 17, 2015, and May 27, 2016, which have no further force or effect.
The members of the Raging Capital Group, Messrs. Traub, Young, and Burger agreed to customary standstill restrictions during the standstill period beginning on the date of execution of the November 2016 Settlement Agreement to allowand ending on the Company to reducedate that is one day after the sizeCompany’s 2018 Annual Meeting of its current Board to nine directors. A Second Amendment toStockholders, including specified prohibitions against solicitation of proxies, submission of stockholder proposals, nomination of director candidates, formation of a group, calling a special meeting, and engaging in extraordinary transactions with or involving the Company. The standstill restrictions are substantially consistent with those set forth in the May 2016 Settlement

143

Agreement.

The standstill also restricts the members of the Raging Capital Group from acquiring beneficial ownership of shares of the Company’s common stock (excluding (i) 18,888 shares of common stock held by Mr. Traub as of the date of the November 2016 Settlement Agreement; (ii) 18,667 shares of common stock held by Mr. Young as of the date of the November 2016 Settlement Agreement; and (iii) shares of common stock underlying the Company’s New Convertible Notes owned by the Raging Capital Group as of the date of the November 2016 Settlement Agreement) or beneficial ownership of any of the Company’s New Secured Notes, Old Convertible Notes, New Convertible Notes or any other interests in the Company’s indebtedness (excluding $27,500,000 principal amount of the Company’s New Secured Notes and $2,940,000 principal amount of the Company’s New Convertible Notes then owned by the Raging Capital Group).


The November 2016 Settlement Agreement was entered into following Mr. Kelly’s resignation in October 2015connection with a transaction pursuant to allowwhich W.B. & Co. had purchased 4,630,795 shares of our common stock owned by Raging Capital Master Fund, Ltd. Jonathan B. Mellin, a director of the Company, to further reduce the sizeis one of the Boardgeneral partners of W.B. & Co. and shares voting power with respect to eight directors. All other termsthe shares of the Company’s common stock owned by W.B. & Co. Following this purchase, W.B. & Co. owned approximately 35% of the Company’s outstanding common stock.
Raging Capital Settlement Agreement remain unchanged.Group’s Ownership of Equity and Debt Securities

In the first quarter of 2016, the Company entered into separate Transaction Support Agreements (the “Support Agreements”) with holders of the Company’s Old Secured Notes and Old Convertible Notes to refinance the Company’s public indebtedness. The Raging Capital Group was party to one of the Support Agreements.
Two of our former directors, Messrs. Young and Traub, are Managing Partners of, and hold an economic interest in, Raging Capital Group. Raging Capital Group currently owns approximately 20.6% ofAt the Company’s outstanding common stock, $27,500,000 principal amount of the Company’s 12.75% Senior Secured Notes due 2018 (the “New Notes”), and $4,200,000 principal amount of the Company’s 7.0% Convertible Notes due 2017 (the “Existing Convertible Notes”).

As a holder of the Company's 12.75% Senior Secured Notes due 2016 (the “Existing Notes”), which were exchanged through a private exchange (the “Exchange Offer”) in early 2016 for the Company’s New Notes pursuant to the terms of the Support Agreements (as defined below), Raging Capital Group received interest payments in 2015 with respect to such notes, commensurate with other holders of the Exiting Notes. In connection with the Exchange Offer, Raging Capital Group received a consent payment commensurate with similarly situated holders of the Existing Notes, and is expected to receive interest payments with respect to the New Notes in 2016, commensurate with other holders of the New Notes.

Raging Capital Group also received interest payments in 2015 with respect to the Existing Convertible Notes, commensurate with other holders of the Existing Convertible Notes.
On January 15, 2016,time the Company entered into separate Transactionthe Support Agreements (the “Support Agreements”)Agreement with holdersRaging Capital Group, Raging Capital Group owned in the aggregate $27.5 million of the New Secured Notes, $4.2 million of the Old Convertible Notes and approximately 20% of the Company’s Existing Notes and the Company’s Existing Convertible Notes to refinance the Company’s public indebtedness. On January 29, 2016, certain terms of the Support Agreements were amended. Raging Capital Group is party to one of the Support Agreements. common stock.
For additional information on the terms of the Support Agreements, as amended, see the Company’s Current Reports on Form 8-Ks8-K filed with the SEC on January 15, 2016, and February 3, 2016, March 22, 2016, and May 13, 2016.

As a holder of the Company's Old Secured Notes and Old Convertible Notes, which were exchanged in early 2016 for the Company’s New Secured Notes and New Convertible Notes, respectively, Raging Capital Group received interest payments in 2016 with respect to the Old Secured Notes and Old Convertible Notes, commensurate with other holders. In connection with the exchange of its Old Secured Notes, Raging Capital Group received a consent payment commensurate with similarly situated holders of the Old Secured Notes. Raging Capital Group also received interest payments with respect to the New Secured Notes and New Convertible Notes in 2016, commensurate with other holders thereof.
W.B. & Co.Simpson Estates, Inc.
One of our current directors, Mr. Mellin is the President and FOM Corporation

On February 9, 2016, the Company entered intoChief Executive Officer of, and holds an agreement (the “Agreement”) with a companyeconomic interest in, entities affiliated with W.B. & Co. and FOM Corporation (the “Significant Equity Holder”Simpson Estates, Inc. (collectively, “Simpson”), which together hold in the aggregate. Simpson currently owns approximately 28%35% of the Company’s outstanding common stock and have two representatives serving on the Company’s board of directors (Messrs. Mellin and Donnelley). Pursuant the Agreement, the Significant Equity Holder agreed to purchase $32,496,000 aggregate$32.496 million principal amount of Existing Notes from a significant holderthe Company’s New Secured Notes. Simpson is also party to one of the Company’s public debt (the “Significant Debt Holder”). As part of the Agreement, the Significant Debt Holder agreedSupport Agreements described above. Simpson received interest payments in 2016 with respect to tenderits Old Secured Notes, and not withdraw prior to the expiration of the Exchange Offer referenced above the remaining principal amount of Existing Notes that it held. In addition, pursuant to a separate letter agreementin connection with the Company, the Significant Equity Holder agreed to tender and not withdraw prior to the expirationexchange of the Exchange Offer the Existingits Old Secured Notes, it agreed to purchase. In consideration of these agreements to participate in the Exchange Offer, the Company agreed to pay to the Significant Equity Holder and the Significant Debt Holder thereceived a consent payment provided for in the Exchange Offer, commensurate with similarly situated noteholders, and to reimburseholders of the Significant Debt Holder $50,000 in legal fees.Old Secured Notes.


Simpson also received interest payments with respect to the New Secured Notes in 2016, commensurate with other holders thereof.
Director Independence
Our common stock is traded on the OTCQB Ventures Market, which does not maintain any standards regarding the “independence” of the directors on the Board, and we are not subject to the requirements of any national securities exchange or inter-dealer quotation system. In the absence of such requirements, we have elected to use the definition for “independent director” under the NYSE listing standards and the standards set by the Board in the Company’s Corporate Governance Guidelines. The Board reserves the right to apply a different standard for this or other determinations, as it determines is in the best interest of the Company and its stakeholders, in accordance with applicable law and regulations.
The Board has affirmatively determined that each current board member, except for Mr. Scheinkman, (i) is “independent” within the definitions contained in the current NYSE listing standards and the standards set by the Board in the Company’s Corporate Governance Guidelines, and (ii) has no other “material relationship” with the Company that could interfere with his or her ability to exercise independent judgment. In addition, the Board has determined that each member of the Audit Committee is “independent” within the definition contained in current SEC rules.


144




ITEM 14 — Principal Accountant Fees and Services

Audit and Non-Audit Fees

The following table sets forth the aggregate fees billed or expected to be billed by Deloitte for professional services incurred for the years ended December 31, 2015,2016 and 2014,2015, on our behalf:
 
Fee Category2015
    2014
2016
 2015
Audit Fees$1,461,400
$1,240,400

$1,722,300
 
$1,461,400
Audit-Related Fees—
—
117,000
 —
Tax Fees95,200
204,400
136,500
 95,200
All Other Fees—
—
—
 —
Total Fees$1,556,600
$1,444,800

$1,975,800
 
$1,556,600
    
A description of the type of services provided in each category is as follows:
Audit Fees
Consists of fees billed for professional services rendered for the audits of the Company’s annual financial statements on Form 10-K and internal controls over financial reporting, review of the interim financial statements included in the Company’s quarterly reports on Form 10-Q, and other services normally provided in connection with statutory and regulatory filings or engagements.

Audit-RelatedAudit‑Related Fees
Consists of fees billed for professional services rendered for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements.

Tax Fees
Consists of fees billed for professional services rendered for tax compliance, tax advice, and tax planning. These services include assistance with the preparation of various tax returns.

Pre-ApprovalPre‑Approval Policy for Audit and Non-AuditNon‑Audit Services

The Audit Committee has adopted a policy for the pre-approval of all audit and permitted non-audit services to be provided by the Company’s independent auditor. Also, specific pre-approval by the Audit Committee is required for any proposed services exceeding pre-approved cost levels. The Audit Committee periodically reviews reports summarizing all services provided by the independent auditor. In 2015,2016, the Audit Committee pre-approved all audit and non-audit services provided to the Company in accordance with the Audit Committee pre-approval policy.




145




PART IV
ITEM 15 — Exhibits and Financial Statement Schedules
A. M. Castle & Co.
Index Toto Financial Statements
 
 Page
Consolidated Statements of Operations and Comprehensive Loss—For the years ended December 31, 2015,6, 2015 and 2014 and 2013
4437
Consolidated Balance Sheets—December 31, 20156 and 20142015
4538
Consolidated Statements of Cash Flows—For the years ended December 31, 2015,6, 2015 and 2014 and 2013
4639
Consolidated Statements of Stockholders’Stockholders' (Deficit) Equity – For the years ended December 31, 2015,6, 2015 and 2014 and 2013
4741
Notes to Consolidated Financial Statements
4842
ReportReports of Independent Registered Public Accounting Firms
90
Kreher Steel Company, LLC Financial Statements
9175
Exhibit Index 

146




The following exhibits are filed herewith or incorporated by reference.
   Incorporated by Reference Herein
Exhibit
Number		 Description of ExhibitFormExhibitFiling DateFile No.
    ��  
3.1 Articles of Restatement of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012.10-Q3.1May 3, 20121-5415
       
3.2 Amendment to Articles of Incorporation of the Company.8-K3.1August 31, 20121-5415
       
3.3 Articles Supplementary of the Charter of the Company.8-A3.1September 6, 20121-5415
       
3.4 Articles Supplementary of the Charter of the Company.8-K3.1August 14, 20131-5415
       
3.5 Amended and Restated Bylaws of the Company, as adopted April 6, 2017.8-K3.1April 7, 20171-5415
       
4.1 Indenture, dated as of December 15, 2011, relating to the 7.00% convertible senior notes due 2017, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee.8-K4.1December 21, 20111-5415
       
4.2 
Indenture, dated as of February 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.

8-K4.2February 11, 20161-5415
       
4.3 Indenture, dated as of May 19, 2016, relating to the Company’s 5.25% convertible notes due 2019, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1May 19, 20161-5415
       
4.4 First Supplemental Indenture, dated as of May 16, 2011, entered into as of June 2, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1June 13, 20161-5415
       
4.5 Second Supplemental Indenture, dated as of June 9, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.2June 13, 20161-5415
       
4.6 Third Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.2December 14, 20161-5415
       
4.7 Fourth Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.3December 14, 20161-5415
       
4.8 First Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 5.25% convertible notes due 2019, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.4December 14, 20161-5415
       
4.9 Form of Warrant to Purchase Common Stock.8-K4.1December 14, 20161-5415


  Incorporated by Reference Herein Incorporated by Reference Herein
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No. Description of ExhibitFormExhibitFiling DateFile No.
  
3.1 Articles of Restatement of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012.10-Q3.1May 3, 20121-5415
 
3.2 Amendment to Articles of Incorporation of the Company.8-K3.1August 31, 20121-5415
 
3.3 Articles Supplementary of the Charter of the Company.8-A3.1September 6, 20121-5415
 
3.4 Articles Supplementary of the Charter of the Company.8-K3.1August 14, 20131-5415
 
3.5 Amendment to the Amended and Restated Bylaws of the Company, adopted March 17, 2015.8-K3.1March 17, 20151-5415
 
4.1 Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1December 21, 20111-5415
 
4.2 Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors and U.S. Bank National Association, as trustee.8-K4.2December 21, 20111-5415
 
4.3 Rights Agreement, dated as of August 31, 2012, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent.8-K4.1August 31, 20121-5415
 
4.4 Amendment No. 1 to Rights Agreement, dated as of August 13, 2013, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent.8-K4.1August 14, 20131-5415
 
10.1* A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009.10-K10.14March 12, 20091-5415
10.1 Registration Rights Agreement, dated as of December 8, 2016, by and between A.M. Castle & Co. and Highbridge Capital Management, LLC, Corre Partners Management, LLC, Whitebox Credit Partners, L.P. WFF Cayman II Limited and SGF.8-K10.2December 14, 20161-5415
  
10.2* A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009.10-K10.15March 12, 20091-5415 A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009.10-K10.14March 12, 20091-5415
  
10.3* First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009).8-K10.1April 16, 20091-5415 A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009.10-K10.15March 12, 20091-5415
  
10.4* Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers.8-K10.16July 29, 20091-5415 First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009).8-K10.1April 16, 20091-5415
  
10.5* Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.20March 24, 20101-5415 Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers.8-K10.16July 29, 20091-5415
  
10.6* Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.21March 24, 20101-5415 Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.20March 24, 20101-5415
  
10.7* Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.22March 24, 20101-5415 Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.21March 24, 20101-5415
  
10.8* Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.23March 24, 20101-5415 Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.22March 24, 20101-5415
  
10.9* Form of Non-Employee Director Restricted Stock Award Agreement.8-K10.1April 27, 20101-5415 Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.23March 24, 20101-5415
  
10.10* Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO.8-K10.24September 21, 20101-5415 Form of Non-Employee Director Restricted Stock Award Agreement.8-K10.1April 27, 20101-5415
  
10.11* Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO.8-K10.24September 21, 20101-5415
 
10.12* Form of Amended and Restated Severance Agreement for executive officers other than the CEO.8-K10.26December 23, 20101-5415
 
10.13* Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.29March 8, 20111-5415
 
10.14* A.M. Castle & Co. 2008 Omnibus Incentive Plan (formerly known as the A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan) as Amended and Restated as of July 27, 2016.DEF14AAppendix AJune 17, 20161-5415
 
10.15 Credit Agreement, dated December 8, 2016, by and among A.M. Castle & Co., certain subsidiaries of A.M. Castle & Co., as borrowers and guarantors, the Financial Institutions, and Cantor Fitzgerald Securities, as agent.8-K10.1December 14, 20161-5415
 
10.16 Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 21, 20111-5415

147




   Incorporated by Reference Herein
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.
       
10.11* Form of Amended and Restated Severance Agreement for executive officers other than the CEO.8-K10.26December 23, 20101-5415
       
10.12* Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.29March 8, 20111-5415
       
10.13* A.M. Castle & Co. 2008 Omnibus Incentive Plan (formerly known as the A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan) as Amended and Restated as of April 25, 2013.DEF14AAppendix AMarch 12, 20131-5415
       
10.14 Loan and Security Agreement, dated December 15, 2011, by and among A.M. Castle & Co., Transtar Metals Corp., Advanced Fabricating Technology, LLC, Oliver Steel Plate Co., Paramont Machine Company, LLC, Total Plastics, Inc., Tube Supply, LLC, A.M. Castle & Co. (Canada) Inc., Tube Supply Canada ULC, the other Loan Parties party thereto, the lenders which are now or which hereafter become a party thereto, and Wells Fargo Bank, National Association, a national banking association, in its capacity as administrative agent and collateral agent for Secured Parties.8-K10.4December 21, 20111-5415
       
10.15 Pledge and Security Agreement, dated as of December 15, 2011, by A.M. Castle & Co., and its subsidiaries that are party thereto, in favor of U.S. Bank National Association, as collateral agent, for the benefit of the Secured Parties.8-K10.1December 21, 20111-5415
       
10.16 Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 21, 20111-5415
       
10.17 Amendment No. 1 to Loan and Security Agreement, dated as of January 21, 2014, by and among A.M. Castle & Co., Advanced Fabricating Technology, LLC, Paramont Machine Company, LLC, Total Plastics, Inc., A.M. Castle & Co. (Canada) Inc., the financial institutions from time to time party to the Loan Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent.8-K10.1January 23, 20141-5415
       
10.18 Amendment No. 2 to Loan and Security Agreement, dated as of December 10, 2014, by and among A.M. Castle & Co., Advanced Fabricating Technology, LLC, Paramont Machine Company, LLC, Total Plastics, Inc., A.M. Castle & Co. (Canada) Inc., the financial institutions from time to time party to the Loan Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent.8-K10.2December 11, 20141-5415
       
10.19* Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.29August 7, 20121-5415
       
10.20* Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012.10-Q10.30August 7, 20121-5415
       
10.21* Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.31August 7, 20121-5415
   Incorporated by Reference Herein
Exhibit
Number		 Description of ExhibitFormExhibitFiling DateFile No.
       
10.17 First Amendment to Amended and Restated Intercreditor Agreement, dated December 8, 2016, among Cantor Fitzgerald Securities, in its capacity as administrative and collateral agent for the First Lien Secured Parties, U.S. Bank National Association, and U.S. Bank National Association, in its capacity as trustee and collateral agent for the New Convertible Notes Secured Parties and U.S. Bank National Association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 14, 20161-5415
       
10.18* Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.29August 7, 20121-5415
       
10.19* Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012.10-Q10.30August 7, 20121-5415
       
10.20* Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.31August 7, 20121-5415
       
10.21* Employment Offer Letter dated March 7, 2014, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.39May 1, 20141-5415
       
10.22* Employment Offer Letter dated September 25, 2014, between A.M. Castle & Co. and Mr. Patrick R. Anderson.10-Q10.40October 29, 20141-5415
       
10.23* Form of Non-Employee Director Restricted Stock Award Agreement, dated December 11, 2014.10-K10.37March 9, 20151-5415
       
10.24* Amendment of Non-Employee Director Restricted Stock Award Agreements under the 2008 A.M. Castle & Co. Omnibus Incentive Plan, dated December 11, 2014.10-K10.38March 9, 20151-5415
       
10.25 Settlement Agreement dated March 17, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.1March 18, 20151-5415
       
10.26* Employment Offer Letter dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.2April 22, 20151-5415
       
10.27* Severance Agreement dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.3April 22, 20151-5415
       
10.28* Change of Control Agreement, dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.4April 22, 20151-5415
       
10.29 First Amendment to Settlement Agreement dated April 22, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub and Allan J. Young.8-K10.6April 22, 20151-5415
       
10.30 Settlement Agreement by and among A. M. Castle & Co., Raging Capital Management, LLC, Raging Capital Master Fund, Ltd., William C. Martin, Kenneth H. Traub, Allan J. Young and Richard N. Burger, dated May 27, 2016.8-K10.1May 27, 20161-5415
       
10.31 Settlement Agreement dated November 3, 2016, by and among A. M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, Allan J. Young, and Richard N. Burger.8-K10.1November 4, 20161-5415

148




       
   Incorporated by Reference Herein
       
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.
       
10.22* Employment Offer Letter dated October 10, 2012, between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.32October 15, 20121-5415
       
10.23* Form of Restricted Stock Unit Award Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.33October 15, 20121-5415
       
10.24* Form of Severance Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.34October 15, 20121-5415
       
10.25* Form of Change of Control Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.35October 15, 20121-5415
       
10.26* Employment Offer Letter dated July 1, 2013, between A.M. Castle & Co. and Mr. Stephen Letnich.10-Q10.38November 1, 20131-5415
       
10.27* Employment Offer Letter dated March 7, 2014, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.39May 1, 20141-5415
       
10.28* Employment Offer Letter dated September 25, 2014, between A.M. Castle & Co. and Mr. Patrick R. Anderson.10-Q10.40October 29, 20141-5415
       
10.29* Form of Non-Employee Director Restricted Stock Award Agreement, dated December 11, 2014.10-K10.37March 7, 20141-5415
       
10.30* Amendment of Non-Employee Director Restricted Stock Award Agreements under the 2008 A.M. Castle & Co. Omnibus Incentive Plan, dated December 11, 2014.10-K10.38March 7, 20141-5415
       
10.31 Settlement Agreement dated March 17, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.1March 17, 20151-5415
       
10.32* Employment Offer Letter dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.2April 22, 20151-5415
       
10.33* Severance Agreement dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.3April 22, 20151-5415
       
10.34* Change of Control Agreement, dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.4April 22, 20151-5415
       
10.35* Separation and General Release dated April 16, 2015, between A.M. Castle & Co. and Scott Dolan.8-K10.5April 22, 20151-5415
10.36 First Amendment to Settlement Agreement dated April 22, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub and Allan J. Young.8-K10.6April 22, 20151-5415
       
10.37* Form Non-Qualified Stock Option Award Agreement8-K10.7July 28, 20151-5415
       
10.38* Form Restricted Stock Unit Award Agreement8-K10.8July 28, 20151-5415
       
10.39 Second Amendment to Settlement Agreement, as amended, dated October 30, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Messrs. Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.9November 5, 20151-5415
       
10.40* Special Bonus Letter dated March 17, 2015, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.2April 29, 20151-5415
       
10.41* Separation Agreement and General Release, dated June 24, 2015, by and between A.M. Castle & Co. and Mr. Stephen J. Letnich.10-Q10.8August 5, 20151-5415
       

149

   Incorporated by Reference Herein
Exhibit
Number		 Description of ExhibitFormExhibitFiling DateFile No.
       
10.32 Amended and Restated Transaction Support Agreement, dated March 16, 2016, with certain holders of the senior secured notes and convertible notes.8-K10.1March 22, 20161-5415
       
10.33 Unit Purchase Agreement, dated August 7, 2016, by and between A.M. Castle & Co. and Duferco Steel, Inc.8-K10.1August 9, 20161-5415
       
10.34 Asset Purchase Agreement, dated March 11, 2016, by and between Total Plastics, Inc. and Total Plastics Resources LLC.8-K10.1March 17, 20161-5415
       
10.35 Amendment No. 1 to Asset Purchase Agreement, dated March 14, 2016, by and between Total Plastics, Inc. and Total Plastics Resources LLC.8-K10.2March 17, 20161-5415
       
10.36* Form Non-Qualified Stock Option Award Agreement.8-K10.7July 28, 20151-5415
       
10.37* Form Restricted Stock Unit Award Agreement.8-K10.8July 28, 20151-5415
       
10.38 Second Amendment to Settlement Agreement, as amended, dated October 30, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Messrs. Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.9November 5, 20151-5415
       
10.39* Special Bonus Letter dated March 14, 2015, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.2April 29, 20151-5415
       
10.40* A.M. Castle & Co. Directors Deferred Compensation Plan (as amended and restated as of January 1, 2015).10-K/A10.42March 16, 20161-5415
       
10.41* Second Amendment dated October 8, 2015 to the A.M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan as Amended and Restated effective as of January 1, 2009.10-K/A10.43March 16, 20161-5415
       
10.42* A.M. Castle & Co. 401(k) Savings and Retirement Plan (as amended and restated effective as of January 1, 2015).10-K/A10.44March 16, 20161-5415
       
10.43* Second Amendment dated October 8, 2015, to the A.M. Castle & Co. Salaried Employees Pension Plan as Amended and Restated Effective as of January 1, 2010.10-K/A10.45March 16, 20161-5415
       
21.1 Subsidiaries of Registrant.   
       
23.1 Consent of Deloitte & Touche LLP    
       
23.2 Consent of Grant Thornton LLC    
       
31.1 CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.    
       
31.2 
CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

    
       
32.1 
CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

    
       
101.INS 
XBRL Instance Document

    
       
101.SCH 
XBRL Taxonomy Extension Schema Document

    
       
101.CAL 
XBRL Taxonomy Calculation Linkbase Document

    
       
101.DEF 
XBRL Taxonomy Extension Definition Linkbase Document

    
       
101.LAB XBRL Taxonomy Label Linkbase Document    
       
101.PRE 
XBRL Taxonomy Presentation Linkbase Document

    



Incorporated by Reference Herein
Exhibit
Number
Description of ExhibitFormExhibitFiling DateFile No.
10.42*A.M. Castle & Co. Directors Deferred Compensation Plan (as amended and restated as of January 1, 2015).
10.43*Second Amendment dated October 8, 2015 to the A.M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan as Amended and Restated effective as of January 1, 2009.
10.44*A.M. Castle & Co. 401(k) Savings and Retirement Plan (as amended and restated effective as of January 1, 2015).
10.45*Second Amendment dated October 8, 2015, to the A.M. Castle & Co. Salaried Employees Pension Plan as Amended and Restated Effective as of January 1, 2010.
18.1Preferability Letter from Deloitte & Touche LLP
21.1Subsidiaries of Registrant
23.1Consent of Deloitte & Touche LLP
23.2Consent of Grant Thornton LLP
31.1CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Label Linkbase Document
101.PREXBRL Taxonomy Presentation Linkbase Document
*These agreements are consideredConsidered a compensatory plan or arrangement.

150




SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
A. M. Castle & Co.
(Registrant)
By: /s/ Paul SchwindPatrick R. Anderson
  Paul Schwind,Patrick R. Anderson, Executive Vice President,
  Corporate ControllerChief Financial Officer & Chief Accounting OfficerTreasurer
  (Principal Financial Officer & Principal Accounting
Officer)
   
Date: March 15, 2016April 7, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities as shown following their name on this 15th7th day of March, 2016.April, 2017.
/s/ Brian P. AndersonPamela Forbes Lieberman    
Brian P. Anderson,Pamela Forbes Lieberman, Chairman of the Board    
     
/s/ Steven W. Scheinkman /s/ Patrick R. Anderson  
Steven W. Scheinkman, President, Patrick R. Anderson, Executive Vice  
Chief Executive Officer and President, Chief Financial Officer &  
Director Treasurer  
(Principal Executive Officer) 
(Principal Financial Officer)

  
     
/s/ Reuben S. Donnelley/s/ Kenneth H. TraubHoward Brod Brownstein /s/ Jonathan B. Mellin
Reuben S. Donnelley, Director Kenneth H. Traub,/s/ Michael J. Sheehan
Howard Brod Brownstein, Director Jonathan B. Mellin, DirectorMichael J. Sheehan, Director
     
/s/ Pamela Forbes Lieberman /s/ Gary A. Masse /s/ Allan J. Young
Pamela Forbes Lieberman, DirectorGary A. Masse, DirectorAllan J. Young, Director
     
/s/ Jonathan B. Mellin    
Jonathan B. Mellin, Director
    

151




Exhibit Index
The following exhibits are filed herewith or incorporated herein by reference:
   Incorporated by Reference Herein 
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.Page No.
        
3.1 Articles of Restatement of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012.10-Q3.1May 3, 20121-5415—
        
3.2 Amendment to Articles of Incorporation of the Company.8-K3.1August 31, 20121-5415—
        
3.3 Articles Supplementary of the Charter of the Company.8-A3.1September 6, 20121-5415—
        
3.4 Articles Supplementary of the Charter of the Company.8-K3.1August 14, 20131-5415—
        
3.5 Amendment to the Amended and Restated Bylaws of the Company, adopted March 17, 2015.8-K3.1March 17, 20151-5415—
        
4.1 Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1December 21, 20111-5415—
        
4.2 Indenture, dated as of December 15, 2011, among A.M. Castle & Co., the Guarantors and U.S. Bank National Association, as trustee.8-K4.2December 21, 20111-5415—
        
4.3 Rights Agreement, dated as of August 31, 2012, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent.8-K4.1August 31, 20121-5415—
        
4.4 Amendment No. 1 to Rights Agreement, dated as of August 13, 2013, by and between A.M. Castle & Co. and American Stock Transfer & Trust Company, LLC, as Rights Agent.8-K4.1August 14, 20131-5415—
        
10.1* A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009.10-K10.14March 12, 20091-5415—
        
10.2* A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009.10-K10.15March 12, 20091-5415—
        
10.3* First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009).8-K10.1April 16, 20091-5415—
        
10.4* Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers.8-K10.16July 29, 20091-5415—
        
10.5* Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.20March 24, 20101-5415—
        
10.6* Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.21March 24, 20101-5415—
        

152




   Incorporated by Reference Herein 
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.Page No.
        
10.7* Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.22March 24, 20101-5415—
        
10.8* Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.23March 24, 20101-5415—
        
10.9* Form of Non-Employee Director Restricted Stock Award Agreement.8-K10.1April 27, 20101-5415—
        
10.10* Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO.8-K10.24September 21, 20101-5415—
        
10.11* Form of Amended and Restated Severance Agreement for executive officers other than the CEO.8-K10.26December 23, 20101-5415—
        
10.12* Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.29March 8, 20111-5415—
        
10.13* A.M. Castle & Co. 2008 Omnibus Incentive Plan (formerly known as the A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan) as Amended and Restated as of April 25, 2013.DEF14AAppendix AMarch 12, 20131-5415—
        
10.14 Loan and Security Agreement, dated December 15, 2011, by and among A.M. Castle & Co., Transtar Metals Corp., Advanced Fabricating Technology, LLC, Oliver Steel Plate Co., Paramont Machine Company, LLC, Total Plastics, Inc., Tube Supply, LLC, A.M. Castle & Co. (Canada) Inc., Tube Supply Canada ULC, the other Loan Parties party thereto, the lenders which are now or which hereafter become a party thereto, and Wells Fargo Bank, National Association, a national banking association, in its capacity as administrative agent and collateral agent for Secured Parties.8-K10.4December 21, 20111-5415—
        
10.15 Pledge and Security Agreement, dated as of December 15, 2011, by A.M. Castle & Co., and its subsidiaries that are party thereto, in favor of U.S. Bank National Association, as collateral agent, for the benefit of the Secured Parties.8-K10.1December 21, 20111-5415—
        
10.16 Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 21, 20111-5415—
        
        
        
        
        
        
        

153




        
   Incorporated by Reference Herein 
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.Page No.
        
10.17 Amendment No. 1 to Loan and Security Agreement, dated as of January 21, 2014, by and among A.M. Castle & Co., Advanced Fabricating Technology, LLC, Paramont Machine Company, LLC, Total Plastics, Inc., A.M. Castle & Co. (Canada) Inc., the financial institutions from time to time party to the Loan Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent.8-K10.1January 23, 20141-5415—
        
10.18 Amendment No. 2 to Loan and Security Agreement, dated as of December 10, 2014, by and among A.M. Castle & Co., Advanced Fabricating Technology, LLC, Paramont Machine Company, LLC, Total Plastics, Inc., A.M. Castle & Co. (Canada) Inc., the financial institutions from time to time party to the Loan Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent.8-K10.2December 11, 20141-5415—
        
10.19* Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.29August 7, 20121-5415—
        
10.20* Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012.10-Q10.30August 7, 20121-5415—
        
10.21* Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.31August 7, 20121-5415—
        
10.22* Employment Offer Letter dated October 10, 2012, between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.32October 15, 20121-5415—
        
10.23* Form of Restricted Stock Unit Award Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.33October 15, 20121-5415—
        
10.24* Form of Severance Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.34October 15, 20121-5415—
        
10.25* Form of Change of Control Agreement between A.M. Castle & Co. and Mr. Scott Dolan.8-K/A10.35October 15, 20121-5415—
        
10.26* Employment Offer Letter dated July 1, 2013, between A.M. Castle & Co. and Mr. Stephen Letnich.10-Q10.38November 1, 20131-5415—
        
10.27* Employment Offer Letter dated March 7, 2014, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.39May 1, 20141-5415—
        
10.28* Employment Offer Letter dated September 25, 2014, between A.M. Castle & Co. and Mr. Patrick R. Anderson. .10-Q10.40October 29, 20141-5415—
        
10.29* Form of Non-Employee Director Restricted Stock Award Agreement, dated December 11, 2014.10-K10.37March 7, 20141-5415—
        
10.30* Amendment of Non-Employee Director Restricted Stock Award Agreements under the 2008 A.M. Castle & Co. Omnibus Incentive Plan, dated December 11, 2014.10-K10.38March 7, 20141-5415—
        

154




   Incorporated by Reference Herein 
Exhibit
Number
 Description of ExhibitFormExhibitFiling DateFile No.Page No.
        
10.31 Settlement Agreement dated March 17, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.1March 17, 20151-5415—
        
10.32* Employment Offer Letter dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.2April 22, 20151-5415—
        
10.33* Severance Agreement dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.3April 22, 20151-5415—
        
10.34* Change of Control Agreement, dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.4April 22, 20151-5415—
        
10.35* Separation and General Release dated April 16, 2015, between A.M. Castle & Co. and Scott Dolan.8-K10.5April 22, 20151-5415—
        
10.36 First Amendment to Settlement Agreement dated April 22, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub and Allan J. Young.8-K10.6April 22, 20151-5415—
        
10.37* Form Non-Qualified Stock Option Award Agreement.8-K10.7July 28, 20151-5415—
        
10.38* Form Restricted Stock Unit Award Agreement.8-K10.8July 28, 20151-5415—
        
10.39 Second Amendment to Settlement Agreement, as amended, dated October 30, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Messrs. Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.9November 5, 20151-5415—
        
10.40* Special Bonus Letter dated March 14, 2015, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.2April 29, 20151-5415 
        
10.41* Separation Agreement and General Release, dated June 24, 2015, by and between A.M. Castle & Co. and Mr. Stephen J. Letnich.10-Q10.8August 5, 20151-5415 
        
10.42* A.M. Castle & Co. Directors Deferred Compensation Plan (as amended and restated as of January 1, 2015).    E-1
        
10.43* Second Amendment dated October 8, 2015 to the A.M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan as Amended and Restated effective as of January 1, 2009.    E-13
        
10.44* A.M. Castle & Co. 401(k) Savings and Retirement Plan (as amended and restated effective as of January 1, 2015).    E-14
        
10.45* Second Amendment dated October 8, 2015, to the A.M. Castle & Co. Salaried Employees Pension Plan as Amended and Restated Effective as of January 1, 2010.    E-88
        

155




Incorporated by Reference Herein
Exhibit
Number
Description of ExhibitFormExhibitFiling DateFile No.Page No.
18.1Preferability Letter from Deloitte & Touche LLPE-89
21.1Subsidiaries of RegistrantE-90
23.1Consent of Deloitte & Touche LLPE-91
23.2Consent of Grant Thornton LLPE-92
31.1CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.E-93
31.2CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.E-94
32.1CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.E-95
101.INSXBRL Instance Document—
101.SCHXBRL Taxonomy Extension Schema Document—
101.CALXBRL Taxonomy Calculation Linkbase Document—
101.DEFXBRL Taxonomy Extension Definition Linkbase Document—
101.LABXBRL Taxonomy Label Linkbase Document—
101.PREXBRL Taxonomy Presentation Linkbase Document—
   Incorporated by Reference Herein 
Exhibit
Number		 Description of ExhibitFormExhibitFiling DateFile No.Page No.
        
3.1 Articles of Restatement of the Company filed with the State Department of Assessments and Taxation of Maryland on April 27, 2012.10-Q3.1May 3, 20121-5415-
        
3.2 Amendment to Articles of Incorporation of the Company.8-K3.1August 31, 20121-5415-
        
3.3 Articles Supplementary of the Charter of the Company.8-A3.1September 6, 20121-5415-
        
3.4 Articles Supplementary of the Charter of the Company.8-K3.1August 14, 20131-5415-
        
3.5 Amended and Restated Bylaws of the Company, as adopted April 6, 2017.8-K3.1April 7, 20171-5415-
        
4.1 Indenture, dated as of December 15, 2011, relating to the 7.00% convertible senior notes due 2017, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee.8-K4.1December 21, 20111-5415-
        
4.2 
Indenture, dated as of February 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.

8-K4.2February 11, 20161-5415-
        
4.3 Indenture, dated as of May 19, 2016, relating to the Company’s 5.25% convertible notes due 2019, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1May 19, 20161-5415-
        
4.4 First Supplemental Indenture, dated as of May 16, 2011, entered into as of June 2, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.1June 13, 20161-5415-
        
4.5 Second Supplemental Indenture, dated as of June 9, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.2June 13, 20161-5415-
        
4.6 Third Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.2December 14, 20161-5415-
4.7 Fourth Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 12.75% senior secured notes due 2018, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.3December 14, 20161-5415-
        
4.8 First Supplemental Indenture, dated as of December 8, 2016, relating to the Company’s 5.25% convertible notes due 2019, among A.M. Castle & Co., the Guarantors, U.S. Bank National Association, as trustee and U.S. Bank National Association, as collateral agent.8-K4.4December 14, 20161-5415-
        
4.9 Form of Warrant to Purchase Common Stock.8-K4.1December 14, 20161-5415-
        
10.1 Registration Rights Agreement, dated as of December 8, 2016, by and between A.M. Castle & Co. and Highbridge Capital Management, LLC, Corre Partners Management, LLC, Whitebox Credit Partners, L.P. WFF Cayman II Limited and SGF.8-K10.2December 14, 20161-5415-
        
10.2* A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and restated, effective as of January 1, 2009.10-K10.14March 12, 20091-5415-
        
10.3* A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as of January 1, 2009.10-K10.15March 12, 20091-5415-
        
10.4* First Amendment to the A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, executed April 15, 2009 (as effective April 27, 2009).8-K10.1April 16, 20091-5415-
        
10.5* Form of A.M. Castle & Co. Indemnification Agreement to be executed with all directors and executive officers.8-K10.16July 29, 20091-5415-
        
10.6* Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.20March 24, 20101-5415-
        
10.7* Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.21March 24, 20101-5415-
        
10.8* Form of Incentive Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.22March 24, 20101-5415-
        
10.9* Form of Non-Qualified Stock Option Award Agreement under A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.23March 24, 20101-5415-
        
10.10* Form of Non-Employee Director Restricted Stock Award Agreement.8-K10.1April 27, 20101-5415-
10.11* Form of Amended and Restated Change of Control Agreement for all executive officers other than the CEO.8-K10.24September 21, 20101-5415-
        
10.12* Form of Amended and Restated Severance Agreement for executive officers other than the CEO.8-K10.26December 23, 20101-5415-
        
10.13* Form of Performance Share Award Agreement, adopted March 2, 2011, under A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan.8-K10.29March 8, 20111-5415-
        
10.14* A.M. Castle & Co. 2008 Omnibus Incentive Plan (formerly known as the A.M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan) as Amended and Restated as of July 27, 2016.DEF14AAppendix AJune 17, 20161-5415-
        
10.15 Credit Agreement, dated December 8, 2016, by and among A.M. Castle & Co., certain subsidiaries of A.M. Castle & Co., as borrowers and guarantors, the Financial Institutions, and Cantor Fitzgerald Securities, as agent.8-K10.1December 14, 20161-5415-
        
10.16 Intercreditor Agreement, dated as of December 15, 2011, among Wells Fargo Bank, National Association, in its capacity as administrative and collateral agent for the First Lien Secured Parties and U.S. Bank National Association, a national banking association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 21, 20111-5415-
        
10.17 First Amendment to Amended and Restated Intercreditor Agreement, dated December 8, 2016, among Cantor Fitzgerald Securities, in its capacity as administrative and collateral agent for the First Lien Secured Parties, U.S. Bank National Association, and U.S. Bank National Association, in its capacity as trustee and collateral agent for the New Convertible Notes Secured Parties and U.S. Bank National Association, in its capacity as trustee and collateral agent for the Second Lien Secured Parties.8-K10.2December 14, 20161-5415-
        
10.18* Employment Agreement, dated November 9, 2011, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.29August 7, 20121-5415-
        
10.19* Form of Retention Bonus Agreement for certain executive officers in connection with CEO leadership transition, dated May 14, 2012.10-Q10.30August 7, 20121-5415-
        
10.20* Amendment to Employment Agreement, dated May 30, 2012, by and between A. M. Castle & Co. and Mr. Paul Sorensen.10-Q10.31August 7, 20121-5415-
        
10.21* Employment Offer Letter dated March 7, 2014, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.39May 1, 20141-5415-
10.22* Employment Offer Letter dated September 25, 2014, between A.M. Castle & Co. and Mr. Patrick R. Anderson.10-Q10.40October 29, 20141-5415-
        
10.23* Form of Non-Employee Director Restricted Stock Award Agreement, dated December 11, 2014.10-K10.37March 9, 20151-5415-
        
10.24* Amendment of Non-Employee Director Restricted Stock Award Agreements under the 2008 A.M. Castle & Co. Omnibus Incentive Plan, dated December 11, 2014.10-K10.38March 9, 20151-5415-
        
10.25 Settlement Agreement dated March 17, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.1March 18, 20151-5415-
        
10.26* Employment Offer Letter dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.2April 22, 20151-5415-
        
10.27* Severance Agreement dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.3April 22, 20151-5415-
        
10.28* Change of Control Agreement, dated April 16, 2015, between A.M. Castle & Co. and Steven W. Scheinkman.8-K10.4April 22, 20151-5415-
        
10.29 First Amendment to Settlement Agreement dated April 22, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub and Allan J. Young.8-K10.6April 22, 20151-5415-
        
10.30 Settlement Agreement by and among A. M. Castle & Co., Raging Capital Management, LLC, Raging Capital Master Fund, Ltd., William C. Martin, Kenneth H. Traub, Allan J. Young and Richard N. Burger, dated May 27, 2016.8-K10.1May 27, 20161-5415-
        
10.31 Settlement Agreement dated November 3, 2016, by and among A. M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Steven W. Scheinkman, Kenneth H. Traub, Allan J. Young, and Richard N. Burger.8-K10.1November 4, 20161-5415-
        
10.32 Amended and Restated Transaction Support Agreement, dated March 16, 2016, with certain holders of the senior secured notes and convertible notes.8-K10.1March 22, 20161-5415-
        
10.33 Unit Purchase Agreement, dated August 7, 2016, by and between A.M. Castle & Co. and Duferco Steel, Inc.8-K10.1August 9, 20161-5415-
        
10.34 Asset Purchase Agreement, dated March 11, 2016, by and between Total Plastics, Inc. and Total Plastics Resources LLC.8-K10.1March 17, 20161-5415-
10.35 Amendment No. 1 to Asset Purchase Agreement, dated March 14, 2016, by and between Total Plastics, Inc. and Total Plastics Resources LLC.8-K10.2March 17, 20161-5415-
        
10.36* Form Non-Qualified Stock Option Award Agreement.8-K10.7July 28, 20151-5415-
        
10.37* Form Restricted Stock Unit Award Agreement.8-K10.8July 28, 20151-5415-
        
10.38 Second Amendment to Settlement Agreement, as amended, dated October 30, 2015, by and among A.M. Castle & Co., Raging Capital Management, LLC and certain of their affiliates, and Messrs. Steven W. Scheinkman, Kenneth H. Traub, and Allan J. Young.8-K10.9November 5, 20151-5415-
        
10.39* Special Bonus Letter dated March 14, 2015, between A.M. Castle & Co. and Mr. Marec Edgar.10-Q10.2April 29, 20151-5415-
        
10.40* A.M. Castle & Co. Directors Deferred Compensation Plan (as amended and restated as of January 1, 2015).10-K/A10.42March 16, 20161-5415-
        
10.41* Second Amendment dated October 8, 2015 to the A.M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan as Amended and Restated effective as of January 1, 2009.10-K/A10.43March 16, 20161-5415-
        
10.42* A.M. Castle & Co. 401(k) Savings and Retirement Plan (as amended and restated effective as of January 1, 2015).10-K/A10.44March 16, 20161-5415-
        
10.43* Second Amendment dated October 8, 2015, to the A.M. Castle & Co. Salaried Employees Pension Plan as Amended and Restated Effective as of January 1, 2010.10-K/A10.45March 16, 20161-5415-
        
21.1 Subsidiaries of Registrant.    
        
23.1 Consent of Deloitte & Touche LLP     
        
23.2 Consent of Grant Thornton LLP     
        
31.1 CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.     
        
31.2 
CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

     
        
32.1 
CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

     
        
101.INS 
XBRL Instance Document

     
        
101.SCH 
XBRL Taxonomy Extension Schema Document

     
        
101.CAL 
XBRL Taxonomy Calculation Linkbase Document

     
        
101.DEF 
XBRL Taxonomy Extension Definition Linkbase Document

     
        
101.LAB XBRL Taxonomy Label Linkbase Document     
        
101.PRE 
XBRL Taxonomy Presentation Linkbase Document

     
*These agreements are consideredConsidered a compensatory plan or arrangement.


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