Form 10-K

For the fiscal year ended March 31, 2015

Yes   ¨    No  ý

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).    Yes  ¨    No  ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of May 11, 2015, the registrant had 1,000 common shares outstanding. All of the Registrant’s outstanding shares were held indirectly by Hindalco Industries Ltd., the Registrant’s parent company. 

We are the world’s leading aluminum rolled products producer based on shipment volume in fiscal 2015, with flat rolled product shipments during that period of approximately 3,050 kt. We are also the global leader in the recycling of aluminum. We are the only 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 approximately $11 billion for the year ended March 31, 2015.

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. As of March 31, 2015, 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. In addition to aluminum rolled products plants, our South American business includes power generation facilities, although we divested the majority of these facilities during fiscal 2015.

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.

Transportation. Aluminum rolled products are used in vehicle structures 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 automotive 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, improved emissions and better fuel economy; while also maintaining or improving vehicle handling, braking, and safety.

Consumer Electronics. 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.

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 and Other. Industrial applications include heat exchangers, process and electrical machinery, lighting fixtures, furniture and insulation. Other uses of aluminum rolled products in consumer durables include microwaves, coffee makers, air conditioners and cooking utensils.

The aluminum rolled products market is highly competitive and is characterized by economies of scale; and significant capital investments are required to achieve and maintain technological capabilities and demanding customer qualification standards. We face competition from a number of companies in all of the geographic regions and end-use markets in which we operate. Our primary competitors are as follows:

Production Capacity and Alternative Technology. In the aluminum rolled products industry, the addition of rolling capacity requires large capital investments and significant plant construction or expansion, and typically requires long lead-time equipment orders. Advances in technological capabilities allow aluminum rolled products producers to better align product portfolios and supply with industry demand. In addition, there are lower cost ways to enter the industry such as continuous casting, which offers the ability to increase capacity in smaller increments than is possible with hot mill additions. This enables production capacity to better adjust to small year-over-year increases in demand; however, the continuous casting process results in a more limited range of products.

Trade. Some trade flows do occur between regions despite shipping costs, import duties and the lack of localized customer support. Higher value-added products are more likely to be traded internationally, especially if demand in certain markets exceeds local supply. With respect to less technically demanding applications, emerging markets with low cost inputs may export commodity aluminum rolled products to larger, more mature markets, as we have seen with China. Accordingly, regional changes in supply, such as plant expansions, have some impact on the worldwide supply of aluminum rolled products.

The following factors have historically affected the demand for aluminum rolled products:

Economic Growth. We believe that economic growth is a significant driver of aluminum rolled products demand. In mature markets, growth in demand has typically correlated closely with growth in industrial production.

Substitution Trends. Manufacturers’ willingness to substitute other materials for aluminum in their products and competition from substitution materials suppliers also affect demand. There has been a strong substitution trend toward aluminum in the use of vehicles as automobile manufacturers look for ways to meet fuel efficiency regulations, improve performance and reduce carbon emissions in a cost-efficient manner. As a result of aluminum’s durability, strength and light weight, automobile manufacturers are substituting heavier alternatives such as steel and iron with aluminum. Carbon fiber is another lightweight material option, but its relatively high cost and limited end-of-life recyclability reduce its competitiveness as a widespread material substitute today. Consequently, demand for flat rolled aluminum products has increased. We also see strong substitution trends toward aluminum and away from steel in the beverage can market globally; except for North America, which is already a mature market.

Seasonality. During our third fiscal quarter, we typically experience seasonal slowdowns resulting in lower shipment volumes. This is a result of declines in overall production output due primarily to holidays and cooler weather in North America and Europe, our two largest operating regions. We also experience downtime at our mills and customers’ mills due to scheduled plant maintenance and are impacted to a lesser extent by the seasonal downturn in construction activity.

Sustainability. Growing awareness of environmentalism and demand for recyclable products has increased the demand for aluminum rolled products. Unlike other commonly recycled materials such as paper or PET plastic, aluminum can be recycled an unlimited number of times without affecting the quality of the product. Additionally, the recycling process uses 95% less energy than is required to produce primary aluminum from mining and smelting, with an equivalent reduction in greenhouse gas emissions.

We have invested to increase our capacity in growth markets. Our international presence positions us well to capture additional growth opportunities in targeted aluminum rolled products. In particular, we believe there is strong automotive growth potential worldwide. Additionally, we believe there are opportunities to capture growth in areas such as beverage can driven by substitution and urbanization trends in emerging markets within Asia and South America. While our existing manufacturing and operating presence positions us well to capture this growth, we are making incremental capital expenditures in these areas. The following table summarizes our significant global expansion projects, the estimated capacity and estimated or actual commission start date.    

Novelis is in the process of shifting our business model from a traditional linear structure to a circular economy, closed-loop model.  Although creating a true closed loop business model will take some time and require working with many stakeholders in our value chain, we are focusing right now on the most material aspects, which will have the most impact. To embark upon tackling our biggest issues, we have set 10 goals, which address recycled inputs, greenhouse gas emissions, energy, water and waste; as well as social targets for health and safety, ethical guidelines, employee performance and the communities where we operate. One of our goals is to reach 80% recycled content in our products, which significantly reduces our environmental footprint.  Since 2011, we have invested approximately $500 million to increase our global recycling capacity.  The results of these investments are beginning to be realized, as our recycled input has increased from 33% in fiscal 2011 to 53% by the end of fiscal year 2015.  We report our progress against these targets annually through our global sustainability report. 

Novelis is working closely with our customers on innovation to drive more sustainable products for society.  Through lifecycle analysis, aluminum has shown to be a key material for light-weighting automobiles in order to increase fuel-efficiency.  We are positioning ourselves to meet dramatically increased global demand for aluminum from our automobile customers by increasing the number of automotive finishing lines in our facilities in North America, Europe, and Asia.  We are also working closely with our automobile customers to redesign automobile alloys to be made with more scrap, as well as to close the loop with them by taking back their production scrap and, in the longer term, end-of-life scrap. For our can customers, Novelis introduced the evercan™ sheet, the first-of-its-kind, independently certified, high-recycled content aluminum beverage can sheet in fiscal 2014. In March 2015, we launched the sale of certified high-recycled content aluminum for specialty applications called evercycle™ sheet in North America. This product, which is the only material of its kind in the market, is certified by SCS Global Services to contain 100% recycled aluminum, made up of 90% post-consumer content and 10% customer manufacturing scrap. Our evercycle sheet is expected to become available globally as demand grows.

The following is a description of our operating segments as of March 31, 2015:

Headquartered in Atlanta, Georgia, Novelis North America operates eight aluminum rolled products facilities, including two fully dedicated recycling facilities and one facility with recycling operations; and manufactures a broad range of aluminum sheet and light gauge products. End-use markets for this segment include beverage and food cans, containers and packaging, automotive and other transportation applications, architectural and other industrial applications. The majority of North America’s volumes are currently directed toward the beverage can sheet market. The beverage can end-use market is technically demanding to supply. There is currently overcapacity in the beverage can market which has resulted in competitive pricing.

Headquartered in Küsnacht, Switzerland, Novelis Europe operates ten aluminum rolled product facilities, including two fully dedicated recycling facilities and two facilities with recycling operations; and manufactures a broad range of sheet and foil products. We also have distribution centers in Italy and sales offices in several European countries. End-use markets for this segment include beverage and food can, automotive, architectural and industrial products, foil and technical products and lithographic sheet. Beverage and food can represent the largest end-use market in terms of shipment volume for Europe. Operations include our 50% joint venture interest in Aluminium Norf GmbH (Alunorf), which is the world’s largest aluminum rolling and remelt facility. Alunorf supplies high quality can stock, foilstock and feeder stock for finishing at our other European operations.

Headquartered in Seoul, South Korea, Novelis Asia operates five facilities, including three facilities with recycling operations; and manufactures a broad range of sheet and light gauge products. End-use markets include beverage and food cans, electronics, architectural, automotive, foil, industrial and other products. The beverage can market represents the largest end-use market in terms of volume. Recycling is an important part of our operations with recycling facilities at both the Ulsan and Yeongju, South Korea plants. Additionally, we have a facility in Binh Duong, Vietnam, which handles the collection and processing of UBCs.

Headquartered in Sao Paulo, Brazil, Novelis South America operates two aluminum rolled product facilities, including one facility with recycling operations, both of which are located in Brazil. Novelis South America manufactures aluminum rolled products, including can sheet, industrial sheet and light gauge. The main markets are beverage and food can, specialty, industrial, foil and other packaging and transportation end-use applications. Beverage can represents the largest end-use application in terms of shipment volume.

Primary Aluminum Sourcing. We purchased or tolled approximately 1,726 kt of primary aluminum in fiscal 2015 in the form of sheet ingot, standard ingot and molten metal, approximately 28% of which we purchased from Rio Tinto Alcan.

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 recycled processed 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 cars and buildings, which are starting to become high volume sources of recycled material. We purchased or tolled approximately 1,622 kt of recycled material inputs in fiscal 2015 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 49% of our total aluminum rolled products shipments in fiscal 2015 were made from recycled 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.

We use several sources of energy in the manufacture and delivery of our aluminum rolled products. In fiscal 2015, natural gas and electricity represented approximately 97% of our energy consumption by cost. We also use fuel oil and transport fuel. The majority of energy usage occurs at our casting centers and during the hot rolling of aluminum. Our cold rolling facilities require relatively less energy. We purchase our natural gas on the open market, which subjects us to market pricing fluctuations. We have in the past and may continue to seek to stabilize our future exposure to natural gas prices through the purchase of derivative instruments. Natural gas prices in Europe, Asia and South America have historically been more stable than in the United States.

In South America, we owned and operated hydroelectric facilities that met all of our electricity requirements for our smelter operations in fiscal 2015. In December 2014, Novelis ceased operations at its remaining smelting facilities in South America. In addition, during the same period we sold our share of the Consorcio Candonga joint venture and the associated power generation operations in South America. We also sold the majority of our remaining power generation operations in South America in February 2015.

In fiscal 2015, approximately 55% of our total “Net sales” were to our ten largest customers, most of whom we have been supplying for more than 20 years. To address consolidation trends, we focus significant efforts on developing and maintaining close working relationships with our customers and end-users. Our major customers include:

We have two principal distribution channels for the end-use markets in which we operate: direct sales to our customers and sales to distributors.

We supply various end-use markets all over the world through a direct sales force operating from individual plants or sales offices, as well as from regional sales offices in 13 countries. The direct sales channel typically serves very large, sophisticated fabricators and original equipment manufacturers. Longstanding relationships are maintained with leading companies in industries using aluminum rolled products. Supply contracts for large global customers generally range from one to five years in length and historically there has been a high degree of renewal business with these customers. Given the customized nature of products and in some cases, large order sizes, switching costs are significant, thus adding to the overall consistency of the customer base.

We conduct research and development activities at our plants 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 310 employees dedicated to research and development, located in many of our plants 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. To reach the Company’s sustainability commitments, a key focus is to increase the amount of recycled metal content across all product lines while meeting performance requirements.

We consider our employee relations to be satisfactory. Approximately 49% 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, 2015, approximately 1,829 of our employees were covered under collective bargaining agreements that expire within one year.

Item 1A. Risk Factors

Our ten largest customers accounted for approximately 55%, 54% and 51% of our total “Net sales” for the year ended March 31, 2015, 2014 and 2013, respectively, with Rexam Plc, a leading global beverage can maker, and its affiliates representing approximately 18%, 17% and 15% 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.

Our financial condition and results of operations depend significantly on worldwide economic conditions. Uncertainty about current or future global economic conditions poses a risk as our customers may postpone purchases in response to tighter credit and negative financial news, which could adversely impact demand for our products. In addition, there can be no assurance that actions we may take in response to economic conditions will be sufficient to counter any continuation or any downturn or disruption. A significant global economic downturn or disruption in the financial markets could have a material adverse effect on our financial condition and results of operations.

The supply risks relating to our metal inputs vary by input type. Our sheet ingot requirements have historically been supplied, in part, by Rio Tinto Alcan pursuant to agreements with us. For the year ended March 31, 2015, we purchased a majority of our third party sheet ingot requirements from Rio Tinto Alcan's primary metal group. If Rio Tinto Alcan or any other significant supplier of sheet ingot is unable to deliver sufficient quantities of this material on a timely basis, our production may be disrupted and our net sales, profitability and cash flows could be materially adversely affected. Although aluminum is traded on the world markets, developing alternative suppliers of sheet ingot could be time consuming and expensive.

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.

Approximately 49% 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.

We have a relatively high degree of leverage. As of March 31, 2015, we had $5.3 billion of indebtedness outstanding. Our substantial indebtedness and interest expense could have important consequences to our company and holders of notes, including:

Item 1B. Unresolved Staff Comments

Item 2. Properties

The total number of operating facilities within our operating segments as of March 31, 2015 is shown in the table below, including operating facilities we jointly own and operate with third parties.

The following tables provide information, by operating segment, about the plant locations, processes and major end-use markets/applications for the aluminum rolled products, recycling and primary metal facilities we operated during all or part of the year ended March 31, 2015.

North America 

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Item 6. Selected Financial Data

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Novelis is the world's leading aluminum rolled products producer based on shipment volume in fiscal 2015. 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 are also the world's largest recycler of aluminum and have recycling operations in many of our plants to recycle both post-consumer aluminum and post-industrial aluminum. As of March 31, 2015, we had manufacturing operations in eleven countries on four continents, which include 25 operating plants, and recycling operations in eleven of these plants. In addition to aluminum rolled products plants, our South American businesses have historically included primary aluminum smelting and power generation facilities. In fiscal 2015, Novelis ceased operations at our remaining smelting facilities in South America and sold the majority of the power generation operations which supported those facilities. We are the only company of our size and scope focused solely on the aluminum rolled products markets and capable of local supply of technologically sophisticated products in all of our geographic regions, but with the global footprint to service global customers.

We reported "Segment income" of $902 million for the year ended March 31, 2015, which is up 2% compared to the prior year. The "Segment income" was driven by continued growth in shipment levels and higher recycling benefits, despite a significant amount of global economic uncertainty, unfavorable impacts from the strengthening of the U.S. dollar compared to the international functional currencies in which we operate and higher costs associated with the commissioning of our expansion projects. Global economic uncertainty, foreign currency volatility and uncertainty in commodity markets, while not impacting the efficiency and success of our operations, will ultimately impact our financial results in the near term.

Shipments of our flat rolled products increased from 2,895 kt in fiscal 2014 to 3,050 kt in fiscal 2015, supported by our recent rolling expansions in Asia and South America and our automotive heat treatment investments in the U.S. and China. Sales growth in North America and Europe is driven by higher demand in the automotive sector and higher can shipments in Europe. Sales growth in Asia was achieved due to higher shipments to customers in the Middle East and other regions, despite highly competitive market conditions throughout Southeast Asia, which led to lower pricing. The can market continued to be strong in South America.

We have made significant investments in our automotive sheet finishing operations as the automotive industry is using more aluminum to improve vehicle performance and fuel efficiency by reducing vehicle weight. In fiscal 2015, we began production at two new automotive sheet finishing lines in our Oswego, New York facility, and began the commissioning of a new automotive sheet finishing plant in Changzhou, China. As a result of this added capacity, our global automotive shipments grew to 11% of our flat rolled product shipments in fiscal 2015, up from 9% of flat rolled product shipments in fiscal 2014. We expect automotive shipments to continue to increase in fiscal 2016 as productivity improves on these three lines and as additional new capacity comes on line. A third automotive finishing line is under construction at our Oswego, New York facility, as is a second automotive finishing line at our Nachterstedt, Germany facility. These projects are on track to begin commissioning in late calendar year 2015.

We increased the average amount of recycled content in our products over the past fiscal year. By the end of fiscal 2015, 53% of our input materials were recycled aluminum. The full year average for recycled content was 49%, up from an average 46% in fiscal 2014. Our various recycling expansion projects are significant components of our strategy to achieve 80% recycled content in our products. Our newest recycling facility in Nachterstedt, Germany is the largest aluminum recycling facility in the world, and with recent recycling expansion in South Korea, Brazil and the U.S., we are increasing the use of recycled content in all regions. We have also expanded our recycling operations in Oswego, New York to support higher levels of automotive scrap processing. In fiscal 2015, one of our craft beer customers launched the world's first commercial use of evercan™, the Company's high-recycled content aluminum sheet for beverage cans. In March 2015, we launched the sale of certified high-recycled content aluminum for specialty applications called evercycle™ in North America.

We reported "Net income" of $148 million for the year ended March 31, 2015, an increase of $44 million compared to $104 million for the year ended March 31, 2014. Net cash provided by operating activities was $604 million for the year ended March 31, 2015 compared to net cash provided by operating activities of $702 million in the prior year, reflecting increasing working capital requirements. Our capital expenditures have declined as some of our larger strategic expansion projects have either recently commissioned or are in the commissioning phase. Our global capital expenditures for the year ended March 31, 2015 were $518 million compared to $717 million in prior year.

For the sixth consecutive quarter, total consolidated shipment levels increased versus the comparable year period, despite lost sales associated with a major hotmill outage in North America and production issues in Europe.

LME Base Aluminum Prices and Local Market Premiums

The average (based on the simple average of the monthly averages) and closing prices for aluminum set on the LME for the years ended March 31, 2015, 2014, and 2013 are as follows:

Although full year average aluminum prices were higher by 7% in fiscal 2015 compared to fiscal 2014, the trend in these prices during the second half of fiscal 2015 was declining. Average aluminum prices during fiscal 2014 were lower by 10% compared to fiscal 2013. The fluctuating prices and timing of when derivatives are realized resulted in $3 million of net unrealized gains on undesignated metal derivatives in fiscal 2015, $9 million of net losses in fiscal 2014, and $8 million of net gains in fiscal 2013.

The prices we pay for aluminum also include local market premiums, which we pass through to most of our customers. These premiums globally have historically been fairly stable but have increased rapidly over the past two years. Although the local market premiums in all four of our regions were significantly higher for the year ended March 31, 2015 compared to the year ended March 31, 2014, there was a decline in these premiums during the fourth quarter of fiscal 2015 compared to the previous sequential quarter. The weighted average local market premium was as follows:

Recycled aluminum is generally purchased at a discount as compared to the price of primary aluminum. 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 metal inputs. For the year ended March 31, 2015, the overall recycling benefit increased as a result of these three factors.

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 recent devaluation of the Euro against the U.S. dollar and the Swiss Franc have had a negative impact on our financial results. In Brazil, where our functional currency is the U.S. dollar, the devaluation of the Brazilian real against the U.S. dollar has had a positive impact on our financial results. 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, 2015, 2014, and 2013: