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Business Segments
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
Business Segments
Business Segments
The Company operates in two business segments: High Performance Materials & Components and Flat Rolled Products. Our measure of segment operating profit, which is used to analyze the performance and results of the business segments, excludes income taxes, corporate expenses, net interest expense, retirement benefit expense, closed company expenses and restructuring costs, if any. Discontinued operations are also excluded. Management believes segment operating profit, as defined, provides an appropriate measure of controllable operating results at the business segment level. Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2014
 
2013
 
2014
 
2013
Total sales:
 
 
 
 
 
 
 
High Performance Materials & Components
$
531.4

 
$
520.5

 
$
1,035.5

 
$
1,080.5

Flat Rolled Products
630.5

 
560.6

 
1,160.1

 
1,128.4

 
1,161.9

 
1,081.1

 
2,195.6

 
2,208.9

Intersegment sales:
 
 
 
 
 
 
 
High Performance Materials & Components
17.3

 
16.4

 
37.0

 
36.3

Flat Rolled Products
25.6

 
7.9

 
52.3

 
16.8

 
42.9

 
24.3

 
89.3

 
53.1

Sales to external customers:
 
 
 
 
 
 
 
High Performance Materials & Components
514.1

 
504.1

 
998.5

 
1,044.2

Flat Rolled Products
604.9

 
552.7

 
1,107.8

 
1,111.6

 
$
1,119.0

 
$
1,056.8

 
$
2,106.3

 
$
2,155.8

Operating profit (loss):
 
 
 
 
 
 
 
High Performance Materials & Components
$
85.1

 
$
69.0

 
$
154.2

 
$
144.0

Flat Rolled Products
(19.9
)
 
1.2

 
(45.5
)
 
3.7

Total operating profit
65.2

 
70.2

 
108.7

 
147.7

Corporate expenses
(11.7
)
 
(11.8
)
 
(23.2
)
 
(24.2
)
Interest expense, net
(28.5
)
 
(13.9
)
 
(57.6
)
 
(28.3
)
Closed company and other expenses
(4.3
)
 
(5.5
)
 
(9.3
)
 
(8.9
)
Retirement benefit expense
(24.1
)
 
(32.5
)
 
(48.0
)
 
(65.0
)
Income (loss) from continuing operations before income taxes
$
(3.4
)
 
$
6.5

 
$
(29.4
)
 
$
21.3


Retirement benefit expense represents defined benefit plan pension expense and other postretirement benefit expense for both defined benefit and defined contribution plans. Operating profit with respect to the Company’s business segments excludes any retirement benefit expense. Costs associated with multiemployer pension plans are included in segment operating profit, and costs associated with defined contribution pension plans are included in segment operating profit or corporate expenses, as applicable.
Interest expense, net of interest income, in the second quarter 2014 was $28.5 million, compared to net interest expense of $13.9 million in the second quarter 2013. The increase in interest expense was primarily due to reduced capitalized interest and higher debt levels. Interest expense benefited from the capitalization of interest costs of $1.4 million in the second quarter 2014 compared to $10.6 million in the second quarter 2013. The decrease in capitalized interest is due to a lower construction in progress balance, primarily related to the Flat Rolled Products segment Hot-Rolling and Processing Facility.
Closed company and other expenses primarily includes charges incurred in connection with closed operations and other non-operating income or expense. These items are presented primarily in selling and administrative expenses and in other income in the statements of operations. These items resulted in net charges of $4.3 million for the three months ended June 30, 2014 and $5.5 million for the three months ended June 30, 2013.