Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting Information, Revenue for Reportable Segment [Abstract]

Segment Reporting

Segment Reporting

We operate in two reportable segments: Industrial Materials and Engineered Solutions.

Industrial Materials. Our Industrial materials Segment manufactures and delivers high quality graphite electrodes, refractory products and needle coke products. Electrodes are key components of the conductive power systems used to produce steel and other non-ferrous metals. Refractory products are used in blast furnaces and submerged arc furnaces due to their high thermal conductivity and the ease with which they can be machined to large or complex shapes. Needle coke, a crystalline form of carbon derived from decant oil, is the key ingredient in, and is used primarily in, the production of graphite electrodes.

Engineered Solutions. The Engineered Solutions segment includes advanced electronics technologies, advanced graphite materials, advanced composite materials and advanced materials. Advanced electronics technologies products consist of electronic thermal management solutions, fuel cell components and sealing materials. Advanced graphite materials are highly engineered synthetic graphite products used in many areas due to their unique properties and the ability to tailor them to specific solutions. These products are used in transportation, alternative energy, metallurgical, chemical, oil and gas exploration and various other industries. Advanced composite materials are highly engineered carbon products that are woven into various shapes primarily to support the aerospace and defense industries. Advanced materials use carbon and graphite powders as components or additives in a variety of industries, including metallurgical processing, battery and fuel cell components, and polymer additives.

We continue to evaluate the performance of our segments based on segment operating income. Intersegment sales and transfers are not material and the accounting policies of the reportable segments are the same as those for our Consolidated Financial Statements as a whole. Corporate expenses are allocated to segments based on each segment’s percentage of consolidated net sales.

The following tables summarize financial information concerning our reportable segments:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2013			2014			2013			2014
	(Dollars in thousands)						(Dollars in thousands)
Net sales to external customers:
Industrial Materials	$	231,339		$	206,655		$	440,116		$	425,431
Engineered Solutions	70,022			77,529			114,972			139,544
Total net sales	$	301,361		$	284,184		$	555,088		$	564,975
Segment operating income (loss):
Industrial Materials	$	7,530		$	(11,366	)	$	23,608		$	(20,790	)
Engineered Solutions	8,443			(128,122		)	8,109			(125,767		)
Total segment operating income (loss)	$	15,973		$	(139,488	)	$	31,717		$	(146,557	)
Reconciliation of segment operating income (loss) to     income (loss) before provision for income taxes
Other expense (income), net	$	975		$	(41	)	$	1,525		$	753
Interest expense	8,947			9,155			17,955			18,154
Interest income	(49		)	(55		)	(113		)	(113		)
Income (loss) before provision for income taxes	$	6,100		$	(148,547	)	$	12,350		$	(165,351	)

Assets are managed based on geographic location because certain reportable segments share certain facilities. Assets by reportable segment are estimated based on the value of long-lived assets at each location and the activities performed at the location.  As a result of the rationalization initiatives and related impairments discussed in Note 2, the carrying value of our long-lived assets has changed significantly since December 31, 2013, particularly in our Engineered Solutions segment. The following is a summary of long-lived assets by reportable segment.

	As of December 31, 2013		As of June 30, 2014
	(Dollars in thousands)
Long-lived assets (a):
Industrial Materials.	$	601,322	$	586,305
Engineered Solutions	219,663		96,479
Total long-lived assets	$	820,985	$	682,784