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Discontinued Operations and Related Assets Held for Sale | 12 Months Ended
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Dec. 31, 2016
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations and Related Assets Held for Sale | Discontinued Operations and Related Assets Held for Sale On February 26, 2016, the Company announced that it had initiated a strategic review of its Engineered Solutions business segment to better direct its resources and simplify its operations. Any potential sale of assets was prohibited by the Revolving Facility without approval of the requisite lenders thereunder. On April 27, 2016, GrafTech and certain of its subsidiaries entered into an amendment to the Revolving Facility (see Note 7 "Debt and Liquidity") which, among other things, permits the sale of assets with the restriction that the proceeds be utilized to pay down revolver borrowings. As of June 30, 2016, the Engineered Solutions segment qualified for reporting as discontinued operations as we expect the divestiture to be complete within 12 months of the qualification. During the second quarter of 2016, we evaluated the fair value of the Engineered Solutions business segment utilizing the market approach (Level 3 measure). As a result, we incurred an impairment charge to our Engineered Solutions business segment of $105.6 million to align the carrying value with estimated fair value. The analysis was updated as of December 31, 2016, resulting in an additional impairment charge of $14.3 million. The estimate reflects Management’s view of the manner in which the Engineered Solutions business will be divested, including assumptions as to if and how it will be split, given the lines of business and asset groups that constitute the Engineered Solutions segment. Amongst other things, the split into groups influences the computation of the impairment charge. These assumptions and estimates are subject to change until divestiture is completed and may be adjusted in the quarter that the information becomes available. On November 30, 2016, we completed the sale of our Fiber Materials Inc. business, which was a business line within our former Engineered Solutions business. The sale resulted in cash proceeds of $15.9 million and a loss of $0.2 million. We have the ability to realize up to $8.5 million of additional proceeds based on the earnings of the Fiber Materials business over the 24 months following the transaction. We have elected to record this contingent consideration as it is realized and as such it is not part of the gain recognized thus far on the transaction. The following tables summarize the results of the Engineered Solutions business segment, reclassified as discontinued operations:
| For the Year Ended December 31, 2014 |  | For the Period January 1 Through August 14, 2015 |  | For the Period August 15 Through December 31, 2015 |  | For the Year Ended December 31, 2016
| (dollars in thousands)
Net sales | $ | 260,160 |  |  | $ | 98,024 |  |  | $ | 55,608 |  |  | $ | 115,336 |
Cost of sales | 235,901 |  |  | 94,817 |  |  | 49,068 |  |  | 98,440 |
Gross profit | 24,259 |  |  | 3,207 |  |  | 6,540 |  |  | 16,896 |
Research and development | 5,107 |  |  | 2,179 |  |  | 1,265 |  |  | 3,145 |
Selling and administrative expenses | 29,550 |  |  | 16,764 |  |  | 8,627 |  |  | 19,220 |
Rationalizations | 3,679 |  |  | 4,492 |  |  | 791 |  |  | (405 | )
Impairment | 121,570 |  |  | — |  |  | — |  |  | 119,907 |
Operating loss | (135,647 | ) |  | (20,228 | ) |  | (4,143 | ) |  | (124,971 | )
Other expense (income) | (485 | ) |  | (90 | ) |  | (135 | ) |  | (66 | )
Interest expense | 1,320 |  |  | 907 |  |  | 918 |  |  | 3,258 |
Loss from discontinued operations before income taxes | (136,482 | ) |  | (21,045 | ) |  | (4,926 | ) |  | (128,163 | )
Benefit for income taxes on discontinued operations | (3,626 | ) |  | (2,366 | ) |  | — |  |  | (1,189 | )
Loss from discontinued operations | $ | (132,856 | ) |  | $ | (18,679 | ) |  | $ | (4,926 | ) |  | $ | (126,974 | )
During 2014, GrafTech impaired certain long-lived assets and announced exiting the isomolded product line within our AGM product group resulting in the above impairment and rationalization charges. The significant components of our Statements of Cash Flows for discontinued operations held for sale are as follows:
| For the Year Ended December 31, 2014 |  | For the Period January 1 Through August 14, 2015 |  | For the Period August 15 Through September 30, 2015 |  | For the Year Ended December 31, 2016
|  |  | (dollars in thousands) |  |
Depreciation and amortization | $ | 21,780 |  |  | $ | 7,988 |  |  | $ | 4,194 |  |  | $ | 5,277 |
Impairment | 121,570 |  |  | — |  |  | — |  |  | 119,907 |
Deferred income taxes | (3,626 | ) |  | (2,366 | ) |  | — |  |  | (1,189 | )
Cash received from divestitures | — |  |  | — |  |  | — |  |  | 15,889 |
Capital expenditures | 24,018 |  |  | 10,104 |  |  | 4,447 |  |  | 4,713 |
Credit Facility reductions | — |  |  | — |  |  | — |  |  | (15,889 | )
The following table summarizes the carrying value of the assets and liabilities of discontinued operations as of December 31, 2015 and December 31, 2016.
| As of December 31, 2015 |  | As of December 31, 2016
| (dollars in thousands)
Assets of discontinued operations: |  |  |
Accounts receivable | $ | 20,425 |  |  | $ | 17,094 |
Inventories | 77,332 |  |  | 71,816 |
Prepaid expenses and other current assets | 524 |  |  | 320 |
Net property plant and equipment | 86,369 |  |  | 79,048 |
Other assets | 17,606 |  |  | 12,608 |
Total assets of discontinued operations prior to impairment | 202,256 |  |  | 180,886 |
Impairment of assets held for sale | — |  |  | (119,907 | )
Total assets of discontinued operations | $ | 202,256 |  |  | $ | 60,979 |
Liabilities of discontinued operations: |  |  |
Accounts payable | $ | 9,331 |  |  | $ | 7,253 |
Accrued income and other taxes | 3,113 |  |  | 2,326 |
Other accrued liabilities | 10,638 |  |  | 10,463 |
Total current liabilities of discontinued operations | 23,082 |  |  | 20,042 |
Other long-term obligations | 1,167 |  |  | 850 |
Total liabilities of discontinued operations | $ | 24,249 |  |  | $ | 20,892 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760 + Details
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