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Discontinued Operations and Related Assets Held for Sale | 9 Months Ended
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Sep. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 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 6 "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 its divestiture represents a strategic shift for the Company. During 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 $120 million to align the carrying value with estimated fair value. We continued to update this estimate and during the nine months ended September 30, 2017, we further reduced the estimated fair value by $5.3 million based upon current information. 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 recognized thus far on the transaction. On July 3, 2017 we completed the sale of our Advanced Energy Technologies (AET) business. AET was a product line within our Engineered Solutions business which had been classified as held for sale since the second quarter of 2016. The sale resulted in cash proceeds of $28.5 million. On September 30, 2017, we completed the sale of the majority of the U.S. assets of our GrafTech Advanced Graphite Materials (GAGM) business, which was a component of our Engineered Solutions business. The sale of the Italian GAGM assets closed on October 5, 2017. In the jurisdictions where the GAGM assets were not acquired, we initiated the wind-down of the business which we expect to be substantially completed by year-end. The sale was structured as a non-cash transaction with the buyer assuming certain liabilities associated with the assets acquired. In addition, GrafTech retained certain current assets of GAGM, mostly receivables, which will be substantially realized in the course of the 4th quarter of 2017. As such, the disposition of the GAGM assets did not result in any cash proceeds in the third quarter of 2017. As a result of the sales described above, we recorded a gain of $3.7 million in the third quarter of 2017. The disposition of the Engineered Solutions business is now substantially complete, with only the wind-down in the fourth quarter of 2017 remaining. In accordance with our Credit Facility, all cash proceeds from these sales were used to pay down our Revolving Facility and Term Loan. The following tables summarize the results of the Engineered Solutions business segment, reclassified as discontinued operations for the three and nine months ended September 30, 2016 and 2017.
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2016 |  | 2017 |  | 2016 |  | 2017
| (Dollars in thousands)
Net sales | $ | 30,165 |  |  | $ | 14,528 |  |  | $ | 89,184 |  |  | $ | 78,721 |
Cost of sales | 23,497 |  |  | 14,574 |  |  | 74,051 |  |  | 71,596 |
Gross profit (loss) | 6,668 |  |  | (46 | ) |  | 15,133 |  |  | 7,125 |
Research and development | 707 |  |  | 106 |  |  | 2,398 |  |  | 1,387 |
Selling and administrative expenses | 3,983 |  |  | 3,561 |  |  | 13,474 |  |  | 11,360 |
Gain on sale of assets | — |  |  | (3,676 | ) |  | — |  |  | (3,676 | )
Impairments | — |  |  | — |  |  | 105,623 |  |  | 5,300 |
Operating income (loss) | 1,978 |  |  | (37 | ) |  | (106,362 | ) |  | (7,246 | )
Other income | (3 | ) |  | (56 | ) |  | (75 | ) |  | (71 | )
Interest expense | 783 |  |  | — |  |  | 2,452 |  |  | 1,131 |
Income (loss) from discontinued operations before income taxes | 1,198 |  |  | 19 |  |  | (108,739 | ) |  | (8,306 | )
Provision for (benefit from) income taxes on discontinued operations | 64 |  |  | (3,215 | ) |  | (1,171 | ) |  | (3,424 | )
Income (loss) from discontinued operations | $ | 1,134 |  |  | $ | 3,234 |  |  | $ | (107,568 | ) |  | $ | (4,882 | )
The significant components of our Statements of Cash Flows for the Engineered Solutions business segment held for sale are as follows:
| For the Nine Months Ended September 30,
| 2016 |  | 2017
| (Dollars in thousands)
Depreciation and amortization | $ | 3,849 |  |  | $ | 2,418 |
Impairment | 105,623 |  |  | 5,300 |
Gain on sale of assets | — |  |  | (3,676 | )
Inventory | (217 | ) |  | 13,804 |
Deferred income taxes | (1,172 | ) |  | (3,068 | )
Capital expenditures | 3,621 |  |  | 528 |
The following table summarizes the carrying value of the assets and liabilities of discontinued operations as of December 31, 2016 and September 30, 2017.
| As of December 31, 2016 |  | As of September 30, 2017
| (Dollars in thousands)
Assets of discontinued operations: |  |  |
Accounts receivable | $ | 17,094 |  |  | $ | 10,004 |
Inventories | 71,816 |  |  | 8,092 |
Prepaid expenses and other current assets | 320 |  |  | 2,173 |
Net property plant and equipment | 79,048 |  |  | 8,892 |
Other assets | 12,608 |  |  | 746 |
Total assets of discontinued operations prior to impairment | 180,886 |  |  | 29,907 |
Impairment | (119,907 | ) |  | (14,532 | )
Total assets of discontinued operations | $ | 60,979 |  |  | $ | 15,375 |
Liabilities of discontinued operations: |  |  |
Accounts payable | $ | 7,253 |  |  | $ | 1,270 |
Accrued income and other taxes | 2,326 |  |  | 238 |
Other accrued liabilities | 10,463 |  |  | 10,449 |
Total current liabilities of discontinued operations | 20,042 |  |  | 11,957 |
Other long-term obligations | 850 |  |  | 581 |
Total liabilities of discontinued operations | $ | 20,892 |  |  | $ | 12,538 |

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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 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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