Handy & Harman Ltd. ("HNH") is a diversified manufacturer of engineered niche industrial products with leading market positions in many of the markets it serves. Through its wholly-owned operating subsidiaries, HNH focuses on high margin products and innovative technology and serves customers across a wide range of end markets. HNH sells its products and services through direct sales forces, distributors and manufacturer's representatives. It serves a diverse customer base, including the construction, electrical, electronics, transportation, power control, utility, medical, oil and gas exploration, aerospace and defense, and food industries. As of December 31, 2015,2016, HNH and its subsidiaries employed over 2,1003,400 people at 3347 locations in eight countries. All references herein to "we," "our," "its" or the "Company" refer to HNH together with all of its subsidiaries.

We manage our portfolio of businesses on a continuous basis. In 2016, we acquired SL Industries, Inc. ("SLI"), a designer and manufacturer of power electronics, motion control, power protection, power quality electromagnetic equipment, and custom gears and gearboxes used in a variety of medical, commercial and military aerospace, computer, datacom, industrial, architectural and entertainment lighting, and telecom applications. We also acquired certain assets and assumed certain liabilities of the Electromagnetic Enterprise division ("EME") of Hamilton Sundstrand Corporation used or useful in the design, development, manufacture, marketing, service, distribution, repair and sale of electric motors, starters and generators for certain commercial applications, including for use in commercial hybrid electric vehicles and refrigeration and in the aerospace and defense sectors. In 2015, we acquired certain assets and assumed certain liabilities of ITW Polymers Sealants North America Inc. ("ITW"), which are used in the business of manufacturing two-component polyurethane adhesive for the roofing industry, and also acquired JPS Industries, Inc. ("JPS"), a manufacturer of mechanically formed glass, quartz and aramid substrate materials for specialty applications in a wide expanse of markets requiring highly engineered components. In 2014, we entered into an agreement to sell Arlon, LLC, which operations comprised substantially all of the Company's former Arlon Electronic Materials ("Arlon") segment. The sale was finalized in January 2015. In 2013, we acquired substantially all of the assets of Wolverine Joining Technologies, LLC ("Wolverine Joining") used for the development, manufacturing and sale of brazing, flux and soldering products, and the alloys for electrical, catalyst and other industrial specialties, and also acquired PAM Fastening Technology, Inc. ("PAM"), a distributor of screw guns, collated screws and hot melt systems. Also during 2013, we divested substantially all of the assets and existing operations of our Continental Industries, Inc. ("Continental") and Canfield Metal Coating Corporation business units, and sold substantially all of the equipment owned or utilized by Indiana Tube de México, S. De R.L. de C.V. Further discussion of our acquisitions and divestitures is contained in Notes 4 and 5, respectively, to our consolidated financial statements included in "Item 8 - Financial Statements and Supplementary Data."

The Joining Materials segment primarily fabricates precious metals and their alloys into brazing alloys. Brazing alloys are used to join similar and dissimilar metals, as well as specialty metals and some ceramics, with strong, hermetic joints. The Joining Materials segment offers these metal joining products in a wide variety of alloys, including gold, silver, palladium, copper, nickel, aluminum and tin. These brazing alloys are fabricated into a variety of engineered forms and are used in many industries, including electrical, appliance, transportation, construction and general industrial, where dissimilar material and metal joining applications are required. Operating income from precious metal products is principally derived from the "value added""value-added" of processing and fabricating and not from the direct purchase and resale of precious metals. The Joining Materials segment enters into commodity futures and forward contracts to mitigate the impact of price fluctuations on its precious and certain non-precious metal inventories that are not subject to fixed price contracts. We believe that the business unit that comprises our Joining Materials segment is the North American market leader in many of the markets that it serves.

The Tubing segment manufactures a wide variety of steel tubing products. We believe that the Tubing segment manufactures the world's longest continuous seamless stainless steel tubing coils, in excess of 5,000 feet, serving the petrochemical infrastructure and shipbuilding markets. In addition, we believe it is the number one supplier of small diameter (less than 3 mm) coil tubing to industry leading specifications serving the aerospace, defense and semiconductor fabrication markets. This segment also manufactures welded carbon steel tubing in coiled and straight lengths with a primary focus on products for the transportation,

Our internet website address is www.handyharman.com. Copies of the following reports are available free of charge through the internet website, as soon as reasonably practicable after they have been filed with or furnished to the Securities and Exchange Commission ("SEC") pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"): annual reports on Form 10-K; quarterly reports on Form 10-Q; current reports on Form 8-K; any amendments to such reports; and proxy statements. Information on the website does not constitute part of this or any other report filed with or furnished to the SEC.

This report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Exchange Act, including, in particular, forward-looking statements under the headings "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8 - Financial Statements and Supplementary Data." These statements appear in a number of places in this report and include statements regarding the Company's intent, belief or current expectations, such as those relating to future business, future results of operations or financial condition, new or planned products or services, or management strategies, including those with respect to (i) the Company's financing plans, (ii) trends affecting its financial condition or results of operations and (iii) the impact of competition. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements; however, this report also contains other forward-looking statements in addition to historical information.

These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in "Item 1A - Risk Factors" of this Annual Report on Form 10-K, as well as in our consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the SEC. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

HNH owned 8,436,715 and 6,383,005 shares of the common stock of ModusLink Global Solutions, Inc. ("ModusLink") at December 31, 20152016 and December 31, 2014, respectively,2015, and has elected the option to value its investment in ModusLink using fair value, calculated based on the closing market price for ModusLink common stock. The value of this investment decreased from $23.9 million at December 31, 2014 to $20.9 million at December 31, 2015 to $12.3 million at December 31, 2016 entirely due to a decrease in the share price of ModusLink's common stock, partially offset by the additional shares ofstock. ModusLink common stock purchased by the Company during 2015. ModusLink primarily provides supply chain and logistics services to companies in the consumer electronics, communications, computing, medical devices, software, storage and retail.retail industries. Fluctuations in the price of ModusLink common stock are subject to market fluctuations and other factors outside our control, which are not directly linked to the financial and operational performance of the Company.

In our served markets, we compete against foreign and domestic private and public companies that manufacture products of the type we manufacture. Some of these competitors are larger than we are and have financial resources greater than we do. This results in intense competition in a number of markets in which we operate. Some of these competitors enjoy certain other competitive advantages, including greater name recognition, greater financial, technical, marketing and other resources, a larger installed base of customers, and well-established relationships with current and potential customers. Competition is based on quality, technology, service, and price, and in some industries, new product introduction. We may not be able to compete successfully, and competition may have a negative impact on our business, operating results or financial condition by reducing volume of products sold and/or selling prices, and accordingly reducing our sales and profits.

Our businesses are based primarily upon individual orders and sales with our customers and not long-term supply contracts. As such, our customers could cease buying products at any time and for any reason, and we will have no recourse in the event a

Some of our businesses are potentially at risk of losing business to competitors operating in lower cost countries. An additional risk is the movement offshore of some of our businesses' customers, leading them to procure products from more closely located companies. Either of these factors could negatively impact our financial condition, business and results of operations.

We rely on information technology systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of critical business processes and activities. We also collect and store sensitive data, including confidential business information and personal data. These systems may be susceptible to damage, disruptions or shutdowns due to attacks by computer hackers, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events. Upgrading our information technology systems is costly and subject to delay, and there is no assurance new systems will provide the benefits expected. In addition, security breaches of our systems could result in the misappropriation or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers or suppliers. Any such events could disrupt our operations, delay production and shipments, result in defective products or services, damage customer relationships and our reputation and result in legal claims or proceedings, liability or penalties under privacy laws, each of which could adversely affect our business and our financial condition.

Our businesses are subject to extensive regulation by U.S. and non-U.S. governmental and self-regulatory entities at the federal, state and local levels, including laws related to anti-corruption, environmental matters, health and safety, import laws and export control and economic sanctions, and the sale of products and services to government entities.

In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as conflict minerals, originating from the Democratic Republic of Congo ("DRC") and adjoining countries. As a result, the SEC has adopted annual disclosure and reporting requirements for those companies who use conflict minerals mined from the DRC and adjoining countries in their products. The implementation of these rules could adversely affect the sourcing, supply and pricing of materials used in our products. As there may be only a limited number of suppliers offering "conflict free" conflict minerals, we cannot be sure that we will be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices. Also, we may face reputational challenges if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to sufficiently verify the origins for all conflict minerals used in our products through the procedures we may implement.

These are not the only regulations that our businesses must comply with. Failure to comply with these or any other regulations could result in civil and criminal, monetary and non-monetary penalties, damage to our reputation, disruptions to our business, limitations on our ability to manufacture, import, export and sell products and services, disbarment from selling to certain federal agencies, damage to our reputation and loss of customers and could cause us to incur significant legal and investigatory fees. Compliance with these and other regulations may also require us to incur significant expenses. Our products and operations are also often subject to the rules of industrial standards bodies such as the International Organization for Standardization (ISO), and failure to comply with these rules could result in withdrawal of certifications needed to sell our products and services and otherwise adversely impact our financial condition.

There can be no assurance as to the volume of shares of our common stock or the degree of price volatility for our common stock traded on the NASDAQ Capital Market. There are transfer restrictions contained in our charter to help preserve our net operating tax loss carryforwards that will generally prevent any person from acquiring amounts of our common stock such that such person would hold 5% or more of our common stock, for up to three years after July 29, 2015, as specifically provided in our charter. The transfer restrictions could hinder development of an active market for our common stock.

There are no unresolved SEC Staff comments.

In the ordinary course of our business, we are subject to periodic lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes, employment, environmental, health and safety matters, as well as claims associated with our historical acquisitions and divestitures. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations, claims and proceedings asserted against us, we do not believe any currently pending legal proceeding to

Not applicable.

The line graph below compares the cumulative total stockholder return on our common stock with the cumulative total return of the Russell 3000 Index and a peer group of fivesix companies, which operate in similar industries to the Company's fivesix operating segments, that includes: AK Steel Holding Corporation, Materion Corporation, Quanex Building Products Corporation, Shiloh Industries, Inc., Core Molding Technologies, Inc. and Core MoldingAllied Motion Technologies Inc. for the five years ended December 31, 2015.2016. The graph and table assume that $100 was invested on December 31, 20102011 in each of our common stock, the Russell 3000 index

The stock performance graph shall not be deemed to be incorporated by reference by means of any general statement incorporating by reference this Form 10-K into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such acts.

There were no issuer purchases of its equity securities during the three months ended December 31, 2015.2016.

The following table summarizes certain selected consolidated financial data, which should be read in conjunction with our consolidated financial statements and the notes thereto and with "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Annual Report on Form 10-K. The selected consolidated financial data has been derived from our annual consolidated financial statements.

HNH's business units encompass the following segments: Joining Materials, Tubing, Building Materials, Performance Materials, Electrical Products and Kasco. Management has determined that certain operating companies should be aggregated and presented within a single segment on the basis that such segments have similar economic characteristics and share other qualitative characteristics. Management reviews net sales, gross profit and operating income (loss) to evaluate segment performance. Operating income (loss) for the segments generally includes costs directly attributable to the segment and excludes other unallocated general corporate expenses. Interest expense, other income and expense, and income taxes are not presented by segment since they are excluded from the measures of segment profitability reviewed by the Company's management. For a more complete description of the Company's business segments, see "Item 1 - Business - Products and Product Mix."

Net sales for the year ended December 31, 2015 increased by $49.0 million, or 8.2%, to $649.5 million, as compared to $600.5 million in 2014. The change in net sales reflects approximately $59.5 million in incremental sales associated with our acquisition of JPS and a net increase from core growth of approximately $6.5 million, which was partially offset by a reduction of approximately $17.1 million in net sales due to lower average silver prices. Excluding the impact of the JPS acquisition our value added sales, defined asand the change in silver prices, net sales less revenue from the direct purchase and resale of precious metals, increased by approximately $6.5 million on higher volume, primarily from the Building Materials segment. The average silver market price was approximately $15.70 per troy ounce during 2015, as compared to $19.05 per troy ounce in 2014.

Gross profit for the year ended December 31, 2015 increased to $178.2 million, as compared to $164.8 million in 2014, and was consistent with 2014 as a percentage of net sales. The change in gross profit reflects a net increase from core growth of approximately $5.5 million, and the incremental gross profit and lower manufacturing costs resulting from the JPS and ITW acquisitions, which were partially offset by a reduction of approximately $2.3 million in gross profit due to lower average silver prices. Higher sales volume from the Building Materials segment and Kasco segment led to the increase in gross profit from our

SG&A")&A for the year ended December 31, 2015 werewas $123.4 million, as compared to $114.1 million in 2014. SG&A expenses from the Performance Materials segment werewas approximately $4.9 million during 2015. Excluding the impact of the JPS acquisition, the increased SG&A during 2015 was driven by higher personnel costs and business development expenses, primarily associated with our 2015 acquisitions, which were partially offset by lower stock-based compensation charges.

Pension expense was $7.5 million for the year ended December 31, 2015, which was $3.7 million higher than 2014. The increased pension expense was due to a decline in discount rates based on changes in corporate bond yields, an increase in participant life expectancy reflected in revised mortality assumptions, and also due to the fact that the investment returns on the assets of the WHX Pension Plan were lower than actuarial assumptions during 2014, which were partially offset by income of $0.5 million from the JPS Pension Plan from the date of acquisition to December 31, 2015. We currently expect pension expense to be approximately $8.8 million in 2016.

In the fourth quarter of 2015, a non-cash asset impairment charge of $1.4 million was recorded related to certain unused, real property located in Norristown, Pennsylvania to reflect its current market value.

In the fourth quarter of 2014, a non-cash asset impairment charge of $0.6 million was recorded related to certain equipment owned by the Company's Joining Materials segment located in Toronto, Canada to be sold or scrapped as part of the Company's integration activities associated with the Wolverine Joininga 2013 acquisition. In addition, the Company recorded a $0.6 million non-cash asset impairment charge associated with certain unused, real property owned by the Company's Kasco segment located in Atlanta, Georgia in the fourth quarter of 2014.

Interest expense for the year ended December 31, 2015 was $4.6 million, as compared to $7.5 million in 2014. The lower interest expense was primarily due to lower borrowing levels and lower average interest rates in 2015.

H&HHNH utilizes commodity forward and futures contracts to mitigate the impact of price fluctuations on its precious metal and certain non-precious metal inventories. The factors that affect the gain or loss on these derivative instruments are changes in the price of the associated metals and the amountnumber of ounces hedged.

For the years ended December 31, 2015 and 2014, tax provisions from continuing operations of $18.0 million and $17.0 million, respectively, were recorded. The effective tax rates in the years ended December 31, 2015 and 2014 were 43.3% and 43.3%, respectively. Changes in the effective tax rate arise principally from differences in the mix of income between taxable jurisdictions, including the impact of foreign sourced income, as well as changes in estimates associated with our state tax rates.

The Company carries its investment in ModusLink at fair value, calculated based on the closing market price for ModusLink common stock, and the losses recorded during the years ended December 31, 2015 and 2014 are due entirely to changes in the share price of ModusLink's common stock.

The following table summarizes information about HNH's segment operating results for the years ended December 31, 2015 and 2014:

For the year ended December 31, 2015, the Joining Materials segment net sales decreased by $24.6 million, or 11.9%, to $182.7 million, as compared to net sales of $207.3 million in 2014. The change in net sales reflects a reduction of approximately $17.1 million in net sales due to a $3.35 per troy ounce decline in the average market price of silver and lower value added sales volume, primarily in North America, due to reduced demand from the oil and gas markets.

Segment operating income for the year ended December 31, 2015 increased by $0.5 million, or 2.5%, to $19.9 million, as compared to $19.4 million in 2014. Higher operating income in 2015 was principally due to improved product mix, lower plant overhead costs and reduced SG&A due to higher severance and recruitment costs incurred during 2014, partially offset by the reduced sales volume and lower silver prices. The effect of lower average silver prices reduced operating income by approximately $2.3 million in 2015.

For the year ended December 31, 2015, the Tubing segment net sales decreased by $1.7 million, or 2.1%, to $79.5 million, as compared to $81.3 million in 2014. The decrease was primarily driven by reduced demand for our welded carbon and stainless steel products in the energy services, oil and gas, and chemical processing markets, due to historically low crude oil prices in 2015.

Segment operating income for the year ended December 31, 2015 decreased by $0.3 million, or 1.9%, to $13.1 million, as compared to $13.3 million in 2014. Lower operating income for the year ended December 31, 2015, as compared to 2014, was primarily driven by lower sales volume and higher SG&A, as a result of higher personnel costs, partially offset by lower plant overhead and operating costs.

For the year ended December 31, 2015, the Building Materials segment net sales increased by $13.2 million, or 5.2%, to $266.9 million, as compared to $253.6 million in 2014. Sales of both our roofing and FastenMaster products were higher, as compared to 2014, due to growth from our company branded and roof edge roofing products, and strong demand from home centers and lumberyards for our FastenMaster products.

Segment operating income increased by $7.3 million, or 24.0%, to $37.5 million for the year ended December 31, 2015, as compared to $30.2 million in 2014, reflecting higher sales volume and lower manufacturing costs. Gross profit margin in 2015 was higher, as compared to 2014, primarily due to lower manufacturing costs as a result of the ITW acquisition and favorable overhead absorption, partially offset by higher freight costs, in part due to the West Coast port slowdown in early 2015, as well as costs associated with the consolidation of our Midwest manufacturing and warehouse facilities into a single location. SG&A also increased, reflecting increased employee headcount and benefit costs.

As indicated above, theThe Performance Materials segment is currently comprised solely of the operations of JPS, which were acquired on July 2, 2015.

Segment operating loss was $2.2 million for the year ended December 31, 2015, primarily due to $3.4 million of nonrecurring expense recorded during the year associated with the amortization of the fair value adjustment to acquisition-date inventories, as well as the impact of integration costs totaling $0.4 million recorded in 2015. Segment operating loss also includes depreciation and amortization expense totaling $4.9 million, reflecting the fair value of acquired assets recognized at the acquisition date of JPS.

Kasco segment net sales increased by $2.6 million, or 4.5%, to $60.8 million in 2015, as compared to $58.2 million in 2014, due to higher sales from its domestic route business, partially offset by lower sales from its Canadian and European operations, primarily due to a negative impact from changes in foreign currency exchange rates.

Segment operating income increased by $1.2 million, or 36.5%, to $4.3 million in 2015, as compared to $3.2 million in 2014. Gross profit increased in 2015 primarily due to the higher net sales, as well as lower fuel costs, as compared with 2014. These improvements were partially offset by increased personnel costs to support the higher sales. Kasco also recorded a $0.6 million asset impairment charge associated with certain unused, real property located in Atlanta, Georgia in 2014.

The following table provides a summary of the Company's consolidated operating resultscash flows for the years ended December 31, 20142016 and 2013 are summarized in the following table:2015:

Net salesOperating cash flows for the year ended December 31, 2014 increased by $29.32016 provided $82.9 million or 5.1%, to $600.5 million,of cash, as compared to $571.2$58.3 million in 2013. The change in net sales reflects approximately $26.7 million in incremental sales associated with our historical acquisitions and a net increase from core growth of approximately $27.8 million, which were partially offset by a reduction of approximately $25.2 million in net sales2015, primarily due to lower average precious metal prices, principally due to silver. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business unitshigher operating income, excluding non-cash charges, as part of the Company's integration activities,well as overall improvements in working capital. Other current liabilities provided incremental net sales of approximately $16.7$1.4 million and $10.0 million, respectively, during the year ended December 31, 2014. Excluding the impact of these acquisitions, value added sales increased by approximately $27.8 million on higher volume, primarily from the Building Materials and Joining Materials segments, which were partially offset by lower sales volume from the Tubing segment. The average silver market price was approximately $19.05 per troy ounce during 2014,2016, as compared to $23.79 per troy ouncea use of $19.0 million in 2013.2015, primarily due to the timing of payments of trade payables. Trade and other receivables used $7.3 million during 2016, as compared to a source of $5.4 million in 2015, driven by higher fourth quarter sales volume in 2016, as compared to the fourth quarter of 2015. Non-cash charges in reflected in operating income include increased depreciation and amortization resulting from our recent acquisitions, as well as the goodwill and asset impairment charges recording in 2016 discussed above under "Results of Operations."

Investing activities used $241.6 million of cash for the year ended December 31, 2014 increased to $164.82016 and provided $40.8 million as compared to $159.8 millionof cash in 2013. Gross profit as a percentage of net sales decreased to 27.4%, as compared to 28.0% in 2013. The decrease of 0.6% was principally due to unfavorable production variances in the Tubing segment driven by lower sales volume, along with higher international freight costs and a change in product mix in the Building Materials segment, which were partially offset by favorable sales mix in the Joining Materials segment. The change in gross profit reflects approximately $4.0 million in incremental gross profit associated with our historical acquisitions and a net increase from core growth of approximately $4.0 million, which were partially offset by a reduction of approximately $3.0 million in gross profit due to lower average precious metal prices. The acquisitions of Wolverine Joining and PAM, net of sales volume transferred to or from the acquired business units as part of the Company's integration2015. Investing activities provided incremental gross profit of approximately $1.2 million and $2.8 million, respectively, for the year ended December 31, 2014. Higher sales volume from2016 included a total of $219.6 million paid for the Building Materialsacquisitions of SLI and Joining Materials segments led to the increase in gross profit from our core business, which was partially offset by unfavorable production variances, leading to a decline in gross profit margin, in the Tubing segment due to lower sales volume.

For the year ended December 31, 2014,2016, the Joining Materials segment net salesCompany's financing activities provided $164.5 million of cash. Borrowings under the Company's revolving credit facilities increased by $12.1$167.1 million, or 6.2%,primarily to $207.3 million, as compared to net sales of $195.2 million in 2013. The change in net sales reflects approximately $16.7 million in incremental sales associated withfinance the acquisition of Wolverine JoiningSLI and a net increase from core growth of approximately $20.6 million, which were partially offset by a reduction of approximately $25.2 million in net sales due to lower average precious metal prices, primarily due to a $4.74 per troy ounce decline in the average market price of silver. The core growth of approximately $20.6 million was due to overall higher sales volume, including increased sales for our distributed product and aluminum product lines, partially offset by softness from the European and refining markets.

The following table provides a summary of the Company's consolidated cash flows for the years ended December 31, 2015 and 2014:

Operating cash flows for the year ended December 31, 2015 provided $58.3 million, as compared to $50.7 million provided in 2014, primarily due to improvements in working capital levels. Trade and other receivables provided $5.4 million during 2015, as compared to a use of $0.8 million in 2014, and inventories provided $9.6 million during 2015, as compared to a use of $5.4 million in 2014. These improvements were primarily driven by lower fourth quarter sales volume and improved working capital management in the Performance Materials segment, as well as lower silver prices in the Joining Materials segment, partially offset by strong sales volume in the Building Materials segment during the fourth quarter of 2015, as compared to the fourth quarter of 2014. Discontinued operations used $2.3 million during 2015, as compared to a source of $18.6 million in 2014.

Investing activities provided $40.8 million of cash for the year ended December 31, 2015 and used $11.9 million in 2014. Investing activities for the year ended December 31, 2015 included net proceeds of $155.5 million from the sale of Arlon, LLC, partially offset by acquisition costs of $92.9 million primarily related to the JPS and ITW acquisitions. During the third quarter of 2014, the Company received $3.7 million from thea 2013 sale of Continental,divestiture, which was previously held in escrow pending resolution of certain indemnification provisions contained in the sales agreement. Capital spending was $15.2 million in 2015, as compared with $12.7 million in 2014. The Company also invested approximately $7.6 million, including brokerage commissions, in the common stock of ModusLink in 2015, as compared with $1.5 million in 2014. Discontinued operations used $0.1 million in 2015, as compared to $2.9 million in 2014.

For the year ended December 31, 2015, the Company's financing activities used $106.7 million of cash. Borrowings under the Company's revolving credit facilityfacilities decreased by $104.3 million for the year ended December 31, 2015, primarily driven by cash proceeds from the sale of Arlon, LLC, partially offset by borrowings to fund the JPS and ITW acquisitions.

The following table summarizes the Company's contractual obligations at December 31, 20152016 and the effects such obligations are expected to have on liquidity and cash flows in future periods:

It is not the Company's usual business practice to enter into off-balance sheet arrangements such as guarantees on loans and financial commitments, indemnification arrangements and retained interests in assets transferred to an unconsolidated entity for securitization purposes. Certain customers and suppliers of the Joining Materials segment choose to do business on a "pool" basis. Such customers or suppliersbasis and furnish precious metal to subsidiaries of H&HHNH for return in fabricated form or for purchase from or return to the supplier. When the customer's precious metal is returned in fabricated form, the customer is charged a fabrication charge. The value of pooled preciousthis customer metal is not included on the Company's consolidated balance sheet.sheets. As of December 31, 2015,2016, customer metal in H&H'sHNH's custody consisted of 160,363126,427 ounces of silver, 535520 ounces of gold and 1,391 ounces of palladium. The market value per ounce of silver, gold and palladium as of December 31, 20152016 was $13.86, $1,062.25,$16.05, $1,159.10 and $547.00,$676.00, respectively.

The Company's discussion and analysis of financial condition and results of operations is based upon its consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Estimates are based on historical experience, expected future cash flows and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

U.S. GAAP requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. Note 2 to the Company's consolidated financial statements, included elsewhere in this Annual Report on Form 10-K, includes a summary of the significant accounting policies and methods used in the preparation of the consolidated financial statements. The following is a discussion of the critical accounting policies and methods used by the Company.

Goodwill represents the difference between the purchase price and the fair value of net assets acquired in a business combination. At December 31, 2015,2016, the Company had recorded goodwill totaling $121.8$182.2 million. Goodwill is reviewed annually for impairment in accordance with U.S. GAAP as of the end of the fourth quarter. Goodwill impairment testing consists of a two-step process. Step 1 of the goodwill impairment test involves comparing the fair values of the applicable reporting units with their carrying values, including goodwill. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, Step 2 of the goodwill impairment test is performed to determine the amount of impairment loss. An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform the two-step quantitative impairment test; otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the two-step quantitative impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether an entity chooses to perform the qualitative assessment or proceeds directly to the two-step quantitative impairment test. The Company utilized a qualitative approach to assess its goodwill as of its most recent assessment date.date, except for the Performance Materials segment, for which the Company performed a Step 1 and a Step 2 process.

The testing of goodwill for impairment is performed at a level referred to as a reporting unit. Goodwill is allocated to each reporting unit based on the goodwill valued in connection with each business combination consummated within each reporting unit. FourFive reporting units of the Company currently have goodwill assigned to them. The results of the Company's goodwill impairment testing indicatedresulted in an impairment charge of $24.3 million for the year ended December 31, 2016 related to its Performance Materials segment. This impairment resulted from a decline in market conditions and lower demand for certain of JPS' product lines. At December 31, 2016, the remaining goodwill associated with the Performance Materials segment of $7.9 million is at risk of future impairment if the fair value of this reporting unit declines in value. There were no goodwill impairment for all periods presented,charges recorded in 2015 and based on its most recent assessment,2014, and the Company does not believe that any of its remaining reporting units isare at risk of failing Step 1 of the goodwill impairment test.

In evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company assesses relevant events and circumstances, including: macroeconomic conditions; industry and market considerations; cost factors; overall financial performance; and other entity-specific events. The Company's current expectations associated with such factors could differ from future results, and the recoverability of goodwill may be impacted if the Company's estimated future operating cash flows are not achieved. The Company also uses judgment in assessing whether assets may have become impaired between annual impairment tests. Circumstances that could trigger an interim impairment test include, but are not limited to: the occurrence of a significant change in circumstances, such as continuing adverse business conditions or legal factors; an adverse action or assessment by a regulator; unanticipated competition; loss of key personnel; the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed; or results of testing for recoverability of a significant asset group within a reporting unit.

Intangible assets with finite lives are amortized over their estimated useful lives. The Company also estimates the depreciable lives of property, plant and equipment, and reviews long-lived assets for impairment whenever events, or changes in circumstances, indicate the carrying amount of such assets may not be recoverable. The Company performs such assessments at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, which

Long-lived assets consisting of land and buildings used in previously operating businesses are carried at the lower of cost or fair value less cost to sell and are included primarily in other non-current assets inon the Company's consolidated balance sheet.sheets. A reduction in the carrying value of such long-lived assets used in previously operating businesses is recorded as an asset impairment charge in the consolidated income statement.statements of operations.

The Company maintains several qualified and non-qualified pension plans and other post-retirement benefit plans. The Company recorded pension expense of $7.5$8.1 million for the year ended December 31, 2015,2016, and, at December 31, 2015,2016, the Company had recorded pension liabilities totaling $265.6$265.5 million. Pension benefits are generally based on years of service and the amount of compensation atearned during the time of retirement.participants' employment. However, the qualified pension benefits have been frozen for all participants.

The Company's pension and other post-retirement benefit costs are developed from actuarial valuations. Inherent in these valuations are key assumptions, including discount and mortality rates, and expected long-term rates of return on plan assets. Material changes in the Company's pension and other post-retirement benefit costs may occur in the future due to changes in these assumptions, changes in the number of plan participants, changes in the level of benefits provided, changes to the level of contributions to these plans and other factors.

The Company determines its actuarial assumptions for its pension and other post-retirement benefit plans on December 31 of each year to calculate liability information as of that date and pension and other post-retirement benefit expense or income for the following year. The discount rate assumption is derived from the rate of return on high qualityhigh-quality bonds as of December 31 of each year.

The Company's pension plan assets are diversified as to type of assets, investment strategies employed and number of investment managers used. Investments may include equities, fixed income, cash equivalents, convertible securities and private investment funds. Derivatives may be used as part of the investment strategy. The Company may direct the transfer of assets between investment managers in order to rebalance the portfolio in accordance with asset allocation guidelines established by the Company. The private investment funds, or the investment funds they are invested in, own marketable and non-marketable securities and other investment instruments. Such investments are valued by the private investment funds, underlying investment managers or the underlying investment funds at fair value, as described in their respective financial statements and offering memorandums. The Company utilizes these values in quantifying the value of the assets of its pension plans, which are then used in the determination of the unfunded pension liabilityliabilities on the consolidated balance sheet.sheets. Because of the inherent uncertainty of valuation of some of the pension plans' investments in private investment funds and the nature of some of the underlying investments held by the investment funds, the recorded value may differ from the value that would have been used had a ready market existed for some of these investments for which market quotations are not readily available.

Management uses judgment to make assumptions on which its employee benefit liabilities and expenses are based. The effect of a 1% change in two key assumptions for the Company's pension plans is summarized as follows:

The Company recorded a tax provision from continuing operations of $18.0$13.9 million for the year ended December 31, 2015,2016, and has deferred income tax assets, after valuation allowances, totaling $120.1$94.9 million at December 31, 2015.2016. As part of the process of preparing its consolidated financial statements, the Company is required to estimate income taxes in each of the jurisdictions in which it conducts business. This process involves estimating actual current tax expense and temporary differences between tax and financial reporting. Temporary differences result in deferred income tax assets and liabilities, which are included on the consolidated balance sheet.sheets. The Company must assess the likelihood that deferred income tax assets will be realized. A valuation allowance is recognized to reduce deferred income tax assets if, and to the extent that, it is more likely than not that all or some portion of the deferred income tax assets will not be realized. The determination of the need for a valuation allowance is based on an on-going evaluation of current information including, among other things, estimates of future earnings in different tax jurisdictions and the expected timing of deferred income tax asset and liability reversals. The Company believes that the determination to record a valuation allowance to reduce deferred income tax assets is a critical accounting estimate because it is based, in part, on an estimate of future taxable income in the various tax jurisdictions in which it does business, which is susceptible to change and may or may not occur, as well as on the estimated timing of the reversal of temporary differences, which give rise to its deferred income tax assets, and because the impact of adjusting a valuation allowance may be material. In the event that actual results differ from estimates in future periods, and depending on the tax strategies that the Company may be able to implement, changes to the valuation allowance could impact its financial position and results of operations.

The Company recognizes an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority that has full knowledge of all relevant information, based on the technical merits of the position. The income tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon settlement with a taxing authority. The determination of an uncertain tax position and the likelihood of it being realized requires critical judgment and estimates. The Company carefully assesses each of the uncertain tax positions in order to determine the tax benefit that can be recognized in the consolidated financial statements. It records and/or discloses such potential tax liabilities, as appropriate, and reasonably estimates its income tax liabilities and recoverable tax assets. If new information becomes available, adjustments will be charged against income at that time. The Company does not anticipate that such adjustments would have a material adverse effect on its consolidated financial position or liquidity; however, it is possible that the final outcomes could have a material impact on its reported results of operations.

Market risk is the risk of loss arising from adverse changes in market rates and prices. Our significant market risks are primarily associated with commodity prices, interest rates, equity prices and foreign currency exchange rates. In the normal course of business, we manage these risks through a variety of strategies. We enter into derivative instruments to mitigate certain commodity price risks, and we have entered into derivative instruments to mitigate certain interest rate risks.risks in the past. We do not engage in commodity, interest rate, investment or currency speculation, and no derivatives are held for trading purposes. No credit loss is anticipated on our derivative agreements as the counterparties are major financial institutions that are highly rated, or the derivatives are exchange traded contracts.

HNH's quantitative and qualitative disclosures about market risk include forward-looking statements. These statements are based on certain assumptions with respect to market prices, interest rates and other industry-specific risk factors. To the extent these assumptions prove to be inaccurate, future outcomes may differ materially from those discussed herein.

In the normal course of business, HNH and its subsidiaries are exposed to market risk or price fluctuations related to the purchase of electricity, natural gas, fuel and petroleum-based commodities, including adhesives, and other products, such as yarns, precious metals, electronic and electrical components, steel products and certain non-ferrous metals used as raw materials. HNH is also exposed to the effects of price fluctuations on the value of its commodity inventories, in particular, its precious metal inventory. The raw materials and energy which we use are largely commodities, subject to price volatility caused by changes in global supply and demand and governmental controls.

HNH's market risk strategy has generally been to obtain competitive prices for its products and services, sourced from more than one vendor, and to allow operating results to reflect market price movements dictated by supply and demand.

Certain customers and suppliers of HNH's subsidiary, H&H,HNH choose to do business on a "pool" basis. Such customers or suppliersbasis and furnish precious metal to subsidiaries of H&HHNH for return in fabricated form or for purchase from or return to the supplier. When the customer's precious metal is returned in fabricated form, the customer is charged a fabrication charge. The value of pooled preciousthis customer metal is not included on the Company's consolidated balance sheet.sheets. As of December 31, 2015,2016, customer metal in H&H'sHNH's custody consisted of 160,363126,427 ounces of silver, 535520 ounces of gold and 1,391 ounces of palladium.

To the extent that we have not mitigated our exposure to changing raw material and energy prices, we may not be able to increase our prices to our customers to offset such potential raw material or energy price fluctuations, which could have a material adverse effect on our results of operations and operating cash flows.

The fair value of the Company's cash and cash equivalents, trade and other receivables, trade payables and short-term borrowings approximate their carrying values and are relatively insensitive to changes in interest rates due to the short-term maturities of these instruments or the variable nature of the associated interest rates.

A reduction in long-term interest rates could also materially increase HNH's cash funding obligations to its pension and other post-retirement benefit plans.

The Company holds an investment in the common stock of ModusLink and has elected the option to value its investment in ModusLink using fair value, calculated based on the closing market price for ModusLink common stock. The value of this investment decreased from $23.9 million at December 31, 2014 to $20.9 million at December 31, 2015 to $12.3 million at December 31, 2016 entirely due primarily to changesa decrease in the share price of ModusLink's common stock, partially offset by the additional shares of ModusLink common stock purchased by the Company during 2015.stock. Fluctuations in the price of ModusLink common stock are subject to market fluctuations and other factors outside of our control, which are not directly linked to the financial and operational performance of the Company.

HNH manufactures and sells its products in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. Most of its operating costs for its non-U.S. operations are denominated in local currencies. The Company's major foreign currency exposures involve the markets in Asia, Europe, Canada and Mexico. The Company is subject to the risk of price fluctuations related to anticipated revenues and operating costs, firm commitments for capital expenditures and existing assets orand liabilities denominated in currencies other than the U.S. dollar. The Company has not generally used derivative instruments to manage these specific risks. During the year ended December 31, 2016, the Company recorded a gain of $0.5 million from foreign currency fluctuations, and for the years ended December 31, 2015 2014 and 2013,2014, the Company incurred losses of $0.4 million and $0.3 million from foreign currency fluctuations, totaling $0.4 million, $0.3 million and $0.3 million, respectively.