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Rationalizations (Notes) | 3 Months Ended
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Mar. 31, 2014
Restructuring and Related Activities [Abstract] |
Restructuring and Related Activities Disclosure [Text Block] |
(2) | Rationalizations
Industrial Materials Rationalization On October 31, 2013, we announced a global initiative to reduce our Industrial Materials segment's cost base and improve our competitive position. As part of this initiative, we will close our two highest cost graphite electrode plants, located in Brazil and South Africa, as well as a machine shop in Russia. Upon these closures, our graphite electrode capacity will be reduced by approximately 60,000 metric tons. In parallel, we adopted measures for reductions in overhead and related corporate operations. These actions in total are expected to reduce global headcount by approximately 600 people or approximately 20 percent of our global workforce. The rationalization plan is targeted to be substantially complete by the end of the second quarter of 2014. This rationalization initiative will result in approximately $95 million of pre-tax charges, of which approximately $25 million will be cash outlays, the majority of which will be incurred in 2014, and funded through working capital improvements. The remaining $70 million are non-cash costs, which primarily reflects the accelerated depreciation of assets, and will be expensed throughout the wind-down period. We incurred $61.8 million of expense related to this initiative in 2013. Impact to 2014 financial results In the three months ended March 31, 2014, as a result of the Industrial Materials rationalization, we incurred $0.1 million in charges for post-employment benefits (including corporate charges) in Rationalizations. As a result of the planned shut-down, certain assets in progress were written off and the estimated useful life of productive assets changed. Consequently, we incurred non-cash charges of $17.0 million of accelerated depreciation, recorded in Cost of sales. We also recorded in Cost of sales $0.3 million of other charges, including cleaning and dismantling costs, loss reserves for inventory of products. These costs were partially offset by proceeds from the sale of assets and scrap. Engineered Solutions Rationalization In order to optimize our Engineered Solutions platform and improve our cost structure, we initiated actions to centralize certain operations and reduce overhead. These actions are expected to reduce global headcount by approximately 40 people. The total expected cost of these actions is approximately $4.5 million, approximately $1.0 million of which will be cash outlays, the majority of which will be incurred in 2014. The remaining $3.5 million are non-cash costs, which primarily reflect the write-off of assets. We incurred $3.9 million of expense related to this initiative in 2013 and we expect the remainder to be incurred in 2014. Impact to 2014 financial results In the three months ended March 31, 2014, as a result of the Engineered Solutions Rationalization we incurred non-cash charges of $0.4 million for accelerated depreciation, recorded in Cost of sales. The following table represents the roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the two initiatives described above. This liability is recorded as a current liability on the Consolidated Balance Sheet.
| (dollars in thousands)
Balance as of December 31, 2013 | $ | 18,421 |
Charges incurred | 123 |
Change in estimates | (37 | )
Payments and settlements | (8,665 | )
Effect of change in currency exchange rates | 168 |
Balance as of March 31, 2014 | $ | 10,010 |
Charges incurred related to these plans for the year ended March 31, 2014 are as follows:
| For the Three Months Ended March 31, 2014
| Industrial Materials Segment |  | Engineered Solutions Segment |  | Total
| (dollars in thousands)
Accelerated depreciation (recorded in Cost of sales) | 17,020 |  |  | 413 |  |  | 17,433 |
Other (recorded in Cost of sales) | 321 |  |  | — |  |  | 321 |
Other (recorded Selling and administrative) | 25 |  |  | (10 | ) |  | 15 |
Severance and related costs (recorded in Rationalizations) | 114 |  |  | (28 | ) |  | 86 |
Total rationalization and related charges | $ | 17,480 |  |  | $ | 375 |  |  | $ | 17,855 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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