Segment Reporting

9 Months Ended

Sep. 30, 2015

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. Prior to 2014, certain global expenses such as research and development, shared IT and accounting services as well as corporate headquarter’s finance, HR, legal and executive management were allocated to the segments mostly based on each segment’s contribution to consolidated sales. During 2014, as part of our initiative to decentralize the organization and reduce the costs of the global headquarter functions, the performance measure of our existing segments was changed to reflect our new management and operating structure. We currently exclude such expenses from the segment operating income measure and report them under “Corporate, R&D and Other Expenses” in order to reconcile to the consolidated operating income of the Company.

The following tables summarize financial information concerning our reportable segments and all prior periods have been recast to reflect our new methodology:

	For the Three Months Ended September 30, 2014			For the Period July 1, 2015 Through August 14, 2015			For the Period August 15, 2015 Through September 30, 2015
	(Dollars in thousands)
Net sales to external customers:
Industrial Materials	$	208,573		$	51,925		$	74,080
Engineered Solutions	51,885			13,673			20,511
Total net sales	$	260,458		$	65,598		$	94,591
Operating (loss) income:
Industrial Materials	$	5,082		$	(2,873	)	$	2,393
Engineered Solutions	(12,445		)	(7,520		)	(550		)
Corporate, R&D and Other expenses	(15,688		)	(19,255		)	(3,955		)
Total operating loss	$	(23,051	)	$	(29,648	)	$	(2,112	)
Reconciliation of segment operating loss to     loss before provision for income taxes
Other expense (income), net	$	1,149		$	243		$	678
Interest expense	9,069			9,002			3,701
Interest income	(144		)	(22		)	(21		)
Loss before provision for income taxes	$	(33,125	)	$	(38,871	)	$	(6,470	)

	For the Nine Months Ended September 30, 2014			For the Period January 1, 2015  Through August 14, 2015			For the Period August 15, 2015 Through September 30, 2015
	(Dollars in thousands)
Net sales to external customers:
Industrial Materials	$	634,004		$	341,974		$	74,080
Engineered Solutions	191,429			95,957			20,511
Total net sales	$	825,433		$	437,931		$	94,591
Operating (loss) income:
Industrial Materials	$	7,742		$	(25,678	)	$	2,393
Engineered Solutions	(131,704		)	(15,368		)	(550		)
Corporate, R&D and Other expenses	(45,646		)	(47,431		)	(3,955		)
Total operating loss	$	(169,608	)	$	(88,477	)	$	(2,112	)
Reconciliation of segment operating loss to     loss before provision for income taxes
Other expense (income), net	$	1,902		$	1,335		$	678
Interest expense	27,223			27,118			3,701
Interest income	(257		)	(367		)	(21		)
Loss before provision for income taxes	$	(198,476	)	$	(116,563	)	$	(6,470	)

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 of December 31, 2014		As of September 30, 2015
	(Dollars in thousands)
Long-lived assets (a):
Industrial Materials.	$	552,155	$	581,362
Engineered Solutions	101,885		68,986
Total long-lived assets	$	654,040	$	650,348

(a) Long-lived assets represent fixed assets, net of accumulated depreciation.