This document also contains information concerning our markets and products generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which these markets and product categories will develop. These assumptions have been derived from information currently available to us and to the third party industry analysts quoted herein. This information includes, but is not limited to, product shipments and share of production. Actual market results may differ from those predicted. We do not know what impact any of these differences may have on our business, our results of operations, financial condition, and cash flow. Factors that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements include, among other things:

The above list of factors is not exhaustive. These and other factors are discussed in more detail under “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

~~In this Annual Report on Form 10-K, unless otherwise specified, the terms “we,” “our,” “us,” “Company,” and “Novelis” refer to~~ Novelis Inc.~~, a company incorporated in Canada under the Canadian Business Corporations Act~~ ("we," "our," "us," "Company," and its subsidiaries. References herein to “Hindalco” refer to Hindalco Industries Limited, which acquired Novelis in May 2007. In October 2007, Rio Tinto Group purchased all of the outstanding shares of Alcan Inc. References herein to “RT” refer to Rio Tinto Inc.

A significant amount of our business is conducted under a conversion model, which allows us to pass through increases or decreases in the price of aluminum to our customers. Nearly all of our flat-rolled products have a price structure with three components: (i) a base aluminum price quoted off the London Metal Exchange (LME); (ii) a local market premium; and (iii) a “conversion premium” to produce the rolled product which reflects, among other factors, the competitive market conditions for that product. The use of the term “conversion premium” in this Annual Report, refers to the conversion costs plus a margin we charge our customers to produce the rolled product which reflects, among other factors, the competitive market conditions for that product, exclusive of the pass through aluminum price.

~~We are the world’s leading aluminum rolled products producer, based on shipment volume of 3,123 kt in fiscal~~ ~~2016~~, and on capacity, with 15% of the world’s flat-rolled aluminum products capacity as of December 31, 2015. We are also the global leader in the recycling of aluminum. We are the only known company of our size and scope focused solely on aluminum rolled products markets and capable of local supply of technologically sophisticated aluminum products in all four major industrialized continents: North America, South America, Europe and Asia. We had “Net sales” of ~~$10 billion~~ for the year ended March 31, ~~2016~~.

All of the common shares of Novelis are owned directly by AV Metals Inc. and indirectly by Hindalco Industries Limited. We produce aluminum sheet and light gauge products primarily for use in the beverage can, automotive, specialty products (including consumer electronics, architecture, and other transportation) and foil markets. We also have recycling operations in many of our plants to recycle aluminum, such as UBCs and automotive scrap. As of ~~March 31, 2016, we had manufacturing operations in~~ ~~eleven~~ ~~countries on~~ ~~four~~ ~~continents: North America, South America, Asia and Europe, through~~ 25 ~~operating facilities, including recycling operations in~~ ~~eleven~~ ~~of these plants.~~

~~Aluminum rolled products are semi-finished aluminum products~~2023 that constitute the raw material for the manufacture of finished goods ranging from automotive structures and body panels to food and beverage cans. There are two major types of manufacturing processes for aluminum rolled products differing mainly in the process used to achieve the initial stage of processing:

There are two sources of input material: (1) recycled aluminum, produced by remelting post-industrial and post-consumer scraps; and (2) primary aluminum, produced from bauxite processed in a smelter.

Primary aluminum and sheet ingot can generally be purchased at prices set on the LME, plus a local market premium that varies by geographic region of delivery, alloying material, form (ingot or molten metal) and purity.

Recycled aluminum is an important source of input material. Aluminum is infinitely recyclable and recycling it requires approximately 5% of the energy needed to produce primary aluminum. As a result, in regions where aluminum is widely used, manufacturers and customers are active in setting up collection processes in which UBCs and other recyclable aluminum products are collected for re-melting and reuse. Manufacturers may also enter into agreements with customers who return processed scrap and pay to have it re-melted and rolled into the same product again.

Recycled aluminum is generally purchased at a discount compared to the price of primary aluminum. The spread between the prices for recycled aluminum and the price of primary aluminum varies by the LME primary aluminum price, type and quality of the scrap, geographic region, and other market factors.

Aluminum, because of its light weight, recyclability and formability, has a wide variety of uses in packaging and other end-use markets. The recyclability of aluminum enables it to be used, collected, melted and returned to the original product form an unlimited number of times, unlike paper and polyethylene terephthalate (PET) plastic, which deteriorate with every iteration of recycling.

~~Packaging.~~ Aluminum is used in beverage cans and bottles, food cans, beverage screw caps and foil, among others. Packaging is the largest aluminum rolled products application, according to market data from Commodity Research Unit International Limited (CRU), an independent business analysis and consultancy group. Beverage cans are one of the largest aluminum rolled products applications. In addition to their recyclability, aluminum beverage cans offer advantages in fabricating efficiency and product shelf life. Fabricators are able to produce and fill beverage cans at very high speeds, and non-porous aluminum cans provide longer shelf life than PET plastic containers. Additionally, the use of aluminum to package beverages such as craft beer is increasing, as aluminum blocks sunlight and therefore maintains the quality and taste of the product longer. Aluminum cans are light, stackable and use space efficiently, making them convenient and cost-efficient to ship.

Beverage can sheet is sold in coil form for the production of can bodies, ends and tabs. The material can be ordered as rolled, degreased, pre-lubricated, pre-treated and/or lacquered. Typically, can makers define their own specifications for material to be delivered in terms of alloy, gauge, width and surface finish.

Foil wrap is another packaging application and it includes household and institutional aluminum foil. Known in the industry as packaging foil, it is manufactured in thicknesses ranging from 11 microns to 23 microns. Container foil is used to produce semi-rigid containers such as pie plates and take-out food trays and is usually manufactured in thicknesses ranging from 60 microns to 200 microns.

~~Transportation.~~ Aluminum rolled products are used in vehicle structures (also known as "body-in-white") as well as automotive body panel applications, including hoods, deck lids, fenders and lift gates. These uses typically result from cooperative efforts between aluminum rolled products manufacturers and their customers that yield tailor-made solutions for specific requirements in alloy selection, fabrication procedure, surface quality and joining. There has been recent growth in certain geographic markets in passenger and commercial vehicle applications due to the lighter weight, better fuel economy and improved emissions performance associated with these applications. We expect increased growth in this end-use market driven by government regulations requiring improved emissions and better fuel economy; while also maintaining or improving vehicle handling, braking, and safety.

Heat exchangers, such as radiators and air conditioners, are an important application for aluminum rolled products in the transportation end-use market. Original equipment manufacturers also use aluminum sheet with specially treated surfaces and other specific properties for interior and exterior applications. Newly developed alloys are being used in transportation tanks and rigid containers allowing for safer and more economical transportation of hazardous and corrosive materials.

Aluminum is also used in aerospace applications, as well as in the construction of ships’ hulls, superstructures and passenger rail cars because of its strength, light weight, formability and corrosion resistance.

~~Architectural.~~ Construction is the largest application within this end-use market. Aluminum rolled products developed for the construction industry are often decorative and non-flammable, offer insulating properties, are durable and corrosion resistant, and have a high strength-to-weight ratio. Aluminum siding, gutters, and downspouts comprise a significant amount of construction volume. Other applications include doors, windows, awnings, canopies, facades, roofs and ceilings.

~~Industrial.~~ ~~Industrial applications include heat exchangers, process and electrical machinery, lighting fixtures, furniture and insulation.~~

~~Consumer Durables and Other.~~ Aluminum’s lightweight characteristics, high formability, ability to conduct electricity and dissipate heat and to offer corrosion resistance makes it useful in a wide variety of electronic applications. Uses of aluminum rolled products in electronics include flat screen televisions, personal computers, laptops, mobile devices, and digital music players. Other uses of aluminum rolled products in consumer durables include microwaves, coffee makers, air conditioners and cooking utensils.

The factors influencing competition vary by region and end-use market, but generally we compete on the basis of our value proposition; which includes price, product quality, the ability to meet customers’ specifications, range of products offered, lead times, technical support and customer service. In some end-use markets, competition is also affected by fabricators’ requirements that suppliers complete a qualification process to supply their plants. This process can be rigorous and may take many months to complete. As a result, obtaining business from these customers can be a lengthy and expensive process. However, the ability to obtain and maintain these qualifications can represent a competitive advantage.

In addition to competition from others within the aluminum rolled products industry, we also face competition from non-aluminum material producers. In the packaging end-use market (primarily beverage and food cans), aluminum rolled products compete mainly with glass, PET plastic, and in some regions, steel. In the transportation end-use market, aluminum rolled products compete mainly with steel and composites. Aluminum competes with wood, plastic, cement and steel in building products applications. In the consumer durables end-use market, aluminum rolled products compete mainly with plastic, steel, and magnesium. Additionally, aluminum competes with steel, cooper, plastic, and glass in industrial applications. Factors affecting competition with substitute materials include price, ease to manufacture, consumer preference and performance characteristics.

~~Primary Aluminum Sourcing.~~ ~~We purchased or tolled approximately 1,530 kt of primary aluminum in fiscal 2016 in the form of sheet ingot, standard ingot and molten metal, approximately 25% of which we purchased from RT.~~

~~Aluminum Products Recycling.~~ We operate facilities in several plants to recycle post-consumer aluminum, such as UBCs collected through recycling programs. In addition, we have agreements with several of our large customers where we have a closed-looped system whereby we take production scrap material from their fabricating activity and re-melt, cast and roll it to re-supply these customers with aluminum sheet. Other sources of recycled material include lithographic plates, and products with longer lifespans, like vehicles and buildings, which are starting to become high volume sources of recycled material. We purchased or tolled approximately 1,790 kt of recycled material inputs in fiscal 2016 and have made recycling investments in all of our operating regions to increase the amount of recycled material we use as raw materials.

~~The materials that we recycle are remelted, cast and then used in our operations. The net effect of all recycling activities~~ was that on average approximately 53% of our total aluminum rolled products shipments in fiscal 2016 were made from recycled inputs. The overall benefit we receive from utilizing recycled metal is influenced by: 1) the overall price levels of the LME and local market premiums, 2) the spread between the price for recycled aluminum and the LME primary aluminum price and 3) our consumption levels of the recycled material inputs.

Our recycled content performance and methodology are detailed in our annual sustainability report, which can be found at www.novelis.com/sustainability. Information in our sustainability report does not constitute part of this Annual Report on Form 10-K.

The table below shows “Net sales” and total shipments by segment. For additional financial information related to our operating segments, see Note 21 — Segment, Geographical Area, Major Customer and Major Supplier Information to our accompanying audited consolidated financial statements.

In response to the growing demand in the broader Asia region, we expanded our aluminum rolling operations beginning in fiscal 2014 and our recycling operations in fiscal 2013 in South Korea. The move is designed to rapidly bring to market high-quality aluminum rolling capacity aligned with the projected needs of a growing customer base. The expansion includes the construction of a state-of-the-art recycling center primarily for UBCs and a casting operation.

~~We built an aluminum automotive sheet finishing plant in Changzhou, China, which was commissioned in fiscal 2015.~~

~~During fiscal 2015, we closed the Ouro Preto smelter facility and we sold the majority of our hydroelectric generation operations in Brazil.~~

Our single largest end-use product is beverage can sheet. We sell can sheet directly to beverage makers and bottlers as well as to can fabricators that sell the cans they produce to bottlers. In certain cases, we operate under umbrella agreements with beverage makers and bottlers under which they direct their can fabricators to source their requirements for beverage can body, end and tab stock from us.

Additional information related to our top customers is contained in Note 21 - Segment, Geographical Area, Major Customer and Major Supplier Information to our accompanying audited consolidated financial statements.

~~We also use third party agents or traders in some regions to complement our own sales force. These agents provide service to our customers in countries where we do not have local expertise.~~

We conduct research and development activities at our facilities in order to satisfy current and future customer requirements, improve our products and reduce our conversion costs. Our customers work closely with our research and development professionals to improve their production processes and market options. We have approximately 330 employees dedicated to research and development, located in many of our facilities and research centers. We have a global research and technology center in Kennesaw, Georgia, which offers state of the art research and development capabilities to help Novelis meet the global long-term demand for aluminum used for the automotive, beverage can and specialty markets.

We consider our employee relations to be satisfactory. A substantial portion of our employees are represented by labor unions and their employment conditions are governed by collective bargaining agreements. Collective bargaining agreements are negotiated on a site, regional or national level, and are of varying durations. As of March 31, 2016, approximately 2,670 of our employees were covered under collective bargaining agreements that expire within one year.

We actively review intellectual property arising from our operations and our research and development activities and, when appropriate, we apply for patents in appropriate jurisdictions. We currently hold patents and patent applications on approximately 180 different items of intellectual property. While these patents and patent applications are important to our business on an aggregate basis, no single patent or patent application is deemed to be material to our business.

We have applied for, or received registrations for, the “Novelis” word trademark and the Novelis logo trademark in approximately 50 countries where we have significant sales or operations. Novelis uses the Aditya Birla logo under license from Aditya Birla Management Corporation Private Limited.

~~We have also registered the word “Novelis” and several derivations thereof as domain names in numerous top level domains around the world to protect our presence on the world wide web.~~

We are involved in proceedings under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or Superfund, or analogous state provisions regarding our liability arising from the usage, storage, treatment or disposal of hazardous substances and wastes at a number of sites in the United States, as well as similar proceedings under the laws and regulations of the other jurisdictions in which we have operations, including Brazil and certain countries in the European Union. Many of these jurisdictions have laws that impose joint and several liability, without regard to fault or the legality of the original conduct, for the costs of environmental remediation, natural resource damages, third party claims, and other expenses. In addition, we are, from time to time, subject to environmental reviews and investigations by relevant governmental authorities.

We have established procedures for regularly evaluating environmental loss contingencies, including those arising from environmental reviews and investigations and any other environmental remediation or compliance matters. We believe we have a reasonable basis for evaluating these environmental loss contingencies, and we also believe we have made reasonable estimates for the costs that are reasonably possible for these environmental loss contingencies. Accordingly, we have established liabilities based on our estimates for the currently anticipated costs that are deemed probable associated with these environmental matters. Management has determined the currently anticipated costs associated with these environmental matters will not, individually or in the aggregate, materially impair our operations or materially adversely affect our financial condition.

~~In addition to the factors discussed elsewhere~~otherwise defined in this ~~report, you should consider~~Amendment shall have the ~~following factors, which could materially affect our business, financial condition or results of operations~~same meanings assigned to such terms in the ~~future. The following factors, among others, could cause our actual results to differ from those projected in any forward looking statements we make.~~

Our ten largest customers accounted for approximately 60%, 55% and 54% of our total “Net sales” for the year ended March 31, 2016, 2015 and 2014, respectively, with Rexam Plc, a leading global beverage can maker, and its affiliates representing approximately 19%, ~~18%~~ ~~and~~ ~~17%~~ of our total “Net sales” in the respective periods. A significant downturn in the business or financial condition of our significant customers could materially adversely affect our results of operations and cash flows. In addition, some of our customer contracts are subject to renewal, renegotiation or re-pricing at periodic intervals or upon changes in competitive supply conditions. Our failure to successfully renew, renegotiate or re-price such agreements could result in a reduction or loss in customer purchase volume or revenue, and if we are not successful in replacing business lost from such customers, our results of operations and cash flows could be adversely affected. Additionally, in the event of consolidation among our customers, our customers may be able to use increased leverage in negotiating prices and other contract terms. Consolidation in our customer base may also lead to reduced demand for our products or cancellations of sales orders, which could adversely affect our results of operations and cash flows.

We consume substantial amounts of energy in our rolling and casting operations. The factors affecting our energy costs and supply reliability tend to be specific to each of our facilities. A number of factors could materially affect our energy position adversely including:

~~In addition, global climate change may increase our costs for energy sources, supplies or raw materials. See~~ ~~We may be affected by global climate change or by legal, regulatory or market responses to such change. If energy costs were to rise, or if energy supplies or supply arrangements were disrupted, our profitability and cash flows could decline.~~

Our purchase and sales contracts for primary aluminum are based on the LME price plus a regional market premium, which is a surcharge in addition to the LME price. There are typically timing differences between the pricing periods for purchases and sales where purchase prices we pay tend to be fixed and paid earlier than sales prices we charge our customers. This creates a price exposure we call “metal price lag.” We use derivative instruments to manage the timing differences related to LME associated with metal price lag. However, we do not use derivative contracts for local market premiums, as there are not adequate cost effective hedges in the market. The timing difference associated with metal price lag could positively or negatively impact our operating results and short term liquidity position.

~~The total number of operating facilities within our operating segments as of~~ ~~March 31, 2016~~ ~~is shown in the table below, including operating facilities we jointly own and operate with third parties.~~

Our Oswego, New York facility operates modern equipment used for recycling beverage cans and other aluminum scrap, ingot casting, hot rolling, cold rolling and finishing. The Oswego facility produces can stock, automotive sheet, as well as building and industrial products. The facility also provides feedstock to our Kingston, Ontario facility, which produces automotive sheet and products for construction and industrial applications, and to our Fairmont, West Virginia facility, which produces foil and light-gauge sheet.

Our Logan facility in Russellville, Kentucky is a processing joint venture between us and Tri-Arrows Aluminum Inc. (Tri-Arrows). Logan is a dedicated manufacturer of aluminum sheet products for the can stock market and operates modern and high-speed equipment for ingot casting, hot-rolling, cold-rolling and finishing. A portion of the can end stock is coated at North America’s Warren, Ohio facility, in addition to Logan’s on-site coating assets. Together with Tri-Arrows, we operate Logan as a production cooperative, with each party supplying its own primary metal inputs for conversion at the facility. The converted product is then returned to the supplying party at cost. Logan does not own any of the primary metal inputs or any of the converted products. Most of the fixed assets at Logan are directly owned by us and Tri-Arrows in varying ownership percentages or solely by each party.

Along with our recycling center in Oswego, New York, we own two other fully dedicated recycling facilities in North America, located in Berea, Kentucky and Greensboro, Georgia. Each offers a modern, cost-efficient process to recycle UBCs and other aluminum scrap into sheet ingot to supply our hot mills in Logan and Oswego.

Aluminium Norf GmbH (Alunorf) in Germany, a 50/50 production-sharing joint venture between us and Hydro, is a large scale, modern manufacturing hub, located in Neuss, Germany, for several of our operations in Europe, and is the largest aluminum rolling mill and remelting operation in the world. Together with Hydro, we operate Alunorf as a production cooperative, with each party supplying its own primary metal inputs for transformation at the facility. The transformed product is then transferred back to the supplying party on a pre-determined cost-plus basis. Alunorf supplies hot coil for further processing through cold rolling to some of our other plants, including Göttingen and Nachterstedt in Germany and provides foilstock to our plants in Ohle and Lüdenscheid in Germany. The Ohle and Lüdenscheid cold mill and finishing lines produce products for a number of end use applications, such as flexible tubes and bare, container, and converter foil.

Our Göttingen plant has a cold mill and paint line as well as finishing capability for can, food, and automotive sheet. Our Nachterstedt plant cold rolls and finishes automotive, can, industrial, and architectural sheet. In October 2014, we opened the world’s largest recycling center at our Nachterstedt, Germany site. It is a fully integrated recycling facility, capable of recycling a wide variety of scrap. The Pieve plant, located near Milan, Italy, produces continuous cast coil that is cold rolled into paintstock and sent to the Bresso, Italy plant for painting and finishing.

The Sierre rolling mill and remelt operation in Switzerland, along with the Nachterstedt and Göttingen plants in Germany, combine to make Novelis Europe’s leading producer of automotive sheet in terms of shipments.

~~We lease a facility in Crick, U.K., that houses a small finishing operation for automotive products.~~

In addition to its rolling operations, Novelis Asia operates recycling furnaces at both its Ulsan and Yeongju facilities in South Korea for the conversion of customer and third-party recycled aluminum. We also have an aluminum automotive sheet finishing plant in Changzhou, China. In addition, we have a facility in Binh Duong, Vietnam, which handles the collection and processing of UBCs.

Pinda is the largest aluminum rolling and recycling facility in South America in terms of shipments and is the only facility in South America capable of producing can body and end stock. Pinda recycles primarily UBCs, and is engaged in tolling recycled metal for our customers.

~~We also own certain hydroelectric power assets that supplied electricity for our primary aluminum smelting operations, which were closed in fiscal 2015. These assets are currently held for sale.~~

Dividends or returns of capital are at the discretion of the board of directors and will depend on, among other things, our financial resources, cash flows generated by our business, our cash requirements, restrictions under and covenant compliance under the instruments governing our indebtedness, being in compliance with the appropriate indentures and covenants under the instruments that govern our indebtedness that would allow us to legally pay dividends or return capital and other relevant factors.

~~In March 2014, we declared a return of capital to our shareholder, AV Metals Inc., in the amount of $250 million, which we subsequently paid on April 30, 2014.~~

~~All of our common shares were indirectly held by Hindalco; thus, earnings per share data are not reported. Amounts in the tables below are in millions.~~

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Annual Report, particularly in “Special Note Regarding Forward-Looking Statements and Market Data” and “Risk Factors.”

We reported "Net loss" of $38 million for the year ended March 31, 2016, compared to "Net income" of $148 million for the year ended March 31, 2015. Net cash provided by operating activities was $541 million for the year ended March 31, 2016, a decrease of $63 million from the prior comparable period, primarily due to lower "Segment income", partially offset by a favorable net change in working capital. Capital expenditures related to strategic expansion projects declined as our larger projects have either recently commissioned or are in the commissioning phase. Our global capital expenditures for the year ended March 31, 2016 were $370 million compared to $518 million in prior year.

The demand for aluminum in the automotive industry continues to grow rapidly. This demand has been driven by the benefits that result from using lighter weight materials in vehicles, as companies respond to government regulations, which are driving improved emissions and better fuel economy; while also maintaining or improving vehicle handling, braking, and safety. We expect the automotive aluminum market to grow significantly through the end of the decade, which is driving the investments we have made in our automotive sheet finishing capacity in North America, Europe and Asia.

While economic growth and material substitution continues to drive increasing global demand for aluminum beverage cans, consumer demand for carbonated soft drinks in North America has declined and continued asset capacity increases along with increased imports are creating excess capacity in the can sheet market in the region. Slower economic growth and uncertainty in China and increased competition from Chinese suppliers of flat rolled aluminum products has put downward pressure on conversion premiums, primarily in can and specialty products.

Increases or decreases in the price of aluminum based on the average LME base aluminum prices and local market premiums directly impact “Net sales,” “Cost of goods sold (exclusive of depreciation and amortization)” and working capital. The timing of these impacts varies based on contractual arrangements with customers and metal suppliers in each region. These timing impacts are referred to as metal price lag. Metal price lag exists due to: (i) the period of time between the pricing of our purchases of metal, holding and processing the metal, and the pricing of the sale of finished inventory to our customers, and (ii) certain customer contracts containing fixed forward price commitments which result in exposure to changes in metal prices for the period of time between when our sales price fixes and the sale actually occurs.

~~See~~ ~~Segment Review~~ ~~below for the impact of metal price lag on each of our segments.~~

We operate a global business and conduct business in various currencies around the world. We have exposure to foreign currency risk as fluctuations in foreign exchange rates impact our operating results as we translate the operating results from various functional currencies into our U.S. dollar reporting currency at the current average rates. We also record foreign exchange remeasurement gains and losses when business transactions are denominated in currencies other than the functional currency of that operation. Global economic uncertainty is contributing to higher levels of volatility among the currency pairs in which we conduct business. The following table presents the exchange rates as of the end of each period and the average of the month-end exchange rates for the years ended March 31, 2016, 2015, and 2014:

In both South Korea and Europe, operations are recorded in their local currency and translated into the U.S. dollar reporting currency. When comparing fiscal 2016 operating results with fiscal 2015, in Europe and South Korea, the stronger U.S. dollar resulted in unfavorable foreign exchange translation.

In Brazil and Canada, the U.S. dollar is the functional currency due to predominantly U.S. dollar selling prices while our manufacturing costs are predominately denominated in the Brazilian real and the Canadian dollar. The stronger U.S. dollar compared to the Brazilian real and the Canadian dollar resulted in a favorable remeasurement of local currency operating costs and liabilities into the U.S. dollar in fiscal 2016 compared to fiscal 2015.

In January 2015, the Swiss National Bank discontinued its policy to support a minimum exchange rate between the Euro and the Swiss franc. Following this announcement, the Swiss franc rapidly appreciated in value. This adversely impacted our Swiss operations, where operating costs are incurred primarily in the Swiss franc, and a large portion of revenues are denominated in the Euro.

We use foreign exchange forward contracts and cross-currency swaps to manage our exposure arising from recorded assets and liabilities, firm commitments, and forecasted cash flows denominated in currencies other than the functional currency of certain operations, which include capital expenditures and net investment in foreign subsidiaries. The impact of foreign exchange remeasurement, net of related hedges, was a net gain of $2 million in fiscal 2016 and a net loss of $27 million in fiscal 2015. For the year ended March 31, 2016, the balance sheet remeasurement hedging gains and losses partially offset the foreign currency exchange remeasurement gains and losses arising from the non-functional currency denominated assets and liabilities being remeasured to the functional currency of certain operations. The increased volatility in the daily Brazilian real, Swiss Franc and Euro exchange rates versus the U.S. dollar resulted in a portion of the balance sheet remeasurement gains and losses not being fully offset by the foreign currency exchange hedges. In South America, foreign currency remeasurement gains on the Brazilian real denominated liabilities being remeasured to the U.S. dollar were partially offset by foreign currency exchange hedging losses. In Europe, foreign currency exchange remeasurement gains were partially offset by foreign currency exchange hedging losses. For other foreign currency hedging programs, the unrealized gains or losses on other undesignated derivatives will be recognized in the statement of operations prior to the hedged transaction. Unrealized gains and losses from undesignated foreign currency derivatives was not significant in either period.

~~See~~ ~~Segment Review~~ ~~below for the impact of foreign currency on each of our segments.~~

"Net sales" were $9.9 billion, a decrease of 11% driven by a 16% decrease in average base aluminum prices, and a 58% decrease in local market premiums. This decline in base aluminum prices more than offset a 73 kt increase in flat rolled products shipments to a record level for a fiscal year of 3,123 kt, and a favorable impact from our strategic shift to higher conversion premium products.

“Cost of goods sold (exclusive of depreciation and amortization)” was $8.7 billion, a decrease of 11% due to lower weighted average metal costs, partially offset by an increase in flat rolled products shipments and higher costs related to our strategic expansion projects. Total metal input costs included in "Cost of goods sold (exclusive of depreciation and amortization)” decreased $1.1 billion.

~~“Income before income taxes” for the year ended March 31, 2016 was~~ ~~$8 million~~ ~~compared to~~ ~~$162 million~~ ~~in the year ended March 31, 2015. In addition to the factors noted above, the following items affected “Income before income taxes:”~~

For the year ended March 31, 2016, we recognized $46 million of tax expense as a result of the net impact of statutory tax expense, losses in jurisdictions where we believe it is more likely than not that we will not be able to utilize those losses, and the net impact of foreign exchange movement. For the year ended March 31, 2015, we recognized $14 million in tax expense primarily due to losses in jurisdictions where we believe it is more likely than not that we will not be able to utilize those losses, partially offset by favorable foreign exchange movement.

We reported “Net loss attributable to our common shareholder” of $38 million for the year ended March 31, 2016 as compared to “Net income attributable to our common shareholder” of $148 million for the year ended March 31, 2015, primarily as a result of the factors discussed above.

“Segment income” was $258 million, a decrease of 5%, reflecting significant unfavorable metal price lag of $79 million, higher fixed, variable, and selling, general, and administrative costs associated with the commissioning and support of our new automotive capacity. Partially offsetting these was a significant increase in automotive shipments, which then doubled, as a result of our strategic product portfolio shift to higher premium products and higher conversion premiums from the related product mix shift. Fiscal 2016 was also favorably impacted by strong production whereas in December 2014 we experienced an unscheduled outage at the hot mill in the Logan Aluminum joint venture facility that significantly reduced "Segment income" during the fourth quarter of fiscal 2015.

“Segment income” was $116 million, a decrease of 54%, reflecting significant unfavorable metal price lag of $77 million, unfavorable changes in foreign currency rates, and higher fixed costs associated with increased employment costs, and the ramp-up of our new recycling facility in Nachterstedt, Germany, as well as less favorable metal input costs. Partially offsetting these was favorable higher conversion premiums from the related product mix shift. Fiscal 2016 was also favorably impacted by strong production whereas in fiscal 2015 we experienced an unscheduled outage in a hot mill motor at one of our facilities in Europe leading to reduced "Segment income."

“Segment income” was $135 million, a decrease of 4%, reflecting unfavorable metal price lag of $21 million, an unfavorable impact from changes in foreign currency rates, partially offset by lower metal input costs associated with a decrease in the local market premium which is a cost we incur and are unable to fully pass along to some of our customers, and a favorable shift in product mix towards automotive that more than offset some can and specialty pricing pressures. We continue to experience pricing pressures and competition within the region.

“Segment income” was $282 million, an increase of 18%, reflecting favorable foreign currency changes, customer price adjustments resulting from inflation, and improved product mix shift towards can as demand continues to increase, partially offset by higher utility and employment costs, and an impact related to the closure of our smelting operations in fiscal 2015.

Costs such as depreciation and amortization, interest expense and unrealized gains (losses) on changes in the fair value of derivatives (except for derivatives used to manage our foreign currency remeasurement activities) are not utilized by our chief operating decision maker in evaluating segment performance. The table below reconciles income from reportable segments to “Net (loss) income attributable to our common shareholder” for the years ended ~~March 31, 2016~~ ~~and~~ ~~2015~~ ~~(in millions).~~

“Adjustment to eliminate proportional consolidation” relates to depreciation and amortization and income taxes at our Aluminium Norf GmbH (Alunorf) joint venture. Income taxes and depreciation and amortization related to our equity method investments are reflected in the carrying value of the investment and not in our consolidated “Income tax provision" or "Depreciation and amortization."

“Realized (losses) gains on derivative instruments not included in segment income” represents realized gains on foreign currency derivatives related to asset sales, capital expenditures and net investment.

~~"Other costs, net" related primarily to losses on certain indirect tax expenses in Brazil, partially offset by interest income.~~

"Net sales" were $11.1 billion, which is higher compared to the prior year. Factors impacting "Net sales" include higher average base aluminum prices, higher local market premiums, an increase in shipments of our can and automotive products, and higher non-FRP shipments, partially offset by the sale of our North American consumer foil operations in the first quarter of the current year.

“Cost of goods sold (exclusive of depreciation and amortization)” was $9.8 billion, which is also higher compared to the prior year. Factors impacting "Cost of goods sold (exclusive of depreciation and amortization)" include higher average base aluminum prices, higher average local market premiums, an increase in shipments, higher costs related to our strategic expansion projects, cost reductions due to an amendment we made to a non-union retiree medical plan in the prior year, partially offset by higher recycled metal benefits, and the sale of our North American consumer foil operations in the first quarter of fiscal 2015. Total metal input costs included in "Cost of goods sold (exclusive of depreciation and amortization)” increased $1.5 billion.

“Income before income taxes” for the year ended March 31, 2015 was $162 million, which compared to $115 million reported in the year ended March 31, 2014. In addition to the factors noted above, the following items affected “Income before income taxes:”

Our effective tax rate for the year ended March 31, 2015 was 8%, compared to 9% for the year ended March 31, 2014. The effective tax rate in these periods was primarily driven by favorable movement in foreign currency rates on translation and remeasurement of deferred income taxes.

We reported “Net income attributable to our common shareholder” of $148 million for the year ended March 31, 2015 as compared to $104 million for the year ended March 31, 2014, primarily as a result of the factors discussed above.

“Segment income” was $273 million, an increase of 19%, reflecting higher shipment levels as discussed above, higher conversion premiums for our automotive products, and improved cost containment of general and administrative expenses, partially offset by higher conversion costs, unfavorable metal price lag, and lower conversion premiums of our can products. Excluding the impact of our North American foil business, which was sold in June 2014, conversion premiums and conversion costs increased during the period. Conversion premiums increased due to improved conversion premiums in our automotive products. Conversion costs increased due to higher freight costs, higher costs associated with the commissioning of our automotive lines, higher repairs and maintenance costs, and higher market premiums on the procurement of metal.

In December 2014, there was an outage at the hot mill in the Logan Aluminum joint venture facility ("Logan facility") in North America due to an unexpected failure of a motor. A repaired motor was installed and operations at the hot mill resumed within approximately three weeks, at which time we began the process of ramping up to full capacity. The business disruption resulting from this unscheduled outage significantly reduced "Segment income" during the fourth quarter of fiscal 2015 in spite of a partial insurance settlement gain we realized during the quarter.

We have commissioned two automotive sheet finishing lines at our Oswego, New York facility. These two lines will result in approximately 240 kt of additional automotive finishing capacity annually when operating at full capacity. A third automotive finishing line is under construction in our Oswego, New York facility. This third automotive finishing line is expected to become operational at the end of calendar year 2015 and will add an additional 120 kt of finishing capacity. We have also invested in a new recycling line at our Oswego, New York facility for the automotive business.

“Segment income” was $250 million, a decrease of 6%, reflecting unfavorable changes in foreign currency rates, net of realized gains and losses on hedging, increased conversion costs, and unfavorable metal price lag, partially offset by higher shipment levels discussed above, improved conversion premiums, and lower general and administrative costs. Conversion costs were unfavorable due to higher wages, a higher cost base related to the commissioning of our recycling plant in Nachterstedt, Germany, higher freight costs, and higher repairs and maintenance, partially offset by an increase in the benefits from the utilization of recycled metal. Our conversion premiums were favorable due to an improved product portfolio mix. General and administrative costs were favorable due to lower costs as a result of our restructuring activities to optimize our business in Europe in the prior year.

During the second quarter of fiscal 2015, there was an outage caused by an electrical short circuit in a hot mill motor at one of our facilities in Europe. The business disruption resulting from this outage reduced "Segment income" during the year in spite of an insurance settlement gain we realized in the fourth quarter.

In June 2014, we began the commissioning of our fully integrated recycling facility at our Nachterstedt, Germany plant, which will have an annual capacity of approximately 400 kt when operating at full capacity. We are in the process of constructing a second automotive finishing line in our Nachterstedt, Germany facility, which will add an additional 120 kt of finishing capacity. The second line is expected to become operational at the end of calendar year 2015.

“Segment income” was $141 million, a decrease of 12%, reflecting higher conversion costs and lower conversion premiums, partially offset by higher shipment levels discussed above, favorable impacts of foreign exchange, favorable metal price lag, and a positive impact from certain operating efficiencies gained during the year associated with higher production. Many of our competitors in China price their metal off the Shanghai Futures Exchange, which does not have a local market premium. The purchase price for our metal inputs is based on the LME and results in us paying a local market premium, which we are unable to fully pass along to some of our customers. The local market premium was significantly higher during fiscal 2015 as compared with historical levels. Although prices moderated somewhat during the fourth quarter, this increased our conversion costs because we were not able to pass these higher market premiums through to some of our customers. Other factors resulting in higher conversion costs include an increase in labor costs, higher energy rates, higher maintenance costs, higher freight, and unfavorable metal mix, partially offset by an increase in the benefits from the utilization of recycled metal. Conversion premiums were unfavorable due to competitive pressures from FRP suppliers in China with the renewal of certain beverage can product customer contracts and a higher mix of intersegment shipments.

In fiscal 2015, we began the commissioning of our new automotive sheet finishing plant at our Changzhou, China plant, which will have an annual capacity of approximately 120 kt when operating at full capacity.

“Segment income” was $240 million, an increase of 4%, due to higher volumes discussed above, favorable foreign currency, partially offset by higher conversion costs and lower conversion premiums. Conversion costs were unfavorable in fiscal 2015 due to production issues related to the start up of certain expansion projects, higher headcount, higher market premiums on the procurement of metal, higher freight and an increase in repairs and maintenance costs. Energy sales positively impacted our results during the year ended March 31, 2015, partially offset by sales of alumina in the comparable period. The decline in conversion premiums was primarily related to changes in customer mix. Other changes impacting "Segment income" include higher general and administrative costs.

In December 2014, we finalized the sale of our share of the joint venture of the Consorcio Candonga. The sale of the majority of our other hydroelectric power generation operations was completed in February 2015. Additionally, in December 2014, we ceased operations at our last primary aluminum smelter in Ouro Preto, Brazil. Our new can end stock coating line and recycling facility in Pindamonhangaba, Brazil (Pinda), both of which began the commissioning process in early 2014, continue to ramp up production.

Costs such as depreciation and amortization, interest expense and unrealized gains (losses) on changes in the fair value of derivatives (except for derivatives used to manage our foreign currency remeasurement activities) are not utilized by our chief operating decision maker in evaluating segment performance. The table below reconciles income from reportable segments to “Net income attributable to our common shareholder” for the years ended March 31, 2015 and 2014 (in millions).

"Depreciation and amortization” increased by $18 million due to the recent commissioning of some of our expansion projects, partially offset by accelerated depreciation in the prior year on certain non-core assets.

“Adjustment to eliminate proportional consolidation” relates to depreciation and amortization and income taxes at our Aluminium Norf GmbH (Alunorf) joint venture. Income taxes related to our equity method investments are reflected in the carrying value of the investment and not in our consolidated “Income tax provision.”

“Realized (losses) gains on derivative instruments not included in segment income” represents realized gains on foreign currency derivatives related to asset sales, capital expenditures and net investment.

~~"Other costs, net" related primarily to losses on certain indirect tax expenses in Brazil, partially offset by interest income.~~

~~Our available liquidity as of March 31, 2016 and 2015 is as follows (in millions):~~

We define “Free cash flow” (which is a non-GAAP measure) as: (a) “net cash provided by (used in) operating activities,” (b) plus "net cash provided by (used in) investing activities” and (c) less “net proceeds from sales of assets, net of transaction fees and hedging.” Management believes “Free cash flow” is relevant to investors as it provides a measure of the cash generated internally that is available for debt service and other value creation opportunities. However, “Free cash flow” does not necessarily represent cash available for discretionary activities, as certain debt service obligations must be funded out of “Free cash flow.” Our method of calculating “Free cash flow” may not be consistent with that of other companies.

~~The following table shows the “Free cash flow” for the year ended~~ ~~March 31, 2016, 2015 and 2014, the change between periods, as well as the ending balances of cash and cash equivalents (in millions).~~

~~“Free cash flow” was~~ ~~$160 million~~ ~~in fiscal 2016, an increase of~~ ~~$89 million~~ ~~as compared to fiscal 2015. "Free cash flow" was positive~~ ~~$71 million~~ ~~in fiscal 2015, an increase of~~ ~~$87 million~~ ~~as compared to fiscal 2014. The changes in “Free cash flow” are described in greater detail below.~~

~~Net cash provided by operating activities was $541 million for the year ended~~ ~~March 31, 2016~~, which compares unfavorably to $604 million in the year ended March 31, 2015. The decrease in net cash provided by operating activities was primarily related to lower "Segment income", driven by significant unfavorable impacts from metal price lag, partially offset by a favorable change in working capital. The following summarizes changes in working capital accounts (in millions).

~~The following table presents information regarding our “Net cash used in investing activities” (in millions).~~

~~In accordance with SEC rules, the following qualify as off-balance sheet arrangements:~~

~~The following discussion addresses the applicable off-balance sheet items for our Company.~~

~~See Note 15 — Financial Instruments and Commodity Contracts to our accompanying audited consolidated financial statements for a full description of derivative instruments.~~

We factor and forfait trade receivables (collectively, we refer to these as "factoring" programs) based on local cash needs, as well as attempting to balance the timing of cash flows of trade payables and receivables, fund strategic investments, and fund other business needs. Factored invoices are not included in our consolidated balance sheets when we do not retain a financial or legal interest. If a financial or legal interest is retained, we classify these factorings as secured borrowings.

~~The following tables summarize our factoring amounts (in millions).~~

As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as special purpose entities (SPEs), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of March 31, 2016 and 2015, we were not involved in any unconsolidated SPE transactions.

We have future obligations under various contracts relating to debt and interest payments, capital and operating leases, long-term purchase obligations, and postretirement benefit plans. The following table presents our estimated future payments under contractual obligations that exist as of ~~March 31, 2016~~, based on undiscounted amounts (in millions). The future cash flow commitments we may have related to derivative contracts are excluded from our contractual obligations table as these are fair value measurements determined at an interim date within the contractual term of the arrangement and, accordingly, do not represent the ultimate contractual obligation (which could ultimately become a receivable). As a result, the timing and amount of the ultimate future cash flows related to our derivative contracts, including the $92 million of derivative liabilities recorded on our balance sheet as of ~~March 31, 2016~~, are uncertain. See the Liquidity section of Management's Discussion and Analysis for a discussion of potential future cash flows from derivatives in the first quarter of fiscal 2017. Furthermore, due to the difficulty in determining the timing of settlements, the table excludes $34 million of uncertain tax positions. See Note 19 — Income Taxes to our accompanying audited consolidated financial statements.

Payments to our shareholder are at the discretion of the board of directors and will depend on, among other things, our financial resources, cash flows generated by our business, our cash requirements, restrictions under the instruments governing our indebtedness, being in compliance with the appropriate indentures and covenants under the instruments that govern our indebtedness and other relevant factors.

~~In March 2014, we declared a return of capital to our direct shareholder, AV Metals Inc., in the amount of $250 million, which we subsequently paid on April 30, 2014.~~

We strive to be a leader in environment, health and safety (EHS). Our EHS system is aligned with ISO 14001, an international environmental management standard, and OHSAS 18001, an international occupational health and safety management standard. As of March 31, 2016 and March 31, 2015, 24 and 23 of our established manufacturing facilities worldwide were ISO 14001 certified and OHSAS 18001 certified, respectively, and all have dedicated quality improvement management systems.

Our expenditures for environmental protection (including estimated and probable environmental remediation costs as well as general environmental protection costs at our facilities) and the betterment of working conditions in our facilities were $18 million in fiscal 2016, of which $10 million was expensed and $8 million capitalized. We expect these expenditures will be approximately $16 million in fiscal 2017, of which we estimate $9 million will be expensed and $7 million capitalized. Generally, expenses for environmental protection are recorded in “Cost of goods sold (exclusive of depreciation and amortization).” However, significant remediation costs that are not associated with on-going operations are recorded in "Restructuring and impairment, net."

Our discussion and analysis of our results of operations, liquidity and capital resources are based on our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). In connection with the preparation of our consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors we believe to be relevant at the time we prepare our consolidated financial statements. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 1 — Business and Summary of Significant Accounting Policies to our accompanying consolidated financial statements. We believe the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, as they require management to make difficult, subjective or complex judgments, and to make estimates about the effect of matters that are inherently uncertain. Although management believes that the estimates and judgments discussed herein are reasonable, actual results could differ, which could result in gains or losses that could be material. We have reviewed these critical accounting policies and related disclosures with the Audit Committee of our board of directors.

We hold derivatives for risk management purposes and not for trading. We use derivatives to mitigate uncertainty and volatility caused by underlying exposures to aluminum prices, foreign exchange rates, interest rates, and energy prices. The fair values of all derivative instruments are recognized as assets or liabilities at the balance sheet date and are reported gross.

The majority of our derivative contracts are valued using industry-standard models that use observable market inputs as their basis, such as time value, forward interest rates, volatility factors, and current (spot) and forward market prices for

We may be exposed to losses in the future if the counterparties to our derivative contracts fail to perform. We are satisfied that the risk of such non-performance is remote due to our monitoring of credit exposures. Additionally, we enter into master netting agreements with contractual provisions that allow for netting of counterparty positions in case of default, and we do not face credit contingent provisions that would result in the posting of collateral.

For derivatives designated as fair value hedges, we assess hedge effectiveness by formally evaluating the high correlation of changes in the fair value of the hedged item and the derivative hedging instrument. The changes in the fair values of the underlying hedged items are reported in other current and noncurrent assets and liabilities in the consolidated balance sheets. Changes in the fair values of these derivatives and underlying hedged items generally offset and the effective portion is recorded in "Net sales" consistent with the underlying hedged item and the net ineffectiveness is recorded in "Other (income) expense, net."

For derivatives designated as cash flow hedges or net investment hedges, we assess hedge effectiveness by formally evaluating the high correlation of the expected future cash flows of the hedged item and the derivative hedging instrument. The effective portion of gain or loss on the derivative is included in Other Comprehensive Income and reclassified to earnings in the period in which earnings are impacted by the hedged items or in the period that the transaction becomes probable of not occurring. Gains or losses representing reclassifications of OCI to earnings are recognized in the line item most reflective of the underlying risk exposure. We exclude the time value component of foreign currency and aluminum price risk hedges when measuring and assessing ineffectiveness to align our accounting policy with risk management objectives when it is necessary. If at any time during the life of a cash flow hedge relationship we determine that the relationship is no longer effective, the derivative will no longer be designated as a cash flow hedge and future gains or losses on the derivative will be recognized in “Other (income) expense, net."

For all derivatives designated in hedging relationships, gains or losses representing hedge ineffectiveness or amounts excluded from effectiveness testing are recognized in “Other (income) expense, net” in our current period earnings. If no hedging relationship is designated, gains or losses are recognized in “Other (income) expense, net” in our current period earnings.

Consistent with the cash flows from the underlying risk exposure, we classify cash settlement amounts associated with designated derivatives as part of either operating or investing activities in the consolidated statements of cash flows. If no hedging relationship is designated, we classify cash settlement amounts as part of investing activities in the consolidated statement of cash flows.

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets of acquired companies. As a result of Hindalco's indirect purchase of Novelis, we estimated fair value of the identifiable net assets using a number of factors, including the application of multiples and discounted cash flow estimates. The carrying value of goodwill for each of our reporting units, which is tested for impairment annually, is as follows (in millions):

Goodwill is not amortized; instead, it is tested for impairment annually or more frequently if indicators of impairment exist. On an ongoing basis, absent any impairment indicators, we perform our goodwill impairment testing as of the last day of February of each fiscal year. We do not aggregate components of operating segments to arrive at our reporting units, and as such our reporting units are the same as our operating segments.

The accounting guidance provides an entity 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 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 existing two-step quantitative impairment test, otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead,

We invest in certain joint ventures and consortiums. We use the equity method to account for our investments in entities that we do not control, but where we have the ability to exercise significant influence over operating and financial policies. We exercise judgment to determine which investments should be accounted for using the equity method and which investments should be consolidated.

As a result of Hindalco's indirect purchase of Novelis, investments in and advances to equity method affiliates were adjusted to reflect fair value as of May 16, 2007. We review these investments for impairment whenever certain indicators are present suggesting that the carrying value of an investment is not recoverable. This analysis requires a significant amount of judgment to identify events or circumstances indicating that an investment may be impaired. Once an impairment indicator is identified, we must determine if an impairment exists, and if so, whether the impairment is other than temporary, in which case the investment would be written down to its estimated fair value.

We assess the recoverability of long-lived assets and finite-lived intangible assets whenever events or changes in circumstances indicate that we may not be able to recover the asset's carrying amount. Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business or a change in utilization of property and equipment.

We group assets to test for impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. These levels are dependent upon an asset's usage, which may be on an individual asset level or aggregated at a higher level including a region-wide grouping. The metal flow and management of supply within our regions creates an interdependency of the plants within a region on one another to generate cash flows. Accordingly, under normal operating conditions, our assets are grouped on a region-wide basis for impairment testing. Any expected change in usage, retirement, disposal or sale of an individual asset or group of assets below the region level which

When evaluating long-lived assets and finite-lived intangible assets for potential impairment, we first compare the carrying value of the asset to the asset's estimated future net cash flows (undiscounted and without interest charges). If the estimated future net cash flows are less than the carrying value of the asset, we calculate and recognize an impairment loss. If we recognize an impairment loss, the carrying amount of the asset is adjusted to fair value based on the discounted estimated future net cash flows and will be its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated over the remaining useful life of that asset. For an amortizable intangible asset, the new cost basis will be amortized over the remaining useful life of the asset.

Our impairment loss calculations require management to apply judgments in estimating future cash flows to determine asset fair values, including forecasting useful lives of the assets and selecting the discount rate that represents the risk inherent in future cash flows. Impairment charges are recorded in "Restructuring and impairment, net" in our consolidated statement of operations. For the year ended March 31, 2016, we recorded impairment charges of $3 million of certain non core assets in North America, South America, and Asia. Additionally, we recorded restructuring charges during the the year ended March 31, 2016 of $21 million related to the impairment of capitalized software intangible assets. For the year ended March 31, 2015, we recorded impairment charges on long-lived assets and intangible assets of $2 million of certain non core assets in North America. For the year ended March 31, 2014, we recorded impairment charges on long-lived assets and intangible assets of $24 million which included $17 million related to certain non-core assets in Brazil, $5 million on certain capitalized software assets and $2 million on other assets in North America.

~~Our other intangible assets of~~ ~~$523 million~~ ~~and $584 million as of~~ ~~March 31, 2016~~ and March 31, 2015, respectively, consisted of trade names, technology and software, customer relationships and favorable energy and supply contracts and are amortized over an original period of 3 to 20 years. As of ~~March 31, 2016, we do not have any other intangible assets with indefinite useful lives, other than Goodwill.~~

If actual results are not consistent with our assumptions and judgments used in estimating future cash flows and asset fair values, we may be exposed to additional impairment losses that could be material to our results of operations.

~~We account for our pensions and other postretirement benefits in accordance with ASC 715,~~ ~~Compensation — Retirement Benefits~~ (ASC 715). Liabilities and expense for pension plans and other postretirement benefits are determined using actuarial methodologies and incorporate significant assumptions, including the rate used to discount the future estimated liability, the long-term rate of return on plan assets, and several assumptions related to the employee workforce (compensation increases, health care cost trend rates, expected service period, retirement age, and mortality). These assumptions bear the risk of change as they require significant judgment and they have inherent uncertainties that management may not be able to control.

The actuarial models use an attribution approach that generally spreads the financial impact of changes to the plan and actuarial assumptions over the average remaining service lives of the employees in the plan. The principle underlying the required attribution approach is that employees render service over their average remaining service lives on a relatively smooth basis and, therefore, the accounting for benefits earned under the pension or non-pension postretirement benefits plans should follow the same relatively smooth pattern. Changes in the liability due to changes in actuarial assumptions such as discount rate, rate of compensation increases and mortality, as well as annual deviations between what was assumed and what was experienced by the plan are treated as actuarial gains or losses. The gains and losses are initially recorded to "Other comprehensive income (loss)" and are subsequently amortized over periods of 15 years or less, which represent the group's average future service life of the employees or the group's average life expectancy.

The most significant assumption used to calculate pension and other postretirement obligations is the discount rate used to determine the present value of benefits. The discount rate is based on spot rate yield curves and individual bond matching models for pension and other postretirement plans in Canada, the United States, United Kingdom, and other Euro zone countries, and on published long-term high quality corporate bond indices in other countries with adjustments made to the index rates based on the duration of the plans' obligations for each country, at the end of each fiscal year. This bond matching approach matches the bond yields with the year-to-year cash flow projections from the actuarial valuation to determine a discount rate that more accurately reflects the timing of the expected payments. The weighted average discount rate used to determine the pension benefit obligation was 3.3%, ~~3.1%, and~~ ~~4.0%, and other postretirement benefit obligation was 4.0%,~~ ~~3.6%~~ ~~and~~ ~~4.1%~~ ~~as of~~ ~~March 31, 2016~~, ~~2015, and~~ ~~2014, respectively. The weighted average discount rate used to determine the net periodic benefit cost is the rate used to determine the benefit obligation at the end of the previous fiscal year.~~

~~As of~~ ~~March 31, 2016~~, an increase in the discount rate of 0.5%, assuming inflation remains unchanged, would result in a decrease of $144 million in the pension and other postretirement obligations and in a pre-tax decrease of $13 million in the net periodic benefit cost in the following year. A decrease in the discount rate of 0.5% as of March 31, 2016, assuming inflation remains unchanged, would result in an increase of $160 million in the pension and other postretirement obligations and in a pre-tax increase of $15 million in the net periodic benefit cost in the following year.

The long term expected return on plan assets is based upon historical experience, expected future performance as well as current and projected investment portfolio diversification. The weighted average expected return on plan assets was 5.6% for 2016, 6.1% for 2015, and 6.3% for 2014. The expected return on assets is a long-term assumption whose accuracy can only be measured over a long period based on past experience. A variation in the expected return on assets of 0.5% as of March 31, 2016 would result in a pre-tax variation of approximately $6 million in the net periodic benefit cost in the following year.

We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, deferred tax assets are also recorded with respect to net operating losses and other tax attribute carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when realization of the benefit of deferred tax assets is not deemed to be more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We considered all available evidence, both positive and negative, in determining the appropriate amount of the valuation allowance against our deferred tax assets as of March 31, 2016. In evaluating the need for a valuation allowance, we consider all potential sources of taxable income, including income available in carryback periods, future reversals of taxable temporary differences, projections of taxable income, and income from tax planning strategies, as well as any other available and relevant information. Positive evidence includes factors such as a history of profitable operations, projections of future profitability within the carryforward period and potential income from prudent and feasible tax planning strategies. Negative evidence includes items such as cumulative losses, projections of future losses, and carryforward periods that are not long enough to allow for the utilization of the deferred tax asset based on existing projections of income. In certain jurisdictions, deferred tax assets related to loss carryforwards and other temporary differences exist without a valuation allowance where in our judgment the weight of the positive evidence more than offsets the negative evidence.

Upon changes in facts and circumstances, we may conclude that certain deferred tax assets for which no valuation allowance is currently recorded may not be realizable in future periods, resulting in a charge to income. Existing valuation allowances are re-examined under the same standards of positive and negative evidence. If it is determined that it is more likely than not that a deferred tax asset will be realized, the appropriate amount of the valuation allowance, if any, is released, in the period this determination is made.

~~As of March 31, 2016, the Company concluded that valuation allowances totaling $613 million were required against its deferred tax assets comprised of the following:~~

By their nature, tax laws are often subject to interpretation. Further complicating matters is that in those cases where a tax position is open to interpretation, differences of opinion can result in differing conclusions as to the amount of tax benefits to be recognized under ASC 740, ~~Income Taxes~~. We utilize a two-step approach for evaluating tax positions. Recognition (Step 1) occurs when we conclude that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (Step 2) is only addressed if Step 1 has been satisfied. Under Step 2, we measure the tax benefit as the largest amount of benefit, determined on a cumulative probability basis that is more likely than not to be realized upon ultimate settlement. Consequently, the level of evidence and documentation necessary to support a position prior to being given recognition and measurement within the financial statements is a matter of judgment that depends on all available evidence.

We have legal and other contingencies, including environmental liabilities, which could result in significant losses upon the ultimate resolution of such contingencies. Environmental liabilities that are not legal asset retirement obligations are accrued on an undiscounted basis when it is probable that a liability exists for past events.

We have provided for losses in situations where we have concluded that it is probable that a loss has been or will be incurred and the amount of the loss is reasonably estimable. A significant amount of judgment is involved in determining whether a loss is probable and reasonably estimable due to the uncertainty involved in determining the likelihood of future events and estimating the financial statement impact of such events. If further developments or resolution of a contingent matter are not consistent with our assumptions and judgments, we may need to recognize a significant charge in a future period related to an existing contingency.

See Note 1 — Business and Summary of Significant Accounting Policies to our accompanying audited consolidated financial statements for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on results of operations and financial condition.

Management believes investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations from one period to the next and would ordinarily add back items that are not part of normal day-to-day operations of our business. By providing total “Segment income,” together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives.

However, total “Segment income” is not a measurement of financial performance under U.S. GAAP, and our total “Segment income” may not be comparable to similarly titled measures of other companies. Total “Segment income” has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. For example, total “Segment income”:

~~Total “Segment income” is equivalent to our Adjusted EBITDA, which we refer to in our earnings announcements and other external presentations to analysts and investors.~~

Increases or decreases in the average price of aluminum based on the LME directly impact “Net sales,” “Cost of goods sold (exclusive of depreciation and amortization)” and working capital. The timing of these impacts varies based on contractual arrangements with customers and metal suppliers in each region. These timing impacts are referred to as metal price lag. Metal price lag exists due to: (i) certain customer contracts containing fixed forward price commitments which result in exposure to changes in metal prices for the period of time between when our sales price fixes and the sale actually occurs, and (ii) the period of time between the pricing of our purchases of metal, holding and processing the metal, and the pricing of the sale of finished inventory to our customers.

We use derivative instruments to preserve our conversion margins and manage the timing differences associated with metal price lag related to base aluminum price. We use over-the-counter derivatives indexed to the London Metals Exchange (LME) (referred to as our "aluminum derivative contracts") to reduce our exposure to fluctuating metal prices associated with the period of time between the pricing of our purchases of inventory and the pricing of the sale of that inventory to our customers. We also purchase forward LME aluminum contracts simultaneous with our sales contracts with customers that contain fixed metal prices. These LME aluminum forward contracts directly hedge the economic risk of future metal price fluctuations to better match the purchase price of metal with the sales price of metal.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Management has assessed the effectiveness of the Company’s internal control over financial reporting as of~~ ~~March 31, 2016. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in~~ ~~“Internal Control — Integrated Framework (2013).”~~ ~~Based on its assessment, management has concluded that, as of~~ ~~March 31, 2016, the Company’s internal control over financial reporting was effective based on those criteria.~~

~~The effectiveness of the Company’s internal control over financial reporting as of~~ ~~March 31, 2016~~ ~~has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.~~

References herein to “Novelis,” the “Company,” “we,” “our,” or “us” refer to Novelis Inc. and its subsidiaries unless the context specifically indicates otherwise. References herein to “Hindalco” refer to Hindalco Industries Limited. Hindalco acquired Novelis in May 2007. All of the common shares of Novelis are owned directly by AV Metals Inc. and indirectly by Hindalco Industries Limited.

We produce aluminum sheet and light gauge products for use in the packaging market, which includes beverage and food can and foil products, as well as for use in the automotive, transportation, electronics, architectural and industrial product markets. We have recycling operations in many of our plants to recycle post-consumer aluminum, such as used-beverage cans and post-industrial aluminum, such as class scrap. As of ~~March 31, 2016, we had manufacturing operations in~~ ~~eleven~~ ~~countries on~~ ~~four~~ ~~continents: North America, South America, Asia and Europe, through~~ 25 ~~operating facilities, including recycling operations in~~ ~~eleven~~ ~~of these plants.~~

Our consolidated financial statements include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and entities in which we have a controlling financial interest or are deemed to be the primary beneficiary. We eliminate all significant intercompany accounts and transactions from our consolidated financial statements.

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The principal areas of judgment relate to (1) the fair value of derivative financial instruments; (2) impairment of goodwill; (3) impairment of long lived assets and other intangible assets; (4) impairment and assessment of consolidation of equity investments; (5) actuarial assumptions related to pension and other postretirement benefit plans; (6) tax uncertainties and valuation allowances; and (7) assessment of loss contingencies, including environmental and litigation liabilities. Future events and their effects cannot be predicted with certainty, and accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluations. Actual results could differ from the estimates we have used.

~~We are exposed to a number of risks in the normal course of our operations that could potentially affect our financial position, results of operations, and cash flows.~~

We operate in an industry that is subject to a broad range of environmental, health and safety laws and regulations in the jurisdictions in which we operate. These laws and regulations impose increasingly stringent environmental, health and safety protection standards and permitting requirements regarding, among other things, air emissions, wastewater storage, treatment and discharges, the use and handling of hazardous or toxic materials, waste disposal practices, the remediation of environmental contamination, post-mining reclamation and working conditions for our employees. Some environmental laws, such as the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or Superfund, and comparable state laws, impose joint and several liability for the cost of environmental remediation, natural resource damages, third party claims, and other expenses, without regard to the fault or the legality of the original conduct.

The costs of complying with these laws and regulations, including participation in assessments and remediation of contaminated sites and installation of pollution control facilities, have been, and in the future could be, significant. In addition, these laws and regulations may also result in substantial environmental liabilities associated with divested assets, third party locations and past activities. In certain instances, these costs and liabilities, as well as related action to be taken by us, could be accelerated or increased if we were to close, divest of or change the principal use of certain facilities with respect to which we may have environmental liabilities or remediation obligations. Currently, we are involved in a number of compliance efforts, remediation activities and legal proceedings concerning environmental matters, including certain activities and proceedings arising under U.S. Superfund and comparable laws in other jurisdictions where we have operations.

We have established liabilities for environmental remediation where appropriate. However, the cost of addressing environmental matters (including the timing of any charges related thereto) cannot be predicted with certainty, and these liabilities may not ultimately be adequate, especially in light of potential changes in environmental conditions, changing interpretations of laws and regulations by regulators and courts, the discovery of previously unknown environmental conditions, the risk of governmental orders to carry out additional compliance on certain sites not initially included in remediation in progress, our potential liability to remediate sites for which provisions have not been previously established and the adoption of more stringent environmental laws. Such future developments could result in increased environmental costs and liabilities and could require significant capital expenditures, any of which could have a material adverse effect on our financial position or results of operations or cash flows. Furthermore, the failure to comply with our obligations under the environmental laws and regulations could subject us to administrative, civil or criminal penalties, obligations to pay damages or other costs, and injunctions or other orders, including orders to cease operations. In addition, the presence of environmental contamination at our properties could adversely affect our ability to sell a property, receive full value for a property or use a property as collateral for a loan.

Some of our current and potential operations are located or could be located in or near communities that may regard such operations as having a detrimental effect on their social and economic circumstances. Environmental laws typically provide for participation in permitting decisions, site remediation decisions and other matters. Concern about environmental justice issues may affect our operations. Should such community objections be presented to government officials, the consequences of such a development may have a material adverse impact upon the profitability or, in extreme cases, the viability of an operation. In addition, such developments may adversely affect our ability to expand or enter into new operations in such location or elsewhere and may also have an effect on the cost of our environmental remediation projects.

We use a variety of hazardous materials and chemicals in our rolling processes and in connection with maintenance work on our manufacturing facilities. Because of the nature of these substances or related residues, we may be liable for certain costs, including, among others, costs for health-related claims or removal or re-treatment of such substances. Certain of our current and former facilities incorporated asbestos-containing materials, a hazardous substance that has been the subject of health-related claims for occupation exposure. In addition, although we have developed environmental, health and safety programs for our employees, including measures to reduce employee exposure to hazardous substances, and conduct regular assessments at our facilities, we are currently, and in the future may be, involved in claims and litigation filed on behalf of persons alleging injury predominantly as a result of occupational exposure to substances at our current or former facilities. It is not possible to predict the ultimate outcome of these claims and lawsuits due to the unpredictable nature of personal injury litigation. If these claims and lawsuits, individually or in the aggregate, were finally resolved against us, our financial position, results of operations and cash flows could be adversely affected.

In the aluminum rolled products industry, our raw materials are subject to continuous price volatility. We may not be able to pass on the entire cost of the increases to our customers or offset fully the effects of higher raw material costs through productivity improvements, which may cause our profitability to decline. In addition, there is a potential time lag between changes in prices under our purchase contracts and the point when we can implement a corresponding change under our sales contracts with our customers. As a result, we could be exposed to fluctuations in raw materials prices which could have a material adverse effect on our financial position, results of operations and cash flows. Significant price increases may result in our customers’ substituting other materials, such as plastic or glass, for aluminum or switching to another aluminum rolled products producer, which could have a material adverse effect on our financial position, results of operations and cash flows.

We consume substantial amounts of energy in our rolling operations and our cast house operations. The factors that affect our energy costs and supply reliability tend to be specific to each of our facilities. A number of factors could materially adversely affect our energy position including, but not limited to: (a) increases in the cost of natural gas; (b) increases in the cost of supplied electricity or fuel oil related to transportation; (c) interruptions in energy supply due to equipment failure or other causes and (d) the inability to extend energy supply contracts upon expiration on economical terms. A significant increase in energy costs or disruption of energy supplies or supply arrangements could have a material adverse effect on our financial position, results of operations and cash flows.

A substantial portion of our employees are represented by labor unions under a large number of collective bargaining agreements with varying durations and expiration dates. We may not be able to satisfactorily renegotiate our collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at our facilities in the future, and any such work stoppage could have a material adverse effect on our financial position, results of operations and cash flows.

We are, and will continue to be, subject to financial, political, economic and business risks in connection with our global operations. We have made investments and carry on production activities in various emerging markets, including China, Brazil, South Korea and Malaysia, and we market our products in these countries, as well as certain other countries in Asia, Africa, and the Middle East. While we anticipate higher growth or attractive production opportunities from these emerging markets, they also present a higher degree of risk than more developed markets. In addition to the business risks inherent in developing and servicing new markets, economic conditions may be more volatile, legal and regulatory systems less developed and predictable, and the possibility of various types of adverse governmental action more pronounced. In addition, inflation, fluctuations in currency and interest rates, competitive factors, civil unrest and labor problems could affect our revenues, expenses and results of operations. Our operations could also be adversely affected by acts of war, terrorism or the threat of any of these events as well as government actions such as controls on imports, exports and prices, tariffs, new forms of taxation, changes in fiscal regimes and increased government regulation in the countries in which we operate or service customers. Unexpected or uncontrollable events or circumstances in any of these markets could have a material adverse effect on our financial position, results of operations and cash flows.

~~In addition, refer to Note 17 — Fair Value Measurements and Note 20 — Commitments and Contingencies for a discussion of financial instruments and commitments and contingencies.~~

We recognize sales when the revenue is realized or realizable, and has been earned. We record sales when a firm sales agreement is in place, delivery has occurred and collectability of the fixed or determinable sales price is reasonably assured.

We recognize product revenue, net of trade discounts, allowances, and estimated billing adjustments, in the reporting period in which the products are shipped and the title and risk of ownership pass to the customer. We sell most of our products under contracts based on a “conversion premium,” which is subject to periodic adjustments based on market factors. As a result, the aluminum price risk is largely absorbed by the customer. In situations where we offer customers fixed prices for future delivery of our products, we enter into derivative instruments for all or a portion of the cost of metal inputs to protect our profit on the conversion of the product.

Shipping and handling amounts we bill to our customers are included in “Net sales” and the related shipping and handling costs we incur are included in “Cost of goods sold (exclusive of depreciation and amortization).”

Our customers can receive or earn certain incentives including, but not limited to, contract signing bonuses, cash discounts, volume based incentive programs, and support for infrastructure programs. The incentives are recorded as reductions to "Net sales," and are recognized over the minimum contractual period in which the customer is obligated to make purchases from Novelis. For incentives that must be earned, management must make estimates related to customer performance and sales volume to determine the total amounts earned and to be recorded as reductions to "Net sales." In making these estimates, management considers historical results. The actual amounts may differ from these estimates.

On occasion, and in an attempt to better manage inventory levels, we sell inventory to third parties and have agreed to repurchase the same or similar inventory back from the third parties over a future period, based on market prices at the time of repurchase. For transactions in which the Company sells inventory and agrees to repurchase at a later date, we record the initial sale of the inventory on a net basis in our consolidated statement of operations through "Cost of goods sold (exclusive of depreciation and amortization)." Upon repurchase, the Company accounts for the inventory at the reacquisition price which becomes an input to our moving average inventory cost basis.

“Cost of goods sold (exclusive of depreciation and amortization)” includes all costs associated with inventories, including the procurement of materials, the conversion of such materials into finished products, and the costs of warehousing and distributing finished goods to customers. Material procurement costs include inbound freight charges as well as purchasing, receiving, inspection and storage costs. Conversion costs include the costs of direct production inputs such as labor and energy, as well as allocated overheads from indirect production centers and plant administrative support areas. Warehousing and distribution costs include inside and outside storage costs, outbound freight charges and the costs of internal transfers.

“Selling, general and administrative expenses” include selling, marketing and advertising expenses; salaries, travel and office expenses of administrative employees and contractors; legal and professional fees; software license fees; bad debt expenses; and factoring expenses.

We incur costs in connection with research and development programs that are expected to contribute to future earnings, and charge such costs against income as incurred. Research and development costs consist primarily of salaries and administrative costs.

Restructuring charges, which are recorded within “Restructuring and impairment, net," include employee severance and benefit costs, impairments of assets, and other costs associated with exit activities. We apply the provisions of ASC 420, ~~Exit or Disposal Cost Obligations~~ (ASC 420). Severance costs accounted for under ASC 420 are recognized when management with the proper level of authority has committed to a restructuring plan and communicated those actions to employees. Impairment losses are based upon the estimated fair value less costs to sell, with fair value estimated based on existing market prices for similar assets. Other exit costs include environmental remediation costs and contract termination costs, primarily related to equipment and facility lease obligations. At each reporting date, we evaluate the accruals for restructuring costs to ensure the accruals are still appropriate. See Note 2 — Restructuring and Impairment for further discussion.

“Cash and cash equivalents” includes investments that are highly liquid and have maturities of three months or less when purchased. The carrying values of cash and cash equivalents approximate their fair value due to the short-term nature of these instruments.

We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits.

Our accounts receivable are geographically dispersed. We do not obtain collateral relating to our accounts receivable. We do not believe there are any significant concentrations of revenues from any particular customer or group of customers that would subject us to any significant credit risks in the collection of our accounts receivable. We report accounts receivable at the estimated net realizable amount we expect to collect from our customers.

Additions to the allowance for doubtful accounts are made by means of the provision for doubtful accounts. We write-off uncollectible accounts receivable against the allowance for doubtful accounts after exhausting collection efforts. For each of the periods presented, we performed an analysis of our historical cash collection patterns and considered the impact of any known material events in determining the allowance for doubtful accounts. See Note 3 — Accounts Receivable for further discussion.

We hold derivatives for risk management purposes and not for trading. We use derivatives to mitigate uncertainty and volatility caused by underlying exposures to aluminum prices, foreign exchange rates, interest rates, and energy prices. The fair values of all derivative instruments are recognized as assets or liabilities at the balance sheet date and are reported gross.

We may be exposed to losses in the future if the counterparties to our derivative contracts fail to perform. We are satisfied that the risk of such non-performance is remote due to our monitoring of credit exposures. Additionally, we enter into master netting agreements with contractual provisions that allow for netting of counterparty positions in case of default, and we do not face credit contingent provisions that would result in the posting of collateral.

For derivatives designated as cash flow hedges or net investment hedges, we assess hedge effectiveness by formally evaluating the high correlation of the expected future cash flows of the hedged item and the derivative hedging instrument. The effective portion of gain or loss on the derivative is included in other comprehensive income (OCI) and reclassified to earnings in the period in which earnings are impacted by the hedged items or in the period that the transaction becomes probable of not occurring. Gains or losses representing reclassifications of OCI to earnings are recognized in the line item most reflective of the underlying risk exposure. We exclude the time value component of foreign currency and aluminum price risk hedges when measuring and assessing ineffectiveness to align our accounting policy with risk management objectives when it is necessary. If at any time during the life of a cash flow hedge relationship we determine that the relationship is no longer effective, the derivative will no longer be designated as a cash flow hedge and future gains or losses on the derivative will be recognized in “Other (income) expense, net.”

For derivatives designated as fair value hedges, we assess hedge effectiveness by formally evaluating the high correlation of changes in the fair value of the hedged item and the derivative hedging instrument. The changes in the fair values of the underlying hedged items are reported in "Prepaid expenses and other current assets," "Other long-term assets", "Accrued expenses and other current liabilities," and "Other long-term liabilities" in the consolidated balance sheets. Changes in the fair values of these derivatives and underlying hedged items generally offset and the effective portion is recorded in "Net sales" consistent with the underlying hedged item and the net ineffectiveness is recorded in "Other (income) expense, net."

~~If no hedging relationship is designated, gains or losses are recognized in “Other (income) expense, net” in our current period earnings.~~

Consistent with the cash flows from the underlying risk exposure, we classify cash settlement amounts associated with designated derivatives as part of either operating or investing activities in the consolidated statements of cash flows. If no hedging relationship is designated, we classify cash settlement amounts as part of investing activities in the consolidated statement of cash flows.

We carry our inventories at the lower of their cost or market value, reduced for obsolete and excess inventory. We use the average cost method to determine cost. Included in inventories are stores inventories, which are carried at average cost. See Note 4 — Inventories for further discussion.

We record land, buildings, leasehold improvements and machinery and equipment at cost. We record assets under capital lease obligations at the lower of their fair value or the present value of the aggregate future minimum lease payments as of the beginning of the lease term. We generally depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets or the lease term, excluding any lease renewals, unless the lease renewals are reasonably assured. See Note 6 — Property, Plant and Equipment for further discussion. We assign useful lives to and depreciate major components of our property, plant and equipment.

~~The ranges of estimated useful lives are as follows:~~

As noted above, our machinery and equipment have useful lives of 2 to 25 years. Most of our large scale machinery, including hot mills, cold mills, continuous casting mills, furnaces and finishing mills have useful lives of 15 to 25 ~~years. Supporting machinery and equipment, including automation and work rolls, have useful lives of~~ 2 to 15 ~~years.~~

Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and improvements that increase the estimated useful life of an asset, and we capitalize interest on major construction and development projects while in progress.

We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, after consideration of any proceeds, is included as a gain or loss in “Other (income) expense, net” or "(Gain) loss on assets held for sale" in our consolidated statements of operations.

~~We account for operating leases under the provisions of ASC 840,~~ ~~Leases.~~ These pronouncements require us to recognize escalating rents, including any rent holidays, on a straight-line basis over the term of the lease for those lease agreements where we receive the right to control the use of the entire leased property at the beginning of the lease term.

We test for impairment at least annually as of the last day of February of each fiscal year, unless a triggering event occurs that would require an interim impairment assessment. We do not aggregate components of operating segments to arrive at our reporting units and, as such, our reporting units are the same as our operating segments.

In performing our goodwill impairment test, we have 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 that the estimated fair value of a reporting unit is less than its carrying amount. If we perform a qualitative assessment and determine that an impairment is more likely than not, then we perform the two-step quantitative impairment test, otherwise no further analysis is required. We 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 assessment will be the same whether we choose to perform the qualitative assessment or proceed directly to the two-step quantitative impairment test.

For the years ended March 31, 2016, 2015 and 2014 we elected to perform the two-step quantitative impairment test. No goodwill impairment was identified in any of the years. See Note 7 — Goodwill and Intangible Assets for further discussion.

We use the present value of estimated future cash flows to establish the estimated fair value of our reporting units as of the testing date. This approach includes many assumptions related to future growth rates, discount factors and tax rates, among other considerations. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairment in future periods. When available and as appropriate, we use the market approach to corroborate the estimated fair value. If the carrying amount of a reporting unit's goodwill exceeds its estimated fair value, the second step of the impairment test is performed in order to determine the amount of impairment loss, if any. The second step compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds its implied fair value we would recognize an impairment charge in an amount equal to that excess in our consolidated statements of operations.

~~When a business within a reporting unit is disposed of, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology.~~

~~We amortize the cost of intangible assets over their respective estimated useful lives to their estimated residual value. See Note 7 — Goodwill and Intangible Assets for further discussion.~~

We assess the recoverability of long-lived assets (excluding goodwill) and finite-lived intangible assets, whenever events or changes in circumstances indicate that we may not be able to recover the asset’s carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset (groups) to the expected, undiscounted future net cash flows to be generated by that asset (groups), or, for identifiable intangible assets, by determining whether the amortization of the intangible asset balance over its remaining life can be recovered through undiscounted future cash flows. The amount of impairment of identifiable intangible assets is based on the present value of estimated future cash flows. We measure the amount of impairment of other long-lived assets and intangible assets (excluding goodwill) as the amount by which the carrying value of the asset exceeds the fair value of the asset, which is generally determined as the present value of estimated future cash flows or as the appraised value. Impairments of long-lived assets and intangible assets are included in “Restructuring and impairment, net” in the consolidated statement of operations. See Note 2 - Restructuring and Impairment for further discussions.

We classify long-lived assets (disposal groups) to be sold as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset (disposal group); the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups); an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset (disposal group) beyond one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

We initially measure a long-lived asset (disposal group) that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset (disposal group) until the date of sale. We assess the fair value of a long-lived asset (disposal group) less any costs to sell each reporting period it remains classified as held for sale and report any reduction in fair value as an adjustment to the carrying value of the asset (disposal group). Upon being classified as held for sale we cease depreciation. We continue to depreciate long-lived assets to be disposed of other than by sale.

Upon determining that a long-lived asset (disposal group) meets the criteria to be classified as held for sale, we report the assets and liabilities of the disposal group, if material, in the line items "Assets held for sale" and "Liabilities held for sale," respectively, in our consolidated balance sheets. See Note 5 — Assets Held for Sale for further discussion.

Our pension obligations relate to funded defined benefit pension plans in the U.S., Canada, Switzerland and the U.K., unfunded pension plans in the U.S., Canada, and Germany, and unfunded lump sum indemnities in France, Malaysia and Italy; and partially funded lump sum indemnities in South Korea. Our other postretirement obligations include unfunded health care and life insurance benefits provided to retired employees in Canada, the U.S. and Brazil.

~~We account for our pensions and other postretirement benefits in accordance with ASC 715,~~ ~~Compensation — Retirement Benefits~~ (ASC 715). We recognize the funded status of our benefit plans as a net asset or liability, with an offsetting adjustment to accumulated other comprehensive income in shareholder’s (deficit) equity. The funded status is calculated as the difference between the fair value of plan assets and the benefit obligation. For the years ended March 31, 2016 and 2015, we used March 31 as the measurement date.

We use standard actuarial methods and assumptions to account for our pension and other postretirement benefit plans. Pension and postretirement benefit obligations are actuarially calculated using management’s best estimates of the rate used to discount the future estimated liability, the long-term rate of return on plan assets, and several assumptions related to the employee workforce (compensation increases, health care cost trend rates, expected service period, retirement age, and mortality). Pension and postretirement benefit expense includes the actuarially computed cost of benefits earned during the current service period, the interest cost on accrued obligations, the expected return on plan assets based on fair market value and the straight-line amortization of net actuarial gains and losses and adjustments due to plan amendments, curtailments, and settlements. Net actuarial gains and losses are amortized over periods of ~~15 years~~ ~~or less, which represent the group's average future service life of the employees or the group's average life expectancy. See Note 13 — Postretirement Benefit Plans for further discussion.~~

~~These financial statements reflect the application of ASC 810,~~ ~~Consolidations~~ (ASC 810), which establishes accounting and reporting standards that require: (i) the ownership interest in subsidiaries held by parties other than the parent to be clearly identified and presented in the consolidated balance sheet within shareholder’s (deficit) equity, but separate from the parent’s (deficit) equity; (ii) the amount of consolidated net income attributable to the parent and the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations and (iii) changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary to be accounted for consistently.

Our consolidated financial statements include all assets, liabilities, revenues and expenses of less-than-100%-owned affiliates that we control or for which we are the primary beneficiary. We record a noncontrolling interest for the allocable portion of income or loss and comprehensive income or loss to which the noncontrolling interest holders are entitled based upon their ownership share of the affiliate. Distributions made to the holders of noncontrolling interests are charged to the respective noncontrolling interest balance.

Losses attributable to the noncontrolling interest in an affiliate may exceed our interest in the affiliate’s equity. The excess, and any further losses attributable to the noncontrolling interest, shall be attributed to those interests. The noncontrolling interest shall continue to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. As of March 31, 2016 and 2015, we have no ~~such losses.~~

We record accruals for environmental matters when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. We adjust these accruals periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available. Accruals for environmental liabilities are stated at undiscounted amounts. Environmental liabilities are included in our consolidated balance sheets in “Accrued expenses and other current liabilities” and “Other long-term liabilities,” depending on their short- or long-term nature. Any receivables for related insurance or other third party recoveries for environmental liabilities are recorded when it is probable that a recovery will be realized and are included in our consolidated balance sheets in “Prepaid expenses and other current assets.”

Costs related to environmental matters are charged to expense. Estimated future incremental operations, maintenance and management costs directly related to remediation are accrued in the period in which such costs are determined to be probable and estimable. See Note 20 — Commitments and Contingencies for further discussion.

We accrue for loss contingencies associated with outstanding litigation, claims and assessments for which management has determined it is probable that a loss contingency exists and the amount of loss can be reasonably estimated. We expense professional fees associated with litigation claims and assessments as incurred. See Note 20 — Commitments and Contingencies for further discussion.

We account for income taxes using the asset and liability method. This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the consolidated financial statements and income tax returns. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates. Under ASC 740 ~~Income Taxes~~, (ASC 740) a valuation allowance is required when it is more likely than not that some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient taxable income through various sources.

We record tax benefits related to uncertain tax positions taken or expected to be taken on a tax return when such benefits meet a more than likely than not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, the statute of limitation has expired or the appropriate taxing authority has completed their examination. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized. See Note 19 — Income Taxes for further discussion.

~~In accordance with ASC 718,~~ ~~Compensation~~ — ~~Stock Compensation~~ (ASC 718), we recognize compensation expense for a share-based award over an employee’s requisite service period based on the award’s grant date fair value, subject to adjustment. Our share-based awards are settled in cash and are accounted for as liability based awards. As such, liabilities for awards under these plans are required to be measured at fair value at each reporting date until the date of settlement. See Note 12 — Share-Based Compensation for further discussion.

The assets and liabilities of foreign operations, whose functional currency is other than the U.S. dollar (located in Europe and Asia), are translated to U.S. dollars at the period end exchange rates and revenues and expenses are translated at average exchange rates for the period. Differences arising from this translation are included in the currency translation adjustment (CTA) component of AOCI and Noncontrolling Interest. If there is a planned or completed sale or liquidation of our ownership in a foreign operation, the relevant CTA is recognized in our consolidated statement of operations.

For all operations, the monetary items denominated in currencies other than the functional currency are remeasured at period-end exchange rates and transaction gains and losses are included in “Other (income) expense, net” in our consolidated statements of operations. Non-monetary items are remeasured at historical rates.

~~Effective for the first quarter of fiscal 2016, we adopted Financial Accounting Standards Board (FASB) ASU No. 2013-05,~~ Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in this update provide clarification regarding the release of a cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. Our existing accounting policy complies with this guidance; therefore, there was no impact on our financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606), which, when effective, will supersede the guidance in former ASC 605,~~ ~~Revenue Recognition~~. The new guidance requires entities to recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual periods beginning after December 15, 2016 and interim periods within that year. Early adoption is not permitted. In August 2015, the FASB issued ASU 2015-14, ~~Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date,~~ ~~which provides an optional one-year deferral of the effective date. In March 2016 the FASB issued ASU 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross Versus Net),~~ which amends the principal-versus-agent implementation guidance. The amendment clarifies that the principal-versus-agent evaluation should be performed for each specified good or service promised in a contract with a customer. ~~We are currently evaluating the impact of this standard on our consolidated financial position and results of operations.~~

~~As of~~ ~~March 31, 2016~~, ~~$23 million~~ ~~of restructuring liabilities was classified as short-term and was included in "Accrued expenses and other current liabilities" and~~ ~~$4 million~~ was classified as long-term and was included in "Other long-term liabilities" on our consolidated balance sheet. Additionally, restructuring expenses and the remaining liability for the Asia segment for the year ended March 31, 2016 was $2 million which relates primarily to staff rationalization activities to better align operations to current needs.

We ceased operations at the smelter in Ouro Preto, Brazil, in December 2014. This decision was made in an effort to further align our global sustainability strategy, as we work towards our goal of having higher recycled content in our products. Certain charges associated with this closure are reflected within the "Ouro Preto closures" section above, along with our closure of a pot line in Ouro Preto, Brazil, in fiscal 2013. Additionally, in March 2016, we made a decision to sell properties in Ouro Preto smelter facility in South America with a net book value of $1 million as of March 31, 2016, which were classified as "Assets held for sale" in our consolidated balance sheet.

~~For additional information on environmental charges see Note 20 – Commitments and Contingencies.~~

In fiscal 2016, the Company implemented a series of restructuring actions at the global headquarters office and in the Europe region to better align the organizational structure and corporate staffing levels with strategic priorities. As part of this plan, the Company impaired certain capitalized software assets. As of March 31, 2016, the restructuring liability for the corporate office was $2 million and related to severance charges.

~~“Accounts receivable, net” consists of the following (in millions).~~

~~As of~~ ~~March 31, 2016~~ ~~and~~ ~~2015, our allowance for doubtful accounts represented approximately~~ ~~0.3%~~ ~~and~~ ~~0.2%, respectively, of gross accounts receivable.~~

~~Activity in the allowance for doubtful accounts is as follows (in millions).~~

We factor and forfait trade receivables (collectively, we refer to these as "factoring" programs) to balance the timing of cash flows of trade payables and receivables and to fund other business needs. Factored receivables are not included in our consolidated balance sheets when we do not retain a financial or legal interest. If a financial or legal interest is retained, we classify these factorings as secured borrowings.

~~“Inventories” consists of the following (in millions).~~

We are focused on capturing the global growth we see in our product markets of beverage can, automotive and specialty products. We continually analyze our product portfolio to ensure we are focused on growing in attractive market segments. The following transactions relate to exiting certain non-core operations to focus on our growth strategy in the premium product markets.

In April 2014, we entered into agreements to sell the hydroelectric generation operations in South America and our share of the joint venture of the Consorcio Candonga to two separate parties. In December 2014, we sold our share of the joint venture of the Consorcio Candonga. Additionally, we sold the majority of our hydroelectric power generation operations fully owned by the Company in February 2015. The remaining assets include two hydroelectric power generation facilities, with a net book value of ~~$4 million~~ as of March 31, 2016 and $6 million as of March 31, 2015, which were classified as "Assets held for sale" in our consolidated balance sheets. The contract for the sale of one facility is subject to final regulatory approval and resolution of certain license issues, and the other facility is in the final stages of being sold. Additionally, during the fourth quarter of fiscal 2016, an impairment of $1 million was recorded due to the expiration of a license related to a portion of the hydroelectric power generation facilities.

In March 2016, we made a decision to sell properties in Ouro Preto, Brazil related to the closure of the Ouro Preto smelter facility in South America with a net book value of $1 million as of March 31, 2016, which were classified as "Assets held for sale" in our consolidated balance sheet.

During the year ended March 31, 2015, "Gain on assets held for sale" includes a $23 million gain from our sale of the joint venture of Consorcio Candonga, $7 million from the sale of our consumer foil operations in North America and $6 million for a property and mining rights sale in South America. These gains were partially offset during the twelve months ended March 31, 2015 by an estimated loss of $14 million related to the sale of certain hydroelectric assets that was completed in the fourth quarter of fiscal 2015.

~~“Property, plant and equipment, net” consists of the following (in millions).~~

~~As of~~ ~~March 31, 2016~~ ~~and~~ ~~2015, there were $1 billion and~~ ~~$756 million, respectively, of fully depreciated assets included in our consolidated balance sheets.~~

~~For the years ended~~ ~~March 31, 2016, 2015 and 2014, we capitalized~~ ~~$14 million~~, $20 million and $33 million of interest related to construction of property, plant and equipment and intangibles under development, respectively. Depreciation expense related to property, plant, and equipment, net is shown in the table below (in millions).

~~Impairment charges are recorded in "Restructuring and impairment, net." See Note 2 — Restructuring and impairment for additional information.~~

We lease certain land, buildings and equipment under non-cancelable operating leases expiring at various dates, and we lease assets in Sierre, Switzerland, including a fifteen-year capital lease through December 2019 from Rio Tinto. Operating leases generally have five to ten-year terms, with one or more renewal options, with terms to be negotiated at the time of renewal. Various facility leases include provisions for rent escalation to recognize increased operating costs or require us to pay certain maintenance and utility costs. During fiscal 2014 and 2015 we entered into various capital lease arrangements to upgrade and expand our information technology infrastructure.

~~The following table summarizes rent expense included in our consolidated statements of operations (in millions):~~

~~Future minimum lease payments as of~~ ~~March 31, 2016, for our operating and capital leases having an initial or remaining non-cancelable lease term in excess of one year are as follows (in millions).~~

~~Assets and related accumulated amortization under capital lease obligations as of~~ ~~March 31, 2016~~ ~~and~~ ~~2015~~ ~~are as follows (in millions).~~

~~There were no changes to the gross carrying amount or accumulated impairment of goodwill during the years ended~~ ~~March 31, 2016~~ ~~and~~ ~~2015. The following table summarizes “Goodwill” (in millions) for the years ended~~ ~~March 31, 2016~~ ~~and~~ ~~2015~~.

~~The components of “Intangible assets, net” are as follows (in millions).~~

~~In the year ended March 31, 2016, we recorded impairment charges related to certain capitalized software. For additional information refer to Note 2 - Restructuring and impairment.~~

Our favorable energy supply contract is amortized over its estimated useful life using a method that reflects the pattern in which the economic benefits are expected to be consumed. All other intangible assets are amortized using the straight-line method.

~~Amortization expense related to “Intangible assets, net” is as follows (in millions).~~

Year Ended March 31,
2016 2015 2014
Total amortization expense related to intangible assets $ 71
$ 70
$ 67
Less: Amortization expense related to intangible assets included in “Cost of goods sold (exclusive of depreciation and amortization)” (A) (12 ) (12 ) (12 )
Amortization expense related to intangible assets included in “Depreciation and amortization” $ 59
$ 58
$ 55

Estimated total amortization expense related to “Intangible assets, net” for each of the five succeeding fiscal years is as follows (in millions). Actual amounts may differ from these estimates due to such factors as customer turnover, raw material consumption patterns, impairments, additional intangible asset acquisitions and other events.

We have a joint interest in Logan Aluminum Inc. (Logan) with Tri-Arrows Aluminum Inc. (Tri-Arrows). Logan processes metal received from Novelis and Tri-Arrows and charges the respective partner a fee to cover expenses. Logan is thinly capitalized and relies on the regular reimbursement of costs and expenses by Novelis and Tri-Arrows to fund its operations. This reimbursement is considered a variable interest as it constitutes a form of financing of the activities of Logan. Other than these contractually required reimbursements, we do not provide other material support to Logan. Logan’s creditors do not have recourse to our general credit.

We have the ability to make decisions regarding Logan's production operations. We also have the ability to take the majority share of production and associated costs. These facts qualify us as Logan's primary beneficiary and this entity is consolidated for all periods presented. All significant intercompany transactions and balances have been eliminated.

The following table summarizes the carrying value and classification of assets and liabilities owned by the Logan joint venture and consolidated in our consolidated balance sheets (in millions). There are significant other assets used in the operations of Logan that are not part of the joint venture, as they are directly owned and consolidated by Novelis or Tri-Arrows.

The following table summarizes the ownership structure and our ownership percentage of the non-consolidated affiliate in which we have an investment as of March 31, 2016 and 2015, and which we account for using the equity method. We do not control our non-consolidated affiliate, but have the ability to exercise significant influence over the operating and financial policies. We have no material investments that we account for using the cost method.

~~In March 2014, we declared a return of capital to our direct shareholder, AV Metals Inc., in the amount of $250 million, which we subsequently paid on April 30, 2014.~~

~~Debt consists of the following (in millions).~~

~~Principal repayment requirements for our total debt over the next five years and thereafter (excluding unamortized carrying value adjustments and using exchange rates as of~~ ~~March 31, 2016~~ ~~for our debt denominated in foreign currencies) are as follows (in millions).~~

As of March 31, 2016, the senior secured credit facilities consisted of (i) a $1.8 billion seven-year secured term loan credit facility (Term Loan Facility), (ii) a $1.2 billion five-year asset based loan facility (ABL Revolver) and (iii) a $200 million 15-month subordinated secured lien revolving facility (Subordinated Lien Revolver). As of March 31, 2016, $18 million of the Term Loan Facility is due within one year.

In June 2015, we entered into the Subordinated Lien Revolver with a maturity date of September 10, 2016. The interest rate for a loan under the Subordinated Lien Revolver is either equal to (i) a prime rate plus a spread of 2.5% or 2.25% depending on the total net leverage ratio then in effect or (ii) the higher of LIBOR and 0.75% plus a spread of 3.50% or 3.25% depending on the total net leverage ratio then in effect. The Subordinated Lien Revolver requires us to maintain a secured net leverage ratio of 4 to 1. Pursuant to the terms of the Term Loan Facility, such secured net leverage maintenance covenant will automatically apply to the Term Loan Facility as well for so long as the Subordinated Lien Revolver is in effect.

~~As of~~ ~~March 31, 2016, our short-term borrowings were~~ ~~$579 million~~ ~~consisting of~~ ~~$394 million~~ ~~of short-term loans under our ABL Revolver,~~ ~~$38 million~~ ~~(KRW~~ ~~44 billion) in Novelis Korea bank loans,~~ ~~$77 million~~ in Novelis Brazil loans, $9 million (VND 203 billion) in Novelis Vietnam loans, $46 million in Novelis China loans (CNY 296 million), $12 million in Novelis Middle East and Africa loans and $3 million of other short term borrowings.

~~As of~~ ~~March 31, 2016~~, ~~$12 million~~ ~~of the ABL Revolver was utilized for letters of credit, and we had~~ ~~$204 million~~ ~~in remaining availability under the ABL Revolver.~~

~~As of March 31, 2016, $200 million under the Subordinated Lien Revolver was available.~~

In December 2010, we issued $1.1 billion in aggregate principal amount of 8.375% Senior Notes Due 2017 (the 2017 Notes) and $1.4 billion in aggregate principal amount of 8.75% Senior Notes Due 2020 (the 2020 Notes, and together with the 2017 Notes, the Notes).

The Notes contain customary covenants and events of default that will limit our ability and, in certain instances, the ability of certain of our subsidiaries to (1) incur additional debt and provide additional guarantees, (2) pay dividends or return capital beyond certain amounts and make other restricted payments, (3) create or permit certain liens, (4) make certain asset sales, (5) use the proceeds from the sales of assets and subsidiary stock, (6) create or permit restrictions on the ability of certain of the Company's subsidiaries to pay dividends or make other distributions to the Company, (7) engage in certain transactions with affiliates, (8) enter into sale and leaseback transactions, (9) designate subsidiaries as unrestricted subsidiaries and (10) consolidate, merge or transfer all or substantially all of our assets and the assets of certain of our subsidiaries. During any future period in which either Standard & Poor's Ratings Group, Inc. or Moody's Investors Service, Inc. have assigned an investment grade credit rating to the Notes and no default or event of default under the indenture has occurred and is continuing, most of the covenants will be suspended. The Notes include a cross-acceleration event of default triggered if (1) any other indebtedness with an aggregate principal amount of more than $100 million is (1) accelerated prior to its maturity or (2) not repaid at its maturity. As of March 31, 2016, we were in compliance with the covenants in the Notes. The Notes also contain customary call protection provisions for our bond holders that extend through December 2016 for the 2017 Notes and through December 2018 for the 2020 Notes.

~~As of March 31, 2016, Novelis Korea had $17 million (KRW~~ ~~20 billion) of outstanding long-term loans with various due within one year. All loans have variable interest rates with base rates tied to~~ ~~Korea's 91-day CD rate plus an applicable spread~~ ~~ranging from 0.91% to 1.58%.~~

~~Novelis Brazil entered into loan agreements with Brazil’s National Bank for Economic and Social Development (the BNDES loans) related to the plant expansion in Pindamonhangaba, Brazil (Pinda). As of~~ ~~March 31, 2016, there are $1 million of BNDES loans due within one year.~~

~~In December 2004, we entered into a~~ ~~fifteen-year capital lease obligation with Alcan for assets in Sierre, Switzerland, which has an interest rate of 7.5% and fixed quarterly payments of CHF~~ ~~1.7 million, (USD $1.8 million).~~

~~During fiscal 2013 and 2014, Novelis Inc. entered into various~~ ~~five-year capital lease arrangements to upgrade and expand our information technology infrastructure.~~

~~As of March 31, 2016, we had $1 million of other debt, including certain capital lease obligations, with due dates through December 2020.~~

We use interest rate swaps to manage our exposure to changes in benchmark interest rates which impact our variable-rate debt. See Note 15- Financial Instruments and Commodity Contracts for further information about these interest rate swaps.

The Company's board of directors has authorized long term incentive plans (LTIPs), under which Hindalco stock appreciation rights (Hindalco SARs), Novelis stock appreciation rights (Novelis SARs), and phantom restricted stock units (RSUs) are granted to certain executive officers and key employees.

~~The Hindalco SARs and Novelis SARs vest at the rate of~~ ~~25%~~ ~~per year, subject to the achievement of an annual performance target, and expire~~ ~~7 years~~ from their original grant date. Each Hindalco SAR is to be settled in cash based on the difference between the market value of one Hindalco share on the date of grant and the market value on the date of exercise. Each Novelis SAR is to be settled in cash based on the difference between the fair value of one Novelis phantom share on the original date of grant and the fair value of a phantom share on the date of the exercise. ~~The amount of cash paid to settle Hindalco SARs and Novelis SARs are limited to two and a half or three times the target payout~~, depending on the plan year. The Hindalco SARs and Novelis SARs do not transfer any shareholder rights in Hindalco or Novelis to a participant. The Hindalco SARs and Novelis SARs are classified as liability awards and are remeasured at fair value each reporting period until the SARs are settled.

The performance criterion for vesting of both the Hindalco SARs and Novelis SARs is based on the actual overall Novelis operating EBITDA compared to the target established and approved each fiscal year. The minimum threshold for vesting each year is 75% of each annual target operating EBITDA. Given that the performance criterion is based on an earnings target in a future period for each fiscal year, the grant date of the awards for accounting purposes is generally not established until the performance criterion has been defined.

~~The RSUs vest in full~~ ~~three years~~ ~~from the grant date, subject to continued employment with the Company, but are not subject to performance criteria. Each RSU is to be settled in cash equal to the market value of one Hindalco share.~~ ~~The payout on the RSUs is limited to three times the market value of one Hindalco share measured on the original date of grant.~~ ~~The RSUs are classified as liability awards and expensed over the requisite service period (three years) based on the Hindalco stock price as of each balance sheet date.~~

On May 13, 2013, the Company's board of directors amended the long-term incentive plans for fiscal years 2010 - 2013 (FY 2010 Plan), fiscal years 2011- 2014 (FY 2011 Plan), fiscal years 2012 - 2015 (FY 2012 Plan) and fiscal years 2013 - 2016 (FY 2013 Plan). The amendment gave each participant the option to cancel a portion of their outstanding Hindalco SARs for a lump-sum cash payment and/or the issuance of new Novelis SARs. The remaining Hindalco SARs and the new Novelis SARs continue to vest according to the terms and conditions of the original grant. The table below reflects the fiscal 2014 activity related to the participants' elections under the amendment.

Total compensation expense related to Hindalco SARs, Novelis SARs, and RSUs under the plans for the respective periods is presented in the table below (in millions). These amounts are included in “Selling, general and administrative expenses” in our consolidated statements of operations. As the performance criteria for fiscal years 2017, 2018 and 2019 have not yet been established, measurement periods for Hindalco SARs and Novelis SARs relating to those periods have not yet commenced. As a result, only compensation expense for vested and current year Hindalco SARs and Novelis SARs has been recorded.

~~The table below shows the RSUs activity for the year ended~~ ~~March 31, 2016~~.

Number of
RSUs

Grant Date Fair
Value
(in Indian Rupees)

Aggregate
Intrinsic
Value (USD
in millions)
RSUs outstanding as of March 31, 2015 5,338,612
120.77
$ 12
Granted 2,193,752
123.69
—
Exercised (2,160,299 ) 132.82
5
Forfeited/Cancelled (789,340 ) 130.44
—
RSUs outstanding as of March 31, 2016 4,582,725
124.52
$ 7

~~The cash payments made to settle SAR liabilities were~~ ~~$2 million~~, ~~$8 million, and~~ ~~$15 million~~, in the years ended March 31, 2016, 2015, and 2014, respectively. Total cash payments made to settle Hindalco RSUs were $5 million, $3 million, and $2 million in the years ended March 31, 2016, 2015 and 2014, respectively. Unrecognized compensation expense related to the non-vested Hindalco SARs (assuming all future performance criteria are met) was $4 million which is expected to be recognized over a weighted average period of 2.7 years. Unrecognized compensation expense related to the non-vested Novelis SARs (assuming all future performance criteria are met) was $10 million, which is expected to be recognized over a weighted average period of 2.7 years. Unrecognized compensation expense related to the RSUs was ~~$3 million, which will be recognized over the remaining weighted average vesting period of~~ ~~1.3~~ ~~years.~~

Our pension obligations relate to: (1) funded defined benefit pension plans in the U.S., Canada, Switzerland, and the U.K.; (2) unfunded defined benefit pension plans in Germany; (3) unfunded lump sum indemnities payable upon retirement to employees in France, Malaysia and Italy; and (4) partially funded lump sum indemnities in South Korea. Our other postretirement obligations (Other Benefits, as shown in certain tables below) include unfunded health care and life insurance benefits provided to retired employees in the U.S., Canada, and Brazil. We have combined our domestic (i.e. Canadian Plans) and foreign (i.e. All other Plans other than Canadian Plans) postretirement benefit plan disclosures because our domestic benefit obligation is not significant as compared to our total benefit obligation, as our foreign benefit obligation is 94% of the total benefit obligation, and the assumptions used to value domestic and foreign plans were not significantly different.

During fiscal year 2015 and as a result of the sale of our North America foil operations, $11 million of benefits were transferred out of the pension plan along with a corresponding amount of plan assets resulting in settlement accounting. Various other pension plans recognized settlements totaling $3 million as a result of restructuring initiatives and other factors. The settlements resulted in an insignificant impact to the statement of operations.

In October 2014, the Society of Actuaries published an updated mortality table and mortality improvement scale for U.S. plans. We recognized an increase of $33 million to our benefit obligation and net actuarial loss as a result of updating mortality assumptions applicable to our U.S. plans. These deferred costs will be amortized on a straight-line basis to net periodic benefit costs in future years.

In June 2014, the Company amended its U.S. non-union retiree medical plan to extend retirees' option to participate in a Retiree Health Access Exchange (RHA). For calendar years 2014 through 2017, the Company will subsidize a portion of the retiree medical premium rates of the RHA. The Company will not provide a subsidy beginning in calendar year 2018. The amendment to the plan resulted in a plan remeasurement and recognition of prior service costs of approximately $11 million which is being amortized on a straight-line basis through December 31, 2017, subject to an annual remeasurement adjustment.

In August 2013, the Company amended its U.S. non-union retiree medical plan. Beginning January 2014, the health care benefits provided by the Company to retirees' was discontinued and replaced with the retirees' option to participate in a new Retiree Health Access Exchange. For calendar year 2014 and 2015, the Company will subsidize a portion of the retiree medical premium rates of the RHA. The amendment resulted in the Company no longer providing a subsidy beginning in calendar year 2016. The amendments to the plan resulted in a plan remeasurement and recognition of a negative plan amendment, which reduced our obligation by $97 million as of August 31, 2013. The negative plan amendment, net of unrecognized actuarial losses resulted in a credit balance of $70 million recorded in AOCI as of August 31, 2013. The $70 million is being amortized, on a straight-line basis, as a reduction to net periodic benefit cost from September 1, 2013 through December 31, 2015, subject to an annual remeasurement adjustment.

~~For pension plans, our policy is to fund an amount required to provide for contractual benefits attributed to service to-date, and amortize unfunded actuarial liabilities typically over periods of~~ ~~15 years~~ or less. We also participate in savings plans in Canada and the U.S., as well as defined contribution pension plans in the U.S., U.K., Canada, Germany, Italy, Switzerland, Malaysia and Brazil. We contributed the following amounts (in millions) to all plans.

~~During fiscal year 2017, we expect to contribute~~ ~~$23 million~~ ~~to our funded pension plans,~~ ~~$13 million~~ ~~to our unfunded pension plans and~~ ~~$23 million~~ ~~to our savings and defined contribution pension plans.~~

~~The following tables present the change in benefit obligation, change in fair value of plan assets and the funded status for pension and other benefits (in millions).~~

The postretirement amounts recognized in “Accumulated other comprehensive loss,” before tax effects, are presented in the table below (in millions), and includes the impact related to our equity method investments. Amounts are amortized to net periodic benefit cost over the group’s average future service life of the employees or the group's average life expectancy.

~~The estimated amounts that will be amortized from “Accumulated other comprehensive loss” into net periodic benefit costs in fiscal year 2017 (exclusive of equity method investments) are~~ ~~$38 million~~ ~~for pension benefit costs related to net actuarial losses of $40 million partially offset by prior service credits of $2 million, and~~ ~~$6 million~~ ~~for other postretirement benefits, related to amortization of prior service costs of $2 million and net actuarial losses of $4 million.~~

The postretirement changes recognized in “Accumulated other comprehensive loss,” before tax effects, are presented in the table below (in millions), and include the impact related to our equity method investments.

~~The projected benefit obligation, accumulated benefit obligation and fair value of plan assets are presented in the table below (in millions).~~

March 31,
2016 2015
The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans:
       Projected benefit obligation $ 1,868
$ 1,863
       Accumulated benefit obligation $ 1,692
$ 1,689
Pension plans with projected benefit obligations in excess of plan assets:
       Projected benefit obligation $ 1,868
$ 1,760
       Fair value of plan assets $ 1,177
$ 1,129
Pension plans with accumulated benefit obligations in excess of plan assets:
       Accumulated benefit obligation $ 1,567
$ 1,563
       Fair value of plan assets $ 1,039
$ 1,093
Pension plans with projected benefit obligations less than plan assets:
       Projected benefit obligation $ —
$ 103
       Fair value of plan assets $ —
$ 104

~~Expected benefit payments to be made during the next ten fiscal years are listed in the table below (in millions).~~

Pension Benefits Other Benefits
2017 $ 66
$ 9
2018 68
8
2019 72
6
2020 77
7
2021 81
8
2021 through 2025 465
50
Total $ 829
$ 88

In selecting the appropriate discount rate for each plan, for pension and other postretirement plans in Canada, the U.S., U.K., and other Euro zone countries, we used spot rate yield curves and individual bond matching models. For other countries we used published long-term high quality corporate bond indices with adjustments made to the index rates based on the duration of the plans' obligation.

In estimating the expected return on assets of a pension plan, consideration is given primarily to its target allocation, the current yield on long-term bonds in the country where the plan is established, and the historical risk premium of equity or real estate over long-term bond yields in each relevant country. The approach is consistent with the principle that assets with higher risk provide a greater return over the long-term. The expected long-term rate of return on plan assets is ~~5.4%~~ ~~in fiscal 2017.~~

~~We provide unfunded health care and life insurance benefits to our retired employees in Canada, the U.S. and Brazil, for which we paid~~ ~~$10 million~~, ~~$10 million, and $9 million in fiscal 2016, 2015 and 2014, respectively. The assumed health care cost trend used for measurement purposes is~~ ~~7.1%~~ ~~for fiscal 2017, decreasing gradually to~~ 5% ~~in 2026 and remaining at that level thereafter.~~

~~A change of one percentage point in the assumed health care cost trend rates would have the following effects on our other benefits (in millions).~~

In addition, we provide post-employment benefits, including disability, early retirement and continuation of benefits (medical, dental, and life insurance) to our former or inactive employees, which are accounted for on the accrual basis in accordance with ASC No. 712, ~~Compensation — Retirement Benefits. “Other long-term liabilities” and "Accrued expenses and other current liabilities" on our consolidated balance sheets include~~ ~~$12 million~~ ~~and $5 million, respectively, as of~~ ~~March 31, 2016, for these benefits. Comparatively, “Other long-term liabilities” and "Accrued expenses and other current liabilities" on our consolidated balance sheets include~~ ~~$10 million~~ ~~and $4 million, respectively, as of March 31, 2015.~~

Each of our funded pension plans is governed by an Investment Fiduciary, who establishes an investment policy appropriate for the pension plan. The Investment Fiduciary is responsible for selecting the asset allocation for each plan, monitoring investment managers, monitoring returns versus benchmarks and monitoring compliance with the investment policy. The targeted allocation ranges by asset class, and the actual allocation percentages for each class are listed in the table below.

~~The following currency (gains) losses are included in “Other (income) expense, net” in the accompanying consolidated statements of operations (in millions).~~

The following currency (losses) gains are included in Accumulated other comprehensive loss (“AOCI”) and “Noncontrolling interests” in the accompanying consolidated balance sheets (in millions).

~~The following tables summarize the gross fair values of our financial instruments and commodity contracts as of March 31, 2016 and 2015 (in millions):~~

Price risk exposure arises from commitments to sell aluminum in future periods at fixed prices. We identify and designate certain LME aluminum forward contracts as fair value hedges of the metal price risk associated with fixed price sales commitments that qualify as firm commitments. Such exposures do not extend beyond ~~two years~~ ~~in length. We had less than~~ 1 ~~kt and~~ 2 ~~kt of outstanding aluminum forward purchase contracts designated as fair value hedges as of~~ ~~March 31, 2016~~ ~~and 2015, respectively. One kilotonne (kt) is 1,000 metric tonnes.~~

~~The following table summarizes the amount of gain (loss) recognized on fair value hedges of metal price risk (in millions):~~

Amount of Gain (Loss)
Recognized on Changes in Fair Value
Year Ended March 31,
2016 2015
Fair Value Hedges of Metal Price Risk
Derivative contracts $ (2 ) $ —
Designated hedged items 2
—
Net ineffectiveness (A) $ —
$ —

Price risk arises due to fluctuating aluminum prices between the time the sales order is committed and the time the order is shipped. We identify and designate certain LME aluminum forward purchase contracts as cash flow hedges of the metal price risk associated with our future metal purchases that vary based on changes in the price of aluminum. Such exposures do not extend beyond ~~two years~~ ~~in length. We had 1 kt of outstanding aluminum forward purchase contracts designated as cash flow hedges as of March 31, 2016 and 2015.~~

Price risk exposure arises due to the timing lag between the LME based pricing of raw material metal purchases and the LME based pricing of finished product sales. We identify and designate certain LME aluminum forward sales contracts as cash flow hedges of the metal price risk associated with our future metal sales that vary based on changes in the price of aluminum. Generally, such exposures do not extend beyond ~~two years~~ ~~in length. We had~~ ~~301~~ ~~kt and~~ ~~285~~ ~~kt of outstanding aluminum forward sales contracts designated as cash flow hedges as of March 31, 2016 and 2015, respectively.~~

The remaining aluminum derivative contracts are not designated as accounting hedges. As of March 31, 2016 and 2015, we had 76 kt and 36 kt, respectively, of outstanding aluminum sales contracts not designated as hedges. The average duration of undesignated contracts is less than ~~six months~~.

~~The following table summarizes our notional amount (in kt).~~

We use foreign exchange forward contracts, cross-currency swaps and options to manage our exposure to changes in exchange rates. These exposures arise from recorded assets and liabilities, firm commitments and forecasted cash flows denominated in currencies other than the functional currency of certain operations.

We use foreign currency contracts to hedge expected future foreign currency transactions, which include capital expenditures. These contracts cover the same periods as known or expected exposures. We had total notional amounts of ~~$601 million~~ ~~and~~ ~~$590 million~~ ~~in outstanding foreign currency forwards designated as cash flow hedges as of March 31, 2016 and 2015, respectively.~~

We use foreign currency contracts to hedge our foreign currency exposure to our net investment in foreign subsidiaries. We had $36 million and $28 million of outstanding foreign currency forwards designated as net investment hedges as of March 31, 2016 and March 31, 2015, respectively.

~~As of March 31, 2016 and 2015, we had outstanding foreign currency exchange contracts with a total notional amount of~~ ~~$636 million~~ ~~and~~ ~~$868 million, respectively, to primarily hedge balance sheet remeasurement risk, which were not designated as hedges. Contracts representing the majority of this notional amount will mature during~~ ~~the first quarter of fiscal 2017~~ ~~and offset the remeasurement impact.~~

We own an interest in an electricity swap that matures January 5, 2017 which we formerly designated as a cash flow hedge of our exposure to fluctuating electricity prices. As of March 31, 2011, due to significant credit deterioration of our counterparty, we discontinued hedge accounting for this electricity swap, even though the counterparty's credit has subsequently improved. Less than ~~1 million~~ ~~of notional megawatt hours remained outstanding as of~~ ~~March 31, 2016, and the fair value of this swap was a liability of~~ ~~$9 million~~ ~~as of~~ ~~March 31, 2016. As of March 31, 2015, the fair value of this electricity swap was a liability of~~ ~~$16 million~~.

On December 31, 2015, we entered into an agreement to extend the existing electricity swap contract for an additional five years, effective January 6, 2017 and maturing on January 5, 2022. As of March 31, 2016, 1 million of notional megawatt hours was outstanding and the fair value of this swap was an asset of $1 million. The electricity swap was not designated as of March 31, 2016.

~~We use natural gas forward purchase contracts to manage our exposure to fluctuating energy prices in North America. We had~~ ~~5 million~~ ~~MMBTUs designated as cash flow hedges as of~~ ~~March 31, 2016, and the fair value was~~ ~~a liability~~ of ~~$4 million. There were~~ ~~7 million~~ MMBTUs of natural gas forward purchase contracts designated as cash flow hedges as of March 31, 2015 and the fair value was a liability of $8 million. As of March 31, 2016 and 2015, we had less than 1 million MMBTUs and 2 million MMBTUs, respectively, of natural gas forward purchase contracts that were not designated as hedges. The fair value as of March 31, 2016 and 2015 was a liability of $1 million and a liability of $3 million, respectively, for the forward purchase contracts not designated as hedges. The average duration of undesignated contracts is less than ~~two years. One MMBTU is the equivalent of one decatherm, or one million British Thermal Units.~~

We use diesel fuel forward purchase contracts to manage our exposure to fluctuating fuel prices in North America, which are not designated as hedges as of March 31, 2016. We had 4 million gallons of diesel fuel forward purchase contracts outstanding as of March 31, 2016, and the fair value was a liability of less than $1 million. The average duration of undesignated contracts is less than one year.

The following table summarizes the impact on AOCI and earnings of derivative instruments designated as cash flow and net investment hedges (in millions). Within the next twelve months, we expect to reclassify ~~$8 million~~ of ~~gains~~ ~~from “AOCI” to earnings, before taxes.~~

~~The following table summarizes the change in the components of accumulated other comprehensive loss net of tax and "Noncontrolling interests", for the periods presented (in millions).~~

We record certain assets and liabilities, primarily derivative instruments, on our consolidated balance sheets at fair value. We also disclose the fair values of certain financial instruments, including debt and loans receivable, which are not recorded at fair value. Our objective in measuring fair value is to estimate an exit price in an orderly transaction between market participants on the measurement date. We consider factors such as liquidity, bid/offer spreads and nonperformance risk, including our own nonperformance risk, in measuring fair value. We use observable market inputs wherever possible. To the extent observable market inputs are not available, our fair value measurements will reflect the assumptions we used. We grade the level of the inputs and assumptions used according to a three-tier hierarchy:

~~Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities we have the ability to access at the measurement date.~~

~~Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.~~

Level 3 — Unobservable inputs for which there is little or no market data, which require us to develop our own assumptions based on the best information available as what market participants would use in pricing the asset or liability.

The following section describes the valuation methodologies we used to measure our various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified.

For certain derivative contracts with fair values based upon trades in liquid markets, such as aluminum, foreign exchange, natural gas and diesel fuel forward contracts and options, valuation model inputs can generally be verified and valuation techniques do not involve significant judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy.

The majority of our derivative contracts are valued using industry-standard models with observable market inputs as their basis, such as time value, forward interest rates, volatility factors, and current (spot) and forward market prices. We generally classify these instruments within Level 2 of the valuation hierarchy. Such derivatives include interest rate swaps, cross-currency swaps, foreign currency contracts, aluminum derivative contracts, natural gas and diesel fuel forward contracts.

We classify derivative contracts that are valued based on models with significant unobservable market inputs as Level 3 of the valuation hierarchy. Our two electricity swaps, which are our only Level 3 derivative contracts, represent agreements to buy electricity at a fixed price at our Oswego, New York facility. Forward prices are not observable for this market, so we must make certain assumptions based on available information we believe to be relevant to market participants. We use observable forward prices for a geographically nearby market and adjust for 1) historical spreads between the cash prices of the two markets, and 2) historical spreads between retail and wholesale prices.

~~All of the Company's derivative instruments are carried at fair value in the statements of financial position prior to considering master netting agreements.~~

The following table presents our derivative assets and liabilities which were measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of ~~March 31, 2016~~ ~~and~~ ~~March 31, 2015~~ ~~(in millions).The table below also discloses the net fair value of the derivative instruments after considering the impact of master netting agreements.~~

~~We recognized unrealized~~ ~~gains~~ of ~~$2 million~~ ~~for the year ended~~ ~~March 31, 2016~~ ~~related to Level 3 financial instruments that were still held as of~~ ~~March 31, 2016. These unrealized gains were included in “Other (income) expense, net.”~~

~~The following table presents a reconciliation of fair value activity for Level 3 derivative contracts (in millions).~~

The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis (in millions). The table excludes short-term financial assets and liabilities for which we believe carrying value approximates fair value. We value long-term receivables and long-term debt using Level 2 inputs. Valuations are based on either market and/or broker ask prices when available or on a standard credit adjusted discounted cash flow model using market observable inputs.

~~“Other (income) expense, net” is comprised of the following (in millions).~~

We are subject to Canadian and United States federal, state, and local income taxes as well as other foreign income taxes. The domestic (Canada) and foreign components of our "Income before income taxes" (and after removing our "Equity in net loss of non-consolidated affiliates") are as follows (in millions).

~~The components of the "Income tax provision" are as follows (in millions).~~

Year Ended March 31,
2016 2015 2014
Current provision:
Domestic (Canada) $ 5
$ 4
$ 12
Foreign (all other countries) 134
98
128
Total current 139
102
140
Deferred provision (benefit):
Domestic (Canada) —
—
—
Foreign (all other countries) (93 ) (88 ) (129 )
Total deferred (93 ) (88 ) (129 )
Income tax provision $ 46
$ 14
$ 11

~~The reconciliation of the Canadian statutory tax rates to our effective tax rates are shown below (in millions, except percentages).~~

Year Ended March 31,
2016 2015 2014
Pre-tax income before equity in net loss on non-consolidated affiliates $ 11
$ 167
$ 127
Canadian Statutory tax rate 25 % 25 % 25 %
Provision at the Canadian statutory rate $ 3
$ 42
$ 32
Increase (decrease) for taxes on income (loss) resulting from:
Exchange translation items 16
(22 ) —
Exchange remeasurement of deferred income taxes (8 ) (31 ) (20 )
Change in valuation allowances 104
95
94
Tax credits and other allowances (22 ) (22 ) (38 )
Income items not subject to tax —
2
(6 )
State tax benefit, net (10 ) (7 ) (7 )
Dividends not subject to tax (52 ) (52 ) (52 )
Enacted tax rate changes 5
(1 ) 3
Tax rate differences on foreign earnings 4
7
(4 )
Uncertain tax positions 7
10
8
Prior year adjustments (2 ) 2
(1 )
Income tax settlements —
(6 ) —
Other — net 1
(3 ) 2
Income tax provision $ 46
$ 14
$ 11
Effective tax rate 411 % 8 % 9 %

Our effective tax rate differs from the Canadian statutory rate primarily due to the following factors: (1) pre-tax foreign currency gains or losses with no tax effect and the tax effect of U.S. dollar denominated currency gains or losses with no pre-tax effect, which is shown above as exchange translation items; (2) the remeasurement of deferred income taxes due to foreign currency changes, which is shown above as exchange remeasurement of deferred income taxes; (3) changes in valuation allowances; (4) non-taxable dividends; (5) income tax settlements; (6) differences between the Canadian statutory and foreign effective tax rates applied to entities in different jurisdictions shown above as tax rate differences on foreign earnings; (7) tax credits in various jurisdictions; (8) state income tax benefit; and (9) increases or decreases in uncertain tax positions recorded under the provisions of ASC 740.

Deferred income taxes recognize the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes, and the impact of available net operating loss (NOL) and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered.

As of March 31, 2016, we elected to early adopt ASU 2015-17. The new standard requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. We applied the new standard prospectively to the Consolidated Balance Sheet as of March 31, 2016. The Consolidated Balance Sheet as of March 31, 2015 was not retrospectively adjusted.

ASC 740 requires that we reduce our deferred income tax assets by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that all or a portion of a deferred tax asset will not be realized. After consideration of all evidence, both positive and negative, management concluded that it is more likely than not that we will be unable to realize a portion of our deferred tax assets and that valuation allowances of ~~$613 million~~ ~~and~~ ~~$528 million~~ ~~were necessary as of~~ ~~March 31, 2016~~ ~~and 2015, respectively.~~

~~It is reasonably possible that our estimates of future taxable income may change within the next 12 months, resulting in a change to the valuation allowance in one or more jurisdictions.~~

~~As of March 31, 2016, we had net operating loss carryforwards of approximately~~ ~~$638 million~~ ~~(tax effected) and tax credit carryforwards of~~ ~~$103 million~~, which will be available to offset future taxable income and tax liabilities, respectively. The carryforwards will begin expiring in fiscal year 2019 with some amounts being carried forward indefinitely. As of ~~March 31, 2016, valuation allowances of~~ ~~$468 million~~, ~~$88 million~~ and $57 million had been recorded against net operating loss carryforwards, tax credit carryforwards and other deferred tax assets, respectively, where it appeared more likely than not that such benefits will not be realized. The net operating loss carryforwards are predominantly in Canada, the U.S., Italy, Germany, Switzerland, China and the U.K.

~~As of March 31, 2015, we had net operating loss carryforwards of approximately~~ ~~$515 million~~ ~~(tax effected) and tax credit carryforwards of~~ ~~$112 million~~, which will be available to offset future taxable income and tax liabilities, respectively. The carryforwards will begin expiring in fiscal 2020 with some amounts being carried forward indefinitely. As of March 31, 2015, valuation allowances of ~~$381 million~~, ~~$99 million~~ and $48 million had been recorded against net operating loss carryforwards, tax credit carryforwards and other deferred tax assets, respectively, where it appeared more likely than not that such benefits will not be realized. The net operating loss carryforwards are predominantly in Canada, the U.S., Italy, and the U.K.

~~As of March 31, 2016, we had cumulative earnings of approximately~~ ~~$2.5 billion~~ for which we had not provided Canadian income tax or withholding taxes because we consider them to be indefinitely reinvested. We acknowledge that we would need to accrue and pay taxes should we decide to repatriate cash and short term investments generated from earnings of our foreign subsidiaries that are considered indefinitely reinvested. Except for those jurisdictions where we have already distributed and paid taxes on the earnings, we have reinvested and expect to continue to reinvest undistributed earnings of foreign subsidiaries indefinitely. Cash and cash equivalents held by foreign subsidiaries that are indefinitely reinvested are used to cover expansion and short-term cash flow needs of such subsidiaries. The amounts considered indefinitely reinvested would be subject to possible Canadian taxation only if remitted as dividends. However, due to our full valuation allowance position of ~~$538 million~~ ~~in Canada, in excess of~~ ~~$443 million~~ ~~of net operating loss carryforwards, exempt surpluses for~~

Tax authorities continue to examine certain other of our tax filings for fiscal years 2005 through 2014. As a result of further settlement of audits, judicial decisions, the filing of amended tax returns or the expiration of statutes of limitations, our reserves for unrecognized tax benefits, as well as reserves for interest and penalties, may decrease in the next 12 months by an amount up to approximately ~~$14 million. With few exceptions, tax returns for all jurisdictions for all tax years before 2003 are no longer subject to examination by taxing authorities.~~

~~Our policy is to record interest and penalties related to unrecognized tax benefits in the income tax provision (benefit). As of~~ ~~March 31, 2016, 2015 and 2014, we had~~ ~~$4 million~~, ~~$5 million~~ ~~and~~ ~~$4 million~~ ~~accrued, respectively, for interest and penalties. For the year ended~~ ~~March 31, 2016, we recognized~~ ~~$2 million~~ ~~expense related to accrued interest and penalties. For the years ended March 31, 2015 and 2014 we recognized a tax expense and benefit of~~ ~~$1 million~~ ~~and $1 million, respectively, related to reductions in accrued interest and penalties.~~

~~A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):~~

We are party to, and may in the future be involved in, or subject to, disputes, claims and proceedings arising in the ordinary course of our business, including some we assert against others, such as environmental, health and safety, product liability, employee, tax, personal injury and other matters. We have established a liability with respect to contingencies for which a loss is probable and estimable. While the ultimate resolution of and liability and costs related to these matters cannot be determined with certainty, we do not believe any of these pending actions, individually or in the aggregate, will materially impact our operations or materially affect our financial condition or liquidity.

For certain matters in which the Company is involved for which a loss is reasonably possible, we are unable to estimate a loss. For certain other matters for which a loss is reasonably possible and the loss is estimable, we have estimated the aggregated range of loss as $0 to $70 million. This estimated aggregate range of reasonably possible losses is based upon currently available information. The Company’s estimates involve significant judgment, and therefore, the estimate will change from time to time and actual losses may differ from the current estimate. We review the status of, and estimated liability related to, pending claims and civil actions on a quarterly basis. The evaluation model includes all asserted and unasserted claims that can be reasonably identified including claims relating to our responsibility for compliance with environmental, health and safety laws and regulations in the jurisdictions in which we operate or formerly operated. The estimated costs in respect of such reported liabilities are not offset by amounts related to insurance or indemnification arrangements unless otherwise noted.

~~The following describes certain contingencies relating to our business, including those for which we assumed liability as a result of our spin-off from Alcan Inc.~~

We own and operate numerous manufacturing and other facilities in various countries around the world. Our operations are subject to environmental laws and regulations from various jurisdictions, which govern, among other things, air emissions, wastewater discharges, the handling, storage and disposal of hazardous substances and wastes, the remediation of contaminated sites, post-mining reclamation and restoration of natural resources, and employee health and safety. Future environmental regulations may impose stricter compliance requirements on the industries in which we operate. Additional equipment or process changes at some of our facilities may be needed to meet future requirements. The cost of meeting these requirements may be significant. Failure to comply with such laws and regulations could subject us to administrative, civil or criminal penalties, obligations to pay damages or other costs, and injunctions and other orders, including orders to cease operations.

We are involved in proceedings under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or Superfund, or analogous state provisions regarding liability arising from the usage, storage, treatment or disposal of hazardous substances and wastes at a number of sites in the United States, as well as similar proceedings under the laws and regulations of the other jurisdictions in which we have operations, including Brazil and certain countries in the European Union. Many of these jurisdictions have laws that impose joint and several liability, without regard to fault or the legality of the original conduct, for the costs of environmental remediation, natural resource damages, third party claims, and other expenses. In addition, we are, from time to time, subject to environmental reviews and investigations by relevant governmental authorities. We are also involved in claims and litigation filed on behalf of persons alleging exposure to substances and other hazards at our current and former facilities.

We have established liabilities based on our estimates for the currently anticipated costs associated with these environmental matters. We estimated that the remaining undiscounted clean-up costs related to our environmental liabilities as of March 31, 2016~~were approximately $17 million, of which $13 million was associated with restructuring actions and the remaining undiscounted clean-up costswere approximately $4 million. Additionally, $7 million of the environmental liability was included in “Other long-term liabilities,” with the remaining $10 million~~included in “Accrued expenses and other current liabilities” in our consolidated balance sheet as of March 31, 2016. As of March 31, 2015, $18 million of the environmental liability was included in “Other long-term liabilities,” with the remaining $4 million included in “Accrued expenses and other current liabilities” in our consolidated balance sheet. Management has reviewed the environmental matters, including those for which we assumed liability as a result of our spin-off from Alcan Inc. As a result of management's review of these items, management has determined that the currently anticipated costs associated with these environmental matters will not, individually or in the aggregate, materially impact our operations or materially adversely affect our financial condition, results of operations or liquidity.

Under a federal tax dispute settlement program established by the Brazilian government, we have settled several disputes with Brazil’s tax authorities regarding various forms of manufacturing taxes and social security contributions. In most cases, we are paying the settlement amounts over a period of 180 months, although in some cases we are paying the settlement amounts over a shorter period. The assets and liabilities related to these settlements are presented in the table below (in millions).

~~Additionally, we have included in the range of reasonably possible losses disclosed above, any unresolved tax disputes or other contingencies for which a loss is reasonably possible and estimable.~~

~~Other Commitments~~

~~Net sales and expenses are measured in accordance with the policies and procedures described in Note 1 — Business and Summary of Significant Accounting Policies.~~

~~We had~~ 25 ~~operating facilities in~~ ~~eleven~~ ~~countries as of~~ ~~March 31, 2016~~. The tables below present “Net sales” and “Long-lived assets and other intangible assets” by geographical area (in millions). “Net sales” are attributed to geographical areas based on the origin of the sale. “Long-lived assets and other intangible assets” are attributed to geographical areas based on asset location and exclude investments in and advances to our non-consolidated affiliates and goodwill.

The percentage of “Net sales” generated from beverage and food can products were 55%, 56%, and 55% in the years ended March 31, 2016, 2015, and 2014, respectively. The percentage of “Net sales” generated from automotive products increased to 20% in the year ended March 31, 2016, compared to 13% and 11% in the years ended March 31, 2015 and 2014, respectively.

~~The table below shows our net sales to Rexam Plc (Rexam) and Affiliates of Ball Corporation (Ball Corporation), our~~ ~~two~~ ~~largest customers, as a percentage of total “Net sales.”~~

~~RT is our primary supplier of metal inputs, including prime and sheet ingot. The table below shows our purchases from RT as a percentage of our total combined metal purchases.~~

~~As of~~ ~~March 31, 2016, we recorded~~ ~~$53 million~~ ~~of outstanding accounts payable and accrued liabilities related to capital expenditures in which the cash outflows will occur subsequent to~~ ~~March 31, 2016~~. During the year ended March 31, 2016, we did not incur any new capital lease obligations. During the years ended 2015 and 2014, we incurred capital lease obligations of less than $1 million related to capital lease acquisitions.

~~The tables below present select operating results (in millions) by period:~~

~~In connection with the issuance of Novelis Inc.'s (the Parent and Issuer) 2017 Notes and 2020 Notes, certain of our wholly-owned subsidiaries, which are~~ ~~100%~~ owned within the meaning of Rule 3-10(h)(1) of Regulation S-X, provided guarantees. These guarantees are full and unconditional as well as joint and several. In the periods presented below, the guarantor subsidiaries (the Guarantors) are comprised of the majority of our businesses in Canada, the U.S., the U.K., Brazil, Portugal and Switzerland, as well as certain businesses in Germany and France. The remaining subsidiaries (the Non-Guarantors) of the Parent are not guarantors of the Notes.

The fiscal 2015 and 2014 amounts below have been retrospectively adjusted to reflect the amalgamations of certain subsidiaries in the U.S. and Canada that occurred during fiscal 2016. These amalgamations had no impact on the consolidated financial statements.

~~We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit~~12b-15 under the Securities Exchange Act of 1934, as amended, ~~(the Exchange Act) is recorded, processed, summarized~~certifications by Novelis' principal executive officer and ~~reported within the time periods specified~~principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV hereof.

As required by Securities and Exchange Commission rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. This evaluation was carried out under the supervisionOriginal Filing and with our filings with the participation of our management, including our Principal Executive Officer and Principal Financial Officer. Based on this evaluation, our management, including our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~March 31, 2016~~.

~~The report of management on our internal control over financial reporting as of~~ ~~March 31, 2016~~ ~~is set forth in Part II, "Item 8. Financial Statements and Supplementary Data" in this report.~~

~~There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under~~SEC subsequent to the ~~Exchange Act) during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.~~

~~Mr. Kumar Mangalam Birla~~ was elected as the Chairman of the Board of Directors of Novelis on May 15, 2007. Mr. Birla is the Chairman of Hindalco Industries Limited which is an industry leader in aluminum and copper. He is also the Chairman of Aditya Birla Group’s leading blue-chip companies including Grasim, UltraTech Cement, Aditya Birla Nuvo and Idea Cellular; and globally, Novelis, Aditya Birla Chemicals (Thailand) Limited and Indo Phil Textile Mills Inc. Philippines. Mr. Birla also serves as director on the board of the Group’s international companies spanning Thailand, Indonesia, Philippines, Egypt, and Canada. Additionally, Mr. Birla is the Chancellor of the Birla Institute of Technology & Science, Pilani. He is a member of the London Business School’s Asia Pacific Advisory Board. Mr. Birla’s past affiliations include service on the boards of Maruti Udyog Limited and Tata Iron and Steel Co. Limited. He was a part time non official director on the Central Board of Reserve Bank of India. Mr. Birla brings to the board significant global leadership experience acquired through his service as a director of numerous corporate, professional and regulatory entities in various regions of the world.

2

~~Mr. Askaran Agarwala~~ has served as a Director of Hindalco since July 2004. He was Chairman of the Business Review Council of the Aditya Birla Group from October 2003 to March 2010. From 1982 to October 2003, he was President of Hindalco. Mr. Agarwala serves on the Compensation Committee of the Novelis Board of Directors. Mr. Agarwala also serves as a director of several other companies, including Udyog Services Ltd., Tanfac Industries Ltd., Birla Insurance Advisory Services Limited and Aditya Birla Health Services Limited. He is a Trustee of G.D. Birla Medical Research and Education Foundation, Vaibhav Medical and Education Foundation and Sarla Basant Birla Memorial Trust and Aditya Vikram Birla Memorial Trust. Mr. Agarwala’s past and current service as a director of several companies and industry associations in the metals and manufacturing industries adds a very valuable perspective to the board. Having served as president of our parent company, Hindalco, Mr. Agarwala also brings a depth of understanding of our business and operations.

~~Mr. Debnarayan Bhattacharya~~ has served as Managing Director of Hindalco since 2004. Mr. Bhattacharya is Vice Chairman of Novelis and serves on the Audit and Compensation Committees of the Novelis Board of Directors. He is the Chairman of Aditya Birla Minerals Limited in Australia and also serves as a Director of Aditya Birla Management Corporation Private Ltd. Mr. Bhattacharya’s extensive knowledge of the aluminum and metals industries provides a valuable resource to the company in the setting and implementation of its operating business plans as the Company considers various strategic alternatives. Mr. Bhattacharya brings to the board a high degree of financial literacy.

~~Clarence J. Chandran~~ has been a director of the Company since 2005. Mr. Chandran serves on the Compensation and Audit Committees of the Novelis Board of Directors, and acts as the Chairman of the Compensation Committee. Mr. Chandran is Chairman of 4Front Capital Partners Inc. Mr. Chandran also serves as Venture Partner of The Walsingham Fund. He is a past director of Alcan Inc. and MDS Inc. He retired as Chief Operating Officer of Nortel Networks Corporation (communications) in 2001. Mr. Chandran is a past member of the Board of Visitors of the Pratt School of Engineering at Duke University. He has acquired years of significant experience through his leadership and management of companies with international business operations. Mr. Chandran brings to the board his deep knowledge in the areas of technology, sales and global operations.

~~Donald A. Stewart~~ is the retired Chief Executive Officer and Director of Sun Life Financial Inc. and Sun Life Assurance Company of Canada. Mr. Stewart serves on the Audit Committee of the Novelis Board of Directors and serves as its Chairman. Mr. Stewart also serves as a director of Birla Sun Life Insurance Company Limited, Birla Sun Life Asset Management Company Limited, Sun Life Global Investments Inc., Sun Life Everbright Life Insurance Company Limited and Sun Life Assurance Company of Canada (UK) Limited. He is the Chairman of AV Group NB Inc., AV Terrace Bay Inc., and of the federal-provincial Nominating Committee for the Canada Pension Plan Investment Board. Mr. Stewart brings extensive financial management and operating experience to the board.

~~Mr. Satish Pai~~ has served as Deputy Managing Director of Hindalco Industries Limited since February 2014. He previously served as Chief Executive Officer - Aluminum Business of Hindalco Industries Limited from August 2013 to January 2014. Prior to that, Mr. Pai served as Executive Vice President, Worldwide Operations of Schlumberger Ltd. Mr. Pai joined Schlumberger Ltd. in 1985 as a field engineer and held various positions of increased responsibility over the course of his 28 year tenure with the company. He serves on the Compensation Committee of the Novelis Board of Directors and also serves as a director of Hindalco. Mr. Pai also serves as a Director of ABB Limited, Switzerland and Hindalco-Almex Aerospace Limited. Mr. Pai brings extensive industry and global operating experience to the board.

~~Our Executive Officers~~

The following table sets forth information for persons serving as executive officers of our Company as of April 30, 2016. Biographical details for each of our executive officers are also set forth below.



PART IV
Item 15. Exhibits and Financial Statement Schedules.		20

~~Name~~			~~Age~~	~~Position~~
~~Steven Fisher~~	45		~~President and Chief Executive Officer~~
~~Steven E. Pohl~~	56		~~Interim Chief Financial Officer~~
~~Marco Palmieri~~	59		~~Senior Vice President and President, Novelis North America~~
~~Erwin Mayr~~	46		~~Senior Vice President and President, Novelis Europe~~
~~Antonio Tadeu Coelho Nardocci~~	58		~~Senior Vice President and President, Novelis South America~~
~~Shashi Maudgal~~	62		~~Senior Vice President and President, Novelis Asia~~
~~Leslie J. Parrette, Jr.~~	54	SIGNATURES	~~Senior Vice President, General Counsel, Compliance Officer and Corporate Secretary~~22
~~Nicholas Madden~~	59		~~Senior Vice President, Manufacturing Excellence and Procurement~~
~~H.R. Shashikant~~	53		~~Senior Vice President and Chief Human Resources Officer~~
~~Randal Miller~~	53		~~Vice President, Treasurer~~
~~Stephanie Rauls~~	47		~~Vice President, Controller and Chief Accounting Officer~~

~~Steven Fisher~~ ~~is our President and Chief~~

PART III

Item 11. Executive Officer. He served as Senior Vice President and Chief Financial Officer from May 2007 to May 2015. Mr. Fisher joined Novelis in February 2006 as Vice President, Strategic Planning and Corporate Development. He previously served as Vice President and Controller for TXU Energy, the non-regulated subsidiary of TXU Corp. from July 2005 to February 2006, and prior to joining TXU Energy, Mr. Fisher served in various senior finance roles at Aquila, Inc., an international electric and gas utility and energy trading company, including Vice President, Controller and Strategic Planning, from 2001 to 2005. He is also a member of the board of directors of Lionbridge Technologies, Inc. since 2009. Mr. Fisher is a graduate of the University of Iowa in 1993, where he earned a B.B.A. in Finance and Accounting. He is a Certified Public Accountant.

~~Steven Pohl~~ is our Interim Chief Financial Officer. Mr. Pohl joined Novelis in 2009 as Vice President Finance, Chief Financial Officer North America and most recently served as Vice President, Financial Planning & Analysis since 2012. Mr. Pohl was previously employed by PPG Industries, Inc., the world’s leading coatings and specialty products company, where he served as General Auditor from 2008 to 2009. Prior to ~~that, he held key finance and management positions of increasing responsibility~~ ~~at PPG Industries, Inc. from 1981 to 2008. He is also a board member and trustee of La Roche College in Pittsburgh, Pennsylvania. Mr. Pohl earned his B.S. in Accounting from La Roche College.~~

~~Marco Palmieri~~ has served as our Senior Vice President and President, Novelis North America since June 2013. He previously served as Senior Vice President and President, Novelis South America from August 2011 to May 2013. Prior to joining Novelis, Mr. Palmieri spent more than 30 years in the metals and engineering industries, including more than 25 years with Rio Tinto Alcan, where he held a succession of international leadership positions in various areas, including business development, primary metal and energy production. Before joining Novelis, Mr. Palmieri was most recently Aluminum Business Director for Votorantim Metais Ltd.

~~Erwin Mayr~~ has served as our Senior Vice President and President, Novelis Europe since May 2013. He previously served as Senior Vice President and Chief Strategy and Commercial Officer from October 2009 to April 2013. Prior to that, Mr. Mayr held a number of leadership positions within our European operations, including Business Unit President, Advanced Rolled Products, from 2002 to 2009. Before joining our company in 2002, Mr. Mayr was an associate partner with the consulting firm Monitor Group. Mr. Mayr earned his Ph.D., Physics from Ulm University (Germany).

~~Antonio Tadeu Coelho Nardocci~~ has served as our Senior Vice President and President, Novelis South America since May 2013. He previously served as our Senior Vice President and President, Novelis Europe from June 2009 to April 2013. Prior to that, he served as our Strategy, Innovation and Technology from August 2008 to June 2009, and as Senior Vice President and President of our South American operations from February 2005 to August 2008. Before our spin-off from Alcan, Mr. Nardocci held a number of leadership positions with Alcan, most recently serving as President of Rolled Products South America from March 2002 until January 2005. Mr. Nardocci graduated from the University of São Paulo in Brazil with a degree in metallurgy.

~~Shashi Maudgal~~ joined Novelis May 14, 2012, as Senior Vice President and President of Novelis Asia. Mr. Maudgal was previously Chief Marketing Officer for Hindalco from February 2001 to May 2012. During his tenure at Hindalco, Mr. Maudgal built and led the company’s marketing department, led the European due diligence process during Hindalco's acquisition of Novelis in 2007, and served as a member of the executive leadership team in setting strategic direction. In addition, Mr. Maudgal is a member of the Aditya Birla Group’s Business Review Councils for Grasim Viscose Fiber and Ultratech’s Birla White Cement. Mr. Maudgal earned his Bachelor of Technology in Chemical Engineering from the Indian Institute of Technology, Delhi, and his M.B.A. in Marketing & Finance from the Indian Institute of Management, Calcutta.

~~Leslie J. Parrette, Jr.~~ rejoined our company in October 2009 to serve as our Senior Vice President, General Counsel and Compliance Officer, and he was appointed Corporate Secretary in February 2010. Before rejoining Novelis, Mr. Parrette served as Senior Vice President, Legal Affairs and General Counsel for WESCO International, Inc. (formerly Westinghouse Electric Supply Co.) (electrical product distribution) from March 2009 until October 2009. From March 2005 until March 2009, he served as our Senior Vice President, General Counsel, Secretary and Compliance Officer. Prior to that, Mr. Parrette served as Senior Vice President, General Counsel and Secretary for Aquila, Inc. (gas and electric utility; energy trading) from July 2000 until February 2005. Mr. Parrette holds an A.B. in Sociology from Harvard College and received his J.D. from Harvard Law School.

~~Nicholas Madden~~ is our Senior Vice President, Manufacturing Excellence and Procurement. Prior to this role, he served as Senior Vice President and Chief Procurement Officer from October 2006 until December 2011 and President of Novelis Europe’s Can, Litho and Recycling business unit beginning in October 2004. He was Vice President of Metal Management and Procurement for Alcan's Rolled Products division in Europe from December 2000 until September 2004 and was also responsible for the secondary recycling business. Mr. Madden holds a B.Sc. (Hons) degree in Economics and Social Studies from University College in Cardiff, Wales.

~~H.R. Shashikant~~ has served as our Senior Vice President and Chief Human Resources Officer since August 2015. In this role, Mr. Shashikant is responsible for the formulation and implementation of the company's worldwide human resources objectives, policies and practices. As the head of the global Human Resources function, he has responsibility for Talent Acquisition and Development, Compensation, Benefits, HRIS and Global Security. Before joining Novelis, Mr. Shashikant was Group Executive President, Group Human Resources, for the Aditya Birla Group, the Mumbai-based conglomerate of which Novelis is a part. He joined the Aditya Birla Group as a Vice President in 1999 and was instrumental in setting up HR systems, processes, and Centers of Excellence across the Group. An Economics graduate from Karnataka University in Dharwad, India, Mr. Shashikant holds a post graduate degree in Personnel Management from the Tata Institute of Social Sciences, Mumbai.

~~Randal P. Miller~~ is our Vice President, Treasurer. Prior to joining Novelis in July 2008, Mr. Miller served as Vice President and Treasurer of Transocean Offshore Deepwater Drilling from May 2006 to November 2007 where he was responsible for all treasury, banking, and capital markets activities for Transocean and its subsidiaries. From 2001 to 2006, Mr. Miller served as Vice President Finance, Treasurer of Aquila, Inc. Mr. Miller earned his B.S.B.A. from Iowa State University and M.B.A from the University of Missouri — Kansas City.

~~Stephanie Rauls~~ is our Vice President, Controller and Chief Accounting Officer since February 2016. Ms. Rauls previously served as Vice President of Global Tax since December 2013. Prior to joining Novelis, Ms. Rauls served as Vice President, Tax of Wal-Mart Stores, Inc. from 2011 to 2013, and prior to that, she was employed by GE Healthcare as a tax director from 2002 to 2011. Before joining GE Healthcare, Ms. Rauls was employed by KPMG LLP from 1994 to 2002. She earned a Bachelor of Business Administration in Accounting from the University of Wisconsin-Madison and a Juris Doctor from Valparaiso University School of Law. Ms. Rauls is a Certified Public Accountant.

~~Board of Directors and Corporate Governance Matters~~

We are committed to our corporate governance practices, which we believe are essential to our success and to the enhancement of shareholder value. Our Senior Notes are publicly traded in the U.S., and, accordingly, we make required filings with U.S. securities regulators. We make these filings available on our website at www.novelis.com as soon as reasonably practicable after they are electronically filed. We are subject to a variety of corporate governance and disclosure requirements. Our corporate governance practices meet applicable regulatory requirements to ensure transparency and effective governance of the company.

Our Board of Directors reviews corporate governance practices in light of developing requirements in this field. As new provisions come into effect, our Board of Directors will reassess our corporate governance practices and implement changes as and when appropriate. The following is an overview of our corporate governance practices.

~~Novelis Board of Directors~~

Our Board of Directors currently has six members, all of whom are appointed by our sole shareholder. Our Board of Directors has the responsibility for stewardship of Novelis Inc., including the responsibility to ensure that we are managed in the interest of our sole shareholder, while taking into account the interests of other stakeholders. Our Board of Directors supervises the management of our business and affairs and discharges its duties and obligations in accordance with the provisions of: (1) our articles of incorporation and bylaws; (2) the charters of its committees and (3) other applicable legislation and company policies.

Our corporate governance practices require that, in addition to certain statutory duties, the following matters be subject to our Board of Directors’ approval: (1) capital expenditure budgets and significant investments and divestments; (2) our strategic and value-maximizing plans; (3) the number of directors within the limits provided by our by-laws and (4) any matter which may have the potential for substantial impact on Novelis. Our Board of Directors reviews its composition and size once a year. Senior management makes regular presentations to our Board of Directors on the main areas of our business.

~~Corporate Governance~~

Holders of our Senior Notes and other interested parties may communicate with the Board of Directors, a committee or an individual director by writing to Novelis Inc., Two Alliance Center, 3560 Lenox Road N.E., Suite 2000, Atlanta, GA 30326, Attention: Corporate Secretary — Board Communication. All such communications will be compiled by the Corporate Secretary and submitted to the appropriate director or board committee. The Corporate Secretary will reply or take other actions in accordance with instructions from the applicable board contact.

~~Committees of Our Board of Directors~~

Our Board of Directors has established two standing committees: the Audit Committee and the Compensation Committee. Each committee is governed by its own charter. According to their authority as set out in their charters, our Board of Directors and each of its committees may engage outside advisors at the expense of Novelis.

~~Audit Committee and Financial Experts~~

Our Board of Directors has established an Audit Committee. Messrs. Stewart, Bhattacharya and Chandran are the members of the Audit Committee. Mr. Stewart, an independent director, has been identified as an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC.

Our Audit Committee’s main objective is to assist our Board of Directors in fulfilling its oversight responsibilities for the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence of our independent registered public accounting firm and the performance of both our internal audit function and our independent registered public accounting firm. Under the Audit Committee charter, the Audit Committee is responsible for, among other matters:

~~evaluating and compensating our independent registered public accounting firm;~~

~~making recommendations to the Board of Directors and shareholder relating to the appointment, retention and termination of our independent registered public accounting firm;~~

~~discussing with our independent registered public accounting firm its qualifications and independence from management;~~

~~reviewing with our independent registered public accounting firm the scope and results of its audit;~~

~~pre-approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;~~

~~reviewing areas of potential significant financial risk and the steps taken to monitor and manage such exposures;~~

overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; and

~~reviewing and monitoring our accounting principles, accounting policies and disclosure, internal control over financial reporting and disclosure controls and procedures.~~Compensation.

Compensation ~~Committee~~Discussion & Analysis

Our Compensation Committee establishes our general compensation philosophy and oversees the development and implementation of compensation policies and programs. It also reviews and approves the level of and/or changes in the compensation of individual executive officers taking into consideration individual performance and competitive compensation practices. The committee’s specific roles and responsibilities are set out in its charter. Our Compensation Committee periodically reviews the effectiveness of our overall management organization structure and succession planning for senior management, reviews recommendations for the appointment of executive officers, and reviews annually the development process for high potential employees.

~~Code of Conduct and Guidelines for Ethical Behavior~~

Novelis has adopted a Code of Conduct and maintains a Code of Ethics for Senior Financial Officers that applies to our senior financial officers including our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions. Copies of the Code of Conduct and the Code of Ethics for Senior Financial Officers are available on our website at www.novelis.com. We will promptly disclose any future amendments to these codes on our website as well as any waivers from these codes for executive officers and directors. Copies of these codes are also available in print from our Corporate Secretary upon request.

~~Item 11.~~ ~~Executive Compensation~~

This section provides a discussion of the background and objectives of our compensation programs for our named executive officers and other senior management employees. Our named executive officers are determined in accordance with rules of the Securities and Exchange Commission and include persons serving in the role of our principal executive officer, persons serving in the role of our principal financial officer and the three other highest paid executive officers that were employed by the Company on March 31, 2016. Steven Fisher was appointed as the Company’s President and Chief Executive Officer on August 10, 2015, replacing our former President and Chief Executive Officer, Philip Martens, who separated from the Company on April 20, 2015. Steven Pohl was appointed Interim Chief Financial Officer on October 19, 2015.

SEC.



Named Executive Officer ~~for Fiscal 2016~~			Title
Steven Fisher			President and Chief Executive Officer
~~Steven E. Pohl~~Devinder Ahuja		~~Interim~~	Executive Vice President, Chief Financial Officer
~~Leslie J. Parrette, Jr.~~Sachin Satpute		~~Senior Vice President, General Counsel, Compliance Officer and Corporate Secretary~~
~~Erwin Mayr~~	~~Senior~~Executive Vice President and President, of Novelis ~~Europe~~Asia
~~Marco Palmieri~~ Thomas Boney (1)		~~Senior~~	Former Executive Vice President and President, of Novelis North America
Emilio Braghi			Executive Vice President and President, Novelis Europe
HR Shashikant			Executive Vice President, Chief Human Resources Officer

________________________

(1)On January 9, 2023, Mr. Boney departed the company.

Compensation Committee and Role of Management

The Compensation Committee ("the Committee) of our ~~board~~ Board of ~~directors (the “Committee”~~Directors ("the Board") is responsible for approving ~~the~~ compensation programs for our named executive officers and making decisions regarding specific compensation to be paid or awarded to them. The Committee acts pursuant to a charter approved by ~~our board.~~

the Board. Our Chief Human Resources Officer serves as the primary management liaison officer for the Committee. Our human resources and legal departments provide assistance to the Committee in the administration of the ~~Committee’s~~Committee's responsibilities.

Our named executive officers have no direct role in setting their own compensation. The Committee ~~however,~~ meets with members of our management team to evaluate performance against ~~pre‑established~~pre-established goals, and management makes recommendations to the ~~board~~Board regarding budgets, production and sales forecasts and other information, which affect certain goals.

The Committee may seek input from our senior management concerning individual performance, expected future contributions and compensation matters generally.

Management assists the Committee by providing information needed or requested by the Committee (such as our performance against budget and objectives, historical compensation, compensation expense, current Company policies and programs, ~~country‑specific prevalent~~country-specific compensation practices, peer group metrics and peer group target pay levels) and by providing input and advice regarding potential changes to compensation programs and policies and their impact on the Company and its executives.

~~In the first quarter of each fiscal year, the~~The Committee (1) meets annually and reviews prior year performance and approves the distribution of ~~short‑term~~short-term incentive and ~~long‑term~~long-term incentive earned payouts, if any, for the prior year, (2) reviews and approves base pay and ~~short‑term~~short-term incentive targets for executives for the current year, and (3) recommends to the ~~board of directors~~Board the form of ~~long‑term~~long-term incentive award vehicles and vesting performance criteria for the current cycle of the program. The Committee may employ alternative practices when appropriate under the circumstances.

~~Although the~~The Committee did not independently engage a ~~third party~~third-party compensation consultant ~~to assist~~ in ~~developing our~~ fiscal ~~2016 compensation program,~~year 2023. However, management worked with Mercer LLC (a global human resource consulting firm) to evaluate and benchmark our executive compensation program, and management ~~reports Mercer’s~~shared Mercer's analysis towith the ~~Committee..~~Committee. Management also routinely reviews compensation surveys and other materials published by other leading global human resources consulting ~~firms. Hay Group (a global human resource consulting firm) periodically assists management with the internal leveling of executive jobs~~firms to help ensure internal equity and external competitiveness of pay opportunities based on ~~an executive’s job~~the scope and ~~complexity.~~complexity of executive roles.

2

For executive compensation benchmarking purposes, ~~management focuses~~we focus on ~~large global companies headquartered in the southeastern United States with whom Novelis may compete for executive talent, as well as other~~ major companies in the manufacturing and materials sectors having revenues in excess of $1$2 billion. The companies that comprise our peer group may change from year to year as a result of merger and acquisition activity or revenue growth of relevant companies that moves such companies into consideration. This year we shifted away from three large companies with which we compete for talent in the Southeastern United States (Genuine Parts Co, Newell Brands Inc, and Southern Company) and added two companies that are more closely aligned with our industry and with which we compete on a national level for talent (Cleveland-Cliffs Inc and Commercial Metals Company). The peer group considered in ~~management’s~~management's most recent compensation competitive analysis consisted of the following ~~companies, which have median revenues of approximately $13 billion:~~

companies:



~~AGCO~~		~~Coca-Cola Co.~~	~~Noranda Aluminum Holding~~
Air Products & Chemicals Inc.	~~Dow Chemical~~Commercial Metals Company		~~Southern Co.~~PPG Industries Inc.
Alcoa ~~Inc.~~Corp		~~Ingersoll- Rand PLC~~Crown Holdings		~~Genuine Parts Co.~~Reliance Steel & Aluminum Co
~~Altria Group Inc.~~Arconic Corp		~~PPG Industries~~Eastman Chemical Co		~~Praxair~~Steel Dynamics
~~Ashland~~Ball Corp		~~Eastman Chemical Co.~~International Paper Company		~~Newell Rubbermaid~~United States Steel Corp
~~Caterpillar~~Cleveland-Cliffs Inc.		~~Kennametal~~Nucor Corporation		WestRock Company

~~While the Committee and management review compensation data (both in surveys and public filings) to confirm that our executive compensation program is competitive, the~~The Committee retains discretion to set an individual ~~executive’s compensation.~~executive's compensation in recognition of the need for flexibility under a particular circumstance. As a result, compensation for an executive may differ ~~materially~~significantly from the survey or peer group data and may be influenced by factors including ~~past~~cumulative impact of performance, experience and potential, retention needs, job position and/or tenure. ~~Management and~~In addition, macroeconomic conditions may influence compensation decisions, including incentive pay decisions, as the Committee aligns its focus ~~on target compensation opportunities disclosed in survey and peer group compensation data (and not actual compensation earned, which is influenced by~~with the ~~historical company or individual performance~~financial needs of the ~~survey and peer group participants).~~business in times of uncontrollable macroeconomic forces.

Objectives and Design of Our Compensation Program

Our executive compensation program is designed to attract, retain, and reward talented executives who will contribute to our long-term financial and operational success and thereby build value for our shareholder. The program is organized around three fundamental principles:

•Provide Total Cash and Total Direct Compensation Opportunities that are Competitive ~~with Similar Positions at Comparable Companies~~: To enable us to attract, motivate and retain qualified executives to build long-term ~~stockholder~~shareholder value, total cash compensation (base pay plus annual short-term incentives) and total direct compensation (total cash compensation plus the value of long-term incentives) ~~opportunities for each executive are~~should be targeted at levels to be market competitive ~~and reflect the value paid to executives in similar positions at comparable companies~~ and also be appropriately positioned within the Company to ensure internal equity based on the scope and complexity of the role as it is designed at ~~Novelis.~~

the Company.

•A Substantial Portion of Total Direct Compensation Should be at Risk Because it is Performance-Based: We believe an ~~executive’s~~executive's actual compensation should be linked directly to the ~~Company’s short-term and long-term~~Company's financial performance and each ~~individual’s annual~~individual's personal contribution. Consequently, a substantial portion of an ~~executive’s~~executive's total direct compensation should be at risk, with amounts that are paid dependent on actual performance against pre-established objectives for both the individual and financial goals of the Company. The portion of an ~~individual’s~~individual's total direct compensation that is based upon these performance objectives and financial goals should increase as the ~~individual’s~~individual's business responsibilities and job scope increase. Additionally, ~~we believe~~ performance that exceeds target goals should be appropriately rewarded and aligned with prevalent market practices.

The portion of Total Target Compensation that is at risk is:

◦88% for the CEO

◦69% on average for the other named executive officers

•A Substantial Portion of Total Direct Compensation Should be Delivered in the Form of Long-Term Performance Based Awards: We believe a long-term stake in the sustained financial performance of Novelis effectively aligns executive and shareholder interests and provides motivation for enhancing shareholder value.

The portion of Total Target Compensation that is comprised of long-term compensation is:


Canada			98-0442987
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

~~Canada~~		~~98-0442987~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~	~~(I.R.S. Employer~~ ~~Identification Number)~~

~~3560 Lenox~~3550 Peachtree Road NE, Suite ~~2000,~~1100 Atlanta, GA		30326
(Address of principal executive offices)			(Zip Code)




~~SPECIAL~~EXPLANATORY NOTE ~~REGARDING FORWARD-LOOKING STATEMENTS AND MARKET DATA~~
~~PART I~~
~~Item 1. Business~~	4
~~Item 1A. Risk Factors~~	15
~~Item 1B. Unresolved Staff Comments~~	23
~~Item 2. Properties~~	23
~~Item 3. Legal Proceedings~~	26
~~Item 4. Mine Safety Disclosures~~	26
~~PART II~~
~~Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities~~	27
~~Item 6. Selected Financial Data~~	27
~~Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	28
~~Item 7A. Quantitative and Qualitative Disclosures About Market Risk~~	60
~~Item 8. Financial Statements and Supplementary Data~~	64
~~Item 9. Changes In and Disagreements With Accountants On Accounting and Financial Disclosure~~	~~143~~
~~Item 9A. Controls and Procedures~~	~~143~~
~~Item 9B. Other Information~~	~~143~~
~~PART III~~
~~Item 10. Directors, Executive Officers and Corporate Governance~~	~~144~~
~~Item 11. Executive Compensation~~	~~148~~
~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters~~	~~165~~
~~Item 13. Certain Relationships and Related Transactions and Director Independence~~	~~166~~
~~Item 14. Principal Accountant Fees and Services~~	~~167~~
~~PART IV~~
I~~tem 15. Exhibits and Financial Statement Schedules~~	~~168~~



Period	At Period End	Average Rate(A)	High	Low
Year Ended March 31, 2012	0.9973	0.9922	1.0433	0.9510
Year Ended March 31, 2013	1.0160	1.0030	1.0334	0.9601
Year Ended March 31, 2014	1.1044	1.0577	1.1127	1.0074
Year Ended March 31, 2015	1.2666	1.1467	1.2681	1.0665
Year Ended March 31, 2016	1.2978	1.3115	1.4015	1.2065



~~North America~~	~~Asia~~
~~Alcoa, Inc. (Alcoa)~~	~~Alcoa Bohai Aluminum Industries Co., Ltd~~
~~Aleris International, Inc. (Aleris)~~	~~UACJ Corporation~~
~~Constellium N.V. (Constellium)~~	~~Kobe Steel Ltd.~~
~~Noranda Aluminum, Inc.~~	~~Shandong Nanshan Aluminum Co., Ltd~~
~~UACJ Corporation/ Tri-Arrows Aluminum Inc. (Tri-Arrows)~~	~~Chinalco Group~~
	~~Henan Mingtai Aluminum Industrial Co., Ltd~~
~~Europe~~	~~Henan Zhongfu Industrial Co., Ltd~~
~~Alcoa~~	~~Binzhou Weiqiao Aluminium Science & Technology Co., Ltd~~
~~Aleris~~	~~China Zhongwang Holdings Limited~~
~~Norsk Hydro A.S.A.~~
~~Constellium~~	~~South America~~
	~~Alcoa~~
	~~Companhia Brasileira de Alumínio~~



Net sales in millions	Year Ended March 31,
Shipments in kilotonnes	2016		2015		2014
Consolidated
Net sales	$	9,872	$	11,147	$	9,767
Total shipments	3,325		3,374		3,061
North America(A)
Net sales	$	3,266	$	3,483	$	3,050
Total shipments	1,049		1,030		994
Europe(A)
Net sales	$	3,223	$	3,783	$	3,280
Total shipments	1,076		1,153		977
Asia(A)
Net sales	$	1,992	$	2,340	$	1,876
Total shipments	770		770		640
South America(A)
Net sales	$	1,575	$	1,850	$	1,588
Total shipments	569		583		534



ý	~~ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~



¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


~~(A)~~	~~This represents the average of the 16:00 GMT buying rates on the last day of each month during the period.~~


~~(A)~~	"Net sales" and "Total shipments" by segment include intersegment sales and the results of our affiliates on a proportionately consolidated basis, which is consistent with the way we manage our business segments.



~~Beverage and Food Cans~~		~~Automotive~~
~~Anheuser-Busch LLC~~		~~BMW Group~~
~~Affiliates of Ball Corporation (A)~~		~~Daimler Group~~
~~Can-Pack S.A.~~		~~Fiat Chrysler Automobiles N.V.~~
~~Crown Cork & Seal Company~~		~~Ford Motor Company~~
~~Rexam Plc (A)~~		~~General Motors LLC~~
~~Various bottlers of the Coca-Cola System~~		~~Jaguar Land Rover Limited~~
		~~Volkswagen Group~~
~~Construction, Industrial and Other~~
~~Lotte Aluminum Co. Ltd.~~		~~Electronics~~
~~Reynolds Consumer Products LLC~~		~~LG International Corporation~~
~~Ryerson Inc.~~		~~Samsung Electronics Co., Ltd~~



Employees	North America	Europe	Asia	South America	Total
March 31, 2016	3,430	4,970	2,020	1,550	11,970
March 31, 2015	3,210	4,890	1,970	1,490	11,560



	Total Operating Facilities	Facilities with Recycling Operations
North America	8	3
Europe	10	4
Asia	5	3
South America	2	1
Total	25	11



~~Locations~~	~~Plant Processes~~	~~Major Products~~
~~Berea, Kentucky~~	~~Recycling, sheet ingot casting~~	~~Sheet ingot from recycled metal~~
~~Fairmont, West Virginia~~	~~Cold rolling, finishing~~	~~Foil, HVAC material~~
~~Greensboro, Georgia~~	~~Recycling, sheet ingot casting~~	~~Sheet ingot from recycled metal~~
~~Kingston, Ontario~~	~~Cold rolling, finishing~~	~~Automotive sheet, construction sheet, industrial sheet~~
~~Russellville, Kentucky (A)~~	~~Hot rolling, cold rolling, finishing~~	~~Can stock~~
~~Oswego, New York (B)~~	~~Sheet ingot casting, hot rolling, cold rolling, recycling, brazing, finishing, heat treatment~~	~~Can stock, automotive sheet,~~ ~~construction sheet, industrial sheet,~~ ~~semi-finished coil~~
~~Terre Haute, Indiana~~	~~Cold rolling, finishing~~	~~Foil~~
~~Warren, Ohio~~	~~Coating~~	~~Can stock~~


~~(A)~~	We own 40% of the outstanding common shares of Logan, but we have made equipment investments such that our portion of Logan’s total machine hours provides us approximately 55% of Logan’s total production.


~~(B)~~	In fiscal 2015, we began production at two automotive sheet finishing lines and expanded our recycling operations in our Oswego, New York facility. In fiscal 2016, we commissioned a third automotive sheet finishing line.



	March 31,
	2016			2015			2014		2013		2012
Total assets	$	8,310		$	9,102		$	9,114	$	8,522	$	8,021
Long-term debt (including current portion)	$	4,498		$	4,457		$	4,451	$	4,464	$	4,344
Short-term borrowings	$	579		$	846		$	723	$	468	$	18
Cash and cash equivalents	$	556		$	628		$	509	$	301	$	317
Total (deficit) equity	$	(59	)	$	(70	)	$	268	$	239	$	123


~~(A)~~	~~Operated as a 50/50 joint venture between us and Hydro Aluminium Deutschland GmbH (Hydro). This joint venture is known as "Alunorf".~~


~~(B)~~	~~Operated under a long-term lease arrangement with a third party lessor.~~


~~(C)~~	~~In fiscal year 2016, we moved operations from the Wednesbury, U.K. facility to a facility in Crick, U.K.~~


~~(A)~~	~~Ownership of the Bukit Raja plant corresponds to our 59% equity interest in Aluminium Company of Malaysia Berhad, a publicly traded company that operates in Bukit Raja, Selangor, Malaysia.~~



	Year Ended March 31,
	2016			2015		2014		2013		2012
Net sales	$	9,872		$	11,147	$	9,767	$	9,812	$	11,063
Net (loss) income attributable to our common shareholder	$	(38	)	$	148	$	104	$	202	$	63
Return of capital (A)	$	—		$	—	$	250	$	—	$	—



(in millions, except shipments which are in kt)
	Three Months Ended												Year Ended			Three Months Ended												Year Ended
	Jun 30, 2014			Sept 30, 2014			Dec 31, 2014			Mar 31, 2015			Mar 31, 2015			Jun 30, 2015			Sept 30, 2015			Dec 31, 2015			Mar 31, 2016			Mar 31, 2016
Net sales	$	2,680		$	2,831		$	2,847		$	2,789		$	11,147		$	2,634		$	2,482		$	2,354		$	2,402		$	9,872
Percentage increase (decrease) in net sales versus comparable previous year period	12		%	17		%	18		%	9		%	14		%	(2		)%	(12		)%	(17		)%	(14		)%	(11		)%
Rolled product shipments:
North America	249			260			255			243			1,007			261			269			253			249			1,032
Europe	246			234			218			240			938			252			250			232			244			978
Asia	188			186			198			196			768			193			187			193			187			760
South America	114			116			129			131			490			107			117			132			134			490
Eliminations	(27		)	(31		)	(43		)	(52		)	(153		)	(45		)	(35		)	(31		)	(26		)	(137		)
Total	770			765			757			758			3,050			768			788			779			788			3,123

The following summarizes the percentage increase (decrease) in rolled product shipments versus the comparable previous year period:
North America	5		%	9		%	9		%	(2		)%	5		%	5		%	3		%	(1		)%	2		%	2		%
Europe	6		%	4		%	3		%	(1		)%	3		%	2		%	7		%	6		%	2		%	4		%
Asia	16		%	19		%	20		%	25		%	20		%	3		%	1		%	(3		)%	(5		)%	(1		)%
South America	24		%	7		%	5		%	6		%	10		%	(6		)%	1		%	2		%	2		%	—		%
Total	9		%	7		%	5		%	1		%	5		%	—		%	3		%	3		%	4		%	2		%



							Percent Change
	Year Ended March 31,						Year Ended March 31, 2016 versus		Year Ended March 31, 2015 versus
	2016		2015		2014		March 31, 2015		March 31, 2014
London Metal Exchange Prices
Aluminum (per metric tonne, and presented in U.S. dollars):
Closing cash price as of beginning of period	$	1,789	$	1,731	$	1,882	3	%	(8	)%
Average cash price during period	$	1,592	$	1,889	$	1,773	(16	)%	7	%
Closing cash price as of end of period	$	1,492	$	1,789	$	1,731	(17	)%	3	%




							Percent Change
	Year Ended March 31,						Year Ended March 31, 2016 versus March 31, 2015		Year Ended March 31, 2015 versus March 31, 2014
	2016		2015		2014		Year Ended March 31, 2016 versus March 31, 2015		Year Ended March 31, 2015 versus March 31, 2014
Weighted average Local Market Premium (per metric tonne, and presented in U.S. dollars)	$	194	$	464	$	281	(58	)%	65	%



	Exchange Rate as of March 31,			Average Exchange Rate Year Ended March 31,
	2016	2015	2014	2016	2015	2014
U.S. dollar per Euro	1.139	1.075	1.378	1.102	1.256	1.344
Brazilian real per U.S. dollar	3.559	3.208	2.263	3.624	2.504	2.261
South Korean won per U.S. dollar	1,154	1,105	1,069	1,158	1,059	1,090
Canadian dollar per U.S. dollar	1.298	1.267	1.104	1.312	1.147	1.058
Swiss franc per Euro	1.094	1.045	1.218	1.076	1.170	1.227



Selected Operating Results Year Ended March 31, 2016	North America		Europe		Asia		South America		Eliminations and other			Total
Net sales	$	3,266	$	3,223	$	1,992	$	1,575	$	(184	)	$	9,872
Shipments
Rolled products - third party	1,031		918		718		456		—			3,123
Rolled products - intersegment	1		60		42		34		(137		)	—
Total rolled products	1,032		978		760		490		(137		)	3,123
Non-rolled products	17		98		10		79		(2		)	202
Total shipments	1,049		1,076		770		569		(139		)	3,325



Changes in Segment income	North America (A)			Europe			Asia			South America			Eliminations (B)			Total
Segment income - Year Ended March 31, 2015	$	273		$	250		$	141		$	240		$	(2	)	$	902
Volume	21			47			(5		)	—			2			65
Conversion premium and product mix	74			19			9			25			(17		)	110
Conversion costs (C)	(13		)	(111		)	22			(24		)	17			(109		)
Metal price lag	(79		)	(77		)	(21		)	(1		)	—			(178		)
Foreign exchange	1			(32		)	(11		)	64			—			22
Primary operations	—			—			—			(14		)	—			(14		)
Selling, general & administrative and research & development costs (D)	(14		)	11			—			(5		)	—			(8		)
Other changes	(5		)	9			—			(3		)	—			1
Segment income - Year Ended March 31, 2016	$	258		$	116		$	135		$	282		$	—		$	791


~~(C)~~	Conversion costs include expenses incurred in production such as direct and indirect labor, energy, freight, scrap usage, alloys and hardeners, coatings, alumina, melt loss, the benefit of utilizing scrap and other metal costs. Fluctuations in this component reflect cost efficiencies (inefficiencies) during the period as well as cost (inflation) deflation.


~~(D)~~	~~Selling, general & administrative costs and research & development costs include costs incurred directly by each segment and all corporate related costs, which are allocated to each of our segments.~~


~~(D)~~	Selling, general & administrative costs and research & development costs include costs incurred directly by each segment and all corporate related costs, which are allocated to each of our segments. Certain changes were made to our long-term incentive plan in fiscal 2014, which resulted in higher benefit costs in that period. These costs were allocated to each segment.



										Change
	Year Ended March 31,									2016 versus			2015 versus
	2016			2015			2014			2015			2014
Net cash provided by operating activities	$	541		$	604		$	702		$	(63	)	$	(98	)
Net cash used in investing activities	(378		)	(416		)	(702		)	38			286
Less: Proceeds from sales of assets, net of transactions fees and hedging	(3		)	(117		)	(16		)	114			(101		)
Free cash flow	$	160		$	71		$	(16	)	$	89		$	87
Ending cash and cash equivalents	$	556		$	628		$	509		$	(72	)	$	119



	Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years		Total
Debt (A)	$	615	$	1,313	$	1,439	$	1,696	$	5,063
Interest on long-term debt (B)	286		450		346		79		1,161
Capital leases (C)	11		16		5		—		32
Operating leases (D)	30		36		28		39		133
Purchase obligations (E)	3,220		1,968		812		95		6,095
Unfunded pension plan benefits (F)	13		21		22		58		114
Other post-employment benefits (F)	9		14		15		50		88
Funded pension plans (F)	59		130		167		408		764
Total	$	4,243	$	3,948	$	2,834	$	2,425	$	13,450


~~(A)~~	~~Includes only principal payments on our Senior Notes, term loans, revolving credit facilities and notes payable to banks and others. These amounts exclude payments under capital lease obligations.~~


~~(C)~~	~~Includes both principal and interest components of future minimum capital lease payments. Excluded from these amounts are insurance, taxes and maintenance associated with the property.~~


~~(D)~~	Includes the minimum lease payments for non-cancelable leases for property and equipment used in our operations. We do not have any operating leases with contingent rents. Excluded from these amounts are insurance, taxes and maintenance associated with the properties and equipment.



	As of March 31, 2016
North America	$	285
Europe	181
South America	141
	$	607