10q10k10q10k.net

What changed in GRAFTECH INTERNATIONAL LTD's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of GRAFTECH INTERNATIONAL LTD's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+369 added−363 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-14)

Top changes in GRAFTECH INTERNATIONAL LTD's 2024 10-K

369 paragraphs added · 363 removed · 261 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

47 edited+3 added−6 removed63 unchanged
Biggest changeThe tuition reimbursement program, in particular, helps employees who want to continue their education or seek specialized job training, and illustrates our commitment to continued learning and focus on professional development. 9 Employee Engagement Employee engagement is a priority at GrafTech because we believe that engaged employees help us provide high-quality products and services to our customers.
Biggest changeEmployee Engagement Employee engagement is a priority at GrafTech because we believe that engaged employees help us provide high-quality products and services to our customers. We conducted our last employee engagement survey in October 2022. 9 Approximately 56% of full-time GrafTech employees participated in the October 2022 survey.
We generally seek to maintain appropriate inventory levels, taking into account these factors as well as the significant differences in manufacturing cycle times for graphite electrode products and our customers’ products. 7 Finished products are usually stored at our manufacturing facilities. Limited quantities of some finished products are also stored at local warehouses around the world to meet customer needs.
We 7 generally seek to maintain appropriate inventory levels, taking into account these factors as well as the significant differences in manufacturing cycle times for graphite electrode products and our customers’ products. Finished products are usually stored at our manufacturing facilities. Limited quantities of some finished products are also stored at local warehouses around the world to meet customer needs.
Subject to the inherent imprecision in estimating such future costs, but taking into consideration our experience to date regarding environmental matters of a similar nature and facts currently known, we estimate that our costs and capital expenditures (in each case, before adjustment for inflation) for environmental protection regulatory compliance programs and for remedial response actions will not be material over the next several years.
Subject to the inherent imprecision in estimating such future costs, but taking into consideration our experience to date regarding environmental matters of a similar nature and facts currently known, we estimate that our costs and capital expenditures (in each case, before adjustment for inflation) for environmental protection regulatory compliance programs and for remedial response actions will 8 not be material over the next several years.
The performance management system connects employees with job-specific professional development training and continuing education opportunities to help them progress along their career and growth path. We conduct mid-year and annual performance reviews for all salaried employees to assess both job competencies and performance relative to GrafTech’s core competencies.
The performance management system connects employees with job-specific professional development training and continuing education opportunities to help them progress along their career and growth path. We conduct mid-year and annual performance reviews for all salaried employees to assess both individual job competencies and performance relative to GrafTech’s core competencies.
In addition to these advantages, EAF steel producers benefit from their flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as direct reduced iron and hot briquetted iron, both made directly from iron ore.
In addition to these advantages, EAF steel producers benefit from their 4 flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as direct reduced iron and hot briquetted iron, both made directly from iron ore.
Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and 4 infinitely) recyclable at the end of its useful life.
Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and infinitely) recyclable at the end of its useful life.
Chinese petroleum needle coke production capacity is expected to grow significantly in the coming years, with a primary focus on serving the EV market, as China is currently the largest producer of EV batteries.
Chinese petroleum needle coke production is expected to grow significantly in the coming years, with a primary focus on serving the EV market, as China is currently the largest producer of EV batteries.
Insurance We maintain insurance against civil liabilities relating to personal injuries to third parties, for loss of or damage to property, for business interruptions and for certain environmental matters, that provides coverage, subject to the applicable coverage limits, deductibles and retentions, and exclusions, that we believe is appropriate upon terms and conditions and for premiums that we consider fair and reasonable in the circumstances.
Insurance We maintain insurance against civil liabilities relating to personal injuries to third parties, for loss of or damage to property, for business interruptions, for directors and officers and for certain environmental matters, that provides coverage, subject to the applicable coverage limits, deductibles and retentions, and exclusions, that we believe is appropriate upon terms and conditions and for premiums that we consider fair and reasonable in the circumstances.
Based on industry announcements of planned incremental EAF capacity additions and factoring in further production increases at existing EAF steel plants, we estimate this could result in global (excluding China) UHP graphite electrode demand growing at a compound annual growth rate of approximately 3% to 4% through 2028.
Based on industry announcements of planned incremental EAF capacity additions and factoring in further production increases at existing EAF steel plants, we estimate this could result in global (excluding China) UHP graphite electrode demand growing at a compound annual growth rate of approximately 3% to 4% through 2029.
There is a lag between the time we negotiate prices for our short-term agreements and when our electrodes are delivered and recognized in revenue. There is no widely accepted graphite electrode reference price. Pricing has historically been cyclical, reflecting the demand trends of the global EAF steelmaking industry and supply of graphite electrodes.
There is a lag between the time we negotiate prices for our short-term agreements and when our electrodes are delivered and recognized as revenue. There is no widely accepted graphite electrode reference price. Pricing has historically been cyclical, reflecting the demand trends of the global EAF steelmaking industry and supply of graphite electrodes.
Securities and Exchange Commission (“SEC”). We maintain our website at http://www.graftech.com. Information on, or accessible through, our website is not part of this Annual Report. We have included our website address only as an interactive textual reference and do not intend it to be an active link to our website.
Securities and Exchange Commission (“SEC”). We maintain our website at https://www.graftech.com. Information on, or accessible through, our website is not part of this Annual Report. We have included our website address only as an interactive textual reference and do not intend it to be an active link to our website.
With demand for UHP graphite electrodes expected to increase at a compound annual growth rate of approximately 3% to 4% 5 through 2028 (see “Graphite Electrode” section above), we expect this to result in a similar increase in demand for needle coke used in graphite electrode production.
With demand for UHP graphite electrodes expected to increase at a compound annual growth rate of approximately 3% to 4% 5 through 2029 (see “Graphite Electrode” section above), we expect this to result in a similar increase in demand for needle coke used in graphite electrode production.
We believe that we have a competitive portfolio of low-cost ultra-high power (“UHP”) graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We have graphite electrode manufacturing facilities in Calais, France, Pamplona, Spain, Monterrey, Mexico and St. Marys, Pennsylvania.
We believe that we have a competitive portfolio of low-cost ultra-high power (“UHP”) graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We have graphite electrode manufacturing facilities in Calais, France; Pamplona, Spain; Monterrey, Mexico and St. Marys, Pennsylvania (idled in 2024).
Based on Benchmark Mineral Intelligence estimates for growth in battery anodes, we estimate this could result in global needle coke demand for use in EV applications increasing at a 20% or more compound annual growth rate through 2028.
Based on Benchmark Mineral Intelligence estimates for growth in battery anodes, we estimate this could result in global needle coke demand for use in EV applications increasing at a 20% or more compound annual growth rate through 2029.
As of December 31, 2023, our stated production capacity was approximately 202 thousand metric tons (“MT”) 1 through our primary manufacturing facilities in Calais, Pamplona and Monterrey. On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment.
As of December 31, 2024, our stated production capacity was approximately 178 thousand metric tons (“MT”) 1 through our primary manufacturing facilities in Calais, Pamplona and Monterrey. On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment.
Petroleum Needle Coke Industry - Supply and Demand Trends Supply Trends We estimate that, as of the end of 2023, the petroleum needle coke industry globally (excluding China) had capacity to produce approximately 750 thousand MT of petroleum needle coke.
Petroleum Needle Coke Industry - Supply and Demand Trends Supply Trends We estimate that, as of the end of 2024, the petroleum needle coke industry globally (excluding China) had capacity to produce approximately 750 thousand MT of petroleum needle coke.
However, we do not anticipate that multi-year agreements will make up the majority of our portfolio moving forward. 2023 Revenue and Production By Region Approximately 89% of our graphite electrodes were purchased by EAF steel producers in 2023. The remaining portion is primarily used in various other ferrous and non-ferrous melting applications, fused materials, chemical processing, and alloy 6 metals.
However, we do not anticipate that multi-year agreements will make up the majority of our portfolio moving forward. 6 2024 Revenue and Production By Region Approximately 90% of our graphite electrodes were purchased by EAF steel producers in 2024. The remaining portion is primarily used in various other ferrous and non-ferrous melting applications, fused materials, chemical processing, and alloy metals.
The production of UHP electrodes requires an extensive proprietary manufacturing process and material science knowledge, including the use of higher quality needle coke blends. We manufacture graphite electrodes ranging in size up to 30 inches (750 millimeters) in diameter, over 11 feet (3,400 millimeters) in length, and weighing as much as 5,900 pounds (2.6 MT).
The production of UHP electrodes requires an extensive proprietary manufacturing process and material science knowledge, including the use of higher quality needle coke blends. We manufacture graphite electrodes ranging in size up to 31.5 inches (800 millimeters) in diameter, over 11 feet (3,400 millimeters) in length, and weighing as much as 5,900 pounds (2.6 MT).
The charts below show our revenue by region for 2023 and 2022: Sales and Customer Service We differentiate and sell the value of our graphite electrodes primarily based on price, product quality and performance, delivery reliability and customer technical service.
The charts below show our revenue by region for 2024 and 2023: Sales and Customer Service We differentiate and sell the value of our graphite electrodes primarily based on product quality and performance, delivery reliability and customer technical service.
Health and Safety The health and safety of our global team is a top priority and is a core value of the Company. Our comprehensive programs strive to achieve zero injuries and no harm done. Our total recordable incident rate in 2023 was 0.61 per 200,000 work hours, compared to 0.94 per 200,000 work hours in 2022.
Health and Safety The health and safety of our global team is a top priority and is a core value of the Company. Our comprehensive programs strive to achieve zero injuries and no harm done. Our total recordable incident rate in 2024 was 0.59 per 200,000 work hours, compared to 0.61 per 200,000 work hours in 2023.
Although graphite electrode production capacity within China exceeds that of the rest of the world combined, the production landscape in China is fragmented, and the quality of Chinese graphite electrodes varies greatly. We estimate that as of the end of 2023, total production capacity within China for the UHP segment of graphite electrodes was approximately 825 thousand MT.
Although graphite electrode production capacity within China exceeds that of the rest of the world combined, the production landscape in China is fragmented, and the quality of Chinese graphite electrodes varies greatly. We estimate that as of the end of 2024, total production capacity within China for the UHP segment of graphite electrodes was approximately 800 thousand MT.
This compares to a 1% compound annual growth rate for overall global (excluding China) steel production during this same period. As a result, the EAF method of steelmaking accounted for 49% of the global (excluding China) steel production in 2022, compared to 44% in 2015, with share growth in nearly every region.
This compares to a 1% compound annual growth rate for overall global (excluding China) steel production during this same period. As a result, the EAF method of steelmaking accounted for 50% of the global (excluding China) steel production in 2023, compared to 44% in 2015, with share growth in nearly every region.
We sell our products in every major geographic region globally. Sales of our products to buyers outside the United States accounted for approximately 67%, 73% and 79% of net sales in 2023, 2022 and 2021, respectively. Overall, in 2023, we generated 89% of our net sales from EMEA and the Americas.
We sell our products in every major geographic region globally. Sales of our products to buyers outside the United States accounted for approximately 68%, 67% and 73% of net sales in 2024, 2023 and 2022, respectively. Overall, in 2024, we generated 89% of our net sales from EMEA and the Americas.
EAF steelmaking has historically been the fastest-growing segment of the global steel market. According to the World Steel Association (“WSA”), global (excluding China) EAF steel production grew at a 2%-3% compound annual growth rate from 2015 to 2022, the most recent year for which WSA has published such figures.
EAF steelmaking has historically been the fastest-growing segment of the global steel market. According to data derived from World Steel Association (“WSA”) reporting, global (excluding China) EAF steel production grew at a 2%-3% compound annual growth rate from 2015 to 2023, the most recent year for which WSA has published such figures.
The industry is fairly consolidated, with the five largest global (excluding China) producers in the industry, GrafTech, Resonac Holdings Corporation, HEG Limited, Tokai Carbon Co., Ltd. and Graphite India Limited, collectively, representing over 80% of global (excluding China) graphite electrode production capacity.
The industry is fairly consolidated, with the five largest global (excluding China) producers in the industry, GrafTech, Resonac Holdings Corporation, HEG Limited, Tokai Carbon Co., Ltd. and Graphite India Limited, collectively, representing approximately 82% of global (excluding China) graphite electrode production capacity.
Our LTAs were entered into between the end of 2017 and early 2019, which coincided with a period of elevated market prices for graphite electrodes. As graphite electrodes are an essential consumable in the EAF steel production process, the LTAs provided certainty of supply of reliable, high-quality graphite electrodes in an at-times volatile market. These LTAs have fixed prices.
Our LTAs were entered into between the end of 2017 and early 2019, which coincided with a period of elevated market prices for graphite electrodes. As graphite electrodes are an essential consumable in the EAF steel production process, the LTAs provided certainty of supply of reliable, high-quality graphite electrodes in a periodically volatile market.
Graphite Electrode Industry - Supply and Demand Trends Supply trends We estimate that as of the end of 2023, the graphite electrode industry globally (excluding China) had nameplate capacity to produce approximately 810 thousand MT of graphite electrodes.
Graphite Electrode Industry - Supply and Demand Trends Supply trends We estimate that as of the end of 2024, the graphite electrode industry globally (excluding China) had nameplate capacity to produce approximately 786 thousand MT of graphite electrodes.
We adjust the accrual as 8 new remedial actions or other commitments are made, as well as when new information becomes available that changes the prior estimates previously made and we believe our existing accruals are reasonable. Human Capital Resources Employment As of December 31, 2023, we had 1,249 employees (excluding contractors), 758 of which were hourly employees.
We adjust the accrual as new remedial actions or other commitments are made, as well as when new information becomes available that changes the prior estimates previously made and we believe our existing accruals are reasonable. Human Capital Resources Employment As of December 31, 2024, we had 1,072 employees (excluding contractors), 629 of which were hourly employees.
Contracts and Customers Our customers include major steel producers and other ferrous and non-ferrous metal producers in Europe, the Middle East and Africa (collectively, “EMEA”), the Americas, and Asia-Pacific (“APAC”), which sell their products primarily into the automotive, construction, appliance, machinery, equipment and transportation industries.
Contracts and Customers Our customers include major steel producers and other ferrous and non-ferrous metal producers in Europe, the Middle East and Africa (collectively, “EMEA”), the Americas, and Asia-Pacific (“APAC”), which sell their products primarily into the automotive, construction, appliance, machinery, equipment and transportation industries. We sell our products under short-term purchase agreements, multi-year purchase agreements and spot sales.
The price of our short-term agreements is determined through contract negotiations with our customers and is influenced by the then-prevailing price on spot purchase orders as well as the anticipated supply-demand situation at the time of the planned deliveries.
Spot purchase orders are entered into with deliveries usually starting three or more months later. The price of our short-term agreements is determined through contract negotiations with our customers and is influenced by the then-prevailing price on spot purchase orders as well as the anticipated supply-demand situation at the time of the planned deliveries.
Within the contract, our customers are contractually bound to purchase the specified volume of product at the price under the contract. Sales from our LTAs represented 41%, 68% and 77% of our net sales in 2023, 2022 and 2021, respectively.
These LTAs have fixed prices and volumes. Within the contract, our customers are contractually bound to purchase the specified volume of product at the price under the contract. Sales from our LTAs represented 22%, 41% and 68% of our net sales in 2024, 2023 and 2022, respectively.
We primarily compete in the UHP segment of the graphite electrode market. We estimate that, as of the end of 2023, global (excluding China) UHP graphite electrode capacity was approximately 690 thousand MT, or approximately 85% of the global (excluding China) graphite electrode capacity.
We estimate that, as of the end of 2024, global (excluding China) UHP graphite electrode capacity was approximately 670 thousand MT, or approximately 85% of the global (excluding China) graphite electrode capacity.
Because of the long production time, the book building process is largely concentrated in the fourth quarter of each year for the annual short-term agreements as well as for the semi-annual agreements related to the first half of the upcoming year. Spot purchase orders are entered into with deliveries usually starting three or more months later.
Our short-term agreements are either annual, semi-annual or quarterly. Because of the long production time, the book building process is largely concentrated in the fourth quarter of each year for the annual short-term agreements as well as for the semi-annual agreements related to the first half of the upcoming year.
We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.
Information on, or accessible through, our website is not part of this Annual Report. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.
However, we recently added pin production capabilities at our Pamplona, Spain 1 Production capacity reflects expected maximum production volume during the period through our Calais, Pamplona and Monterrey facilities depending on product mix and expected maintenance outage. Actual production may vary. 3 facility to provide alternative sources, if needed, for this critical component.
Prior to 2023, all of our connecting pin production was performed at our Monterrey, Mexico facility. However, in 2023, we added pin production capabilities at our Pamplona, Spain facility to provide 1 Production capacity reflects expected maximum production volume during the period through our Calais, Pamplona and Monterrey facilities depending on product mix and expected maintenance outage.
Our substantial vertical integration into petroleum needle coke supports our ability to offer contracts with varying durations, providing our customers with flexibility and surety of supply.
We will continue to offer multi-year agreements, also known as electrode supply agreements, as an important part of our commercialization strategy and value proposition. Our substantial vertical integration into petroleum needle coke supports our ability to offer contracts with varying durations, providing our customers with flexibility and surety of supply.
This includes an indefinite suspension of production activities at our St. Marys facility, with the exception of graphite electrode and pin machining. We are also indefinitely idling certain assets within our remaining graphite electrode manufacturing footprint. As a result of these initiatives, beginning in 2024, our stated production capacity will be approximately 178 thousand MT 1 .
This included an indefinite suspension of production activities at our St. Marys facility, with the exception of graphite electrode and pin machining. We also indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint.
Moreover, as petroleum needle coke represents a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have typically been priced at a spread to petroleum needle coke. Over the period from 2004 to 2023, the average graphite electrode spread over petroleum needle coke was approximately $3,900 per MT, on an inflation-adjusted basis using constant 2023 dollars.
Moreover, as petroleum needle coke represents a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have typically been priced at a spread to petroleum needle coke.
In 2024, we anticipate expanding our product offerings to include the addition of an 800-millimeter super-sized electrode to our portfolio to serve a small but growing segment of the UHP electrode market.
In 2024, we expanded our product offerings to include the addition of the 800-millimeter super-sized electrode to our portfolio to serve a small but growing segment of the UHP electrode market. We also manufacture corresponding sizes of graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF.
In tight demand markets, this spread has increased, resulting in higher graphite electrode prices. Historically, between 2004 and 2023, our weighted-average realized price of graphite electrodes, excluding volume sold under LTAs, was approximately $6,000 per MT, on an inflation-adjusted basis using constant 2023 dollars.
Historically, between 2005 and 2024, our weighted-average realized price of graphite electrodes, excluding volume sold under our take-or-pay agreements with initial term of three-to-five years (“LTAs”), was approximately $6,000 per MT, on an inflation-adjusted basis using constant 2024 dollars.
Benefits packages include, depending on the country, medical, dental, prescription, vision, group life insurance, short- and long-term disability, paid vacation and holidays, and tuition reimbursement.
Benefits packages include, depending on the country, medical, dental, prescription, vision, group life insurance, short- and long-term disability, paid vacation and holidays, and tuition reimbursement. The tuition reimbursement program, in particular, helps employees who want to continue their education or seek specialized job training, and illustrates our commitment to continued learning and focus on professional development.
The total manufacturing time of a UHP graphite electrode and its associated connecting pin is, on average and except for special requests, approximately six months. The size of the electrodes used in EAF steel production varies depending on the size of the furnace, the size of the furnace’s electric transformer and the planned productivity of the furnace.
The size of the electrodes used in EAF steel production varies depending on the size of the furnace, the size of the furnace’s electric transformer and the planned productivity of the furnace.
As a result, beginning in 2024, our stated production capacity will be approximately 178 thousand MT. We believe that no new graphite electrode production facilities have been built outside of China for several years. In recent years, additional production capacity has been generated by optimization and debottlenecking of existing assets and limited brownfield expansion.
As of December 31, 2024, our stated production capacity was approximately 178 thousand MT through our Calais, Pamplona and Monterrey facilities and represented approximately 23% of the global (excluding China) graphite electrode production capacity. We believe that no new graphite electrode production facilities have been built outside of China for several years.
Our global footprint lends itself to organic diversity, and our employee base has varied educational backgrounds and life experiences. However, we strive to go beyond this organic diversity and we are currently developing a strategy to better measure our ability to do so.
Our global footprint lends itself to organic diversity, and our employee base has varied educational backgrounds and life experiences. We measure and track our diversity and intentional talent acquisition, retention, and development practices.
Our principal executive offices are located at 982 Keynote Circle, Brooklyn Heights, Ohio 44131 and our telephone number is (216) 676‑2000. Our website address is www.graftech.com. Information on, or accessible through, our website is not part of this Annual Report.
As a result of these initiatives, our stated production capacity was reduced from approximately 202 thousand MT in 2023 to approximately 178 thousand MT 1 in 2024. Our principal executive offices are located at 982 Keynote Circle, Brooklyn Heights, Ohio 44131 and our telephone number is (216) 676‑2000. Our website address is www.graftech.com.
A total of 435 employees were in Mexico, 414 were in Europe and the Middle East, 358 were in the United States, 37 were in Brazil and five were in the Asia Pacific region.
A total of 401 employees were in Mexico, 405 were in Europe, 230 were in the United States, 32 were in Brazil, three were in the Asia Pacific region and one was in the Middle East. As of December 31, 2024, 647 employees, or approximately 60% of our worldwide employees, were covered by collective bargaining or similar agreements.
As our LTAs are nearing the end of their terms, our mix of business has shifted towards short-term purchase agreements and spot purchase orders (“non-LTAs”). We will continue to offer multi-year agreements, also known as electrode supply agreements, as an important part of our commercialization strategy and value proposition.
Sales from LTAs represented 18% of our net sales in the fourth quarter of 2024 and we are substantially complete with these agreements. As the substantial majority of our LTAs have expired, our mix of business has shifted towards short-term purchase agreements and spot purchase orders (“non-LTAs”).
Removed
We also manufacture corresponding sizes of graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF. For the past several years, all of our connecting pin production was performed at our Monterrey, Mexico facility.
Added
Actual production may vary. 3 an alternative source, if needed, for this critical component. The Company continues to explore opportunities to increase its pin manufacturing capabilities. The total manufacturing time of a UHP graphite electrode and its associated connecting pin is, on average and except for special requests, approximately six months.
Removed
As of December 31, 2023, our stated production capacity was approximately 202 thousand MT through our Calais, Pamplona and Monterrey facilities and represented approximately one-quarter of the global (excluding China) graphite electrode production capacity. On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment.
Added
In recent years, additional production capacity has been generated by optimization and debottlenecking of existing assets and limited brownfield expansion. We primarily compete in the UHP segment of the graphite electrode market.
Removed
We sell our products under short-term purchase agreements, multi-year purchase agreements (which includes our take-or-pay agreements with initial term of three-to-five years (“LTAs”)) and spot sales. Our short-term agreements are either annual, semi-annual or quarterly.
Added
Over the period from 2005 to 2024, the average graphite electrode spread over petroleum needle coke was approximately $4,000 per MT, on an inflation-adjusted basis using constant 2024 dollars, although recent spreads have been narrower. In tight demand markets, this spread has increased, resulting in higher graphite electrode prices.
Removed
As of December 31, 2023, approximately 440 employees, or 35% of our worldwide employees, were covered by collective bargaining or similar agreements that expire, or are subject to renegotiation, at various times through December 31, 2024.
Removed
As of December 31, 2023, 40% of our senior leadership team and 14% of our Board members were female. We are committed to intentional talent acquisition, retention, and development practices to support our diversity initiatives and to build a competitive workforce.
Removed
We conducted our last employee engagement survey in October 2022. We expect the next survey will be distributed in 2024 and we intend to conduct our employee engagement surveys every other year moving forward. Approximately 56% of full-time GrafTech employees participated in the October 2022 survey.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+15 added−8 removed101 unchanged
Biggest changeSecurity and/or privacy breaches, acts of vandalism or terror, computer viruses, misplaced or lost data, programming, and/or human error or other similar events with respect to our information technology systems or processes or the information technology systems or processes of third-parties that have been entrusted with our information expose us to a risk of loss or misuse of this information, litigation and potential liability, which could have a material adverse effect on our business, financial condition, results of operations or cash flows. 14 If we are unable to successfully negotiate with the representatives of our employees, including labor unions, we may experience strikes and work stoppages.
Biggest changeSecurity and/or privacy breaches, cybersecurity incidents, acts of vandalism or terror, misplaced, corrupted, altered or lost data, programming, and/or human error or other similar events with respect to our information technology systems or processes, or the information technology systems or processes of third-parties that have been entrusted with our information, could have a material adverse effect on our business strategy, financial condition, results of operations or cash flows, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
Our Amended Certificate of Incorporation and Amended By-Laws contain provisions that could make it more difficult for a third-party to acquire us without the consent of our Board of Directors, including: 19 • provisions in our Amended Certificate of Incorporation and Amended By-Laws that prevent stockholders from calling special meetings of our stockholders, except where the Delaware General Corporation Law (“DGCL”) confers the right to fix the date of such meetings upon stockholders; • advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; • provisions in our Amended Certificate of Incorporation provide for a classified Board of Directors such that only one of three classes of directors is elected each year, which prevents our stockholders from replacing the majority our directors at once; • no provision in our Amended Certificate of Incorporation or Amended By-Laws provides for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election; • under our Amended Certificate of Incorporation, our Board of Directors have authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders; and • nothing in our Amended Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock.
Our Amended Certificate of Incorporation and Amended By-Laws contain provisions that could make it more difficult for a third-party to acquire us without the consent of our Board of Directors, including: • provisions in our Amended Certificate of Incorporation and Amended By-Laws that prevent stockholders from calling special meetings of our stockholders, except where the Delaware General Corporation Law (“DGCL”) confers the right to fix the date of such meetings upon stockholders; • advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; • provisions in our Amended Certificate of Incorporation provide for a classified Board of Directors such that only one of three classes of directors is elected each year, which prevents our stockholders from replacing the majority our directors at once; • no provision in our Amended Certificate of Incorporation or Amended By-Laws provides for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election; • under our Amended Certificate of Incorporation, our Board of Directors have authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders; and • nothing in our Amended Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock.
Our indebtedness could: • require us to dedicate a substantial portion of our cash flow to the payment of principal and interest, thereby reducing the funds available for operations and future business opportunities; • make it more difficult for us to satisfy our obligations; 16 • limit our ability to borrow additional money if needed for other purposes, including working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, on satisfactory terms or at all; • limit our ability to adjust to changing economic, business and competitive conditions; • place us at a competitive disadvantage with competitors who may have less indebtedness or greater access to financing; • require us to reduce or delay capital expenditures or sell assets or operations to meet our scheduled debt service obligations; • make us more vulnerable to a downturn in our operating performance or a decline in general economic conditions; and • make us more susceptible to changes in credit ratings, which could impact our ability to obtain financing in the future and increase the cost of such financing.
Our indebtedness could: • require us to dedicate a substantial portion of our cash flow to the payment of principal and interest, thereby reducing the funds available for operations and future business opportunities; • make it more difficult for us to satisfy our obligations; • limit our ability to borrow additional money if needed for other purposes, including working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, on satisfactory terms or at all; • limit our ability to adjust to changing economic, business and competitive conditions; • place us at a competitive disadvantage with competitors who may have less indebtedness or greater access to financing; • require us to reduce or delay capital expenditures or sell assets or operations to meet our scheduled debt service obligations; • make us more vulnerable to a downturn in our operating performance or a decline in general economic conditions; and • make us more susceptible to changes in credit ratings, which could impact our ability to obtain financing in the future and increase the cost of such financing.
For example, the GDPR currently provides that supervisory authorities in the EU may impose administrative fines for non‑compliance of up to €20.0 million or 4% of the subject company’s annual, group‑wide turnover (whichever is higher) and individuals who have suffered damage as a result of a subject company’s non‑compliance with the GDPR also have the right to seek compensation from such company.
For example, the GDPR currently provides that supervisory authorities in the EU may impose administrative fines for non‑compliance of up to €20.0 million or 4% of the subject company’s annual, group‑wide turnover (whichever is higher) and individuals who have suffered 19 damage as a result of a subject company’s non‑compliance with the GDPR also have the right to seek compensation from such company.
Our customers, including major steel producers, have in the past experienced and may again experience downturns or financial distress that could adversely impact our ability to collect our accounts receivable on a timely basis or at all. 10 Pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future.
Our customers, including major steel producers, have in the past experienced and may again experience downturns or financial distress that could adversely impact our ability to collect our accounts receivable on a timely basis or at all. Pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future.
Coal tar pitch, which is classified as a substance of very high concern under the EU’s Registration, Evaluation, Authorization and Restriction of Chemical Regulation (“REACH”) regulations, is used in certain of our processes but in a manner that we believe does not currently require us to obtain a specific authorization under the REACH guidelines.
Coal tar pitch, which is classified as a substance of very high 18 concern under the EU’s Registration, Evaluation, Authorization and Restriction of Chemical Regulation (“REACH”) regulations, is used in certain of our processes but in a manner that we believe does not currently require us to obtain a specific authorization under the REACH guidelines.
Our results of operations could deteriorate if this facility would become unable to provide us with the required volume of connecting pins. 11 We manufacture graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF.
Our results of operations could deteriorate if this facility would become unable to provide us with the required volume of connecting pins. We manufacture graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF.
These hedges may be insufficient or ineffective in protecting against the impact of these fluctuations. Our business and our customers are subject to market changes in the availability and cost of electricity and natural gas that could adversely affect our business. We are in an energy intensive industry that requires both natural gas and electricity in our manufacturing process.
These hedges may be insufficient or ineffective in protecting against the impact of these fluctuations. Our business and our customers are subject to market changes in the cost of electricity and natural gas that could adversely affect our business. We are in an energy intensive industry that requires both natural gas and electricity in our manufacturing process.
We may also be obligated to indemnify affiliates or other 15 partners who are accused of violating third parties’ intellectual property rights by virtue of those affiliates or partners’ agreements with us, and this could increase our costs in defending such claims and our damages.
We may also be obligated to indemnify affiliates or other partners who are accused of violating third parties’ intellectual property rights by virtue of those affiliates or partners’ agreements with us, and this could increase our costs in defending such claims and our damages.
Further measures, in the United States, EU and many other countries, may be enacted in the future. In particular, in December 2015, more than 190 countries participating in the United Nations Framework Convention on Climate Change reached an international agreement related to curbing GHG 18 emissions (the “Paris Agreement”).
Further measures, in the United States, EU and many other countries, may be enacted in the future. In particular, in December 2015, more than 190 countries participating in the United Nations Framework Convention on Climate Change reached an international agreement related to curbing GHG emissions (the “Paris Agreement”).
In addition, as petroleum needle coke reflects a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have historically been priced at a spread to petroleum needle coke, which in the past has increased in tight demand markets.
In addition, as petroleum needle coke reflects a significant 10 percentage of the raw material cost of graphite electrodes, graphite electrodes have historically been priced at a spread to petroleum needle coke, which in the past has increased in tight demand markets.
We primarily rely on third parties for the supply of our energy resources consumed in the manufacture of our products. The prices for and availability of third-party electricity and natural gas are subject to volatile market conditions, particularly in Europe.
We primarily rely on third parties for the supply of our energy resources consumed in the manufacture of our products. The prices for third-party electricity and natural gas are subject to volatile market conditions, particularly in Europe.
In addition, we pay interest on the payments we make to Brookfield with respect to the amount of this cash savings from the due date (without extensions) of our tax return where we realize this savings to the payment date at a rate equal to the forward looking term rate based on the secured overnight financing rate administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) for a one-month period plus 1.10%.
In addition, we pay interest on the payments we make to Brookfield with respect to the amount of this cash savings from the due date (without extensions) of our tax return where we realize this savings to the payment date at a rate equal to the forward looking term rate based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York (or a successor administrator of the SOFR) for a one-month period plus 1.10%.
Any of these events could have a material adverse effect on our business, financial condition, results of operations or cash flows. We may be subject to information technology systems failures, cybersecurity attacks, network disruptions and breaches of data security, which could compromise our information and expose us to liability.
Any of these events could have a material adverse effect on our business, financial condition, results of operations or cash flows. We may be subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, which could compromise our information and expose us to liability.
Excessive imports into the Americas and EMEA, which markets collectively made up 89% of our net sales for the year ended December 31, 2023, can also exert downward pressure on graphite electrode prices, which negatively affects our sales, margins and profitability. The graphite industry is highly competitive.
Excessive imports into the Americas and EMEA, which markets collectively made up 89% of our net sales for the year ended December 31, 2024, can also exert downward pressure on graphite electrode prices, which negatively affects our sales, margins and profitability. The graphite industry is highly competitive.
Information technology systems or processes, and the information technology systems or processes of our customers, our third-party service providers, our vendors or other parties that have been entrusted with our information, including risks associated with any failure to maintain or upgrade our systems, network disruptions and breaches of data security could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information or our financial reporting, leading to increased costs.
Information technology systems or processes, and the information technology systems or processes of our customers, our third-party business partners, our vendors or other parties that have been entrusted with our information, including risks associated with any failure to maintain or upgrade our systems, network disruptions and breaches of data security could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information or our financial reporting, leading to increased costs.
Our computer systems, including our back‑up systems, could be damaged or interrupted by power outages, computer and telecommunications failures, computer viruses, cybercrimes, internal or external security breaches, events such as fires, earthquakes, floods, tornadoes and hurricanes, or errors by our employees.
Our computer systems, including our back‑up systems, could be damaged or interrupted by power outages, computer and telecommunications failures, computer viruses, cybercrimes, internal or external security breaches, events such as fires, earthquakes, floods, tornadoes and hurricanes, errors by our employees, or other cybersecurity incidents.
We expect that, based on current tax laws, future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets will be approximately $11.2 million in the aggregate. The maximum amount over the term of the agreement is approximately $70.0 million.
We expect that, based on current tax laws, future payments under the Tax Receivable Agreement relating to the Pre-IPO Tax Assets will be approximately $6.0 million in the aggregate. The maximum amount over the term of the agreement is approximately $70.0 million.
Competition with respect to new products is, and is expected to continue to be, based primarily on price, performance and cost effectiveness, customer service and product innovation. Competition could prevent implementation of price increases, require price reductions or require increased spending on R&D, marketing and sales that could adversely affect us.
Competition with respect to new products is, and is expected to continue to be, based primarily on price, performance and cost effectiveness, customer service and product innovation. Competition could prevent implementation of price increases, including those described above, require price reductions or require increased spending on R&D, marketing and sales that could adversely affect us.
Our success will continue to depend to a significant extent on the continued service of our executive management team and the ability to recruit, hire and retain other key management and plant operating personnel, including factory and production workers and other staff to support our growth and operational initiatives and replace those who retire or resign.
Our success will continue to depend to a significant extent on the strength of our executive management team and the ability to recruit, hire and retain other key management and plant operating personnel, including factory and production workers 12 and other staff to support our growth and operational initiatives and replace those who retire or resign.
Between 2004 and 2023, our weighted-average realized price of graphite electrodes for non-LTAs was approximately $6,000 per MT (on an inflation‑adjusted basis using constant 2023 dollars). During the last demand trough in 2016, our weighted-average realized price of graphite electrodes for non-LTAs fell to approximately $3,000 per MT, on an inflation‑adjusted basis using constant 2023 dollars.
Between 2005 and 2024, our weighted-average realized price of graphite electrodes for non-LTAs was approximately $6,000 per MT (on an inflation‑adjusted basis using constant 2024 dollars). During the last demand trough in 2016, our weighted-average realized price of graphite electrodes for non-LTAs fell to approximately $3,000 per MT, on an inflation‑adjusted basis using constant 2024 dollars.
The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments. We have made payments of approximately $58.1 million related to the Tax Receivable Agreement.
The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments. We have made payments of approximately $63.3 million related to the Tax Receivable Agreement.
Our manufacturing operations are subject to disruption due to equipment failure, extreme weather conditions, floods, hurricanes and tropical storms and similar events, major industrial accidents, including fires or explosions, cybersecurity attacks, strikes and lockouts, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or 13 changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, public health crises, such as the COVID-19 pandemic, and other events.
Our manufacturing operations are subject to disruption due to equipment failure, extreme weather conditions, floods, hurricanes and tropical storms and similar events, major industrial accidents, including fires or explosions, cybersecurity incidents, strikes and lockouts, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, public health crises and other events.
The 2018 Revolving Credit Facility and the indentures governing the 2020 Senior Secured Notes and the 2023 Senior Secured Notes contain a number of restrictive covenants that, subject to certain exceptions and qualifications, restrict or limit our ability and the ability of our subsidiaries to, among other things: • incur, repay or refinance indebtedness; • create liens on or sell our assets; • engage in certain fundamental corporate changes or changes to our business activities; • make investments or engage in mergers or acquisitions; • pay dividends or repurchase stock; • engage in certain affiliate transactions; • enter into agreements or otherwise restrict our subsidiaries from making distributions or paying dividends to the borrowers under the 2018 Revolving Credit Facility or to us or certain of our subsidiaries, as applicable; and • repay intercompany indebtedness or make intercompany distributions or pay intercompany dividends.
The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes contain a number of restrictive covenants that, subject to certain exceptions and qualifications, restrict or limit our ability and the ability of our subsidiaries to, among other things: • incur, repay or refinance indebtedness; • create liens on or sell our assets; • engage in certain fundamental corporate changes or changes to our business activities; • make investments or engage in mergers or acquisitions; 17 • pay dividends or repurchase stock; • engage in certain affiliate transactions; • enter into agreements or otherwise restrict our subsidiaries from making distributions or paying dividends to the borrowers under the 2018 Revolving Credit Facility or to us or certain of our subsidiaries, as applicable; and • repay intercompany indebtedness or make intercompany distributions or pay intercompany dividends.
Failure to retain our leadership team and workforce and to attract and retain other important management and technical personnel could place a constraint on our global growth and operational initiatives, possibly resulting in inefficient and ineffective management and operations, which would likely harm our revenues, operations and product development efforts and eventually result in a decrease in profitability. 12 Our operations are subject to hazards which could result in significant liability to us.
Failure to retain our leadership team and workforce and to attract and retain other important management and technical personnel could place a constraint on our global growth and operational initiatives, possibly resulting in inefficient and ineffective management and operations, which would likely harm our revenues, operations and product development efforts and eventually result in a decrease in profitability.
If we were unable to repay or pay the amounts due, the lenders under the 2018 Revolving Credit Facility and the noteholders could, among other things, proceed against the collateral granted to them to 17 secure the indebtedness, which includes substantially all of our and our U.S. subsidiaries’ assets and, with respect to the 2018 Revolving Credit Facility, certain assets of certain of our non-U.S. subsidiaries.
If we were unable to repay or pay the amounts due, the lenders under the 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the noteholders could, among other things, proceed against the collateral granted to them to secure the indebtedness, which includes substantially all of our and our U.S. subsidiaries’ assets and certain assets of certain of our non-U.S. subsidiaries.
Compliance with our debt obligations under the 2018 Revolving Credit Facility, 2020 Senior Secured Notes, and 2023 Senior Secured Notes, and any future indebtedness could materially limit our financial or operating activities, or hinder our ability to adapt to changing industry conditions, which could result in our losing market share, a decline in our revenue or a negative impact on our operating results.
Compliance with our debt obligations under the 2018 Revolving Credit Facility, the New Notes and the Initial First Lien Term Loan Facility (as defined below), and any future indebtedness could materially limit our financial or operating activities, or hinder our ability to adapt to changing industry conditions, which could result in our losing market share, a decline in our revenue or a negative impact on our operating results.
Our operations are subject to hazards associated with manufacturing and the related use, storage, transportation and disposal of raw materials, products and wastes.
Our operations are subject to hazards which could result in significant liability to us. Our operations are subject to hazards associated with manufacturing and the related use, storage, transportation and disposal of raw materials, products and wastes.
If we fail to comply with the covenants in the 2018 Revolving Credit Facility and the indentures governing the 2020 Senior Secured Notes and the 2023 Senior Secured Notes, and are unable to obtain a waiver or amendment, an event of default would result, and the lenders and noteholders could, among other things, declare outstanding amounts due and payable or, with respect to the 2018 Revolving Credit Facility, refuse to lend additional amounts to us or require deposit of cash collateral in respect of outstanding letters of credit.
If we fail to comply with the covenants in the 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New 4.625% Notes and the New 9.875% Notes, and are unable to obtain a waiver or amendment, an event of default would result, and the lenders and noteholders could, among other things, declare outstanding amounts due and payable or, with respect to the 2018 Revolving Credit Facility and the Initial First Lien Term Loan Facility (with respect to the Delayed Draw Commitments thereunder), refuse to lend additional amounts to us or require deposit of cash collateral in respect of outstanding letters of credit.
If these anti-dumping duties and tariffs were to be revoked or reduced in the future, our business, financial condition and results would be adversely impacted.
If these anti-dumping duties and tariffs were to be revoked or reduced in the future, our business, financial condition and results would be adversely impacted. Implementation of tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business.
Our credit agreement (as amended, the “2018 Credit Agreement”) currently provides for a $330 million senior secured revolving credit facility after giving effect to the May 2022 amendment (the “Third Amendment”) that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the “2018 Revolving Credit Facility”).
Our credit agreement (as amended, the “2018 Credit Agreement”) currently provides for a $225 million senior secured revolving credit facility after giving effect to the December 2024 amendment (the “Fourth Amendment”) that decreased the revolving commitments under the 2018 Credit Agreement by $105 million from $330 million (the “2018 Revolving Credit Facility”).
If a court were to find the exclusive forum provision in our Amended Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our business.
If a court were to find the exclusive forum provision in our Amended Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our business. 20 We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value.
The 2018 Revolving Credit Facility and the indentures governing the 2020 Senior Secured Notes and 2023 Senior Secured Notes include covenants that could restrict or limit our financial and business operations.
The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes include covenants that could restrict or limit our financial and business operations.
We cannot assure you that agreements designed to protect our proprietary know‑how and information will not be breached, that we will have adequate remedies for any such breach, or that our strategic alliance suppliers and customers, consultants, employees or others will not assert rights against us with respect to intellectual property arising out of our relationships with them.
Our involvement in litigation to protect or defend our rights in these areas could result in a significant expense to us, adversely affect the development of sales of the related products, and divert the efforts of our technical and management personnel, regardless of the outcome of such litigation. 15 We cannot assure you that agreements designed to protect our proprietary know‑how and information will not be breached, that we will have adequate remedies for any such breach, or that our strategic alliance suppliers and customers, consultants, employees or others will not assert rights against us with respect to intellectual property arising out of our relationships with them.
Our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period for any reason, including equipment failure, legal proceedings, climate change, natural disasters, public health crises, political crises or other catastrophic events.
Any of these risks could have a material adverse effect on our business, financial condition, results of operations or cash flows, and we may not be able to mitigate these effects. 13 Our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period for any reason, including equipment failure, legal proceedings, climate change, natural disasters, public health crises, political crises or other catastrophic events.
As of December 31, 2023, we had approximately $925.5 million of secured indebtedness outstanding including borrowings under our 4.625% Senior Secured Notes due 2028 (the “2020 Senior Secured Notes”) and our 9.875% Senior Secured Notes due 2028 (the “2023 Senior Secured Notes”).
As of December 31, 2024, we had approximately $1.1 billion of secured indebtedness outstanding including borrowings under our new 4.625% notes due 2029 (the “New 4.625% Notes”) and our new 9.875% notes due 2029 (the “New 9.875% Notes”, together with the New 4.625% Notes, the “New Notes”).
The 2018 Revolving Credit Facility also contains certain affirmative covenants and contains a financial covenant that requires us to maintain a senior secured first lien net leverage ratio not greater than 4.00:1.00 when the aggregate principal amount of borrowings under the 2018 Revolving Credit Facility and outstanding letters of credit issued under the 2018 Revolving Credit Facility (except for undrawn letters of credit in an aggregate amount equal to or less than $35 million), taken together, exceed 35% of the total amount of commitments under the 2018 Revolving Credit Facility.
The 2018 Revolving Credit Facility also contains certain affirmative covenants and contains a financial covenant that requires us to maintain a senior secured first lien net leverage ratio not greater than 4.00:1.00, tested quarterly, to the extent outstanding revolving loans and letters of credit (subject to certain exclusions) exceed 51.3% of the amount of commitments then-existing under the 2018 Revolving Credit Facility.
Although we have taken steps to address these concerns by implementing network security, back‑up systems and internal control measures, these steps may be insufficient or ineffective.
Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software. Although we have taken steps to address these concerns by implementing network security, back‑up systems and internal control measures, these steps may be insufficient or ineffective.
As of December 31, 2023, we had $112.4 million available for borrowing under the 2018 Revolving Credit Facility (taking into account approximately $3.1 million of outstanding letters of credit issued thereunder). Interest expense for the years ended December 31, 2023 and December 31, 2022 was $58.1 million and $36.6 million, respectively.
As of December 31, 2024, we had $108.0 million available for borrowing under the 2018 Revolving Credit Facility (taking into account approximately $7.4 million of outstanding letters of credit issued thereunder).
While growth in the EAF steel market may support some of these capacity additions, the additional graphite electrode capacity may exceed demand. Excess production capacity may result in manufacturers producing and exporting electrodes at prices that are lower than prevailing domestic prices, and sometimes at or below their cost of production.
Global graphite electrode production capacity that outpaces demand for graphite electrodes adversely affects the price of graphite electrodes. Excess production capacity is resulting in manufacturers producing and exporting electrodes at prices that are lower than prevailing domestic prices, and sometimes at or below their cost of production.
We cannot guarantee that the program will be fully consummated or that it will enhance long-term stockholder value. The program could affect the trading price of our stock, and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock.
The program could affect the trading price of our stock, and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock. In addition, our use of this program will diminish our cash.
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
As a result, any future rising sea levels could have an adverse impact on their operations and on their suppliers.
For instance, our Seadrift facility in Texas and our Calais facility in France are located in geographic areas less than 50 feet above sea level. As a result, any future rising sea levels could have an adverse impact on their operations and on their suppliers.
A disruption in Seadrift’s production of petroleum needle coke could adversely affect our results of operations if we are forced to purchase petroleum needle coke from external sources at a higher cost. We rely primarily on one facility in Monterrey, Mexico for the manufacturing of connecting pins, a necessary component of our graphite electrodes.
An extended interruption of suitable needle coke for our operations could have a material adverse effect on our business, financial condition or operating results. We rely primarily on one facility in Monterrey, Mexico for the manufacturing of connecting pins, a necessary component of our graphite electrodes.
We are party to collective bargaining agreements and similar agreements with our employees. As of December 31, 2023, approximately 440 employees, or 35% of our worldwide employees, were covered by collective bargaining or similar agreements, all of which were covered by agreements that expire, or are subject to renegotiation, at various times through December 31, 2024.
If we are unable to successfully negotiate with the representatives of our employees, including labor unions, we may experience strikes and work stoppages. We are party to collective bargaining agreements and similar agreements with our employees. As of December 31, 2024, 647 employees, or approximately 60% of our worldwide employees, were covered by collective bargaining or similar agreements.
Any of these risks could have a material adverse effect on our business, financial condition, results of operations or cash flows, and we may not be able to mitigate these effects.
Uncertainties with respect to tariffs, trade agreements or any potential trade wars could negatively affect the global economy and could affect demand for our products and could have a material adverse effect on our financial condition, results of operations and cash flows.
Our business, financial condition and operating results could be materially and adversely affected to the extent prices for graphite electrodes continue to decline in the future. Global graphite electrode overcapacity has adversely affected graphite electrode prices in the past, and may adversely affect them again, which could negatively impact our sales, margins and profitability.
Our business, financial condition and operating results are being materially and adversely affected by the spot price of graphite electrodes as of December 31, 2024 and could be materially and adversely affected further to the extent prices for graphite electrodes continue to decline in the future, particularly as we implement our price increase initiative as described below.
These physical impacts may include changes in rainfall and storm patterns, shortages of water or other natural resources, changing sea levels, and changing global average temperatures. For instance, our Seadrift facility in Texas and our Calais facility in France are located in geographic areas less than 50 feet above sea level.
These physical impacts may include changes in rainfall and storm patterns, shortages of water or other natural resources, changing sea levels, changes in the frequency of natural or human induced disasters, including earthquakes, tsunamis, storms, hurricanes, floods, fires, droughts, tornadoes and other extreme weather events or conditions, and changing global average temperatures.
Prices as of December 31, 2023 have receded from the highs of 2018, and the price of graphite electrodes may continue to decline in the future. Supply and demand normalized in 2019, tipping towards overcapacity that exerts downward pressure on graphite electrode prices, and spot prices fell 25% during 2019.
Prices as of December 31, 2024 have receded from the highs of 2018, and the price of graphite electrodes may continue to decline in the future. Beginning in 2023 and continuing throughout 2024, spot prices began decreasing given the softer commercial environment. Spot prices for the year ended December 31, 2024 were approximately $4,200 per MT on a weighted-average basis.
We are involved in certain arbitrations as respondents/counterclaimants with a few customers who, among other things, have failed to perform under their LTAs and in certain instances are seeking to modify or frustrate their contractual commitments to us, and the outcome of these arbitrations could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition.
We may be unable to realize the benefits of our initiative to increase prices on our products in certain of our regions and furthermore may lose market share in these regions as a result of this initiative, which could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition.
Removed
Spot prices decreased further in 2020, bottoming out in the spring of 2021 before beginning to increase. However, beginning in 2023, spot prices began decreasing given the softer commercial environment. Spot prices as of December 31, 2023 were below our weighted-average contract price for LTA contracted volume.
Added
In February 2025, we informed our customers of our intention to increase prices on volume that is not yet committed. This is just one initiative we expect to accelerate our path to profitability and support our ability to invest in our business for the long term.
Removed
Overcapacity in the graphite electrode industry has adversely affected pricing in the past and may do so again. An increase in global graphite electrode production capacity that outpaces an increase in demand for graphite electrodes could adversely affect the price of graphite electrodes.
Added
We operate in a highly competitive industry and, as a result, we may not be successful in raising or maintaining our existing prices. General economic, competitive or market-specific conditions may limit our ability to raise prices or otherwise impact our plans with respect to implementing price increases.
Removed
Our involvement in litigation to protect or defend our rights in these areas could result in a significant expense to us, adversely affect the development of sales of the related products, and divert the efforts of our technical and management personnel, regardless of the outcome of such litigation.
Added
In addition, we may lose customers who choose to source their graphite electrodes from a competitor who has not increased prices. If we are unable to successfully execute this initiative to increase prices, there may be material adverse effects on our market share, results of operations, cash flow, liquidity and financial condition.
Removed
In particular, Aperam South America LTDA, Aperam Sourcing S.C.A., ArcelorMittal Sourcing S.C.A., and ArcelorMittal Brasil S.A. initiated a single arbitration proceeding against two of the Company’s subsidiaries in the International Chamber of Commerce in June 2020.
Added
Global graphite electrode overcapacity has adversely affected graphite electrode prices in the past, and is currently doing so now, which is negatively impacting our sales, margins and profitability. Overcapacity in the graphite electrode industry has adversely affected pricing in the past, and is currently doing so now.
Removed
The claimants argue, among other things, that they should no longer be required to comply with the terms of the LTAs that they signed due to an alleged drop in market prices for graphite electrodes in January 2020.
Added
A disruption in Seadrift’s production of petroleum needle coke could require us to obtain additional petroleum needle coke from third-party sources. There is no assurance that we would be able to obtain acceptable alternative sources on a cost- 11 effective or timely basis, or at all.
Removed
Alternatively, the claimants argue that they should not be required to comply with the LTAs that they signed due to alleged market circumstances at the time of execution. The claimants are alleging damages in the amount of approximately $188.2 million, including interest, for the period covering the first quarter of 2020 through the first quarter of 2023.
Added
Cybersecurity incidents and similar attacks 14 vary in their form and can include the deployment of harmful malware or ransomware, denial-of-service attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information.
Removed
Although we believe we have valid defenses to these claims, arbitrations, like litigation, are inherently subject to many uncertainties, and we ultimately may not prevail, which would have adverse impacts on our business, financial condition and results of operations.
Added
Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended recipient.
Removed
In addition, our use of this program will diminish our cash. 20 Item 1B. Unresolved Staff Comments None.
Added
The U.S. government has imposed tariffs on certain foreign goods from a variety of countries and regions, most notably China, that it perceives as engaging in unfair trade practices, and previously raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods from other countries.
Added
In response, many of these foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S.
Added
Changes in tariffs and trade barriers could also result in adverse changes in the cost and availability of our raw materials, and our ability to manufacture globally to support global sales which could lead to increased costs that we 16 may not be able to effectively pass on to customers, each of which could materially adversely affect our operating margins, results of operations and cash flows.
Added
We did not repurchase any shares of common stock under this program in 2024. We cannot guarantee that the program will be fully consummated or that it will enhance long-term stockholder value.
Added
We may not be able to remain in compliance with the continued listing requirements of the NYSE, and if the NYSE delists our common stock, it could have an adverse impact on the trading, liquidity and market price of our common stock. The Company’s common stock is listed on the NYSE under the symbol “EAF”.
Added
The price of our common stock may be adversely affected due to, among other things, our financial results and market conditions. There can be no assurance that we will continue to remain in compliance with the NYSE’s minimum share price standard or that we will remain in compliance with any of the other applicable continued listing standards of the NYSE.
Added
Any failure to remain in compliance with the NYSE’s continued listing standards, and any subsequent failure to timely resume compliance with the NYSE’s continued listing standards within the applicable cure period, could have adverse consequences including, among others, reducing the number of investors willing to hold or acquire our common stock, reducing the liquidity and market price of our common stock, adverse publicity and a reduced interest in us from investors, analysts and other market participants.
Added
In addition, a suspension or delisting could impair our ability to raise additional capital through the public markets and our ability to attract and retain employees by means of equity compensation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−0 removed4 unchanged
Biggest changeThe Audit Committee, which is made up solely of independent directors, is responsible for overseeing Company policies and practices with respect to cybersecurity issues. Our Vice President, Information Technology leads our information security program and team, which is comprised of several members devoted to infrastructure and information systems security and management.
Biggest changeThe Audit Committee, which is made up solely of independent directors, is responsible for overseeing Company policies and practices with respect to cybersecurity issues.
We also maintain an endpoint threat detection and response tool which uses artificial intelligence to alert our managed security service provider. On a regular basis, we hire a third-party cybersecurity service provider that performs a penetration test on our information systems. The Company seeks to address vulnerabilities that are found.
We also maintain an endpoint threat detection and response tool which uses artificial intelligence to alert our managed security service provider. On a regular basis, we hire a third-party cybersecurity service provider that performs a penetration test on our information systems and the Company seeks to address vulnerabilities that are found.
Risks related to cybersecurity events are detailed in the section of this Annual Report titled “Risk Factors—Risks related to our business and industry—We may be subject to information technology systems failures, cybersecurity attacks, network disruptions and breaches of data security, which could compromise our information and expose us to liability.” Governance The Board oversees risks from cybersecurity threats through the same framework it uses to oversee the management of our risk exposure in general.
Risks related to cybersecurity events are detailed in the section of this Annual Report titled “Risk Factors—Risks related to our business and industry—We may be subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, which could compromise our information and expose us to liability.” Governance The Board oversees risks from cybersecurity threats through the same framework it uses to oversee the management of our risk exposure in general.
Item 1C. Cybersecurity Risk Management and Strategy We have an overarching cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats that includes documented policies and procedures and incorporates a layered cybersecurity defense. We utilize a variety of technologies that target detection of malicious attempts to infiltrate our information systems.
Item 1C. Cybersecurity Risk Management and Strategy We have an overarching cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats that includes documented policies and procedures and incorporates a layered cybersecurity defense. We utilize a variety of technologies that are designed to target detection of malicious attempts to infiltrate our information systems.
We have experienced cybersecurity threats to our information technology infrastructure and have experienced non-material cybersecurity attacks, attempts to breach our systems, fraudulent activity and other similar incidents.
We have experienced cybersecurity threats to our information technology infrastructure and have experienced non-material cybersecurity incidents, attempts to breach our systems, fraudulent activity and other similar incidents.
Our Vice President, Information Technology has over 20 years of industry experience, including over 15 years at our Company, serving in roles throughout his career such as engineer, infrastructure manager, Director of Information Technology Infrastructure, and Global Director of IT. 21
Our Vice President, Information Technology has over 20 years of industry experience, including over 15 years at our Company, serving in roles throughout his career such as engineer, infrastructure manager, Director of Information Technology Infrastructure, and Global Director of IT. 22
As of the filing of this Annual Report, we are not aware of any such incidents that have occurred that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations, or financial condition.
As of the filing of this Annual Report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations, or financial condition.
However, future security and/or privacy breaches, acts of vandalism or terror, computer viruses, misplaced or lost data, programming, and/or human error or other similar events with respect to our information technology systems or processes or the information technology systems or processes of third-parties that have been entrusted with our information expose us to a risk of loss or misuse of this information, litigation and potential liability, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
However, future security and/or privacy breaches, cybersecurity incidents, acts of vandalism or terror, misplaced, corrupted, altered or lost data, programming, and/or human error or other similar events with respect to our information technology systems or processes or the information technology systems or, processes of third-parties that have been entrusted with our information, could have a material adverse effect on our business strategy, financial condition, results of operations or cash flows.
Added
Our Vice President, Information Technology is responsible for managing and assessing material risks from cybersecurity threats and leads our information security program and team, which is comprised of several members devoted to infrastructure and information systems security and management.

Item 2. Properties

Properties — owned and leased real estate

3 edited+3 added−1 removed1 unchanged
Biggest changeLocation of Facility Primary Use Owned or Leased Americas Brooklyn Heights, Ohio Corporate Headquarters, Innovation and Technology Center and Sales Office Leased Monterrey, Mexico Graphite Electrode and Pin Manufacturing Facility, Sales and Service Office Owned St.
Biggest changeLocation of Facility Primary Use Owned or Leased Americas Brooklyn Heights, Ohio Corporate Headquarters Leased Monterrey, Mexico Graphite Electrode and Pin Manufacturing Facility, Sales and Service Office Owned St.
Item 2. Properties The Company uses the following principal physical properties in connection with the manufacturing, sales and services of graphite electrodes, pins and corporate administrative operations, all of which serve its onl y reportable segment, Industrial Materials .
Item 2. Properties The Company uses the following principal physical properties in connection with the manufacturing, sales and services of graphite electrodes, pins and corporate administrative operations, all of which serve its only reportable segment, Industrial Materials.
The total capacity utilization, reflecting production volume as a percentage of production capacity, of our graphite electrode manufacturing facilities in Calais, France, Monterrey, Mexico and Pamplona, Spain, was 44% and 78% for the years ended December 31, 2023 and December 31, 2022, respectively.
The total capacity utilization, reflecting production volume as a percentage of production capacity, of our graphite electrode manufacturing facilities in Calais, France, Monterrey, Mexico and Pamplona, Spain, was 55% and 44% for the years ended December 31, 2024 and December 31, 2023, respectively.
Removed
Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. Our properties located in St. Marys, Pennsylvania and Port Lavaca, Texas are encumbered by our 2018 Credit Agreement, 2020 Senior Secured Notes and our 2023 Senior Secured Notes.
Added
Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. In the first quarter of 2024, we announced a set of initiatives designed to reduce our cost structure and optimize our manufacturing footprint. As part of these initiatives, we indefinitely suspended production activities at our St.
Added
Marys, Pennsylvania facility, with the exception of graphite electrode and pin machining. In addition, we indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint. As a result, our graphite electrode production capacity has been reduced to approximately 178 thousand MT in 2024. Our properties located in St.
Added
Marys, Pennsylvania, Port Lavaca, Texas, Monterrey, Mexico and Pamplona, Spain are encumbered by our Initial First Lien Term Loan Facility, 2018 Credit Agreement, our New 4.625% Notes and our New 9.875% Notes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

14 edited+9 added−11 removed21 unchanged
Biggest changeDe C.V.’s (“GrafTech Mexico”) graphite electrode manufacturing facility located in Monterrey, Mexico to inspect GrafTech Mexico’s facility and certain of the facility’s environmental and operating permits.
Biggest changeMonterrey, Mexico Suspension of Operations Background On September 15, 2022, inspectors from the State Attorney’s Office for the Secretary of Environment of the State of Nuevo León, Mexico visited GrafTech Mexico S.A. De C.V.’s (“GrafTech Mexico”) graphite electrode manufacturing facility located in Monterrey, Mexico to inspect GrafTech Mexico’s facility and certain of the facility’s environmental and operating permits.
On May 31, 2023, the court held a hearing to determine the scope of the issues to be decided in the proceedings. At the court’s request, GrafTech Commercial Mexico submitted formal pleadings on August 1, 2023. On January 8, 2024, the court ruled in GrafTech Commercial Mexico’s favor and annulled the tax assessment.
On May 31, 2023, the court held a hearing to determine the scope of the issues to be decided in the proceedings. At the court’s request, GrafTech Commercial Mexico submitted formal pleadings on August 1, 2023. On January 8, 2024, the court ruled in GrafTech 24 Commercial Mexico’s favor and annulled the tax assessment.
On October 4, 2022, the State Attorney’s Office for the Secretary of Environment granted an extension of the shutdown of the facility until October 7, 2022 and clarified the suspension permitting GrafTech Mexico to perform several activities, including extracting or withdrawing finished or unfinished product.
On October 4, 2022, the State Attorney’s Office for the Secretary of Environment granted an extension of the shutdown of the facility until October 7, 2022 23 and clarified the suspension permitting GrafTech Mexico to perform several activities, including extracting or withdrawing finished or unfinished product.
As of December 31, 2023, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought.
As of December 31, 2024, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought.
Notwithstanding that the suspension notice has been conditionally lifted and that the Monterrey facility has resumed operations, GrafTech Mexico believes it is prudent to continue to pursue the related legal proceeding set forth below.
Notwithstanding the suspension notice having been conditionally lifted and the Monterrey facility having resumed operations, GrafTech Mexico believes it is prudent to continue to pursue the related legal proceeding set forth below.
In the proposed assessment received in January 2023, the MTA is alleging the same improper use of certain VAT exemption rules on purchases from a foreign affiliate and has provided notice of its intent to assess approximately $51.0 million, including penalties, inflation and interest. In Mexico, each tax assessment requires a separate claim.
In the proposed assessment received in January 2023, the MTA is alleging the same improper use of certain VAT exemption rules on purchases from a foreign affiliate and has provided notice of its intent to assess approximately $51.0 million, including penalties, inflation and interest.
On that same day, GrafTech Commerical Mexico submitted before PRODECON the favorable ruling it obtained on January 8, 2024 in connection with the 2019 preceding for the MTA’s consideration. On February 1, 2024, the MTA confirmed its position, holding that GrafTech Commercial Mexico was required to withhold the VAT. GrafTech Commercial Mexico plans to challenge the assessment.
On that same day, GrafTech Commercial Mexico submitted before PRODECON the favorable ruling it obtained on January 8, 2024 in connection with the 2019 proceeding for the MTA’s consideration. On February 1, 2024, the MTA confirmed its position, holding that GrafTech Commercial Mexico was required to withhold the VAT.
In September 2021, the MTA issued a tax assessment, claiming improper use of a certain VAT exemption rule for purchases from a foreign 23 affiliate. As of December 31, 2023, the tax assessment for the four month period under audit amounted to approximately $28.8 million, including penalties, inflation and interest.
In September 2021, the MTA issued a tax assessment, claiming improper use of a certain VAT exemption rule for purchases from a foreign affiliate. As of December 31, 2024, the tax assessment for the four month period under audit amounted to approximately $26.1 million, including penalties, inflation and interest.
The complaint names the Company, certain past and present executive officers, and two entities associated with Brookfield as defendants.
The complaint, as amended, names the Company, certain past and present executive officers, and three entities associated with Brookfield as defendants.
As evidenced by the favorable court decision issued on January 8, 2024, GrafTech Commercial Mexico’s application of the VAT exemption rules is appropriate and, accordingly, GrafTech Commercial Mexico does not believe that it is probable that it will incur a loss related to this matter for either of the two periods under the MTA's audit.
As evidenced by the favorable court decision issued on January 8, 2024 with respect to the 2019 proceeding and the MTA’s conclusion of the tax audit for the 2018 proceeding, GrafTech Commercial Mexico’s application of the VAT exemption rules is appropriate and, accordingly, GrafTech Commercial Mexico does not believe that it is probable that it will incur a loss related to this matter for the 2019 proceeding under the MTA’s audit.
On January 31, 2024, the MTA filed an appeal for review. In March 2022, the MTA opened another audit of the VAT filings of GrafTech Commercial Mexico for the period January 1 to December 31, 2018.
In March 2022, the MTA opened another audit of the VAT filings of GrafTech Commercial Mexico for the period January 1 to December 31, 2018.
The complaint alleges that certain public filings and statements made by the Company contained material misrepresentations or omissions relating to the circumstances before and after the prior temporary suspension of the Company’s graphite electrode facility located in Monterrey, Mexico, in September 2022.
The complaint alleges that certain public filings and statements made by the Company contained material misrepresentations or omissions relating to the circumstances before and after the prior temporary suspension of the Company’s graphite electrode manufacturing facility located in Monterrey, Mexico, in September 2022. The complaint seeks unspecified compensatory damages, costs and expenses, and unspecified equitable or injunctive relief.
The Company intends to vigorously defend its position in these proceedings. Stockholder Class Action On January 25, 2024, a stockholder of the Company filed a class action complaint on behalf of all purchasers of GrafTech common stock between February 8, 2019 and August 3, 2023 in the United States District Court of the Northern District of Ohio.
Stockholder Class Action On January 25, 2024, a stockholder of the Company filed a class action complaint on behalf of a putative class consisting of purchasers of GrafTech common stock between February 8, 2019 and August 3, 2023 in the United States District Court for the Northern District of Ohio.
The $51.0 million includes interest and inflation. Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time.
Interest would continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation would continue to accrue with the passage of time. In Mexico, each tax assessment requires a separate claim.
Removed
Arbitrations We are involved in certain arbitrations as respondents/counterclaimants, pending before the International Chamber of Commerce with a few customers who, among other things, have failed to perform under their LTAs and in certain instances are seeking to modify or frustrate their contractual commitments to us.
Added
On August 29, 2024, the State Attorney’s Office for the Secretary of Environment initiated the summary argument period providing GrafTech Mexico the opportunity to draft final arguments. GrafTech Mexico was notified of such initiation on September 5, 2024. GrafTech Mexico submitted its final summary arguments on September 10, 2024.
Removed
In particular, Aperam South America LTDA, Aperam Sourcing S.C.A., ArcelorMittal Sourcing S.C.A., and ArcelorMittal Brasil S.A. (collectively, the “Claimants”) initiated a single arbitration proceeding against two of the Company’s subsidiaries in the International Chamber of Commerce in June 2020.
Added
On October 3, 2024, the State Attorney’s Office for the Secretary of Environment imposed a fine in the amount of approximately $37,152, using an exchange rate of 1 Mexican peso equals 0.051 United States dollars, for failure to have an environmental impact authorization at the time of the inspection that gave rise to the administrative proceeding.
Removed
The Claimants argue, among other things, that they should no longer be required to comply with the terms of the LTAs that they signed due to an alleged drop in market prices for graphite electrodes in January 2020.
Added
On November 5, 2024, GrafTech Mexico paid the fine under protest stating that an environmental impact authorization was not required because GrafTech Mexico began operations in 1960, such requirement to obtain an environmental impact authorization was introduced in the regulations in 1989, and requiring GrafTech Mexico to obtain an environmental impact authorization for all of its facilities, including those that have been operating since 1960, would constitute a retroactive application of such legislation.
Removed
Alternatively, the Claimants argue that they should not be required to comply with the LTAs that they signed due to alleged market circumstances at the time of execution.
Added
On January 31, 2024, the MTA filed an appeal for review. On March 15, 2024, GrafTech Commercial Mexico filed the Tax Adhesive Appeal for Review before the Collegiate Court in Administrative Matters who has authority to hear the MTA’s appeal. The MTA’s appeal and the Adhesive appeal are still pending to be resolved.
Removed
In June 2021, the Claimants filed their statement of claim, seeking approximately $61.0 million plus interest in monetary relief and/or reimbursement in respect of several fixed price LTAs that were executed between such subsidiaries and the Claimants in 2017 and 2018.
Added
On March 20, 2024, a meeting was held at PRODECON where the parties confirmed their final positions. No agreement between the parties was reached, the conclusive agreement procedure came to an end, and the tax audit process resumed.
Removed
On December 16, 2022, the Claimants revised their calculation of alleged damages to approximately $178.9 million including interest, with damages covering the period from the first quarter of 2020 through the end of the third quarter of 2022 and interest covering the period from June 2020 through December 16, 2022.
Added
On July 10, 2024, the MTA concluded the tax audit and determined that there is no tax deficiency to be assessed for the period January 1, 2018 to December 31, 2018.
Removed
In March 2023, an International Chamber of Commerce hearing was held before the party-appointed sole arbitrator with the Claimants, the Company, and witnesses in attendance. On March 31, 2023, the Claimants further revised their calculation of alleged damages to approximately $171.7 million, including interest, for the period covering the first quarter of 2020 through 2022.
Added
The Company intends to vigorously defend its position in the 2019 proceeding.
Removed
In June of 2023, the Claimants again revised their calculation of alleged damages to approximately $188.2 million, including interest, for the period covering the first quarter of 2020 through the first quarter of 2023. We believe we have valid defenses to these claims.
Added
On May 15, 2024, the Court appointed the University of Puerto Rico Retirement System as the lead plaintiff. On October 7, 2024, the plaintiff filed an amended complaint. On December 6, 2024, the Company filed a motion to dismiss the complaint.
Removed
We intend to vigorously defend them and enforce our rights under the LTAs. 22 Monterrey, Mexico Suspension of Operations Background On September 15, 2022, inspectors from the State Attorney’s Office for the Secretary of Environment of the State of Nuevo León, Mexico visited GrafTech Mexico S.A.
Added
At this stage of the proceedings, it is too early to determine if the matter would reasonably be expected to have a material adverse effect on our financial condition.
Removed
Once the State Attorney’s Office for the Secretary of Environment initiates the summary argument period, GrafTech Mexico will have three business days to provide its summary arguments. A final resolution is expected to be issued within fifteen business days from submission of the summary arguments, but can be extended up to an additional three months and is subject to appeal.
Removed
The plaintiff seeks compensatory damages, which are unquantified at this time, costs and expenses, and unspecified equitable or injunctive relief. We believe we have valid defenses to these claims and we intend to vigorously defend them.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

10 edited+5 added−5 removed3 unchanged
Biggest changePerez most recently served as Vice President, Europe and Asia, Sales and Customer Service at Alcoa, a global industry leader in bauxite, alumina, and aluminum products, a position he held since 2017. Previously at Alcoa, Mr.
Biggest changeHe is admitted to practice law in the State of Ohio. Iñigo Perez Ortiz joined the Company as Senior Vice President, Commercial and CTS in February 2020. Mr. Perez most recently served as Vice President, Europe and Asia, Sales and Customer Service at Alcoa, a global industry leader in bauxite, alumina, and aluminum products, a position he held since 2017.
Perez was Commercial Director, Europe and Asia Pacific from 2011 to 2017, Sales Manager, Europe from 2007 to 2011 and Sales Office Manager from 2002 to 2007. Prior to his career at Alcoa, Mr. Perez served in a variety of senior commercial roles at Autopulit S.A., Warner Electric and Babcock Wilcox Espanola, S.A. Mr.
Previously at Alcoa, Mr. Perez was Commercial Director, Europe and Asia Pacific from 2011 to 2017, Sales Manager, Europe from 2007 to 2011 and Sales Office Manager from 2002 to 2007. Prior to his career at Alcoa, Mr. Perez served in a variety of senior commercial roles at Autopulit S.A., Warner Electric and Babcock Wilcox Espanola, S.A. Mr.
Previously, he also was President of Mayfran International from 2012 to 2013, and spent seven years at Alcoa Corporation (NYSE: AA) ("Alcoa") in a variety of general management and strategy roles. Mr.
Previously, he also was President of Mayfran International from 2012 to 2013, and spent seven years at Alcoa Corporation (NYSE: AA) (“Alcoa”) in a variety of general management and strategy roles. Mr.
Perez holds a Master in Industrial Plans Management, Lean Manufacturing and Engineering degree from Polytechnic University of Barcelona, an Executive Master of Business Administration degree from Instituto de Empresa and a Mining Engineer degree from the University of the Basque Country. 25 PART II
Perez holds a Master in Industrial Plans Management, Lean Manufacturing and Engineering degree from Polytechnic University of Barcelona, an Executive Master of Business Administration degree from Instituto de Empresa and a Mining Engineer degree from the University of the Basque Country. 26 PART II
Halford also was President of Doncasters Aerospace, a manufacturer of components and assemblies for the civil and military aero engine and airframe markets, from 2014 to 2016, and Vice President, Global Business Development, Doncasters Group Limited from 2013 to 2014.
Halford also was President of Doncasters Aerospace, a m anufacturer of components and assemblies for the civil and military aero engine and airframe markets, from 2014 to 2016, and Vice President, Global Business Development, Doncasters Group Limited from 2013 to 2014.
Mr. Flanagan previously served as Executive Vice President, Chief Financial Officer of Cleveland-Cliffs Inc. (NYSE: CLF), a flat-rolled steel producer and supplier of iron ore pellets, from January 2017 to February 2019.
He joined the Company as Chief Financial Officer, Senior Vice President of Finance and Treasurer in November 2021. Mr. Flanagan previously served as Executive Vice President, Chief Financial Officer of Cleveland-Cliffs Inc. (NYSE: CLF), a flat-rolled steel producer and supplier of iron ore pellets, from January 2017 to February 2019.
Item 4. Mine Safety Disclosures Not applicable. Supplemental Item. Information about our Executive Officers The following table sets forth information with respect to our current executive officers, including their ages. 24 Name Age Position Timothy K. Flanagan 46 Interim Chief Executive Officer and President Catherine Hedoux-Delgado 59 Interim Chief Financial Officer and Treasurer Jeremy S.
Item 4. Mine Safety Disclosures Not applicable. Supplemental Item. Information about our Executive Officers The following table sets forth information with respect to our current executive officers, including their ages. 25 Name Age Position Timothy K. Flanagan 47 Chief Executive Officer and President Rory O’Donnell 47 Chief Financial Officer and Senior Vice President Jeremy S.
Before joining the Company, Mr. Flanagan served as Chief Financial Officer of Benesch, Friedlander, Coplan & Aronoff LLP, an AmLaw 200 law firm, from June 2019 to November 2021. He has a B.S. in Accounting from the University of Dayton. Catherine Hedoux-Delgado became Interim Chief Financial Officer and Treasurer in November 2023. Ms.
Before joining the Company, Mr. Flanagan served as Chief Financial Officer of Benesch, Friedlander, Coplan & Aronoff LLP, an AmLaw 200 law firm, from June 2019 to November 2021. He has a Bachelor of Science degree in Accounting from the University of Dayton. Rory O’Donnell became Chief Financial Officer and Senior Vice President in September 2024. Mr.
Halford 51 Executive Vice President, Chief Operating Officer Gina K. Gunning 57 Chief Legal Officer and Corporate Secretary Iñigo Perez Ortiz 52 Senior Vice President, Commercial and CTS Timothy K. Flanagan became Interim Chief Executive Officer and President in November 2023. Mr. Flanagan joined the Company as Chief Financial Officer, Senior Vice President of Finance and Treasurer in November 2021.
Halford 52 Executive Vice President, Chief Operating Officer Andrew J. Renacci 37 Interim Chief Legal Officer and Corporate Secretary Iñigo Perez Ortiz 53 Senior Vice President, Commercial and CTS Timothy K. Flanagan became Chief Executive Officer and President in March 2024. Mr. Flanagan had previously served as the Company’s Interim Chief Executive Officer and President since November 2023.
Halford holds a Master of Business Administration degree from Harvard University and a Bachelor of Science degree in Mechanical Engineering from GMI Engineering and Management Institute (now Kettering University). Gina K. Gunning joined the Company as Chief Legal Officer and Corporate Secretary in July 2018.
Halford holds a Master of Business Administration degree from Harvard University and a Bachelor of Science degree in Mechanical Engineering from GMI Engineering and Management Institute (now Kettering University). Andrew J. Renacci was appointed Interim Chief Legal Officer and Corporate Secretary in January 2025. Prior to that, Mr.
Removed
Hedoux-Delgado joined the Company as Vice President, Corporate Controller in April 2012 where she was responsible for the accounting and financial reporting of the Company. Prior to joining the Company, she spent 20 years at Lexmark International Inc., a multinational printing product and services company, where she most recently served as Director of SEC Reporting and Corporate Consolidation.
Added
O’Donnell previously served as Senior Vice President, Controller and Principal Accounting Officer of Covia Corporation, a provider of mineral-based and material solutions for the industrial and energy markets, since February 2019. While at Covia Corporation, he also served as Interim Chief Financial Officer from August 2022 to July 2023. At Covia Corporation, Mr.
Removed
Prior to that, she held numerous finance and accounting leadership roles at Lexmark, including Corporate Director of Internal Controls, Finance Director of the Consumer Printing Division for EMEA (Europe, Middle East and Africa) and Finance Director of Lexmark Canada. Ms. Hedoux-Delgado holds a B.S. in Management from the ESCP Business School in France. Jeremy S.
Added
O’Donnell was responsible for internal and external financial reporting and compliance, tax planning and compliance, and managing working capital, among other responsibilities. Prior to Covia Corporation, Mr. O’Donnell served as Senior Vice President, Controller at Signet Jewelers Limited (NYSE: SIG), a retailer of diamond jewelry, from 2014 to 2019. Before joining Signet Jewelers Limited, Mr.
Removed
She has more than 25 years of law firm and in-house corporate legal experience across multiple industries.
Added
O’Donnell served as Director, Accounting & Reporting at Cleveland-Cliffs Inc. (NYSE: CLF), a North America-based steel producer. Mr. O’Donnell began his career at KPMG LLP, a professional services firm. Mr. O’Donnell has a Bachelor of Science degree in Accounting from the University of Dayton and is a Certified Public Accountant licensed in Ohio. Jeremy S.
Removed
Prior to joining GrafTech, she was an Associate General Counsel at FirstEnergy Corp., a distributor and generator of electricity, from 2012 to 2018, where she was responsible for legal matters involving SEC reporting, business development, and capital markets, as well as corporate and executive compensation topics. She also served as a partner at Jones Day. Ms.
Added
Renacci served as GrafTech’s Senior Corporate Counsel from April 2021 to January 2025, where he was responsible for advising GrafTech in matters related to corporate governance, executive compensation, capital markets, ESG, securities laws, stock exchange rules and regulations, periodic reporting responsibilities and strategic transactions. Prior to joining GrafTech, Mr.
Removed
Gunning holds a Juris Doctor from Notre Dame Law School and a Bachelor of Arts in English from the University of Notre Dame. Iñigo Perez Ortiz joined the Company as Senior Vice President, Commercial and CTS in February 2020. Mr.
Added
Renacci spent approximately nine years in the corporate and securities group at Squire Patton Boggs (US) LLP, an international law firm, where he advised clients in the chemicals, manufacturing and entertainment and recreation industries on similar matters. Mr. Renacci holds a bachelor’s degree from the University of Michigan and a Juris Doctor from Cleveland State University College of Law.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed3 unchanged
Biggest changeOur ability to pay dividends will depend upon many factors, including our financial position and liquidity, results of operations, legal requirements, restrictions that may be imposed by the terms of our current and future credit facilities and other debt obligations and other factors deemed relevant by our Board of Directors.
Biggest changeOur ability to pay dividends will depend upon many factors, including our financial position and liquidity, results of operations, legal requirements, restrictions that are imposed by the terms of our current credit facilities, restrictions that may be imposed by the terms of our future credit facilities and other debt obligations and other factors deemed relevant by our Board of Directors.
Equity Compensation Plan Information The information about our common stock that may be issued under our Omnibus Equity Incentive Plan as of December 31, 2023 is set forth in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Report under the caption “Equity Compensation Plan Information.” Issuer Purchases of Equity Securities On July 31, 2019, we announced that our Board of Directors approved the repurchase of up to $100.0 million of our common stock in open market purchases, including under Rule 10b5-1 and/or Rule 10b-18 plans.
Equity Compensation Plan Information The information about our common stock that may be issued under our Omnibus Equity Incentive Plan as of December 31, 2024 is set forth in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Report under the caption “Equity Compensation Plan Information.” Issuer Purchases of Equity Securities On July 31, 2019, we announced that our Board of Directors approved the repurchase of up to $100.0 million of our common stock in open market purchases, including under Rule 10b5-1 and/or Rule 10b-18 plans.
On November 4, 2021, we announced that our Board of Directors approved the repurchase of an additional $150.0 million of our common stock under this program . Approximately $99.0 million of the total $250.0 million authorized remained available for stock repurchases as of December 31, 2023. The stock repurchase program has no expiration date.
On November 4, 2021, we announced that our Board of Directors approved the repurchase of an additional $150.0 million of our common stock under this program . Approximately $99.0 million of the total $250.0 million authorized remained available for stock repurchases as of December 31, 2024. The stock repurchase program has no expiration date.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the trading symbol “EAF.” Holders As of December 31, 2023, there were seven registered holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the trading symbol “EAF.” Holders As of December 31, 2024, there were seven registered holders of record of our common stock.
A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policies and Restrictions Through the second quarter of 2023, we paid a quarterly cash dividend of $0.01 per common share.
A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policies and Restrictions Throughout 2022 and in the first and second quarters of 2023, we paid a quarterly cash dividend of $0.01 per common share.
During the quarter ended December 31, 2023, there was no share repurchase activity. Item 6. [Reserved] 26
During the quarter ended December 31, 2024, there was no share repurchase activity. Item 6. [Reserved] 27

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+71 added−69 removed33 unchanged
Biggest changeThe following tables reconcile our non-GAAP key financial measures to the most directly comparable GAAP measures: Reconciliation of Net (Loss) Income to Adjusted Net (Loss) Income Year Ended December 31, 2023 2022 (Dollars in thousands, except per share data) Net (loss) income $ (255,250) $ 382,962 Diluted (loss) income per common share: Net (loss) income per share $ (0.99) $ 1.48 Weighted average common shares outstanding 257,042,843 258,791,228 Net (loss) income $ (255,250) $ 382,962 Adjustments, pre-tax: Pension and OPEB plan expenses (benefits) (1) 6,309 (7,355) Public offerings and related expenses (2) — 100 Non‑cash losses on foreign currency remeasurement (3) 603 521 Stock-based compensation expense (4) 4,433 2,311 Non‑cash fixed asset write‑off (5) — 1,068 Related party Tax Receivable Agreement adjustment (6) 249 (83) Goodwill impairment charges (7) 171,117 — Total non-GAAP adjustments pre-tax $ 182,711 $ (3,438) Income tax impact on non-GAAP adjustments (8) 28,213 (142) Adjusted net (loss) income $ (100,752) $ 379,666 (1) Net periodic benefit cost (credit) for our pension and OPEB plans, including a mark-to-market loss (gain), representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
Biggest changeWhen evaluating our performance, you should consider these non-GAAP financial measures alongside other measures of financial performance and liquidity, including our net loss, loss per share, cash flow from operating activities, cost of goods sold and other GAAP measures. 31 The following tables reconcile our non-GAAP key financial measures to the most directly comparable GAAP measures: Reconciliation of Net Loss to Adjusted Net Loss Year Ended December 31, 2024 2023 (Dollars in thousands, except per share data) Net loss $ (131,165) $ (255,250) Diluted loss per common share: Net loss per share $ (0.51) $ (0.99) Weighted average common shares outstanding 257,667,125 257,042,843 Net loss $ (131,165) $ (255,250) Adjustments, pre-tax: Pension and OPEB expenses (1) 2,270 6,309 Rationalization expenses (2) 3,156 — Rationalization-related expenses (3) 2,655 — Non‑cash (gains) losses on foreign currency remeasurement (4) (1,949) 603 Stock-based compensation expense (5) 6,035 4,433 Proxy contest expenses (6) 752 — Tax Receivable Agreement adjustment (7) 124 249 Debt modification costs (8) 18,369 — Goodwill impairment charges (9) — 171,117 Total non-GAAP adjustments pre-tax $ 31,412 $ 182,711 Income tax impact on non-GAAP adjustments (10) 6,391 28,213 Adjusted net loss $ (106,144) $ (100,752) (1) Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
We use and rely on estimates in determining the economic useful lives of our assets, obligations under our employee benefit plans, provisions for doubtful accounts, provisions for restructuring charges and contingencies, tax valuation allowances, evaluation of goodwill, other intangible assets, pension and OPEB and various other recorded or disclosed amounts, including inventory valuations. Estimates require us to use our judgment.
We use and rely on estimates in determining the economic useful lives of our assets, obligations under our employee benefit plans, provisions for doubtful accounts, provisions for restructuring charges and contingencies, tax valuation allowances, evaluation of other intangible assets, pension and OPEB and various other recorded or disclosed amounts, including inventory valuations. Estimates require us to use our judgment.
In order to seek to reduce our credit risks, we may reduce our sales of, or refuse to sell (except for prepayment, cash on delivery or under letters of credit or parent guarantees), our products to some customers and potential customers. Our unrecovered trade receivables worldwide have not been material during the last two years individually or in the aggregate.
In order to seek to minimize our credit risks, we may reduce our sales of, or refuse to sell (except for prepayment, cash on delivery or under letters of credit or parent guarantees), our products to some customers and potential customers. Our unrecovered trade receivables worldwide have not been material during the last two years individually or in the aggregate.
The result of these effects is to increase (or decrease) operating and net (loss) income. Many of the non-U.S. countries in which we have a manufacturing facility have been subject to significant economic and political changes, which have significantly impacted currency exchange rates.
The result of these effects is to increase (or decrease) operating and net loss. Many of the non-U.S. countries in which we have a manufacturing facility have been subject to significant economic and political changes, which have significantly impacted currency exchange rates.
Sales volume helps investors understand the factors that drive our net sales. Production volume reflects graphite electrodes produced during the period. Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. Capacity utilization reflects production volume as a percentage of production capacity.
Sales volume helps investors understand the factors that drive our net sales. Production volume reflects graphite electrodes produced during the period. Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production 29 may vary. Capacity utilization reflects production volume as a percentage of production capacity.
In certain countries in which we have manufacturing facilities, and in certain export 35 markets, we sell in currencies other than the U.S. dollar. Accordingly, when these currencies increase (or decline) in value relative to the U.S. dollar, this has the effect of increasing (or reducing) net sales.
In certain countries in which we have manufacturing facilities, and in certain export markets, we sell in currencies other than the U.S. dollar. Accordingly, when these currencies increase (or decline) in value relative to the U.S. dollar, this has the effect of increasing (or reducing) net sales.
Adjusted (loss) earnings per share represents adjusted diluted (loss) earnings per share. (2) Non-GAAP financial measure; see below for information and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Adjusted loss per share represents adjusted diluted loss per share. (2) Non-GAAP financial measure; see below for information and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.
As of December 31, 2023, our stated production capacity was approximately 202 thousand MT through our primary manufacturing facilities in Calais, Pamplona and Monterrey. On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment. This includes an indefinite suspension of production activities at our St.
As of December 31, 2023, our stated production capacity was approximately 202 thousand MT through our primary manufacturing facilities in Calais, Pamplona and Monterrey. On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment. This included an indefinite suspension of production activities at our St.
The estimate of stand-alone selling price on the various classes of contracts is the basis for the allocation of revenue amongst periods for new and modified contracts. Historically the amount of contract assets and liabilities resulting from these estimates has been immaterial. See Note 2, "Revenue from Contracts with Customers," to the Consolidated Financial Statements for additional information. 43
The estimate of stand-alone selling price on the various classes of contracts is the basis for the allocation of revenue amongst periods for new and modified contracts. Historically the amount of contract assets and liabilities resulting from these estimates has been immaterial. See Note 2, "Revenue from Contracts with Customers," to the Consolidated Financial Statements for additional information. 45
We define EBITDA, a non‑GAAP financial measure, as net income or loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization.
We define EBITDA, a non‑GAAP financial measure, as net loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization.
Discussion and analysis regarding our financial condition and results of operations for 2022 as compared to 2021 is included in Item 7 of our Annual Report for the year-ended December 31, 2022, filed with the SEC on February 14, 2023.
Discussion and analysis regarding our financial condition and results of operations for 2023 as compared to 2022 is included in Item 7 of our Annual Report for the year-ended December 31, 2023, filed with the SEC on February 14, 2024.
Non-GAAP financial measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net (loss) income, adjusted (loss) earnings per share, free cash flow, adjusted free cash flow and cash cost of goods sold per MT are non-GAAP financial measures.
Non-GAAP financial measures In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow and cash cost of goods sold per MT are non-GAAP financial measures.
The impact of these changes in the average exchange rates of other currencies against the U.S. dollar on our net sales was an increase of $1.5 million in 2023, a decrease of $11.7 million in 2022 and an increase of $5.5 million in 2021.
The impact of these changes in the average exchange rates of other currencies against the U.S. dollar on our net sales was a decrease of $1.1 million in 2024, an increase of $1.5 million in 2023 and a decrease of $11.7 million in 2022.
We may purchase shares from time to time on the open market, including under Rule 10b5-1 and/or Rule 10b-18 plans. The amount and timing of repurchases are subject to a variety of factors including liquidity, stock 36 price, applicable legal requirements, other business objectives and market conditions. In 2023, we did not repurchase any shares of our common stock.
We may purchase shares from time to time on the open market, including under Rule 10b5-1 and/or Rule 10b-18 plans. The amount and timing of repurchases are subject to a variety of factors including liquidity, stock price, applicable legal requirements, other business objectives and market conditions. In 2024, we did not repurchase any shares of our common stock.
We believe adjusted net (loss) income and adjusted (loss) earnings per share are useful to present to investors because we believe that they assist investors’ understanding of the underlying operational profitability of the Company. 30 We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures.
We believe adjusted net loss and adjusted loss per share are useful to present to investors because we believe that they assist investors’ understanding of the underlying operational profitability of the Company. We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures.
Results of Operations Results of operations for 2023 as compared to 2022 The tables presented in our period-over-period comparisons summarize our Consolidated Statements of Operations and illustrate key financial indicators used to assess the consolidated financial results.
Results of Operations Results of operations for 2024 as compared to 2023 The tables presented in our period-over-period comparisons summarize our Consolidated Statements of Operations and illustrate key financial indicators used to assess the consolidated financial results.
We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization and less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes, with this total divided by our sales volume measured in MT.
We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes and less rationalization-related expenses, with this total divided by our sales volume measured in MT.
While we believe that our estimates for these matters are reasonable, if the actual amount is significantly different than the estimated amount, our assets, liabilities or results of operations may be overstated or understated. The following accounting policies are deemed to be critical. Goodwill.
While we believe that our estimates for these matters are reasonable, if the actual amount is significantly different than the estimated amount, our assets, liabilities or results of operations may be overstated or understated. The following accounting policies are deemed to be critical. Impairment of long‑lived assets.
(d) Represents committed purchases of raw materials. 40 (e) Represents Brookfield's right to receive future payments from us for 85% of the amount of cash savings, if any, in U.S. federal income tax and Swiss tax that we and our subsidiaries realize as a result of the utilization of certain tax assets attributable to periods prior to our IPO, including certain federal NOLs, previously taxed income under Section 959 of the Code, foreign tax credits, and certain NOLs in Swissco.
(e) Represents Brookfield's right to receive future payments from us for 85% of the amount of cash savings, if any, in U.S. federal income tax and Swiss tax that we and our subsidiaries realize as a result of the utilization of certain tax assets attributable to periods prior to our IPO, including certain federal NOLs, previously taxed income under Section 959 of the Code, foreign tax credits, and certain NOLs in Swissco.
We were in compliance with all of our debt covenants as of December 31, 2023. Material Cash Requirements.
We were in compliance with all of our debt covenants as of December 31, 2024 and 2023. Material Cash Requirements.
The 2020 Indenture contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.
The New Notes Indentures contain certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.
The 2020 Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Finance, all outstanding 2020 Senior Secured Notes will become due and payable immediately without further action or notice.
The Existing 4.625% Notes Indenture contains certain events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Finance, all outstanding Existing 4.625% Notes will become due and payable immediately without further action or notice.
The impact of these changes in the average exchange rates of other currencies against the U.S. dollar on our cost of goods sold was an increase of $12.4 million in 2023, a decrease of $20.6 million in 2022 and an increase of $10.1 million in 2021. As part of our cash management, we also have intercompany loans between our subsidiaries.
The impact of these changes in the average exchange rates of other currencies against the U.S. dollar on our cost of goods sold was a decrease of $8.5 million in 2024, an increase of $12.4 million in 2023 and a decrease of $20.6 million in 2022. As part of our cash management, we also have intercompany loans between our subsidiaries.
Potential uses of our liquidity (other than operations) include capital expenditures, debt repayments, dividends, share repurchases and other general purposes. Any such potential uses of our liquidity may be funded by existing available liquidity, the incurrence of new secured or unsecured loans or capital market issuances.
Potential uses of our liquidity (other than operations) include capital expenditures, debt repayments, dividends, share repurchases and other general purposes. Any such potential uses of our liquidity may be funded by existing available liquidity, the incurrence of new secured or unsecured loans, capital market issuances, divestitures, joint ventures or equity investments.
A downturn, including any recession or potential resurgence of a global pandemic, could significantly and negatively impact our results of operations and cash flows, which, coupled with increased borrowings, could negatively impact our credit ratings, our ability to comply with debt covenants, our ability to secure additional financing and the cost and availability of such financing.
A downturn, including any recession, could significantly and negatively impact our results of operations and cash flows, which, coupled with increased borrowings, could negatively impact our credit ratings, our ability to comply with debt covenants, our ability to secure additional financing and the cost and availability of such financing.
If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding 2020 Senior Secured Notes may declare all of the 2020 Senior Secured Notes to be due and payable immediately.
If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding Existing 4.625% Notes may declare all of the Existing 4.625% Senior Notes to be due and payable immediately.
Some of these limitations are: • adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments, including any capital expenditure requirements to augment or replace our capital assets; • adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; • adjusted EBITDA does not reflect expenses or benefits relating to our pension and OPEB plans; • adjusted EBITDA does not reflect public offerings and related expenses; • adjusted EBITDA does not reflect the non‑cash gains or losses from foreign currency remeasurement of non‑operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar; • adjusted EBITDA does not reflect stock-based compensation expense; • adjusted EBITDA does not reflect the non‑cash write‑off of fixed assets; • adjusted EBITDA does not reflect related party payable - Tax Receivable Agreement adjustments; • adjusted EBITDA does not reflect goodwill impairment charges; and • other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Some of these limitations are: • adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments, including any capital expenditure requirements to augment or replace our capital assets; • adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness; • adjusted EBITDA does not reflect tax payments or the income tax benefit that may represent a reduction in cash available to us; 30 • adjusted EBITDA does not reflect expenses relating to our pension and OPEB plans; • adjusted EBITDA does not reflect rationalization or rationalization-related expenses; • adjusted EBITDA does not reflect the non‑cash gains or losses from foreign currency remeasurement of non‑operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar; • adjusted EBITDA does not reflect stock-based compensation expense; • adjusted EBITDA does not reflect proxy contest expenses; • adjusted EBITDA does not reflect Tax Receivable Agreement adjustments; • adjusted EBITDA does not reflect goodwill impairment charges; and • other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments. (f) In addition, letters of credit of $3.1 million were issued under the 2018 Revolving Credit Facility as of December 31, 2023.
The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments. (f) In addition, letters of credit of $7.4 million were issued under the 2018 Revolving Credit Facility as of December 31, 2024.
The 2023 Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Global Enterprises Inc., all outstanding 2023 Senior Secured Notes will become due and payable immediately without further action or notice.
The Existing 9.875% Notes Indenture contains certain events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Global, all outstanding Existing 9.875% Notes will become due and payable immediately without further action or notice.
The net realizable value of certain of our inventories fell below their carrying amounts as of December 31, 2023, and as a result, we recorded a LCM inventory valuation adjustment of $12.4 million in order to state our inventories at market.
The net realizable value of certain of our inventories fell below their carrying amounts as of December 31, 2024 and 2023, and as a result, we recorded LCM inventory valuation adjustments of $24.9 million and $12.4 million, respectively, in order to state our inventories at market.
As of December 31, 2023 and December 31, 2022, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $3.1 million and $3.0 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.
As of December 31, 2024 and 2023, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $7.4 million and $3.1 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.
If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding 2023 Senior Secured Notes may declare all of the 2023 Senior Secured Notes to be due and payable immediately.
If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding Existing 9.875% Notes may declare all of the Existing 9.875% Notes to be due and payable immediately.
As of December 31, 2023, we tested our long-lived assets for impairment and determined that their carrying value was recoverable. 42 Accounting for income taxes. We are required to estimate our income taxes in each of the jurisdictions in which we operate.
As of December 31, 2024, we tested our long-lived assets for impairment and determined that their carrying value was recoverable. Accounting for income taxes. We are required to estimate our income taxes in each of the jurisdictions in which we are subject to taxation.
If the Company or GrafTech Finance experiences specific kinds of changes in control or the Company or any of its restricted subsidiaries sells certain of its assets, then GrafTech Finance must offer to repurchase the 2020 Senior Secured Notes on the terms set forth in the 2020 Indenture.
If the Company or GrafTech Finance experiences specific kinds of changes in control or the Company or any of the restricted subsidiaries sells certain of its assets, then GrafTech Finance must offer to repurchase the New 4.625% Notes on the terms set forth in the New 4.625% Notes Indenture.
This process requires us to make the following assessments: • estimate our actual current tax liability in each jurisdiction; • estimate our temporary differences resulting from differing treatment of items for tax and accounting purposes (which result in deferred tax assets and liabilities that we include within the Consolidated Balance Sheets); and • assess the likelihood that our deferred tax assets will be recovered from future taxable income and, if we believe that recovery is not more likely than not, a valuation allowance is established.
This process requires us to make the following assessments: • estimate our actual current tax liability in each jurisdiction; • estimate our temporary differences resulting from differing treatment of items for tax and accounting purposes (which result in deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) that we include within the Consolidated Balance Sheets); and • assess the likelihood that our DTAs will be recovered from future taxable income and, if we believe that recovery is not more likely than not, a valuation allowance is established. 44 If our estimates are incorrect, our DTAs or DTLs may be overstated or understated.
We define adjusted net (loss) income, a non‑GAAP financial measure, as net (loss) income, excluding the items used to calculate adjusted EBITDA, less the tax effect of those adjustments. We define adjusted (loss) earnings per share, a non‑GAAP financial measure, as adjusted net (loss) income divided by the weighted average diluted common shares outstanding during the period.
We define adjusted net loss, a non‑GAAP financial measure, as net loss, excluding the items used to calculate adjusted EBITDA and further excluding debt modification costs, less the tax effect of those adjustments. We define adjusted loss per share, a non‑GAAP financial measure, as adjusted net loss divided by the weighted average diluted common shares outstanding during the period.
GrafTech Finance Inc. (“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à.r.l. (“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) are co-borrowers under the 2018 Revolving Credit Facility. The 2018 Revolving Credit Facility matures on May 31, 2027.
GrafTech Finance Inc. (“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à.r.l. (“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) were co-borrowers under the 2018 Revolving Credit Facility.
The 2023 Indenture contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.
Prior to the Settlement Date, the Existing 4.625% Notes Indenture contained certain covenants that, among other things, limited the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.
We believe that we have adequate liquidity to meet our needs for at least the next twelve months and for the foreseeable future thereafter.
We believe that we have adequate liquidity to meet our needs for at least the next twelve months.
If the Company or GrafTech Global Enterprises experiences specific kinds of changes in control or the Company or any of its restricted subsidiaries sells certain of its assets, then GrafTech Global Enterprises Inc. must offer to repurchase the 2023 Senior Secured Notes on the terms set forth in the 2023 Indenture.
If the Company or GrafTech Global experiences specific kinds of changes in control or the Company or any of the restricted subsidiaries sells certain of its assets, then GrafTech Global must offer to repurchase the New 9.875% Notes on the terms set forth in the New 9.875% Notes Indenture.
In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date at a rate equal to the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10% per annum.
In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date at a rate equal to the one-month period SOFR plus 1.10% per annum.
The “non‑GAAP” financial measures consist of EBITDA, adjusted EBITDA, adjusted net (loss) income and adjusted (loss) earnings per share, which help us evaluate growth trends, establish budgets, assess operational efficiencies and evaluate our overall financial performance.
The “non‑GAAP” financial measures consist of EBITDA, adjusted EBITDA, adjusted net (loss) income and adjusted (loss) earnings per share, which help us evaluate growth trends, establish budgets, assess operational efficiencies and evaluate our overall financial performance. The key operating metrics consist of sales volume, production volume, production capacity and capacity utilization.
Uses of Liquidity In July 2019, our Board of Directors authorized a program to repurchase up to $100.0 million of our outstanding common stock. In November 2021, our Board of Directors authorized the repurchase of an additional $150.0 million of stock repurchases under this program.
These transactions are described under “--Financing transactions” in this section. Uses of Liquidity In July 2019, our Board of Directors authorized a program to repurchase up to $100.0 million of our outstanding common stock. In November 2021, our Board of Directors authorized the repurchase of an additional $150.0 million of stock repurchases under this program.
In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date at a rate equal to the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10%.
In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date at a rate equal to the one-month period SOFR plus 1.10%.
In the event that operating cash flows fail to provide sufficient liquidity to meet our business needs, including capital expenditures, any such shortfall would be expected to be made up by borrowings under our 2018 Revolving Credit Facility, to the extent available.
In the event that operating cash flows fail to provide sufficient liquidity to meet our business needs, including capital expenditures, any such shortfall would be expected to be made up by borrowings under our delayed draw term loan and 2018 Revolving Credit Facility, to the extent available, or other liquidity options described above.
As of December 31, 2023, we had liquidity of $289.3 million, consisting of $112.4 million of availability under our 2018 Revolving Credit Facility, after giving effect to $3.1 million of letters of credit, and cash and cash equivalents of $176.9 million.
As of December 31, 2023, we had liquidity of $289.3 million, consisting of $112.4 million available under our 2018 Revolving Credit Facility, after giving effect to $3.1 million of letters of credit, and cash and cash equivalents of $176.9 million. We had gross long-term debt of $950.0 million and short-term debt of $0.1 million as of December 31, 2023.
These loans are deemed to be temporary and, as a result, remeasurement gains and losses on these loans are recorded as currency gains or losses in other expense (income), net on the Consolidated Statements of Operations.
These loans are deemed to be temporary and, as a result, remeasurement gains and losses on these loans are recorded as currency gains or losses in cost of goods sold on the Consolidated Statements of Operations.
We also record foreign currency transaction gains and losses from non‑permanent intercompany balances as part of cost of goods sold and other expense (income), net. Significant changes in currency exchange rates impacting us are described under “—Effects of Changes in Currency Exchange Rates” and “—Results of Operations” in this section.
Our remaining subsidiaries use their local currency as their functional currency. We also record foreign currency transaction gains and losses from non‑permanent intercompany loan balances as part of cost of goods sold. Significant changes in currency exchange rates impacting us are described under “—Effects of Changes in Currency Exchange Rates” and “—Results of Operations” in this section.
Marys facility, with the exception of graphite electrode and pin machining. We are also indefinitely idling certain assets within our remaining graphite electrode manufacturing 29 footprint. As a result of these initiatives, beginning in 2024, our stated production capacity will be approximately 178 thousand MT.
Marys facility, with the exception of graphite electrode and pin machining. We also indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint. As a result of these initiatives, our stated production capacity was reduced from approximately 202 thousand MT in 2023 to approximately 178 thousand MT in 2024.
As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder (see below and Note 5, “Debt and Liquidity”), our operating performance as of December 31, 2023 resulted in a reduction of the availability under the facility. We do not anticipate the need to borrow against our 2018 Revolving Credit Facility.
As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder (see below and Note 5, “Debt and Liquidity”), our operating performance as of December 31, 2024 and 2023 resulted in a reduction of the availability under the facility. We had gross long-term debt of $1.1 billion as of December 31, 2024.
As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder, our operating performance as of December 31, 2023 resulted in a reduction of the availability under the facility.
As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder, our operating performance as of December 31, 2024 and 2023 resulted in our inability to access the full amount of commitments under the facility.
We define adjusted EBITDA as EBITDA plus any pension and other post-employment benefit (“OPEB”) plan expenses or benefits, adjustments for public offerings and related expenses, non‑cash gains or losses from foreign currency remeasurement of non‑operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, non-cash fixed asset write-offs, related party payable - Tax Receivable Agreement adjustments and goodwill impairment charges.
We define adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted by any pension and other post-employment benefit (“OPEB”) expenses, rationalization and rationalization-related expenses, non‑cash gains or losses from foreign currency remeasurement of non‑operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, proxy contest expenses, Tax Receivable Agreement adjustments and goodwill impairment charges.
GrafTech Global Enterprises Inc. may redeem some or all of the 2023 Senior Secured Notes at the redemption prices and on the terms specified in the 2023 Indenture.
GrafTech Global may redeem some or all of the Existing 9.875% Notes at the redemption prices and on the terms specified in the Existing 9.875% Notes Indenture.
Reconciliation of (Loss) Earnings Per Share to Adjusted (Loss) Earnings Per Share Year Ended December 31, 2023 2022 (Loss) Earnings per share $ (0.99) $ 1.48 Adjustments per share: Pension and OPEB plan expenses (benefits) (1) 0.02 (0.03) Public offerings and related expenses (2) — — Non‑cash losses on foreign currency remeasurement (3) — — Stock-based compensation expense (4) 0.02 0.01 Non‑cash fixed asset write‑off (5) — 0.01 Related party Tax Receivable Agreement adjustment (6) — — Goodwill impairment charges (7) 0.67 — Total non-GAAP adjustments pre-tax per share 0.71 (0.01) Income tax impact on non-GAAP adjustments per share (8) 0.11 — Adjusted (Loss) Earnings per share $ (0.39) $ 1.47 (1) Net periodic benefit cost (credit) for our pension and OPEB plans, including a mark-to-market loss (gain), representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
(10) The tax impact on the non-GAAP adjustments is affected by their tax deductibility and the applicable jurisdictional tax rates. 32 Reconciliation of Loss Per Share to Adjusted Loss Per Share Year Ended December 31, 2024 2023 Loss per share $ (0.51) $ (0.99) Adjustments per share: Pension and OPEB expenses (1) 0.01 0.02 Rationalization expenses (2) 0.01 — Rationalization-related expenses (3) 0.01 — Non‑cash (gains) losses on foreign currency remeasurement (4) — — Stock-based compensation expense (5) 0.02 0.02 Proxy contest expenses (6) — — Tax Receivable Agreement adjustment (7) — — Debt modification costs (8) 0.07 — Goodwill impairment charges (9) — 0.67 Total non-GAAP adjustments pre-tax per share 0.12 0.71 Income tax impact on non-GAAP adjustments per share (10) 0.02 0.11 Adjusted Loss per share $ (0.41) $ (0.39) (1) Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
There can be no assurance that we will resume paying dividends in the future in these amounts or at all. Our Board of Directors may change the timing and amount of any future dividend payments, if reinstated, or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.
Our Board of Directors may change the timing and amount of any future dividend payments, if reinstated, or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.
In 2023, our weighted-average realized price from LTAs was approximately $8,800 per MT and our weighted-average realized price for non-LTA business sales of graphite electrodes was approximately $5,400 per MT. Our weighted-average realized non-LTA price decreased 10% compared to 2022, reflecting the soft commercial environment.
In 2023, our weighted-average realized price from LTAs was approximately $8,800 per MT and our weighted-average realized price for non-LTA sales of graphite electrodes was approximately $5,400 per MT. Production volume for 2024 was approximately 97 thousand MT, increasing 10% compared to 2023.
(6) Non-cash expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that are expected to be utilized. (7) Non-cash goodwill impairment charges.
(6) Expenses associated with our proxy contest. (7) Non-cash expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that have been utilized. (8) Non-cash goodwill impairment charges.
Financing activities Net cash provided by financing activities was $18.7 million in 2023 compared to $176.3 million of net cash used in financing activities in 2022.
Net cash provided by financing activities was $155.7 million in 2024 compared to $18.7 million in 2023.
(8) The tax impact on the non-GAAP adjustments is affected by their tax deductibility and the applicable jurisdictional tax rates. 32 Reconciliation of Net (Loss) Income to Adjusted EBITDA Year Ended December 31, 2023 2022 (Dollars in thousands) Net (loss) income $ (255,250) $ 382,962 Add: Depreciation and amortization 56,889 55,496 Interest expense 58,087 36,568 Interest income (3,439) (4,480) Income taxes (18,514) 69,356 EBITDA (162,227) 539,902 Adjustments: Pension and OPEB plan expenses (benefits) (1) 6,309 (7,355) Public offerings and related expenses (2) — 100 Non‑cash losses on foreign currency remeasurement (3) 603 521 Stock-based compensation expense (4) 4,433 2,311 Non‑cash fixed asset write‑off (5) — 1,068 Related party Tax Receivable Agreement adjustment (6) 249 (83) Goodwill impairment charges (7) 171,117 — Adjusted EBITDA $ 20,484 $ 536,464 (1) Net periodic benefit cost (credit) for our pension and OPEB plans, including a mark-to-market loss (gain), representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
(10) The tax impact on the non-GAAP adjustments is affected by their tax deductibility and the applicable jurisdictional tax rates. 33 Reconciliation of Net Loss to Adjusted EBITDA Year Ended December 31, 2024 2023 (Dollars in thousands) Net loss $ (131,165) $ (255,250) Add: Depreciation and amortization 62,245 56,889 Interest expense 85,313 58,087 Interest income (5,701) (3,439) Income taxes (22,103) (18,514) EBITDA (11,411) (162,227) Adjustments: Pension and OPEB expenses (1) 2,270 6,309 Rationalization expenses (2) 3,156 — Rationalization-related expenses (3) 2,655 — Non‑cash (gains) losses on foreign currency remeasurement (4) (1,949) 603 Stock-based compensation expense (5) 6,035 4,433 Proxy contest expenses (6) 752 — Tax Receivable Agreement adjustment (7) 124 249 Goodwill impairment charges (8) — 171,117 Adjusted EBITDA $ 1,632 $ 20,484 (1) Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience.
Operational and Commercial Update Sales volume for 2023 was approximately 92 thousand MT, consisting of LTA volume of 29 thousand MT and non-LTA volume of 63 thousand MT, representing a decrease of 39% compared to 149 thousand MT in 2022, consisting of LTA volume of 91 thousand MT and non-LTA volume of 58 thousand MT.
Operational and Commercial Update Sales volume for 2024 was approximately 103 thousand MT, consisting of LTA volume of 13 thousand MT and non-LTA volume of 90 thousand MT, representing an increase of 13% compared to 92 thousand MT in 2023, consisting of LTA volume of 29 thousand MT and non-LTA volume of 63 thousand MT.
The Company also maintains access to credit and capital markets and may incur additional debt or issue equity securities from time to time, which may provide an additional source of liquidity. However, there can be no guarantee that we would be able to access the credit or capital markets on commercially satisfactory terms or at all.
The Company also maintains access to credit and capital markets and may incur additional debt or issue equity securities from time to time, which may provide an additional source of liquidity.
Our presentations of EBITDA, adjusted EBITDA, adjusted net (loss) income adjusted (loss) earnings per share, free cash flow and adjusted free cash flow should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non‑recurring items.
Our presentations of these non-GAAP financial measures should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non‑recurring items.
This compares to capital expenditures of $54.0 million for the year ended December 31, 2023. Longer term, we remain confident that the steel industry’s accelerating efforts to decarbonize will lead to increased adoption of the EAF method of steelmaking, driving long-term demand growth for graphite electrodes.
Longer term, we remain confident that the steel industry’s efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes.
Foreign currency translation adjustments are generally recorded as part of stockholders’ equity and identified as part of accumulated other comprehensive loss on the Consolidated Balance Sheets until such time as their operations are sold or substantially or completely liquidated.
Foreign currency translation adjustments are generally recorded as part of stockholders’ (deficit) equity and identified as part of accumulated other comprehensive loss on the Consolidated Balance Sheets until such time as their operations are sold or substantially or completely liquidated. 36 We account for our Russian, Swiss, Luxembourg, United Kingdom and Mexican subsidiaries using the U.S. dollar as the functional currency, as sales and purchases are predominantly U.S. dollar‑denominated.
(3) Non-cash losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (4) Non-cash expense for stock-based compensation grants. (5) Non-cash fixed asset write-off recorded for obsolete assets.
(3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024. (4) Non-cash (gains) losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (5) Non-cash expense for stock-based compensation awards.
(3) Non-cash losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (4) Non-cash expense for stock-based compensation grants. (5) Non-cash fixed asset write-off recorded for obsolete assets.
(3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024. (4) Non-cash (gains) losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (5) Non-cash expense for stock-based compensation awards.
We were in compliance with all of our debt covenants as of December 31, 2023 and 2022. 2023 Senior Secured Notes In June 2023, GrafTech Global Enterprises Inc. issued $450.0 million aggregate principal amount of 2023 Senior Secured Notes, including $11.4 million of original issue discount.
We were in compliance with all of our debt covenants as of December 31, 2024 and 2023. Following the Exchange Offer, approximately $1.8 million aggregate principal amount of Existing 4.625% Notes remain outstanding. Existing 9.875% Notes due 2028 In June 2023, GrafTech Global issued $450 million aggregate principal amount of Existing 9.875% Notes, including $11.4 million of original issue discount.
(b) Represents estimated interest payments on the 2020 and 2023 Senior Secured Notes through December 15, 2028. (c) Represents estimated contributions under our defined benefit pension plans. Contributions in future periods will be dependent upon regulatory requirements, the plans' funded ratios, plan investment performance, discount rates, actuarial assumptions, plan amendments, our contribution objectives and other factors.
(c) Represents estimated contributions under our defined benefit pension plans. Contributions in future periods will be depend ent upon regulatory requirements, the plans' funded ratios, plan investment performance, discount rates, actuarial assumptions, plan amendments, our contribution objectives and other factors. We anticipate funding those contributions with cash on hand or cash generated from operations.
If our estimates are incorrect, our deferred tax assets or liabilities may be overstated or understated. As of December 31, 2023, we had a valuation allowance of $9.0 million against certain deferred tax assets. Our losses in certain tax jurisdictions in recent periods represented sufficient negative evidence to require a full valuation allowance.
As of December 31, 2024, we had a valuation allowance of $19.3 million against certain DTAs. Our losses in certain tax jurisdictions in recent periods represented sufficient negative evidence to require a full valuation allowance.
Year Ended December 31, 2023 2022 2021 (Dollars in thousands) Expenses relating to environmental protection $ 12,085 $ 22,395 $ 16,914 Capital expenditures related to environmental protection 7,588 6,012 7,014 Critical accounting policies Critical accounting policies are those that require difficult, subjective or complex judgments by management, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
Critical accounting policies Critical accounting policies are those that require difficult, subjective or complex judgments by management, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year.
We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year. (2) Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024.
Financing transactions 2018 Term Loan and 2018 Revolving Credit Facility In February 2018, the Company entered into a credit agreement (as amended, the "2018 Credit Agreement"), which provided for (i) a $2,250 million senior secured term facility (the "2018 Term Loan Facility") after giving effect to the June 2018 amendment (the “First Amendment”) that increased the aggregate principal amount of the 2018 Term Loan Facility from $1,500 million to $2,250 million and (ii) a $330 million senior secured revolving credit facility after giving effect to the Third Amendment that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the "2018 Revolving Credit Facility").
The First Lien Term Loan Credit Agreement also contains certain events of default (with grace periods, as applicable) that permit the agent to accelerate the First Lien Term Loans, and provide that, upon the occurrence of certain events of default arising from bankruptcy or insolvency, all First Lien Term Loans will become due and payable immediately without further action or notice. 2018 Term Loan and 2018 Revolving Credit Facility In February 2018, the Company entered into a credit agreement (as amended, the “2018 Credit Agreement”), which provided for (i) a $2,250 million senior secured term facility (the “2018 Term Loan Facility”) after giving effect to the June 2018 amendment (the “First Amendment”) that increased the aggregate principal amount of the 2018 Term Loan Facility from 42 $1,500 million to $2,250 million and (ii) a $330 million senior secured revolving credit facility after giving effect to the May 2022 amendment that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the “2018 Revolving Credit Facility”).
We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis.
We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis. In evaluating these non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to the adjustments in the reconciliations presented below.
Our cash flow typically fluctuates significantly between quarters due to various factors. These factors include customer order patterns, fluctuations in working capital requirements, timing of tax and interest payments and other factors. During the second quarter of 2023, GrafTech Global Enterprises Inc. issued $450 million of 2023 Senior Secured Notes.
Our cash flow typically fluctuates significantly between quarters due to various factors. These factors include customer order patterns, fluctuations in working capital requirements, timing of tax and interest payments and other factors. During the fourth quarter of 2024, the Company consummated a series of financing transactions to extend the maturities on its outstanding debt and help to manage its liquidity.
(2) Legal, accounting, printing and registration fees associated with the public offerings and related expenses. 31 (3) Non-cash losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (4) Non-cash expense for stock-based compensation grants. (5) Non-cash fixed asset write-off recorded for obsolete assets.
(3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024. (4) Non-cash (gains) losses from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar. (5) Non-cash expense for stock-based compensation awards.
Investing activities Net cash used in investing activities was $53.8 million in the year ended December 31, 2023 compared to $72.0 million in the year ended December 31, 2022 primarily driven by decreased capital expenditures.
Cash flow used for accounts payable and accruals increased $15.6 million in 2024 compared to 2023 primarily due to the timing of payments. Net cash used in investing activities was $34.2 million for the year ended December 31, 2024 compared to $53.8 million for the year ended December 31, 2023 primarily driven by reduced capital expenditures.
A shift in the mix of our business from LTA volume to non-LTA volume and lower weighted-average realized prices also contributed to the decline in net sales. Cost of goods sold decreased $154.5 million, or 21%, in 2023 compared to 2022, primarily reflecting lower sales volume.
Net sales decreased $81.7 million, or 13%, compared to 2023. The decline primarily reflected a decrease in the weighted-average realized price for volume derived from non-LTAs and a shift in the mix of our business from volume derived 35 from LTAs to volume derived from non-LTAs.
(2) Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes.
(2) Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes. (3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024.
As of December 31, 2023, we had $99.0 million remaining under our stock repurchase authorization. Throughout 2022 and through the second quarter of 2023, we paid a quarterly dividend of $0.01 per share. On August 2, 2023, the Company’s Board of Directors elected to suspend the quarterly cash dividend of $0.01 per share.
As of December 31, 2024, we had $99.0 million remaining under our stock repurchase authorization. Our ability to repurchase shares is restricted by certain covenants in our debt instruments. In the first and second quarters of 2023 , we paid a quarterly dividend of $0.01 per share.
We also have a partial valuation allowance related to certain U.S. state net operating losses where realizability is unlikely due to discontinued operations in these states. Until we determine that we will generate sufficient jurisdictional taxable income to realize our net operating losses and deferred tax assets, we continue to maintain a valuation allowance. Related-party Tax Receivable Agreement.
We also have a partial valuation allowance related to certain U.S. state net operating losses where realizability is unlikely due to discontinued operations or the ability of our U.S. subsidiaries to generate capital gains to utilize capital loss carryforwards in these states.

… 174 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−2 removed5 unchanged
Biggest changeOur 2018 Revolving Credit Facility bears interest, at our option, at a rate to either (i) the Adjusted Term SOFR Rate and Adjusted EURIBOR Rate (each, as defined in the 2018 Credit Agreement), plus an applicable margin initially equal to 3.00% per annum or (ii) the ABR Rate, plus an applicable margin initially equal to 2.00% per annum, in each case with two 25 basis point step downs based on achievement of certain senior secured first lien net leverage ratios.
Biggest changeThe First Lien Term Loans bear interest at the option of GrafTech Global, at a rate equal to (i) Term SOFR (as defined in the First Lien Term Loan Credit Agreement) (subject to a 2.00% floor) plus 6.00% per annum or (ii) the ABR (as defined in the First Lien Term Loan Credit Agreement) plus 5.00% per annum.
As of December 31, 2023 and 2022, there were no commodity derivative contracts outstanding. Sensitivity analysis. We use sensitivity analysis to quantify potential impacts that market rate changes may have on the underlying exposures as well as on the fair values of our derivatives.
As of December 31, 2024 and 2023, there were no commodity derivative contracts outstanding. Sensitivity analysis. We use sensitivity analysis to quantify potential impacts that market rate changes may have on the underlying exposures as well as on the fair values of our derivatives.
For further information related to the financial instruments described above, see Note 1, "Business and Summary of Significant Accounting Policies" and Note 8, "Fair Value Measurements and Derivative Instruments" in the Notes to the Consolidated Financial Statements for additional information. 44
For further information related to the financial instruments described above, see Note 1, "Business and Summary of Significant Accounting Policies" and Note 8, "Fair Value Measurements and Derivative Instruments" in the Notes to the Consolidated Financial Statements for additional information. 46
As of December 31, 2023, a 10% appreciation or depreciation in the value of the U.S. dollar against foreign currencies from the prevailing market rates would result in a corresponding decrease of $2.0 million or a corresponding increase of $2.0 million, respectively, in the fair value of the foreign currency hedge portfolio.
As of December 31, 2024, a 10% appreciation or depreciation in the value of the U.S. dollar against foreign currencies from the prevailing market rates would result in a corresponding decrease of $0.6 million or a corresponding increase of $0.6 million , respectively, in the fair value of the foreign currency hedge portfolio.
Purchased currency options are instruments which give the holder the right, but not the obligation, to exchange different currencies at a specified rate at a specified date or over a range of specified dates. Forward exchange contracts and purchased currency options are carried at fair value.
Forward exchange contracts are agreements to exchange different currencies at a specified future date and at a specified rate. Purchased currency options are instruments which give the holder the right, but not the obligation, to exchange different currencies at a specified rate at a specified date or over a range of specified dates.
We have previously entered into agreements with financial institutions that were intended to limit our exposure to additional interest expense due to increases in variable interest rates. These instruments effectively capped our interest rate exposure. As of December 31, 2023, we did not have any outstanding interest rate swaps.
We have previously entered into agreements with financial institutions that were intended to limit our exposure to additional interest expense due to increases in variable interest rates. These instruments effectively capped our interest rate exposure. As of December 31, 2024 or 2023, we did not have any outstanding interest rate swap contracts. Currency rate management.
Our outstanding foreign currency derivatives represented a net unrealized pre-tax gain of $0.1 million at December 31, 2023 and a net unrealized pre-tax loss of $0.2 million at December 31, 2022. Energy commodity management. We previously entered into commodity derivative contracts to effectively fix some or all of our exposure to refined oil products.
Forward exchange contracts and purchased currency options are carried at fair value. Our outstanding foreign currency derivatives represented net unrealized pre-tax gains of $0.1 million at both December 31, 2024 and 2023. Energy commodity management. We previously entered into commodity derivative contracts to effectively fix some or all of our exposure to refined oil products.
These foreign currency derivatives, which include, but are not limited to, forward exchange contracts and purchased currency options, attempt to hedge global currency exposures. Forward exchange contracts are agreements to exchange different currencies at a specified future date and at a specified rate.
We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency derivatives, which include, but are not limited to, forward exchange contracts and purchased currency options, attempt to hedge global currency exposures.
If we utilized our 2018 Revolving Credit Facility, we would be exposed to changes in interest rates.
With respect to the First Lien Term Loans and if we draw under our 2018 Revolving Credit Facility, we are exposed to changes in interest rates.
Removed
As of December 31, 2022 , we recorded unrealized pre-tax gains of $27.4 million on our interest rate swaps. As of December 31, 2023, we no longer had any variable rate debt outstanding and therefore no exposure to variability in interest rates.
Added
Borrowings under the 2018 Revolving Credit Facility bear interest (i) with respect to the new revolving loans denominated in U.S. dollars, at the option of GrafTech Finance, Adjusted Term SOFR plus 3.50% per annum or ABR plus 2.50% per annum and (ii) with respect to new revolving loans denominated in euros, the Adjusted EURIBOR Rate plus 3.50% per annum.
Removed
See Note 8, "Fair Value Measurements and Derivative Instruments" in the Notes to the Consolidated Financial Statements for further discussion. Currency rate management. We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates.

Other EAF 10-K year-over-year comparisons