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Rationalizations and Impairments | 3 Months Ended
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Mar. 31, 2015
Restructuring and Related Activities [Abstract] |
Rationalizations and Impairments | Rationalizations and Impairments Throughout 2013, 2014 and 2015 the Company undertook rationalization plans in order to streamline our organization and lower our production costs. The total rationalization and related charges incurred during the three months ended March 31, 2014 and 2015 are as follows:
All Plans | For the Three Months Ended March 31, 2014
| Industrial Materials Segment |  | Engineered Solutions Segment |  | Corporate, R&D and Other |  | Total
| (Dollars in thousands)
Accelerated depreciation (recorded in Cost of sales) | $ | 17,020 |  |  | $ | 413 |  |  | $ | — |  |  | $ | 17,433 |
Inventory loss (recorded in Cost of sales) | 815 |  |  | (10 | ) |  | — |  |  | 805 |
Fixed asset write-offs and other(recorded in Cost of sales) | (494 | ) |  |  |  | — |  |  | (494 | )
Other (recorded in Selling and administrative) | 25 |  |  | — |  |  | — |  |  | 25 |
Severance and related costs (recorded in Rationalizations) | 114 |  |  | (28 | ) |  | — |  |  | 86 |
Total | $ | 17,480 |  |  | $ | 375 |  |  | $ | — |  |  | $ | 17,855 |
All Plans | For the Three Months Ended March 31, 2015
| Industrial Materials Segment |  | Engineered Solutions Segment |  | Corporate, R&D and Other |  | Total
| (Dollars in thousands)
Accelerated depreciation (recorded in Cost of sales) | $ | 433 |  |  | $ | — |  |  | $ | — |  |  | $ | 433 |
Inventory loss (recorded in Cost of sales) | (61 | ) |  | 803 |  |  | — |  |  | 742 |
Fixed asset write-offs and other(recorded in Cost of sales) | 1,243 |  |  | (99 | ) |  | — |  |  | 1,144 |
Accelerated depreciation (recorded in Research and development) | — |  |  | — |  |  | 621 |  |  | 621 |
Other (recorded in Selling and administrative) | — |  |  | 3 |  |  | 1,066 |  |  | 1,069 |
Severance and related costs (recorded in Rationalizations) | 53 |  |  | 2,366 |  |  | — |  |  | 2,419 |
Contract terminations (recorded in Rationalizations) | 25 |  |  | 50 |  |  | — |  |  | 75 |
Total | $ | 1,693 |  |  | $ | 3,123 |  |  | $ | 1,687 |  |  | $ | 6,503 |
2013 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 ceased production at our two highest cost graphite electrode plants, located in Brazil and South Africa, as well as a machine shop in Russia. Our graphite electrode capacity was reduced by approximately 60,000 metric tons as a result of these actions. In parallel, we adopted measures for reductions in overhead and related corporate operations. These actions and measures reduced global headcount by approximately 600 people, or approximately 20 percent of our global workforce. These actions were substantially completed during the first half of 2014. 2013 Engineered Solutions Rationalization In order to optimize our Engineered Solutions platform and improve our cost structure, we also initiated actions to centralize certain operations and reduce overhead in our Engineered Solutions segment. These actions reduced global headcount by approximately 40 people and were substantially completed during 2014. Total 2013 Rationalization Initiatives Impact to Financial Results Charges incurred related to the 2013 rationalization initiatives for the three months ended March 31, 2014 and March 31, 2015 are as follows:
2013 Plan | For the Three Months Ended March 31, 2014
| Industrial Materials Segment |  | Engineered Solutions Segment |  | Corporate, R&D and Other |  | Total
| (Dollars in thousands)
Accelerated depreciation (recorded in Cost of sales) | $ | 17,020 |  |  | $ | 413 |  |  | $ | — |  |  | $ | 17,433 |
Inventory loss (recorded in Cost of sales) | 815 |  |  | (10 | ) |  | — |  |  | 805 |
Fixed asset write-offs and other(recorded in Cost of sales) | (494 | ) |  | — |  |  | — |  |  | (494 | )
Other (recorded in Selling and administrative) | 25 |  |  | — |  |  | — |  |  | 25 |
Severance and related costs (recorded in Rationalizations) | 114 |  |  | (28 | ) |  | — |  |  | 86 |
Total | $ | 17,480 |  |  | $ | 375 |  |  | $ | — |  |  | $ | 17,855 |
2013 Plan | For the Three Months Ended March 31, 2015
| Industrial Materials Segment |  | Engineered Solutions Segment |  | Corporate, R&D and Other |  | Total
| (Dollars in thousands)
Accelerated depreciation (recorded in Cost of sales) | $ | 433 |  |  | $ | — |  |  | $ | — |  |  | $ | 433 |
Inventory loss (recorded in Cost of sales) | (61 | ) |  | — |  |  | — |  |  | (61 | )
Fixed asset write-offs and other(recorded in Cost of sales) | 1,243 |  |  | 9 |  |  | — |  |  | 1,252 |
Severance and related costs (recorded in Rationalizations) | 87 |  |  | — |  |  | — |  |  | 87 |
Contract terminations (recorded in Rationalizations) | 25 |  |  | — |  |  | — |  |  | 25 |
Total | $ | 1,727 |  |  | $ | 9 |  |  | $ | — |  |  | $ | 1,736 |
The following table represents the roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the the rationalization initiatives described above. This liability is recorded as a current liability on the 2013 Consolidated Balance Sheet.
2013 Plan
| (Dollars in thousands)
Balance as of December 31, 2013 | $ | 18,421 |
Charges incurred | 613 |
Change in estimates | 153 |
Payments and settlements | (16,494 | )
Effect of change in currency exchange rates | (1,658 | )
Balance as of December 31, 2014 | 1,035 |
Charges incurred | — |
Change in estimates | 112 |
Payments and settlements | (549 | )
Effect of change in currency exchange rates | (108 | )
Balance as of March 31, 2015 | $ | 490 |
2014 Engineered Solutions Rationalization On July 29, 2014, we announced additional rationalization initiatives to increase profitability, reduce cost and improve global competitiveness in our Engineered Solutions segment. During the second quarter of 2014, worldwide pricing of our isomolded graphite products ("isomolded") within our Advanced Graphite Material ("AGM") product group, as well as our expectation of future pricing, significantly eroded, driven by significant over-capacity and recent competitor responses. In addition, solar product demand continued to erode, with polysilicon, silicon and silicon wafer production migrating to China. New competitors servicing this industry commenced production in China at pricing levels making the market now unprofitable. As a result of these conditions, the Company decided to cease isomolded production and pursue alternative supply chain relationships in our isomolded product line. Charges incurred related to the 2014 Engineered Solutions rationalization initiatives in 2015 are as follows:
2014 Engineered Solutions Plan |  | For the Three Months Ended March 31, 2015
|  | (Dollars in thousands)
Inventory loss (recorded in Cost of sales) |  | 434 |
Fixed asset write-offs and other(recorded in Cost of sales) |  | (3 | )
Severance and related costs (recorded in Rationalizations) |  | (16 | )
Contract terminations (recorded in Rationalizations) |  | 50 |
Total |  | $ | 465 |
The following table represents the roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the 2014 Engineered Solutions rationalization initiatives described above. This liability is recorded as a current liability on the Consolidated Balance Sheet.
2014 Engineered Solutions Plan
| (Dollars in thousands)
Balance as of December 31, 2013 | $ | — |
Charges incurred | 2,611 |
Change in estimates | (40 | )
Payments and settlements | (916 | )
Balance as of December 31, 2014 | 1,655 |
Charges incurred | 50 |
Change in estimates | (16 | )
Payments and settlements | (434 | )
Balance as of March 31, 2015 | $ | 1,255 |
2014 Corporate and Research & Development Rationalization During the third quarter of 2014, we announced the conclusion of another phase of our on-going company-wide cost savings assessment. This resulted in changes to the Company’s operating and management structure in order to streamline, simplify and decentralize the organization. These actions are designed to reduce costs by a combination of reduced contractor costs, attrition, early retirements and layoffs. Additionally, the Company downsized its corporate functions by approximately 25 percent, relocated to a smaller, more cost effective corporate headquarters and established a new Technology and Innovation Center. The 2014 Corporate and Research and Development rationalization plan will result in approximately $20 million of charges consisting of severance, accelerated depreciation and other related costs. Approximately $12 million of these costs will be cash outlays, the majority of which are expected to be disbursed in 2015. Charges incurred related to the 2014 Corporate and Research & Development rationalization initiatives for 2015 are as follows:
2014 Corporate and R&D Plan | For the Three Months Ended March 31, 2015
| Industrial Materials Segment |  | Corporate, R&D and Other
| (Dollars in thousands) |  | (Dollars in thousands)
Accelerated depreciation (recorded in Research and development) | $ | — |  |  | $ | 621 |
Other (recorded in Selling and administrative) | — |  |  | 1,066 |
Severance and related costs (recorded in Rationalizations) | (34 | ) |  | — |
Total | $ | (34 | ) |  | $ | 1,687 |
The following table represents the roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the 2014 Corporate and Research & Development rationalization initiatives described above. This liability is recorded as a current liability on the Consolidated Balance Sheet.
2014 Corporate and R&D Plan
| (Dollars in thousands)
Balance as of December 31, 2013 | $ | — |
Charges incurred | 8,159 |
Change in estimates | 21 |
Payments and settlements | (1,155 | )
Effect of change in currency exchange rates | (152 | )
Balance as of December 31, 2014 | 6,873 |
Charges incurred | (2 | )
Change in estimates | (34 | )
Payments and settlements | (2,231 | )
Effect of change in currency exchange rates | (48 | )
Balance as of March 31, 2015 | $ | 4,558 |
2015 Advanced Graphite Materials Rationalization On March 2, 2015, GrafTech announced plans to further optimize the production platform for its advanced graphite materials business. These actions included the closure of our Notre Dame, France facility and further reductions in force in our Columbia, Tennessee facility and other locations totaling approximately 85 people. The 2015 Advanced Graphite Materials rationalization plan will result in approximately $10 million of charges consisting of severance, inventory losses and other related costs. Approximately $8 million of these costs will be cash outlays, the majority of which are expected to be disbursed in 2015. Charges incurred related to the 2015 Advanced Graphite Materials rationalization initiative for the three months ended March 31, 2015 are as follows:
2015 Advanced Graphite Materials Rationalization | For the Three Months Ended March 31, 2015
| (Dollars in thousands)
Inventory loss (recorded in Cost of sales) | $ | 369 |
Fixed asset write-offs and other(recorded in Cost of sales) | (105 | )
Other (recorded in Selling and administrative) | 3 |
Severance and related costs (recorded in Rationalizations) | 2,382 |
Total | $ | 2,649 |
The following table represents the roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the 2015 Advanced Graphite Materials rationalization initiative described above. This liability is recorded as a current liability on the Consolidated Balance Sheet.
2015 Advanced Graphite Materials Rationalization
| (Dollars in thousands)
Balance as of December 31, 2014 | $ | — |
Charges incurred | 2,382 |
Payments and settlements | (36 | )
Effect of change in currency exchange rates | (17 | )
Balance as of March 31, 2015 | $ | 2,329 |

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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 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: 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 + Details
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