Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting

Segment Reporting

(5) Segment Reporting

Our businesses are reported in the following reportable segments:

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 is a key raw material in the manufacture of the graphite electrodes used in the EAF steel production process.

Engineered Solutions. Engineered Solutions include advanced graphite materials products for the transportation, solar, and oil and gas exploration industries, as well as natural graphite thermal management products used in electronics.

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 June 30,						For the Six Months Ended June 30,
	2010			2011			2010			2011
	(Dollars in thousands)						(Dollars in thousands)
Net sales to external customers:
Industrial Materials	$	208,723		$	269,751		$	391,146		$	533,236
Engineered Solutions		46,131			50,480			79,372			93,132
Total net sales	$	254,854		$	320,231		$	470,518		$	626,368
Segment operating income:
Industrial Materials	$	35,379		$	32,136		$	78,274		$	66,335
Engineered Solutions		5,418			7,433			7,149			10,880
Total segment operating income		40,797			39,569			85,423			77,215
Reconciliation of segment operating income to income before provision for income taxes
Equity in earnings of non-consolidated affiliate		(1,684	)		0			(910	)		0
Other income, net		(8,596	)		(196	)		(11,855	)		(187	)
Interest expense		1,296			4,584			2,202			8,988
Interest income		(507	)		(115	)		(1,068	)		(244	)
Income before provision for income taxes	$	50,288		$	35,296		$	97,054		$	68,658