Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On September 16, 2013, the Company announced it had entered into an agreement to sell its tungsten materials business, which produces tungsten powder, tungsten heavy alloys, tungsten carbide materials, and carbide cutting tools, for $605 million.  The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed during the fourth quarter 2013. 

Also, during the third quarter of 2013, the Company completed a strategic review of its iron castings and fabricated components businesses. Based on current and forecasted results, these businesses were not projected to meet the Company's long-term profitable growth and return on capital employed expectations. As a result of this review, the Company closed its fabricated components business and recorded $6.4 million of pre-tax exit costs, including $5.6 million of non-cash impairment charges for long-lived assets, and $0.8 million primarily related to lease exit costs. The Company expects the cash requirements associated with lease-related exit costs to be approximately $3.8 - $4.3 million, to be incurred over the next four years. The planned divestiture of the iron castings business, which is held for sale at September 30, 2013, resulted in a $3.1 million pre-tax, non-cash long-lived asset impairment charge based on an analysis of the estimated fair value of the business, which represents Level 3 unobservable information in the fair value hierarchy.

The tungsten materials, iron castings and fabricated components businesses were all previously reported as part of the Company's Engineered Products segment. The net assets of these businesses were classified as held for sale as of the end of the third quarter of 2013 and the operating results of these businesses have been included in discontinued operations in the Company's consolidated statements of operations for all periods presented. Results of discontinued operations include $9.5 million pre-tax ($8.1 million after-tax) of charges associated with the iron castings and fabricated components divestitures.

The following table presents summarized operating results for these discontinued operations (in millions):

	Three months ended September 30,					Nine months ended September 30,
	2013			2012		2013			2012
Sales	$	77.6		$	89.0	$	236.7		$	284.9
Income (loss) before income tax provision	$	(7.1	)	$	6.0	$	(5.4	)	$	20.4

Net assets of discontinued operations were $163.4 million at September 30, 2013 and consisted of the following items (in millions):

	September 30, 2013
Accounts receivable, net of allowances for doubtful accounts	$	47.5
Inventories, net	65.0
Prepaid expenses and other current assets	2.9
Property, plant and equipment, net	72.9
Cost in excess of net assets acquired	11.2
Other long-term assets	0.9
Total Assets	200.4
Accounts payable	20.6
Accrued liabilities	13.1
Long-term liabilities	3.3
Total Liabilities	37.0
Net Assets	$	163.4