GrafTech International (EAF) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.18. This compares to loss of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 44.44%. A quarter ago, it was expected that this maker of graphite products would post a loss of $0.21 per share when it actually produced a loss of $0.27, delivering a surprise of -28.57%.Over the last four quarters ...

EXHIBIT 99.1 GrafTech Reports First Quarter 2024 Results Successfully Executing Strategic Initiatives To Reduce Costs and Preserve Long-term Flexibility BROOKLYN HEIGHTS, Ohio - April 26, 2024 - GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced unaudited financial results for the quarter ended March 31, 2024. First Quarter 2024 Highlights CEO Comments "While we are not satisfied with breakeven EBITDA performance, we delivered on our outlook and stated initia ...

BOCA RATON, Fla., April 23, 2024 (GLOBE NEWSWIRE) -- Nilesh Undavia, one of the largest shareholders of GrafTech International Ltd. (NYSE:EAF) ("GrafTech" or the "Company"), today issued the following open letter to shareholders of the Company in connection with the election of directors for the Company's board of directors (the "Board") at the Company's 2024 annual meeting of shareholders (the "Annual Meeting"), which is scheduled to be held on May 9, 2024: April 23, 2024 Dear Fellow Shareholders, The Annu ...

Urges Shareholders to Vote the Blue Proxy Card to Add Independent, Large Shareholder Perspective to GrafTech Board The Incumbent Board Has Destroyed Enormous Shareholder Value while Paying Itself Approx. $7 million in Director Compensation since 2019 Shareholders Must Act Now to Revive GrafTech BOCA RATON, Fla., April 03, 2024 (GLOBE NEWSWIRE) -- Nilesh Undavia issued the following statement on April 3, 2024: Dear Fellow GrafTech Shareholders: As one of the largest shareholders of GrafTech International Lt ...

BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE: EAF) (“GrafTech” or the “Company”) today issued the following response to an open letter to the Company’s stockholders that was issued by Nilesh Undavia, a private investor, on March 12, 2024. Mr. Undavia, along with certain trusts and people affiliated with Mr. Undavia, have provided notice of their intent to nominate Mr. Undavia for election to GrafTech’s Board of Directors (“the Board”) at the Company’s 2024 Annual Meeting of St ...

GrafTech shareholders have lost almost 90% of value since the IPOSince 2019, Net Sales have declined 65% and Adj. EBITDA by 98%Board and Management turmoil persists with the departure of five directors since Jan. 2023, and two CEOs in three yearsCurrent board cannot be trusted to conduct a successful CEO search BOCA RATON, Fla., March 12, 2024 (GLOBE NEWSWIRE) -- Nilesh Undavia issued the following statement on March 12, 2024: An Open Letter to Shareholders of GrafTech International Ltd. Dear Fellow GrafTec ...

Financial Data and Key Metrics Changes - Net sales in Q4 2023 decreased by 45% year-over-year, primarily due to a shift from long-term agreements (LTA) to non-LTA sales, along with lower overall volume and pricing [61][94] - Adjusted EBITDA was negative $22 million in Q4 2023, compared to positive adjusted EBITDA of $80 million in Q4 2022, reflecting the impact of lower sales volume and pricing [64][94] - The company reported a net loss of $217 million or $0.85 per share, which included a goodwill impairment charge of $171 million and a lower of cost or market inventory valuation adjustment of $12 million [94] Business Line Data and Key Metrics Changes - Production and sales volume for Q4 2023 were approximately 24,000 metric tons, with 5,000 metric tons sold under LTAs at a weighted average realized price of $8,500 per metric ton, and 19,000 metric tons of non-LTA sales at approximately $4,800 per metric ton [38][61] - The company anticipates a modest year-over-year improvement in sales and production volume in 2024, which is expected to positively impact cash costs per metric ton [68][97] Market Data and Key Metrics Changes - Steel production in the Americas was down 3% in 2023, with the U.S. steel production remaining flat year-over-year [37][59] - Capacity utilization in Europe ended the year at approximately 50% to 53%, indicating a more challenging economic environment compared to the U.S. [11][12] - The weighted average price for non-LTA sales represented a more than 20% year-over-year decline, reflecting ongoing pricing pressures in the market [92] Company Strategy and Development Direction - The company is implementing a cost rationalization and footprint optimization plan, which includes suspending production at the St. Marys facility and reducing corporate overhead, expected to drive $25 million in annualized cost savings [33][54] - The company remains optimistic about long-term prospects, driven by decarbonization efforts in the steel industry and anticipated growth in electric arc furnace (EAF) steel production, which is expected to increase graphite electrode demand [34][70][102] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic environment is characterized by uncertainty and geopolitical conflicts, impacting industrial production and demand for graphite electrodes [27][50] - The company expects continued softness in the commercial environment into 2024, but remains confident in its ability to navigate these challenges and capitalize on future market recoveries [30][70] Other Important Information - The company ended the year with a liquidity position of $289 million, consisting of $170 million in cash and $112 million available under its revolving credit facility, with no anticipated need to borrow in 2024 [69][99] - The company has proactively reduced inventory by over $100 million in 2023, resulting in positive free cash flow for the year [30][99] Q&A Session Summary Question: What is the outlook for cash costs and realized pricing in 2024? - Management indicated that cash costs are expected to decline towards the lower $4,000 range as volumes pick up, aligning with current spot pricing [80][111] Question: How is the company managing working capital and inventory in 2024? - The company anticipates a balanced approach to working capital, with opportunities to further reduce inventory levels, although some negative impact is expected as sales and production volumes increase [112][132] Question: What is the status of customer relationships following the transition from long-term agreements? - Management expressed satisfaction with customer relationships and engagement during the negotiation process, emphasizing the value proposition offered to customers [114][134] Question: How does the company view its market share in the U.S.? - While specific market share figures were not provided, management noted successful negotiations with customers and a positive outlook for the U.S. market [148] Question: Are there plans to shut down additional plants beyond St. Marys? - Management stated that the current actions taken are deemed sufficient to navigate the market conditions, with no immediate plans to shut down other plants [150][124]

GrafTech International (EAF) came out with a quarterly loss of $0.27 per share versus the Zacks Consensus Estimate of a loss of $0.21. This compares to earnings of $0.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -28.57%. A quarter ago, it was expected that this maker of graphite products would post a loss of $0.05 per share when it actually produced a loss of $0.08, delivering a surprise of -60%.Over the last four quarte ...

BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)--GrafTech International Ltd. (NYSE: EAF) ("GrafTech" or the "Company") today announced financial results for the quarter and year ended December 31, 2023. Fourth Quarter 2023 Highlights Net loss of $217 million, or $0.85 per share(1) Includes a goodwill impairment charge of $171 million and a lower of cost or market ("LCM") inventory valuation adjustment of $12 million Adjusted EBITDA(2) of negative $22 million, including the LCM inventory valuation adjustmen ...

PART I [Presentation of Financial, Market and Industry Data](index=4&type=section&id=Presentation%20of%20Financial%2C%20Market%20and%20Industry%20Data) Financial information is presented on a consolidated basis in U.S. dollars, with market and industry data from third-party sources whose accuracy is not guaranteed - Financial information is presented on a consolidated basis in **U.S. dollars**[10](index=10&type=chunk) - Market and industry data are obtained from third-party sources, but their accuracy or completeness is **not guaranteed**[11](index=11&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements on financial projections and operations, subject to risks like industry cycles and raw material supply, where actual results may differ materially - The report contains **forward-looking statements** regarding financial projections, future operations, and economic performance[12](index=12&type=chunk) - **Key risks** include dependence on the global steel industry, cyclical business nature, economic conditions, graphite electrode overcapacity, raw material supply disruptions, manufacturing hazards, and international operational risks[13](index=13&type=chunk)[17](index=17&type=chunk) - Actual results may **vary materially** from forward-looking statements due to various risks and uncertainties[15](index=15&type=chunk) [Item 1. Business](index=6&type=section&id=Item%201.%20Business) GrafTech is a leading vertically integrated manufacturer of high-quality graphite electrodes for EAF steel, serving global producers with reduced 2024 capacity, emphasizing R&D, IP, and human capital [Introduction](index=6&type=section&id=Introduction) GrafTech is a leading vertically integrated manufacturer of high-quality graphite electrodes, reducing 2024 production capacity due to market softness - GrafTech International Ltd. is a **leading manufacturer** of **high-quality graphite electrode products** essential to **EAF steel production**[19](index=19&type=chunk) - The company is substantially **vertically integrated** into **petroleum needle coke**, a key raw material, providing **competitive advantages** in product quality and cost[19](index=19&type=chunk) Stated Production Capacity | Year | Capacity (thousand MT) | | :--- | :--- | | As of Dec 31, 2023 | 202 | | Beginning 2024 | 178 | - The **reduction in production capacity** for 2024 is a result of a **cost rationalization and footprint optimization plan**, including an **indefinite suspension** of production activities at the St. Marys facility, in response to **persistent softness** in the commercial environment[21](index=21&type=chunk) [Products and Raw Materials](index=6&type=section&id=Products%20and%20Raw%20Materials) Graphite electrodes are essential for EAF steel, with UHP segment growth and increasing petroleum needle coke demand driven by EVs - Graphite electrodes are essential industrial consumables for EAF steel production, representing less than **5% of total steel production cost**[23](index=23&type=chunk) - The company primarily competes in the **Ultra-High Power (UHP) segment**, which requires extensive proprietary manufacturing processes and high-quality needle coke[24](index=24&type=chunk)[30](index=30&type=chunk) - EAF steelmaking is more energy-efficient and environmentally advantaged, producing **75% fewer carbon dioxide emissions** compared to BOF steelmaking[33](index=33&type=chunk) - Global (excluding China) UHP graphite electrode demand is estimated to grow at a compound annual growth rate of approximately **3% to 4% through 2028**[35](index=35&type=chunk) - Petroleum needle coke is a **key raw material** for graphite electrodes and synthetic graphite used in lithium-ion batteries for **electric vehicles (EVs)**[36](index=36&type=chunk) - GrafTech's **Seadrift facility** provides the majority of its petroleum needle coke requirements, offering **superior quality** for graphite electrode production[38](index=38&type=chunk) - Global (excluding China) petroleum needle coke capacity was approximately **750 thousand MT** at the end of 2023, with Seadrift representing nearly **one-fifth (140 thousand MT)**[40](index=40&type=chunk) - Global needle coke demand for EV applications is expected to increase at a **20% or more compound annual growth rate through 2028**, potentially leading to regional supply-demand imbalances[46](index=46&type=chunk) [Contracts and Customers](index=9&type=section&id=Contracts%20and%20Customers) GrafTech sells products through diverse agreements, with a recent shift from multi-year LTAs towards short-term and spot sales - GrafTech sells products under **short-term purchase agreements**, **multi-year purchase agreements** (including take-or-pay LTAs), and **spot sales**[49](index=49&type=chunk) LTA Sales as Percentage of Net Sales | Year | % of Net Sales | | :--- | :--- | | 2023 | 41% | | 2022 | 68% | | 2021 | 77% | - As LTAs near their terms, the business mix has **shifted towards short-term purchase agreements and spot orders**, and multi-year agreements are **not anticipated to make up the majority** of the portfolio moving forward[53](index=53&type=chunk) [2023 Revenue and Production By Region](index=9&type=section&id=2023%20Revenue%20and%20Production%20By%20Region) EAF steel producers purchased most graphite electrodes, with a significant portion of net sales generated outside the United States - Approximately **89% of graphite electrodes** were purchased by EAF steel producers in 2023[55](index=55&type=chunk) Sales Outside the United States as Percentage of Net Sales | Year | % of Net Sales | | :--- | :--- | | 2023 | 67% | | 2022 | 73% | | 2021 | 79% | - In 2023, Europe, the Middle East, Africa (EMEA) and the Americas collectively generated **89% of net sales**[56](index=56&type=chunk) [Sales and Customer Service](index=10&type=section&id=Sales%20and%20Customer%20Service) The company differentiates through product quality, reliability, and technical service, offering the ArchiTech Furnace Productivity System for EAF operators - The company differentiates its graphite electrodes based on price, **product quality and performance**, **delivery reliability**, and **customer technical service**[58](index=58&type=chunk) - GrafTech offers the **ArchiTech Furnace Productivity System 6.0**, an advanced support and technical service platform for EAF operators, enabling **real-time diagnostics and troubleshooting**[61](index=61&type=chunk) [Distribution](index=10&type=section&id=Distribution) The company uses demand and inventory management to meet delivery needs, storing finished products at global facilities and warehouses - The company employs **demand and inventory management techniques** to meet customer delivery requirements and maximize production capacity utilization[63](index=63&type=chunk) - Finished products are stored at **manufacturing facilities and local warehouses globally**[64](index=64&type=chunk) [Research and Development](index=11&type=section&id=Research%20and%20Development) GrafTech leverages over 135 years of R&D experience to improve graphite electrode quality, petroleum needle coke production, and explore adjacent markets - GrafTech has over **135 years of experience** in R&D of graphite- and carbon-based solutions[66](index=66&type=chunk) - R&D focuses on **improving graphite electrode quality** and **petroleum needle coke production**, and evaluating technology in adjacent markets[66](index=66&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) The company protects its intellectual property, including approximately 100 patents and the UCAR trademark, through various legal means and confidentiality agreements - The company's intellectual property portfolio includes approximately **100 U.S. and foreign patents** and pending patent applications[68](index=68&type=chunk) - Protection relies on **patent, trademark, copyright, and trade secret laws**, as well as confidentiality agreements[70](index=70&type=chunk) - The **UCAR trademark** is licensed exclusively to GrafTech on a worldwide, royalty-free basis until **January 2035**[69](index=69&type=chunk) [Insurance](index=11&type=section&id=Insurance) GrafTech maintains insurance for civil liabilities, property damage, business interruptions, and environmental matters, though losses may exceed coverage limits - GrafTech maintains insurance for **civil liabilities, property damage, business interruptions, and environmental matters**[72](index=72&type=chunk) - There is **no assurance that losses will not be incurred** beyond the limits or outside the coverage of the insurance policies[72](index=72&type=chunk) [Regulatory Matters](index=11&type=section&id=Regulatory%20Matters) As a global company, GrafTech is subject to various environmental, data protection, and anti-corruption regulations, operating in material compliance with established accruals for liabilities - As a global company, GrafTech is subject to **various federal, state, local, and foreign environmental, data protection (e.g., GDPR), anti-corruption, import/export, and safety regulations**[74](index=74&type=chunk) - The company believes it operates in **material compliance**, and compliance costs and environmental liabilities are **not expected to materially affect its financial position** over the next several years[74](index=74&type=chunk) - Accruals for environmental liabilities are established when a liability is **probable and can be reasonably estimated**[74](index=74&type=chunk) [Human Capital Resources](index=12&type=section&id=Human%20Capital%20Resources) GrafTech manages human capital with 1,249 employees, focusing on health, safety, diversity, competitive compensation, and continuous development - As of December 31, 2023, GrafTech had **1,249 employees**, with approximately **35% covered by collective bargaining agreements**[77](index=77&type=chunk)[78](index=78&type=chunk) - The company reported **no material work stoppages or strikes** by employees during the past year[78](index=78&type=chunk) Total Recordable Incident Rate | Year | Rate per 200,000 work hours | | :--- | :--- | | 2023 | 0.61 | | 2022 | 0.94 | - Diversity and inclusion are foundational to the company's culture, with **40% of senior leadership** and **14% of Board members being female** as of December 31, 2023[80](index=80&type=chunk)[81](index=81&type=chunk) - GrafTech offers **competitive compensation and benefits**, including performance bonuses and tuition reimbursement, to attract and retain talent[82](index=82&type=chunk)[83](index=83&type=chunk) - The company conducts employee engagement surveys every other year, with the last one in October 2022 (**56% participation**) and the next expected in 2024[84](index=84&type=chunk) - Employee **training and development** are supported through detailed job profiles, a performance management system, and regular performance reviews[85](index=85&type=chunk)[86](index=86&type=chunk) [Available Information](index=13&type=section&id=Available%20Information) GrafTech makes its annual, quarterly, and current reports freely available on its corporate website - GrafTech makes its **annual, quarterly, and current reports** (Forms 10-K, 10-Q, 8-K) available **free of charge on its website**[88](index=88&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) GrafTech faces significant risks from the cyclical steel industry, volatile pricing, overcapacity, supply disruptions, operational hazards, geopolitical events, substantial indebtedness, and legal/regulatory challenges - The company is **highly dependent on the global steel industry**, particularly the EAF steel industry, which is **cyclical** and can lead to periods of reduced profitability or net losses[90](index=90&type=chunk) - Graphite electrode pricing is **cyclical** and has **declined from 2018 highs**, with spot prices **decreasing in 2023** due to a softer commercial environment[93](index=93&type=chunk)[95](index=95&type=chunk) - Global graphite electrode **overcapacity** and **intense competition** could **adversely affect prices, sales, margins, and profitability**[96](index=96&type=chunk)[97](index=97&type=chunk) - **Dependence on petroleum needle coke** and other raw materials, along with reliance on a **single facility (Monterrey, Mexico)** for connecting pins, poses risks of **supply disruptions or increased costs**[98](index=98&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - **Substantial international operations** expose the company to **legal, economic, social, and political risks**, including currency fluctuations, tariffs, and trade restrictions[106](index=106&type=chunk) - The company's **indebtedness could limit financial and operating activities**, and **restrictive covenants** in financing agreements could hinder adaptability to market conditions[125](index=125&type=chunk)[129](index=129&type=chunk) - **Stringent health, safety, and environmental laws**, as well as **global data and privacy protection laws**, could result in **substantial compliance costs, sanctions, or material liabilities**[137](index=137&type=chunk)[140](index=140&type=chunk) - **Ongoing arbitrations** with customers regarding non-performance under long-term agreements (LTAs) could have a **material adverse effect** on results[142](index=142&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC - There are **no unresolved staff comments**[149](index=149&type=chunk) [Item 1C. Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) GrafTech maintains a comprehensive cybersecurity program with Board oversight, integrating risks into enterprise management, and has reported no material incidents to date - GrafTech has an **overarching cybersecurity program** with documented policies, **layered defenses**, third-party penetration tests, and employee training[149](index=149&type=chunk) - The **Board oversees cybersecurity risks**, which are incorporated into the enterprise risk management processes[151](index=151&type=chunk) - As of the filing date, **no material cybersecurity incidents have occurred** that have materially affected the company's business strategy, results of operations, or financial condition[150](index=150&type=chunk) [Item 2. Properties](index=25&type=section&id=Item%202.%20Properties) GrafTech operates global manufacturing facilities for its Industrial Materials segment, including key sites in Mexico, France, Spain, and Texas, with capacity utilization significantly decreasing to 44% in 2023 - GrafTech's principal physical properties serve its **Industrial Materials segment** for manufacturing, sales, and services[153](index=153&type=chunk) Graphite Electrode Manufacturing Facilities Capacity Utilization | Year | Capacity Utilization | | :--- | :--- | | 2023 | 44% | | 2022 | 78% | - Key owned facilities include graphite electrode and pin manufacturing in **Monterrey, Mexico**; graphite electrode manufacturing in **St. Marys, Pennsylvania** (production indefinitely suspended except machining); petroleum needle coke manufacturing (Seadrift) in **Port Lavaca, Texas**; and graphite electrode manufacturing in **Calais, France** and **Pamplona, Spain**[154](index=154&type=chunk)[21](index=21&type=chunk) [Item 3. Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) GrafTech faces multiple legal proceedings, including arbitrations for $188.2 million in damages, environmental permit issues in Mexico, wage litigation in Brazil, and a stockholder class action, which it intends to vigorously defend - GrafTech is involved in arbitrations with customers (e.g., Aperam, ArcelorMittal) who have failed to perform under LTAs, with claimants seeking approximately **$188.2 million in damages**[156](index=156&type=chunk) - The Monterrey, Mexico facility experienced a **temporary suspension** in September 2022 due to **environmental permit issues**, which was lifted in November 2022, but an **administrative proceeding is ongoing**[157](index=157&type=chunk)[158](index=158&type=chunk) - The company is involved in **pending wage litigation in Brazil**, where employees seek additional amounts under collective bargaining agreements; the **potential loss is currently unassessable**[159](index=159&type=chunk) - Mexican Tax Authority (MTA) audits for 2019 and 2018 VAT filings allege improper use of VAT exemption rules; the 2019 assessment of **~$28.8 million** was annulled by court in January 2024 (MTA appealed), and the 2018 proposed assessment of **~$51.0 million** is being challenged[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - A **stockholder class action** was filed on January 25, 2024, alleging material misrepresentations related to the Monterrey facility suspension, seeking **unquantified compensatory damages**[164](index=164&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to GrafTech International Ltd - Mine safety disclosures are **not applicable**[165](index=165&type=chunk) [Information About Our Executive Officers](index=27&type=section&id=Information%20About%20Our%20Executive%20Officers) This section provides biographical information for GrafTech's current executive officers, including the Interim CEO, Interim CFO, COO, Chief Legal Officer, and SVP Commercial - Timothy K. Flanagan serves as **Interim Chief Executive Officer and President**, appointed in November 2023, previously Chief Financial Officer[168](index=168&type=chunk) - Catherine Hedoux-Delgado serves as **Interim Chief Financial Officer and Treasurer**, appointed in November 2023, previously Vice President, Corporate Controller[169](index=169&type=chunk) - Jeremy S. Halford is the **Executive Vice President, Chief Operating Officer**, appointed in October 2021[170](index=170&type=chunk) - Gina K. Gunning is the **Chief Legal Officer and Corporate Secretary**, joining in July 2018[171](index=171&type=chunk) - Iñigo Perez Ortiz is the **Senior Vice President, Commercial and CTS**, joining in February 2020[172](index=172&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) GrafTech's common stock trades on the NYSE, with its quarterly cash dividend suspended and $99.0 million remaining in its stock repurchase program, which saw no Q4 2023 activity - GrafTech's common stock is listed on the **NYSE** under the trading symbol **'EAF'**[173](index=173&type=chunk) - As of December 31, 2023, there were **seven registered holders** of common stock[173](index=173&type=chunk) - The quarterly cash dividend of **$0.01 per common share** was **suspended on August 2, 2023**[174](index=174&type=chunk) - Approximately **$99.0 million** of the total **$250.0 million** authorized stock repurchase program remained available as of December 31, 2023, with **no repurchase activity during Q4 2023**[177](index=177&type=chunk) [Item 6. [Reserved]](index=29&type=section&id=Item%206.%20%5BReserved%5D) This item is intentionally reserved and contains no information - This item is **reserved**[178](index=178&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) GrafTech experienced a significant 2023 downturn with decreased sales and production volumes, resulting in a $(255.3) million net loss and a $171.1 million goodwill impairment, despite maintaining $289.3 million liquidity and implementing cost savings [Operational and Commercial Update](index=30&type=section&id=Operational%20and%20Commercial%20Update) Sales and production volumes significantly decreased in 2023 due to market softness and proactive production cuts, impacting non-LTA graphite electrode prices Sales and Production Volume (2023 vs. 2022) | Metric | 2023 (thousand MT) | 2022 (thousand MT) | Change YoY | | :--- | :--- | :--- | :--- | | Sales volume | 92 | 149 | -39% | | Production volume | 88 | 157 | -44% | Weighted-Average Realized Price for Non-LTA Graphite Electrodes | Year | Price per MT | | :--- | :--- | | 2023 | ~$5,400 | | 2022 | ~$6,000 | - Production volume was **proactively reduced** to align with evolving demand outlook and **manage working capital levels**[182](index=182&type=chunk) [Capital Structure and Liquidity](index=30&type=section&id=Capital%20Structure%20and%20Liquidity) As of December 31, 2023, GrafTech maintained **$289.3 million** in liquidity, with total debt at approximately **$950.1 million** - As of December 31, 2023, liquidity was **$289.3 million**, consisting of **$112.4 million** availability under the 2018 Revolving Credit Facility and **$176.9 million** in cash and cash equivalents[183](index=183&type=chunk) - Total debt as of December 31, 2023, was approximately **$950.1 million**[183](index=183&type=chunk) [Outlook](index=30&type=section&id=Outlook) Near-term demand for graphite electrodes is expected to remain weak in 2024, but cost rationalization and long-term growth drivers from EAF steel decarbonization and EV market are positive - Near-term demand for graphite electrodes is expected to **remain weak in 2024** due to global economic uncertainty, but a **modest year-over-year improvement in sales volume** is anticipated[184](index=184&type=chunk) - The company announced a **cost rationalization and footprint optimization plan**, including **indefinitely suspending production** at its St. Marys facility and idling other assets[186](index=186&type=chunk)[187](index=187&type=chunk) - These initiatives are expected to result in annualized cost savings of approximately **$25.0 million**, with **$15.0 million** in cost of goods sold and the remainder in selling and administrative expenses[188](index=188&type=chunk) - Stated production capacity will be reduced by **12% to approximately 178 thousand MT** beginning in 2024[190](index=190&type=chunk) - Anticipated capital expenditures for 2024 are in the range of **$35.0 million to $40.0 million**, down from **$54.0 million in 2023**[191](index=191&type=chunk) - Longer term, the company is confident in **demand growth for graphite electrodes** due to **EAF steel decarbonization** and for petroleum needle coke from the **growing EV market**[192](index=192&type=chunk) Estimated LTA Shipments and Revenue for 2024 | Metric | 2024 (Estimated) | | :--- | :--- | | LTA volume (thousands of MT) | 13-16 | | LTA revenue (millions) | $100-$135 | [Key metrics used by management to measure performance](index=31&type=section&id=Key%20metrics%20used%20by%20management%20to%20measure%20performance) GrafTech utilizes both GAAP and non-GAAP financial measures, alongside operating metrics, to assess performance and analyze business trends - GrafTech uses both **GAAP and non-GAAP financial measures** (EBITDA, adjusted EBITDA, adjusted net income/loss, adjusted EPS, free cash flow, adjusted free cash flow, cash cost of goods sold per MT) and **operating metrics** (sales volume, production volume, production capacity, capacity utilization) to analyze performance[194](index=194&type=chunk)[204](index=204&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) Key Financial Measures (2023 vs. 2022) | Metric | 2023 (thousands) | 2022 (thousands) | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net sales | $620,500 | $1,281,250 | $(660,750) | -52% | | Net (loss) income | $(255,250) | $382,962 | $(638,212) | -167% | | (Loss) earnings per share | $(0.99) | $1.48 | $(2.47) | -167% | | Adjusted EBITDA | $20,484 | $536,464 | $(515,980) | -96% | Key Operating Measures (2023 vs. 2022) | Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Sales volume (MT) | 91.6 thousand | 149.1 thousand | -39% | | Production volume (MT) | 88.1 thousand | 157.1 thousand | -44% | | Total capacity utilization | 38% | 68% | -30 pp | | Capacity utilization excluding St. Marys | 44% | 78% | -34 pp | Cash Cost of Goods Sold per MT | Year | Cost per MT | | :--- | :--- | | 2023 | $5,537 | | 2022 | $4,266 | [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Net sales decreased by **52%** in 2023, leading to an operating loss of **$(214.4) million** and a net loss of **$(255.3) million**, primarily due to lower sales volume and a **$171.1 million** goodwill impairment - Net sales decreased by **$660.8 million (52%)** in 2023 compared to 2022, primarily due to lower sales volume, the residual impact of the Monterrey facility suspension, and a shift to non-LTA volume with lower prices[226](index=226&type=chunk) - Cost of goods sold decreased by **$154.5 million (21%)** but increased on a per MT basis due to higher-priced inventory and **$62.4 million** in fixed manufacturing costs expensed (vs. **$16.0 million in 2022**) due to reduced production levels[227](index=227&type=chunk)[228](index=228&type=chunk) - A **$12.4 million** Lower of Cost or Market (LCM) inventory valuation adjustment was recorded in 2023[229](index=229&type=chunk) - Operating (loss) income shifted from **$474.3 million income in 2022 to $(214.4) million loss in 2023**, largely due to a **$171.1 million goodwill impairment charge**[226](index=226&type=chunk)[230](index=230&type=chunk) - Interest expense increased by **$21.5 million (59%)** in 2023, driven by higher interest on the 2023 Senior Secured Notes and a **$6.4 million** reduction in net gains from interest rate swaps[232](index=232&type=chunk) - Net (loss) income was **$(255.3) million in 2023**, a **167% decrease** from **$383.0 million in 2022**[226](index=226&type=chunk) [Effects of Changes in Currency Exchange Rates](index=38&type=section&id=Effects%20of%20Changes%20in%20Currency%20Exchange%20Rates) Fluctuations in foreign currency exchange rates impact both net sales and cost of goods sold - **Fluctuations in foreign currency exchange rates** impact net sales and cost of goods sold[237](index=237&type=chunk)[238](index=238&type=chunk) Impact of Currency Exchange Rate Changes on Net Sales (millions) | Year | Impact | | :--- | :--- | | 2023 | +$1.5 | | 2022 | -$11.7 | | 2021 | +$5.5 | Impact of Currency Exchange Rate Changes on Cost of Goods Sold (millions) | Year | Impact | | :--- | :--- | | 2023 | +$12.4 | | 2022 | -$20.6 | | 2021 | +$10.1 | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) GrafTech maintained **$289.3 million** in liquidity, issued **$450 million** in new notes to extend debt maturities, suspended its dividend, and anticipates **$35.0-$40.0 million** in 2024 capital expenditures - As of December 31, 2023, GrafTech had **$289.3 million** in liquidity, comprising **$112.4 million** in 2018 Revolving Credit Facility availability and **$176.9 million** in cash and cash equivalents[243](index=243&type=chunk) - The company issued **$450 million** of 2023 Senior Secured Notes to repay the 2018 Term Loan Facility, extending debt maturities to 2028[245](index=245&type=chunk) - The stock repurchase authorization had **$99.0 million** remaining as of December 31, 2023[247](index=247&type=chunk) - The quarterly cash dividend of **$0.01 per share** was **suspended on August 2, 2023**[248](index=248&type=chunk) Capital Expenditures (millions) | Year | Amount | | :--- | :--- | | 2023 | $54.0 | | 2024 (anticipated) | $35.0 - $40.0 | [Cash flows](index=40&type=section&id=Cash%20flows) Operating cash flow significantly decreased in 2023 due to lower net income, while financing activities shifted to a net cash inflow from new debt issuance Cash Flow from Operating Activities (thousands) | Year | Amount | | :--- | :--- | | 2023 | $76,561 | | 2022 | $324,628 | | 2021 | $443,040 | - The decrease in operating cash flow in 2023 was primarily due to a **$638.2 million decrease in net income**, partially offset by a **$207.1 million increase in cash provided by working capital** (mainly from reduced inventories)[255](index=255&type=chunk)[256](index=256&type=chunk) Net Cash Used in Investing Activities (thousands) | Year | Amount | | :--- | :--- | | 2023 | $(53,820) | | 2022 | $(71,970) | | 2021 | $(57,860) | Net Cash Provided by (Used in) Financing Activities (thousands) | Year | Amount | | :--- | :--- | | 2023 | $18,713 | | 2022 | $(176,267) | | 2021 | $(471,792) | - The shift in financing cash flow in 2023 was primarily due to the issuance of **$450.0 million in 2023 Senior Secured Notes** and increased cash from interest rate swap settlements, partially offset by a **$323.7 million increase in cash used to repay the 2018 Term Loan Facility**[258](index=258&type=chunk) [Financing transactions](index=41&type=section&id=Financing%20transactions) GrafTech's financing includes a **$330 million** revolving credit facility, **$500.0 million** in 2020 Senior Secured Notes, and **$450.0 million** in 2023 Senior Secured Notes, with all debt covenants in compliance - The 2018 Revolving Credit Facility has a **$330 million commitment**, matures on **May 31, 2027**, and had **$112.4 million** available for borrowing as of December 31, 2023[259](index=259&type=chunk) - The 2020 Senior Secured Notes have an aggregate principal amount of **$500.0 million**, bear interest at **4.625% per annum**, and mature on **December 15, 2028**[265](index=265&type=chunk)[267](index=267&type=chunk) - The 2023 Senior Secured Notes have an aggregate principal amount of **$450.0 million**, bear interest at **9.875% per annum**, and mature on **December 15, 2028**; proceeds were used to repay the 2018 Term Loan Facility[270](index=270&type=chunk)[273](index=273&type=chunk) - All debt instruments contain restrictive covenants, and GrafTech was in **compliance with all debt covenants** as of December 31, 2023[264](index=264&type=chunk)[269](index=269&type=chunk)[275](index=275&type=chunk) [Material Cash Requirements](index=43&type=section&id=Material%20Cash%20Requirements) Total contractual and other obligations amounted to **$1.32 billion** as of December 31, 2023, with the majority of long-term debt due in 2028 Total Contractual and Other Obligations (Dec 31, 2023) | Category | Total (thousands) | | :--- | :--- | | Long-term debt | $950,139 | | Interest on long-term debt | $334,999 | | Pension plan contributions | $5,386 | | Committed purchase obligations | $21,000 | | Related party Tax Receivable Agreement | $11,154 | | **Total contractual and other obligations** | **$1,322,678** | - The majority of long-term debt (**$950.0 million**) is due in 2028[276](index=276&type=chunk) [Costs Relating to Protection of the Environment](index=44&type=section&id=Costs%20Relating%20to%20Protection%20of%20the%20Environment) Environmental expenses were **$12.1 million** in 2023, with capital expenditures for environmental protection at **$7.6 million** Environmental Expenses (thousands) | Year | Amount | | :--- | :--- | | 2023 | $12,085 | | 2022 | $22,395 | | 2021 | $16,914 | Capital Expenditures Related to Environmental Protection (thousands) | Year | Amount | | :--- | :--- | | 2023 | $7,588 | | 2022 | $6,012 | | 2021 | $7,014 | [Critical accounting policies](index=44&type=section&id=Critical%20accounting%20policies) Critical accounting policies, including goodwill, employee benefits, and income taxes, require significant management judgment, with a **$171.1 million** goodwill impairment recorded in 2023 - A full goodwill impairment charge of **$171.1 million** was recorded in 2023 for the Graphite Electrode reporting unit, primarily due to reduced sales from softening demand and deteriorating electrode spot pricing[290](index=290&type=chunk) - **No goodwill impairment** resulted from annual tests in 2022 and 2021[291](index=291&type=chunk) - **Critical accounting policies** include goodwill, employee benefit plans, impairments of long-lived assets, income taxes, related-party Tax Receivable Agreement, and revenue recognition, all requiring **significant management judgment and estimates**[280](index=280&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) GrafTech manages market risks from interest rates, currency, and commodity prices using non-trading derivative instruments, with a 10% USD fluctuation impacting the foreign currency hedge portfolio by **$2.0 million** - GrafTech is exposed to **market risks** from changes in **interest rates, currency exchange rates, and energy commodity prices**[302](index=302&type=chunk) - The company uses **derivative financial instruments**, primarily **foreign currency derivatives**, to manage these risks, but **not for trading purposes**[302](index=302&type=chunk)[306](index=306&type=chunk) - As of December 31, 2023, there were **no outstanding interest rate swaps or commodity derivative contracts**[305](index=305&type=chunk)[307](index=307&type=chunk) - Foreign currency derivatives showed a net unrealized pre-tax gain of **$0.1 million** at December 31, 2023, compared to a net unrealized pre-tax loss of **$0.2 million** at December 31, 2022[307](index=307&type=chunk) - A **10% appreciation or depreciation** in the U.S. dollar against foreign currencies would result in a corresponding **$2.0 million decrease or increase**, respectively, in the fair value of the foreign currency hedge portfolio[309](index=309&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=48&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents GrafTech's audited consolidated financial statements, including a **$(255.3) million** net loss in 2023 and a significant decrease in assets due to goodwill impairment, with an unqualified opinion from Deloitte & Touche LLP [Report of Independent Registered Public Accounting Firm](index=49&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on GrafTech's financial statements and internal controls, identifying goodwill impairment as a critical audit matter - Deloitte & Touche LLP issued an **unqualified opinion** on GrafTech's consolidated financial statements as of December 31, 2023 and 2022, and on the **effectiveness of internal control over financial reporting** as of December 31, 2023[315](index=315&type=chunk) - The **critical audit matter** identified was the **goodwill impairment evaluation**, which involved challenging judgments regarding forecasts of future revenues, EBITDA, capital expenditures, discount rates, and market multiples for the Graphite Electrode reporting unit[322](index=322&type=chunk)[323](index=323&type=chunk) [Consolidated Balance Sheets](index=51&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$1.29 billion** in 2023, primarily due to the full impairment of goodwill, leading to a significant reduction in stockholders' equity Consolidated Balance Sheet Highlights (thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total assets | $1,288,889 | $1,604,178 | $(315,289) | | Goodwill | $0 | $171,117 | $(171,117) | | Total current assets | $674,793 | $815,228 | $(140,435) | | Total liabilities | $1,210,642 | $1,266,461 | $(55,819) | | Total stockholders' equity | $78,247 | $337,715 | $(259,468) | - The significant decrease in total assets and stockholders' equity in 2023 was primarily due to the **full impairment of goodwill**[326](index=326&type=chunk) [Consolidated Statements of Operations and Comprehensive (Loss) Income](index=52&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) GrafTech reported a **$(255.3) million** net loss in 2023, a **167% decline** from 2022, driven by a **52% decrease in net sales** and a **$171.1 million** goodwill impairment Consolidated Statements of Operations Highlights (thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net sales | $620,500 | $1,281,250 | $1,345,788 | | Gross profit | $36,212 | $554,877 | $644,453 | | Operating (loss) income | $(214,437) | $474,259 | $508,074 | | Net (loss) income | $(255,250) | $382,962 | $388,330 | | Diluted (loss) income per common share | $(0.99) | $1.48 | $1.46 | - The company reported a net loss of **$(255.3) million in 2023**, a significant decline from net income in prior years, primarily driven by a **52% decrease in net sales** and a **$171.1 million goodwill impairment charge**[328](index=328&type=chunk) - A **$12.4 million** Lower of Cost or Market (LCM) inventory valuation adjustment was recorded in 2023[328](index=328&type=chunk) [Consolidated Statements of Cash Flows](index=53&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased significantly in 2023 due to lower net income, while financing activities provided cash from new debt issuance and swap settlements Consolidated Statements of Cash Flows Highlights (thousands) | Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $76,561 | $324,628 | $443,040 | | Net cash used in investing activities | $(53,820) | $(71,970) | $(57,860) | | Net cash provided by (used in) financing activities | $18,713 | $(176,267) | $(471,792) | | Net change in cash and cash equivalents | $41,454 | $76,391 | $(86,612) | - Cash flow from operating activities **decreased significantly** in 2023 due to **lower net income**, partially offset by **increased cash from working capital**[255](index=255&type=chunk)[256](index=256&type=chunk) - Net cash provided by financing activities in 2023 was primarily driven by the **issuance of 2023 Senior Secured Notes** and **interest rate swap settlements**, partially offset by debt repayments[258](index=258&type=chunk) [Consolidated Statements of Stockholders' Equity (Deficit)](index=55&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29) Total stockholders' equity decreased significantly in 2023 to **$78.2 million**, primarily due to the **$(255.3) million** net loss, increasing the accumulated deficit Total Stockholders' Equity (thousands) | Year | Amount | | :--- | :--- | | Dec 31, 2023 | $78,247 | | Dec 31, 2022 | $337,715 | | Dec 31, 2021 | $23,402 | - Total stockholders' equity decreased significantly in 2023, primarily due to the net loss of **$(255.3) million**[335](index=335&type=chunk) - Accumulated deficit increased from **$(401.9) million** at December 31, 2022, to **$(662.4) million** at December 31, 2023[335](index=335&type=chunk) [Notes to the Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed disclosures and accounting policies supporting the consolidated financial statements, including revenue recognition, debt, equity, and significant estimates [Note 1. Business and Summary of Significant Accounting Policies](index=56&type=section&id=Note%201.%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note details GrafTech's Industrial Materials segment, revenue recognition, inventory valuation, the **$171.1 million** goodwill impairment in 2023, and the Tax Receivable Agreement - GrafTech's only reportable segment is **Industrial Materials**, comprising graphite electrodes and petroleum needle coke products[338](index=338&type=chunk) - Revenue is recognized when a customer obtains control of promised goods, typically at the delivery point[341](index=341&type=chunk)[345](index=345&type=chunk) - Inventories are stated at the **lower of cost or net realizable value**, with a **$12.4 million** LCM adjustment recorded in 2023[351](index=351&type=chunk) - Goodwill of **$171.1 million**, allocated to the Graphite Electrode reporting unit, was **fully impaired in 2023** due to softening demand and deteriorating spot pricing[382](index=382&type=chunk)[290](index=290&type=chunk) - The company **defers major maintenance costs** and amortizes them over the period until the next scheduled overhaul[386](index=386&type=chunk) - The **Tax Receivable Agreement** provides Brookfield the right to receive **85% of future cash savings** from U.S. federal and Swiss tax utilization of pre-IPO tax assets[370](index=370&type=chunk) [Note 2. Revenue from Contracts with Customers](index=63&type=section&id=Note%202.%20Revenue%20from%20Contracts%20with%20Customers) This note disaggregates revenue by type, showing **$620.5 million** in total revenues for 2023, and details **$31.6 million** in current deferred revenue Disaggregated Revenue by Type (thousands) | Type | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Graphite Electrodes - LTAs | $253,262 | $870,287 | $1,040,214 | | Graphite Electrodes - Non-LTAs | $338,746 | $351,140 | $258,426 | | By-products and other | $28,492 | $59,823 | $47,148 | | **Total Revenues** | **$620,500** | **$1,281,250** | **$1,345,788** | - Estimated LTA revenue for 2024 is **$100-$135 million**, including expected termination fees[402](index=402&type=chunk) - Current deferred revenue was **$31.6 million** as of December 31, 2023, an increase from **$27.9 million in 2022**[400](index=400&type=chunk) [Note 3. Stock-Based Compensation](index=65&type=section&id=Note%203.%20Stock-Based%20Compensation) This note details stock-based compensation expense of **$4.4 million** in 2023, with **9.5 million** shares available for future issuance under the Omnibus Equity Incentive Plan Stock-Based Compensation Expense (thousands) | Year | Amount | | :--- | :--- | | 2023 | $4,433 | | 2022 | $2,311 | | 2021 | $16,631 | - The 2021 expense included **$14.7 million** due to Change in Control accelerated vesting provisions[405](index=405&type=chunk) - As of December 31, 2023, **9.5 million common stock shares** were available for future issuance under the Omnibus Equity Incentive Plan[404](index=404&type=chunk) - The company grants **stock options, Restricted Stock Units (RSUs), Performance-Based Restricted Stock Units (PSUs), and Deferred Share Units (DSUs)**[404](index=404&type=chunk)[407](index=407&type=chunk)[413](index=413&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)[418](index=418&type=chunk) [Note 4. Segment Reporting](index=68&type=section&id=Note%204.%20Segment%20Reporting) GrafTech's sole reportable segment is Industrial Materials, with **95% of external revenues** from graphite electrodes, and this note provides geographic breakdowns of net sales and long-lived assets - GrafTech's only reportable segment is Industrial Materials, with approximately **95% of external revenues** derived from graphite electrodes[421](index=421&type=chunk) Net Sales by Geographic Region (thousands) | Region | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | United States | $206,263 | $340,793 | $285,710 | | Americas (excluding the United States) | $100,364 | $256,253 | $241,442 | | Asia Pacific | $66,214 | $116,849 | $154,084 | | Europe, Middle East, Africa | $247,659 | $567,355 | $664,552 | | **Total** | **$620,500** | **$1,281,250** | **$1,345,788** | Long-Lived Assets by Geographic Region (thousands, Dec 31, 2023) | Region | Amount | | :--- | :--- | | United States | $196,847 | | Mexico | $117,414 | | France | $93,660 | | Spain | $109,127 | | Brazil | $4,424 | | Other countries | $642 | | **Total** | **$522,114** | [Note 5. Debt and Liquidity](index=69&type=section&id=Note%205.%20Debt%20and%20Liquidity) This note details GrafTech's long-term debt, including **$500.0 million** in 2020 Senior Secured Notes and **$450.0 million** in 2023 Senior Secured Notes, and confirms compliance with all debt covenants Long-Term Debt (thousands) | Debt Instrument | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | 2018 Term Loan Facility | $0 | $433,708 | | 2020 Senior Secured Notes | $500,000 | $500,000 | | 2023 Senior Secured Notes | $450,000 | $0 | | Other debt | $139 | $268 | | Unamortized debt discount and issuance costs | $(24,494) | $(12,049) | | **Total debt** | **$925,645** | **$921,927** | - The 2018 Revolving Credit Facility has **$112.4 million** in availability as of December 31, 2023, and matures on **May 31, 2027**[426](index=426&type=chunk) - The 2020 Senior Secured Notes bear interest at **4.625%** and mature on **December 15, 2028**[433](index=433&type=chunk)[434](index=434&type=chunk) - The 2023 Senior Secured Notes bear interest at **9.875%** and mature on **December 15, 2028**; proceeds were used to repay the 2018 Term Loan Facility[437](index=437&type=chunk)[438](index=438&type=chunk) - GrafTech was in **compliance with all debt covenants** as of December 31, 2023 and 2022[432](index=432&type=chunk)[436](index=436&type=chunk)[442](index=442&type=chunk) Maturities on Long-Term Debt (thousands, Dec 31, 2023) | Year | Amount | | :--- | :--- | | 2024 | $139 | | 2025 | $0 | | 2026 | $0 | | 2027 | $0 | | 2028 | $950,000 | | 2029 and thereafter | $0 | | **Total** | **$950,139** | [Note 6. Goodwill and Other Intangible Assets](index=71&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill of **$171.1 million** was fully impaired in 2023 due to market conditions, with estimated annual amortization expense for intangible assets around **$8.0 million** in 2024 - Goodwill of **$171.1 million**, allocated entirely to the Graphite Electrode reporting unit, was **fully impaired in 2023** due to reduced sales and deteriorating spot pricing[444](index=444&type=chunk)[452](index=452&type=chunk) - **No goodwill impairment** was recorded in 2022 and 2021[453](index=453&type=chunk) Amortization Expense of Intangible Assets (thousands) | Year | Amount | | :--- | :--- | | 2023 | $9,200 | | 2022 | $10,100 | | 2021 | $10,700 | - Estimated annual amortization expense for the next five years will approximate **$8.0 million in 2024**, **$7.3 million in 2025**, **$6.7 million in 2026**, **$6.1 million in 2027**, and **$5.5 million in 2028**[454](index=454&type=chunk) [Note 7. Interest Expense](index=73&type=section&id=Note%207.%20Interest%20Expense) Total interest expense increased to **$58.1 million** in 2023, primarily due to higher interest on the 2023 Senior Secured Notes and changes in interest rate swap gains Total Interest Expense (thousands) | Year | Amount | | :--- | :--- | | 2023 | $58,087 | | 2022 | $36,568 | | 2021 | $68,760 | - Interest expense **increased in 2023** primarily due to **higher interest on the 2023 Senior Secured Notes** and changes in interest rate swap gains/losses[457](index=457&type=chunk)[459](index=459&type=chunk) - The repayment of the 2018 Term Loan Facility in June 2023 triggered **$1.2 million** of accelerated original issue discount accretion and **$1.9 million** of accelerated debt issuance cost amortization[457](index=457&type=chunk) - Termination of interest rate swap contracts in June 2023 resulted in **$6.9 million realized gains** recorded in interest expense[458](index=458&type=chunk) [Note 8. Fair Value Measurements and Derivative Instruments](index=73&type=section&id=Note%208.%20Fair%20Value%20Measurements%20and%20Derivative%20Instruments) GrafTech uses non-trading foreign currency derivatives to manage market risks, with no outstanding interest rate or commodity derivatives, and the fair value of its debt was **$676.6 million** in 2023 - GrafTech uses **derivative financial instruments**, primarily **foreign currency derivatives**, to manage exposure to changes in currency exchange rates, but **not for trading purposes**[467](index=467&type=chunk)[469](index=469&type=chunk) - As of December 31, 2023, there were **no outstanding interest rate swaps or commodity derivative contracts**[473](index=473&type=chunk)[472](index=472&type=chunk) - Foreign currency derivatives showed a net unrealized pre-tax gain of **$0.1 million** at December 31, 2023, compared to a net unrealized pre-tax loss of **$0.2 million** at December 31, 2022[307](index=307&type=chunk) - The fair value of the company's debt was **$676.6 million** as of December 31, 2023, down from **$843.2 million in 2022**[467](index=467&type=chunk) [Note 9. Supplementary Balance Sheet Detail](index=78&type=section&id=Note%209.%20Supplementary%20Balance%20Sheet%20Detail) This note provides detailed balance sheet information, including **$330.1 million** in inventories, a **$7.7 million** allowance for doubtful accounts, and **$4.6 million** in Supplier Finance Program obligations Inventories (thousands) | Category | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Raw materials and supplies | $109,084 | $216,761 | | Work in process | $186,473 | $192,821 | | Finished goods | $34,589 | $38,159 | | **Total** | **$330,146** | **$447,741** | - Allowance for doubtful accounts was **$7.7 million** as of December 31, 2023[485](index=485&type=chunk) - Supplier Finance Program (SFP) obligations outstanding were **$4.6 million** as of December 31, 2023[488](index=488&type=chunk) [Note 10. Leases](index=80&type=section&id=Note%2010.%20Leases) Total lease cost was **$5.8 million** in 2023, with weighted-average remaining lease terms of **2.4 years** for operating leases and **4.1 years** for finance leases Total Lease Cost (thousands) | Year | Amount | | :--- | :--- | | 2023 | $5,814 | | 2022 | $6,360 | | 2021 | $6,260 | - The weighted-average remaining lease term for operating leases was **2.4 years** and for finance leases was **4.1 years** as of December 31, 2023[491](index=491&type=chunk) [Note 11. Retirement Plans and Post-Employment Benefits](index=82&type=section&id=Note%2011.%20Retirement%20Plans%20and%20Post-Employment%20Benefits) This note details pension plan costs, an underfunded status of **$(26.4) million**, and an estimated **$14.3 million** liability for unfunded post-employment benefits Net Periodic Benefit (Credit) Cost for Pension Plans (thousands) | Plan Type | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | U.S. | $(661) | $491 | $(2,351) | | Foreign | $5,173 | $(6,994) | $(412) | - The total underfunded status for all defined benefit pension plans was **$(26.4) million** as of December 31, 2023[501](index=501&type=chunk) - The estimated liability for unfunded post-employment benefit plans was **$14.3 million** as of December 31, 2023[516](index=516&type=chunk) - Expected employer contributions to pension plans in 2024 are **$4.7 million** for U.S. plans and **$0.7 million** for foreign plans[514](index=514&type=chunk) [Note 12. Commitments and Contingencies](index=87&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) GrafTech faces arbitrations seeking **$188.2 million** in damages, ongoing Mexican VAT assessments, a **$77 thousand** product warranty liability, and an **$11.1 million** Tax Receivable Agreement liability - GrafTech is involved in arbitrations with customers seeking approximately **$188.2 million in damages** for alleged non-performance under LTAs[520](index=520&type=chunk) - The 2019 Mexico VAT assessment of **~$28.8 million** was annulled by court in January 2024, but the MTA filed an appeal; a 2018 proposed assessment of **~$51.0 million** is also being challenged[529](index=529&type=chunk)[530](index=530&type=chunk)[531](index=531&type=chunk) - The product warranty liability was **$77 thousand** as of December 31, 2023[522](index=522&type=chunk) - The total Tax Receivable Agreement liability was **$11.1 million** as of December 31, 2023[524](index=524&type=chunk) [Note 13. Income Taxes](index=90&type=section&id=Note%2013.%20Income%20Taxes) The company recorded a **$(18.5) million** tax benefit in 2023, with an effective tax rate of **6.8%**, and maintains a **$9.0 million** valuation allowance against deferred tax assets (Benefit) Provision for Income Taxes (thousands) | Year | Amount | | :--- | :--- | | 2023 | $(18,514) | | 2022 | $69,356 | | 2021 | $68,076 | - The company recorded a tax benefit of **$(18.5) million in 2023**, compared to an expense in 2022, primarily due to a shift from pre-tax profit to loss and a non-tax deductible goodwill impairment charge[534](index=534&type=chunk) - The effective income tax rate was **6.8% in 2023**, down from **15.3% in 2022**[233](index=233&type=chunk) - A valuation allowance of **$9.0 million** was maintained against certain deferred tax assets as of December 31, 2023[537](index=537&type=chunk) - The company intends to indefinitely reinvest its accumulated undistributed foreign earnings of approximately **$1.0 billion**[544](index=544&type=chunk) - There were **no unrecognized tax benefits** as of December 31, 2023[542](index=542&type=chunk) [Note 14. Stockholders' Equity](index=92&type=section&id=Note%2014.%20Stockholders%27%20Equity) GrafTech did not repurchase common stock in 2023, with **$99.0 million** remaining in its authorization, and suspended its quarterly dividend, leading to an increased accumulated other comprehensive loss - GrafTech **did not repurchase any common stock in 2023**, but repurchased **$60.0 million in 2022** and **$50.0 million in 2021**[547](index=547&type=chunk) - Approximately **$99.0 million** remained available under the stock repurchase authorization as of December 31, 2023[548](index=548&type=chunk) - The quarterly cash dividend of **$0.01 per share** was **suspended on August 2, 2023**[549](index=549&type=chunk) - Accumulated other comprehensive loss (AOCL) increased from **$(8.1) million in 2022 to $(11.5) million in 2023**[550](index=550&type=chunk) [Note 15. (Loss) Earnings per Share](index=93&type=section&id=Note%2015.%20%28Loss%29%20Earnings%20per%20Share) Diluted loss per common share was **$(0.99)** in 2023, with approximately **41,198 shares** excluded from the calculation due to their anti-dilutive effect Basic and Diluted (Loss) Earnings per Share | Year | EPS | | :--- | :--- | | 2023 | $(0.99) | | 2022 | $1.48 | | 2021 | $1.46 | - The calculation for 2023 excludes the dilutive effect of approximately **41,198 shares**, primarily related to restricted stock units, as their inclusion would have been **anti-dilutive due to the net loss**[552](index=552&type=chunk) [Note 16. Other Expense (Income), net](index=94&type=section&id=Note%2016.%20Other%20Expense%20%28Income%29%2C%20net) Other expense (income), net, shifted to a **$4.7 million expense** in 2023, primarily due to **$3.0 million** in mark-to-market losses on pension and OPEB plans Other Expense (Income), net (thousands) | Year | Amount | | :--- | :--- | | 2023 | $4,679 (expense) | | 2022 | $(10,147) (income) | | 2021 | $(16,220) (income) | - The shift to an expense in 2023 was primarily due to mark-to-market losses on pension and other post-employment benefit (OPEB) plans of **$3.0 million**, compared to gains of **$9.6 million in 2022**[556](index=556&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=95&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with the company's accountants regarding accounting or financial disclosure - There are **no changes in or disagreements** with accountants on accounting and financial disclosure[558](index=558&type=chunk) [Item 9A. Controls and Procedures](index=95&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and Deloitte & Touche LLP concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes in the recent quarter - Management concluded that disclosure controls and procedures were **effective** as of December 31, 2023[560](index=560&type=chunk) - Management concluded that internal control over financial reporting was **effective** as of December 31, 2023, based on COSO criteria[563](index=563&type=chunk) - Deloitte & Touche LLP, the independent registered public accounting firm, **audited and confirmed the effectiveness** of the company's internal control over financial reporting[563](index=563&type=chunk) - **No material changes** in internal control over financial reporting occurred during the most recent fiscal quarter[564](index=564&type=chunk) [Item 9B. Other Information](index=95&type=section&id=Item%209B.%20Other%20Information) This section details adjustments to executive officer compensatory arrangements, including increased salaries and STIP opportunities for the Interim CEO and CFO, effective April 1, 2024, with no Rule 10b5-1 trading arrangement changes in Q4 2023 - The Interim Chief Financial Officer's annualized base salary increased from **$305,500 to $353,500**, effective **April 1, 2024**[566](index=566&type=chunk) - The Interim CEO, Interim CFO, and COO will continue to receive **monthly stipends** for their interim service and increased responsibilities in 2024[566](index=566&type=chunk) - Short-Term Incentive Plan (STIP) target award opportunities for the Interim CEO and Interim CFO increased to **100% and 65% of base salary and monthly stipend**, respectively, for 2024[566](index=566&type=chunk) - **No Rule 10b5-1 trading arrangements** were adopted, modified, or terminated during the fiscal quarter ended December 31, 2023[567](index=567&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=96&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) Disclosure regarding foreign jurisdictions that prevent inspections is not applicable to GrafTech International Ltd - Disclosure regarding foreign jurisdictions that prevent inspections is **not applicable**[568](index=568&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Executive officer information is incorporated from Part I, and the company maintains a public Code of Conduct and Ethics, with other governance details referenced from the Proxy Statement - Information regarding executive officers is **incorporated from the Supplemental Item to Part I** of this Report[569](index=569&type=chunk) - A **Code of Conduct and Ethics** applies to employees, directors, and officers, and is **available on the company's website**[570](index=570&type=chunk) - Other information is **incorporated by reference from the Proxy Statement** for the 2024 Annual Meeting of Stockholders[571](index=571&type=chunk) [Item 11. Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from various sections of the company's Proxy Statement - Information on executive compensation is **incorporated by reference from the Proxy Statement**, including Compensation Discussion and Analysis, Compensation Tables, CEO Pay Ratio, Pay Versus Performance, Director Compensation Program, Risk Oversight, and Compensation Committee Report[573](index=573&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=97&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated from the Proxy Statement, with **4.1 million** securities to be issued under equity plans at a **$11.27** weighted-average exercise price, and **9.5 million** available for future issuance - Information regarding security ownership of certain beneficial owners and management is **incorporated by reference from the Proxy Statement**[575](index=575&type=chunk) Equity Compensation Plan Information (Dec 31, 2023) | Metric | Amount | | :--- | :--- | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | 4,117,469 | | Weighted-average exercise price of outstanding options, warrants and rights | $11.27 | | Number of securities remaining available for future issuance under equity compensation plans | 9,512,574 | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=97&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships and related party transactions, and director independence is incorporated by reference from the company's Proxy Statement - Information on certain relationships and related party transactions, and director independence is **incorporated by reference from the Proxy Statement**[579](index=579&type=chunk) [Item 14. Principal Accountant Fees and Services](index=97&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's Proxy Statement - Information on principal accountant fees and services is **incorporated by reference from the Proxy Statement**[580](index=580&type=chunk) PART IV [Item 15. Exhibit and Financial Statement Schedules](index=97&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and notes included in Part II, Item 8, omits financial statement schedules due to information being in the consolidated statements, and provides a comprehensive list of exhibits - The report includes the **Report of Independent Registered Public Accounting Firm**, **Consolidated Balance Sheets**, **Consolidated Statements of Operations and Comprehensive (Loss) Income**, **Consolidated Statements of Cash Flows**, **Consolidated Statements of Stockholders' Equity (Deficit)**, and **Notes to the Consolidated Financial Statements**[581](index=581&type=chunk) - **All financial statement schedules have been omitted** because the required information is included in the consolidated financial statements or their notes[582](index=582&type=chunk) - A **detailed list of exhibits** filed or incorporated by reference is provided[583](index=583&type=chunk) [Item 16. Form 10-K Summary](index=102&type=section&id=Item%2016.%20Form%2010-K%20Summary) There is no Form 10-K Summary included in this report - There is **no Form 10-K Summary**[588](index=588&type=chunk) [Signatures](index=103&type=section&id=Signatures) The report is duly signed by GrafTech International Ltd.'s Interim CEO, Interim CFO, and Board of Directors, with all signatures dated February 14, 2024 - The report is signed by **Timothy K. Flanagan (Interim Chief Executive Officer and President)** and **Catherine Hedoux-Delgado (Interim Chief Financial Officer and Treasurer)**[592](index=592&type=chunk) - The report is also signed by the **Chairman and other Directors**[593](index=593&type=chunk) - All signatures are dated **February 14, 2024**[592](index=592&type=chunk)[593](index=593&type=chunk)