GrafTech International(EAF) - 2025 Q4 - Annual Report

Liquidity and Cash Flow - As of December 31, 2025, the company had liquidity of $340.0 million, consisting of $101.6 million from the 2018 Revolving Credit Facility, $100.0 million from the Initial First Lien Term Loan Facility, and $138.4 million in cash and cash equivalents[239]. - The company reported a net cash used in operating activities of $81.6 million in 2025, an increase of $41.5 million compared to 2024, primarily due to a $40.2 million decrease in cash provided by working capital[246]. - Cash flow used for inventories was $8.6 million in 2025, contrasting with cash flow provided by inventories of $68.8 million in 2024, indicating a significant shift in working capital management[246]. - The company experienced a cash use of $0.3 million in financing activities in 2025, compared to a cash source of $155.7 million in 2024, largely due to previous debt issuance[248]. Debt and Financing - The company had long-term debt of $1.1 billion as of December 31, 2025, consistent with the previous year[239]. - The company issued New 4.625% Notes in an aggregate principal amount of $498.2 million and New 9.875% Notes in an aggregate principal amount of $446.2 million on December 23, 2024, as part of a debt exchange[251]. - The New 4.625% Notes will pay interest of 4.625% semiannually, while the New 9.875% Notes will pay interest of 9.875% semiannually[252][253]. - The Initial First Lien Term Loans amount to $175 million, with an additional $100 million available through Delayed Draw Commitments, expected to be drawn before July 23, 2026[270]. - The 2018 Revolving Credit Facility has an availability of $101.6 million as of December 31, 2025, down from $108.0 million in 2024[278]. - The First Lien Term Loans bear interest at a rate of Term SOFR plus 6.00% per annum or ABR plus 5.00% per annum, with a ticking fee of 3.75% per annum on undrawn Delayed Draw Commitments[273][274]. - As of December 31, 2025, there were no outstanding term loans under the 2018 Term Loan Facility, following repayment with proceeds from the Existing 9.875% Notes issuance[276]. - The 2018 Revolving Credit Facility matures on November 30, 2028, with a financial covenant requiring a Senior Secured First Lien Net Leverage Ratio of no more than 4.00 to 1.00[278][281]. - Approximately $1.8 million aggregate principal amount of Existing 4.625% Notes and $3.8 million of Existing 9.875% Notes remain outstanding following the Exchange Offer[264][269]. - The Existing 4.625% Notes Indenture and Existing 9.875% Notes Indenture contain covenants limiting the ability to incur additional indebtedness or engage in certain transactions[262][267]. - GrafTech was in compliance with all debt covenants as of December 31, 2025 and 2024[263][268]. - As of December 31, 2025, total contractual obligations amount to $1,466,279, including long-term debt of $1,125,000 and interest payments of $341,279[282]. - The company anticipates pension plan contributions of $4,027, with total contractual and other obligations reaching $1,470,306[282]. Revenue Recognition - The company recognizes revenue when control of promised goods is obtained, primarily through short-term and multi-year purchase agreements with steel manufacturers[290]. - Performance obligations are satisfied at a point in time when control of graphite electrodes is transferred to the customer, with variable consideration recognized up to its unconstrained amount[292]. - The company’s revenue recognition process follows a five-step model to ensure accurate reporting of revenue from contracts with customers[291]. Asset Management and Impairment - The company tested its long-lived assets for impairment as of December 31, 2025, and determined that their carrying value was recoverable[285]. - A valuation allowance of $92.2 million is established against certain deferred tax assets (DTAs), including $69.9 million for U.S. DTAs and $20.3 million for Switzerland DTAs[289]. - The company assesses the need for valuation allowances against deferred tax assets based on positive and negative evidence, including earnings history and cumulative losses[287]. Pension and Other Obligations - Future contributions to pension plans will depend on regulatory requirements and the plans' funded ratios, with funding anticipated from cash on hand or generated from operations[283]. - The company has issued letters of credit totaling $13.8 million under the 2018 Revolving Credit Facility as of December 31, 2025[283].