Title of each class
|
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|||
Common Stock, $0.01 par value per share
|
|
EAF
|
|
New York Stock Exchange
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 4A.
|
||
|
|
|
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 8.
|
||
Item 9.
|
||
|
|
|
Item 10-14
|
||
|
|
|
Item 15.
|
||
|
|
|
Item 16.
|
•
|
the cyclical nature of our business and the selling prices of our products may lead to periods of reduced profitability and net losses in the future;
|
•
|
the possibility that we may be unable to implement our business strategies, including our initiative to secure and maintain longer-term customer contracts, in an effective manner;
|
•
|
the possibility that global graphite electrode overcapacity may adversely affect graphite electrode prices;
|
•
|
pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future;
|
•
|
the sensitivity of our business and operating results to economic conditions and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all;
|
•
|
our dependence on the global steel industry generally and the electric arc furnace ("EAF") steel industry in particular;
|
•
|
the competitiveness of the graphite electrode industry;
|
•
|
our dependence on the supply of petroleum needle coke;
|
•
|
our dependence on supplies of raw materials (in addition to petroleum needle coke) and energy;
|
•
|
the possibility that our manufacturing operations are subject to hazards;
|
•
|
changes in, or more stringent enforcement of, health, safety and environmental regulations applicable to our manufacturing operations and facilities;
|
•
|
the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries;
|
•
|
the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results;
|
•
|
the possibility that our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, political crises or other catastrophic events;
|
•
|
our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services;
|
•
|
the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions;
|
•
|
the possibility that we may divest or acquire businesses, which could require significant management attention or disrupt our business;
|
•
|
the sensitivity of goodwill on our balance sheet to changes in the market;
|
•
|
the possibility that we are subject to information technology systems failures, cybersecurity attacks, network disruptions and breaches of data security;
|
•
|
our dependence on protecting our intellectual property;
|
•
|
the possibility that third parties may claim that our products or processes infringe their intellectual property rights;
|
•
|
the possibility that significant changes in our jurisdictional earnings mix or in the tax laws of those jurisdictions could adversely affect our business;
|
•
|
the possibility that tax legislation could adversely affect us or our stockholders;
|
•
|
the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness;
|
•
|
the possibility that restrictive covenants in our financing agreements could restrict or limit our operations;
|
•
|
the fact that borrowings under certain of our existing financing agreements subject us to interest rate risk;
|
•
|
the possibility of a lowering or withdrawal of the ratings assigned to our debt;
|
•
|
the possibility that disruptions in the capital and credit markets could adversely affect our results of operations, cash flows and financial condition, or those of our customers and suppliers;
|
•
|
the possibility that highly concentrated ownership of our common stock may prevent minority stockholders from influencing significant corporate decisions;
|
•
|
the possibility that we may not pay cash dividends on our common stock in the future;
|
•
|
the fact that certain of our stockholders have the right to engage or invest in the same or similar businesses as us;
|
•
|
the possibility that the market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets, including by Brookfield (as defined below);
|
•
|
the fact that certain provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated By-Laws could hinder, delay or prevent a change of control;
|
•
|
the fact that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders; and
|
•
|
our status as a "controlled company" within the meaning of the New York Stock Exchange ("NYSE") corporate governance standards, which allows us to qualify for exemptions from certain corporate governance requirements.
|
Item 1.
|
Business
|
(1)
|
Graphite electrode sales represent sales outside of China
|
Item 1A.
|
Risk Factors
|
•
|
limitations, which may be imposed under new legislation or regulation;
|
•
|
suppliers’ allocations to meet demand from other purchasers during periods of shortage (or, in the case of energy suppliers, extended hot or cold weather);
|
•
|
interruptions or cessations in production by suppliers; and
|
•
|
market and other events and conditions.
|
•
|
currency fluctuations and devaluations in currency exchange rates, including impacts of transactions in various currencies, translation of various currencies into dollars for U.S. reporting and financial covenant compliance
|
•
|
imposition of or increase in customs duties and other tariffs;
|
•
|
imposition of or increases in currency exchange controls, including imposition of or increases in limitations on conversion of various currencies into dollars, euros, or other currencies, making of intercompany loans by subsidiaries or remittance of dividends, interest or principal payments or other payments by subsidiaries;
|
•
|
imposition of or increases in revenue, income or earnings taxes and withholding and other taxes on remittances and other payments by subsidiaries;
|
•
|
inflation, deflation and stagflation in any country in which we have a manufacturing facility;
|
•
|
imposition of or increases in investment or trade restrictions by the United States or other jurisdictions or trade sanctions adopted by the United States;
|
•
|
compliance with laws on anti-corruption, export controls, customs, sanctions and other laws governing our operations, including in challenging jurisdictions;
|
•
|
inability to determine or satisfy legal requirements, effectively enforce contract or legal rights, including our rights under our three‑ to five‑year take‑or‑pay contracts and intellectual property rights, and obtain complete financial or other information under local legal, judicial, regulatory, disclosure and other systems; and
|
•
|
nationalization or expropriation of assets, and other risks that could result from a change in government or government policy, or from other political, social or economic instability.
|
•
|
our inability to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees;
|
•
|
the diversion of our management’s attention from our existing business;
|
•
|
possible material adverse effects on our results of operations during the integration process;
|
•
|
becoming subject to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition that were not known to us at the time of the acquisition; and
|
•
|
our possible inability to achieve the intended objectives of the transaction, including the inability to achieve cost savings and synergies.
|
•
|
any of the U.S. or non‑U.S. patents now or hereafter owned by us, or that third parties have licensed to us or may in the future license to us, will not be circumvented, challenged or invalidated;
|
•
|
any of the U.S. or non‑U.S. patents that third parties have non‑exclusively licensed to us, or may non‑exclusively license to us in the future, will not be licensed to others; or
|
•
|
any of the patents for which we have applied or may in the future apply will be issued at all or with the breadth of claim coverage we seek.
|
•
|
lowering corporate income tax rates;
|
•
|
temporarily allowing for immediate expensing of expenditures for certain tangible property;
|
•
|
repealing the corporate alternative minimum tax;
|
•
|
implementing a 100% dividends‑received deduction on certain dividends from 10% or greater owned foreign subsidiaries;
|
•
|
imposing an income tax on deemed repatriated earnings of foreign subsidiaries generally as of December 31, 2017 (payable at reduced rates and potentially over an eight year period);
|
•
|
imposing tax at a reduced rate on certain income derived by foreign corporate subsidiaries in excess of a deemed return on tangible assets (i.e., tax on “global intangible low‑taxed income” or GILTI);
|
•
|
imposing limitations on the ability to deduct interest expense and utilize net operating losses (or NOLs), and
|
•
|
instituting certain proposals to limit base erosion (including the “base erosion anti‑abuse tax” or BEAT, and limitations on the deductibility of certain related‑party payments).
|
•
|
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;
|
•
|
make us more vulnerable to an increase in interest rates, 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.
|
•
|
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 Senior Secured Credit Facilities or to us or certain of our subsidiaries, as applicable; and
|
•
|
repay intercompany indebtedness or make intercompany distributions or pay intercompany dividends.
|
•
|
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;
|
•
|
certain rights of Brookfield with respect to the designation of directors for nomination and election to our board of directors;
|
•
|
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.
|
•
|
any derivative action or proceeding brought on our behalf;
|
•
|
any action asserting a breach of fiduciary duty;
|
•
|
any action asserting a claim against us arising under the DGCL, our Amended Certificate of Incorporation, or our Amended By‑Laws; and
|
•
|
any action asserting a claim against us that is governed by the internal‑affairs doctrine.
|
•
|
the requirement that a majority of our board of directors consist of independent directors;
|
•
|
the requirement that our governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
•
|
the requirement that our compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
•
|
variations in our quarterly or annual operating results;
|
•
|
changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts;
|
•
|
the contents of published research reports about us or our industry or the failure of securities analysts to cover our common stock;
|
•
|
additions or departures of key management personnel;
|
•
|
any increased indebtedness we may incur in the future;
|
•
|
announcements by us or others and developments affecting us;
|
•
|
actions by institutional stockholders;
|
•
|
litigation and governmental investigations;
|
•
|
changes in market valuations of similar companies;
|
•
|
speculation or reports by the press or investment community with respect to us or our industry in general;
|
•
|
increases in market interest rates that may lead purchasers of our shares to demand a higher yield;
|
•
|
announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and
|
•
|
general market, political and economic conditions, including any such conditions and local conditions in the markets in which our customers are located.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Location 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 Manufacturing Facility and Sales Office
|
|
Owned
|
|
|
|
|
|
St. Marys, Pennsylvania
|
|
Graphite Electrode Manufacturing Facility
|
|
Owned
|
|
|
|
|
|
Port Lavaca, Texas
|
|
Petroleum Needle Coke Manufacturing Facility (Seadrift)
|
|
Owned
|
|
|
|
|
|
Salvador, Bahia, Brazil
|
|
Graphite Electrode Machine Shop and Sales Office
|
|
Owned
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
Calais, France
|
|
Graphite Electrode Manufacturing Facility and Sales Office
|
|
Owned
|
|
|
|
|
|
Pamplona, Spain
|
|
Graphite Electrode Manufacturing Facility and Sales Office
|
|
Owned
|
|
|
|
|
|
Bussigny, Switzerland
|
|
Global Sales and Production Planning Office
|
|
Leased
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Name
|
|
Age
|
|
Position
|
David J. Rintoul
|
|
62
|
|
President and Chief Executive Officer
|
Quinn J. Coburn
|
|
56
|
|
Vice President, Chief Financial Officer and Treasurer
|
Jeremy S. Halford
|
|
47
|
|
Senior Vice President, Operations and Development
|
Gina K. Gunning
|
|
53
|
|
Chief Legal Officer and Corporate Secretary
|
Iñigo Perez Ortiz
|
|
48
|
|
Senior Vice President, Commercial
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
|
|
|
|
|
|
|
|
||||||
October 1 through October 31, 2019 (1)
|
125,551
|
|
|
$
|
11.01
|
|
|
125,551
|
|
|
$
|
89,133,000
|
|
November 1 through November 30, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
December 1 through December 31, 2019 (2)
|
19,047,619
|
|
|
$
|
13.125
|
|
|
—
|
|
|
—
|
|
|
Total
|
19,173,170
|
|
|
|
|
125,551
|
|
|
$
|
89,133,000
|
|
Item 6.
|
Selected Financial Data
|
(a)
|
Successor period data gives effect to the 3,022,259.23-for-1 stock split on our common stock effected on April 12, 2018.
|
(b)
|
2018 calculated by total dividends paid of $2,294,265 divided by weighted average shares outstanding. $2,022,000 of these dividends were declared and paid to Brookfield prior to our IPO. All other dividends were declared and paid to all common stockholders.
|
(c)
|
Represents pension and post-retirement benefits and related costs and miscellaneous other long-term obligations.
|
(d)
|
A closing balance sheet as of August 14, 2015 was not required as part of previous filings.
|
|
|
For the year ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net sales
|
|
$
|
1,790,793
|
|
|
$
|
1,895,910
|
|
|
$
|
550,771
|
|
Net income
|
|
$
|
744,602
|
|
|
$
|
854,219
|
|
|
$
|
7,983
|
|
EBITDA from continuing operations(1)
|
|
$
|
1,027,268
|
|
|
$
|
1,102,625
|
|
|
$
|
97,884
|
|
Adjusted EBITDA from continuing operations(1)
|
|
$
|
1,048,259
|
|
|
$
|
1,205,021
|
|
|
$
|
95,806
|
|
|
|
For the year ended December 31,
|
|
||||||
(in thousands)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Sales volume (MT)(2)
|
|
171
|
|
|
176
|
|
|
163
|
|
Production volume (MT)(3)
|
|
177
|
|
|
179
|
|
|
166
|
|
Production capacity excluding St. Marys during idle period (MT)(4)(5)
|
|
202
|
|
|
180
|
|
|
167
|
|
Capacity utilization excluding St. Marys during idle period(4)(6)
|
|
88
|
%
|
|
99
|
%
|
|
85
|
%
|
Total production capacity(5)(7)
|
|
230
|
|
|
208
|
|
|
195
|
|
Total capacity utilization(6)(7)
|
|
77
|
%
|
|
86
|
%
|
|
85
|
%
|
(1)
|
See below for more information and a reconciliation of EBITDA and adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.
|
(2)
|
Effective the first quarter of 2019, we have recast the sales volume above to include only graphite electrodes manufactured by GrafTech. This better reflects management's assessment of our profitability and excludes resales of low grade graphite electrodes manufactured by third party suppliers. For comparability purposes, the prior period has been recast to conform to this presentation.
|
(3)
|
Production volume reflects graphite electrodes produced during the period. See below for more information on our key operating metrics.
|
(4)
|
The St. Marys, Pennsylvania facility was temporarily idled effective the second quarter of 2016 except for the machining of semi‑finished products sourced from other plants. In the first quarter of 2018, our St. Marys facility began graphitizing a limited amount of electrodes sourced from our Monterrey, Mexico facility.
|
(5)
|
Production capacity reflects expected maximum production volume during the period under normal operating conditions, standard product mix and expected maintenance downtime. Actual production may vary. See below for more information on our key operating metrics.
|
(6)
|
Capacity utilization reflects production volume as a percentage of production capacity. See below for more information on our key operating metrics.
|
(7)
|
Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; Pamplona, Spain and St. Marys, Pennsylvania.
|
•
|
adjusted EBITDA from continuing operations does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
adjusted EBITDA from continuing operations 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 from continuing operations does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
|
•
|
adjusted EBITDA from continuing operations does not reflect tax payments that may represent a reduction in cash available to us;
|
•
|
adjusted EBITDA from continuing operations does not reflect expenses relating to our pension and OPEB plans;
|
•
|
adjusted EBITDA from continuing operations does not reflect the non‑cash gains or losses from foreign currency remeasurement of non‑operating liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar;
|
•
|
adjusted EBITDA from continuing operations does not reflect initial and follow-on public offering and related expenses;
|
•
|
adjusted EBITDA from continuing operations does not reflect acquisition and proxy costs;
|
•
|
adjusted EBITDA from continuing operations does not reflect related party Tax Receivable Agreement expense;
|
•
|
adjusted EBITDA from continuing operations does not reflect rationalization‑related charges, stock-based compensation or the non‑cash write‑off of fixed assets; and
|
•
|
other companies, including companies in our industry, may calculate EBITDA from continuing operations and adjusted EBITDA from continuing operations differently, which reduces its usefulness as a comparative measure.
|
|
|
For the year ended December 31,
|
|||||||
(in thousands)
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|||||||
Net income (loss)
|
|
744,602
|
|
|
854,219
|
|
|
7,983
|
|
Add:
|
|
|
|
|
|
|
|||
Discontinued operations
|
|
—
|
|
|
(331
|
)
|
|
6,229
|
|
Depreciation and amortization
|
|
61,819
|
|
|
66,413
|
|
|
64,025
|
|
Interest expense
|
|
127,331
|
|
|
135,061
|
|
|
30,823
|
|
Interest income
|
|
(4,709
|
)
|
|
(1,657
|
)
|
|
(395
|
)
|
Income taxes
|
|
98,225
|
|
|
48,920
|
|
|
(10,781
|
)
|
EBITDA from continuing operations
|
|
1,027,268
|
|
|
1,102,625
|
|
|
97,884
|
|
Adjustments:
|
|
|
|
|
|
|
|||
Pension and OPEB plan expenses (gain)(1)
|
|
6,727
|
|
|
3,893
|
|
|
(1,611
|
)
|
Rationalization‑related gains(2)
|
|
—
|
|
|
—
|
|
|
(3,970
|
)
|
Intial and follow-on public offerings and related expenses(3)
|
|
2,056
|
|
|
5,173
|
|
|
—
|
|
Acquisition and proxy contests costs(4)
|
|
—
|
|
|
—
|
|
|
886
|
|
Non‑cash loss on foreign currency remeasurement(5)
|
|
1,784
|
|
|
818
|
|
|
1,731
|
|
Stock-based compensation(6)
|
|
2,143
|
|
|
1,152
|
|
|
—
|
|
Non‑cash fixed asset write‑off(7)
|
|
4,888
|
|
|
4,882
|
|
|
886
|
|
Related party Tax Receivable Agreement expense(8)
|
|
3,393
|
|
|
86,478
|
|
|
—
|
|
Adjusted EBITDA from continuing operations
|
|
1,048,259
|
|
|
1,205,021
|
|
|
95,806
|
|
(1)
|
Service and interest cost of our OPEB plans. Also includes a mark‑to‑market loss (gain) for plan assets as of December of each year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Components of Results of Operations-Selling and Administrative Expenses” for more information.
|
(2)
|
Costs associated with rationalizations in our graphite electrode manufacturing operations and in the corporate structure. They include severance charges, contract termination charges, write‑off of equipment and (gain)/loss on sale of manufacturing sites.
|
(3)
|
Legal, accounting, printing and registration fees associated with initial and follow-on public offering and related expenses.
|
(4)
|
Costs associated with the merger transaction with Brookfield, resulting in change in control compensation expenses.
|
(5)
|
Non‑cash loss from foreign currency remeasurement of non‑operating liabilities of our non‑U.S. subsidiaries where the functional currency is the U.S. dollar.
|
(6)
|
Non-cash expense for stock-based compensation grants.
|
(7)
|
Non‑cash fixed asset write‑off recorded for obsolete assets.
|
(8)
|
Non-cash expense for future payment to our sole pre-IPO stockholder for tax assets that are expected to be utilized.
|
|
For the year ended December 31,
|
|||||||
(in thousands)
|
2019
|
|
|
2018
|
|
|
2017
|
|
Net sales:
|
|
|
|
|
|
|||
United States
|
403,916
|
|
|
429,599
|
|
|
103,890
|
|
Americas (excluding the United States)
|
348,670
|
|
|
367,561
|
|
|
129,103
|
|
Asia Pacific
|
172,439
|
|
|
131,578
|
|
|
46,329
|
|
Europe, Middle East, Africa
|
865,768
|
|
|
967,172
|
|
|
271,449
|
|
Total
|
1,790,793
|
|
|
1,895,910
|
|
|
550,771
|
|
|
|
For the Year Ended December 31,
|
|
Increase/ Decrease
|
|
% Change
|
|||||||||
(in thousands)
|
|
2019
|
|
2018
|
|
|
|||||||||
Net sales
|
|
$
|
1,790,793
|
|
|
$
|
1,895,910
|
|
|
$
|
(105,117
|
)
|
|
(6
|
)%
|
Cost of sales
|
|
750,390
|
|
|
705,698
|
|
|
44,692
|
|
|
6
|
%
|
|||
Gross profit
|
|
1,040,403
|
|
|
1,190,212
|
|
|
(149,809
|
)
|
|
(13
|
)%
|
|||
Research and development
|
|
2,684
|
|
|
2,129
|
|
|
555
|
|
|
26
|
%
|
|||
Selling and administrative expenses
|
|
63,674
|
|
|
62,032
|
|
|
1,642
|
|
|
3
|
%
|
|||
Operating income
|
|
974,045
|
|
|
1,126,051
|
|
|
(152,006
|
)
|
|
(13
|
)%
|
|||
Other expense (income), net
|
|
5,203
|
|
|
3,361
|
|
|
1,842
|
|
|
55
|
%
|
|||
Related party Tax Receivable Agreement expense
|
|
3,393
|
|
|
86,478
|
|
|
(83,085
|
)
|
|
N/A
|
|
|||
Interest expense
|
|
127,331
|
|
|
135,061
|
|
|
(7,730
|
)
|
|
(6
|
)%
|
|||
Interest income
|
|
(4,709
|
)
|
|
(1,657
|
)
|
|
(3,052
|
)
|
|
184
|
%
|
|||
Income from continuing operations
before provision for income taxes |
|
842,827
|
|
|
902,808
|
|
|
(59,981
|
)
|
|
(7
|
)%
|
|||
Provision for income taxes
|
|
98,225
|
|
|
48,920
|
|
|
49,305
|
|
|
101
|
%
|
|||
Net income from continuing operations
|
|
$
|
744,602
|
|
|
$
|
853,888
|
|
|
$
|
(109,286
|
)
|
|
(13
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from discontinued operations, net of tax
|
|
—
|
|
|
331
|
|
|
(331
|
)
|
|
(100
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
|
$
|
744,602
|
|
|
$
|
854,219
|
|
|
$
|
(109,617
|
)
|
|
(13
|
)%
|
|
For the Year Ended December 31, 2019
|
|
For the Year Ended December 31, 2018
|
||||
|
|
|
|
||||
Tax expense
|
$
|
98,225
|
|
|
$
|
48,920
|
|
Income from continuing operations
before provision for income taxes |
842,827
|
|
|
$
|
902,808
|
|
|
Effective tax rates
|
11.7
|
%
|
|
5.4
|
%
|
|
For the Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(Dollars in millions)
|
|||||||
Cash flow provided by (used in):
|
|
|
|
|
||||
Operating activities
|
$
|
805.3
|
|
|
$
|
836.6
|
|
|
Investing activities
|
(63.9
|
)
|
|
(67.3
|
)
|
|
||
Financing activities
|
(709.6
|
)
|
|
(731.0
|
)
|
|
•
|
Non-cash items such as depreciation and amortization; impairment, post-retirement obligations and pension plan changes;
|
•
|
Gains and losses attributed to investing and financing activities such as gains and losses on the sale of assets and unrealized currency transaction gains and losses; and
|
•
|
Changes in operating assets and liabilities which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations.
|
•
|
use of funds from increases in inventory of $21.5 million due to the increased quantities on hand;
|
•
|
source of funds of $3.9 million from decreased prepaid and other current assets primarily resulting from the lower value of imported goods impacting value-added taxes in certain foreign jurisdictions;
|
•
|
use of funds of $18.2 million resulting from a decrease in income taxes payable driven primarily by the timing of income tax payments in 2019;
|
•
|
use of funds of $11.6 million from decreases in accounts payable and other accruals primarily driven by decreased purchases of raw materials and timing of payments.
|
•
|
use of funds of $139.2 million from the increase in accounts receivable, which was due primarily to increased sales driven by higher sales prices, partially offset by improved collection terms;
|
•
|
use of funds from increases in inventory of $126.4 million due to the increased price of raw materials and higher production levels;
|
•
|
source of funds of $7.1 million from decreased prepaid and other current assets primarily resulting from commodity hedge collections and a reduction in advanced payments to suppliers;
|
•
|
source of funds of $67.1 million resulting from an increase in income taxes payable driven by higher profits in 2018;
|
•
|
source of funds of $15.7 million from increases in accounts payable and other accruals primarily driven by increased raw material costs.
|
|
Payments Due by Year Ending December 31,
|
||||||||||||||||||
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
2025+
|
||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||
Contractual and Other Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
2018 Term Loan Facility (a)
|
$
|
1,844,032
|
|
|
$
|
—
|
|
|
$
|
100,282
|
|
|
$
|
225,000
|
|
|
$
|
1,518,750
|
|
Interest on Long-term Debt (b)
|
464,971
|
|
|
96,635
|
|
|
187,123
|
|
|
171,781
|
|
|
9,432
|
|
|||||
Leases
|
8,628
|
|
|
4,496
|
|
|
3,395
|
|
|
645
|
|
|
92
|
|
|||||
Total contractual obligations
|
2,317,631
|
|
|
101,131
|
|
|
290,800
|
|
|
397,426
|
|
|
1,528,274
|
|
|||||
Postretirement, pension and related benefits (c)
|
118,365
|
|
|
11,771
|
|
|
23,275
|
|
|
24,401
|
|
|
58,918
|
|
|||||
Committed purchase obligations (d)
|
48,632
|
|
|
48,632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Related party Tax Receivable Agreement (e)
|
89,871
|
|
|
27,857
|
|
|
25,650
|
|
|
22,909
|
|
|
13,455
|
|
|||||
Other long-term obligations
|
12,682
|
|
|
9,108
|
|
|
1,172
|
|
|
578
|
|
|
1,824
|
|
|||||
Uncertain income tax provisions
|
185
|
|
|
72
|
|
|
80
|
|
|
33
|
|
|
—
|
|
|||||
Total contractual and other obligations (f)
|
$
|
2,587,366
|
|
|
$
|
198,571
|
|
|
$
|
340,977
|
|
|
$
|
445,347
|
|
|
$
|
1,602,471
|
|
Other Commercial Commitments
|
|
|
|
|
|
|
|
|
|
||||||||||
Guarantees (g)
|
2,935
|
|
|
2,935
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total other commercial commitments
|
$
|
2,935
|
|
|
$
|
2,935
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
The Company entered into the 2018 Credit Agreement, which provided for the 2018 Term Loan Facility and 2018 Revolving Credit Facility. The proceeds of the 2018 Term Loan Facility were used to redeem the Senior Notes, repay outstanding indebtedness under the amended and restated credit agreement dated February 27, 2015, pay fees and expenses relating to the redemption of the Senior Notes and repayment of such indebtedness and pay a dividend. The 2018 Term Loan Facility has an outstanding balance of $1,844 million and matures on February 12, 2025. The term loan bears interest at a rate equal to either the Adjusted LIBO Rate, plus an applicable margin initially equal to 3.50% per annum or the ABR Rate, plus an applicable margin initially equal to 2.50% per annum, in each case with one step down of 75 basis points based on achievement of certain public ratings of the 2018 Term Loans (see "Liquidity and Capital Resources" for full details of this transaction).
|
(b)
|
Represents estimated interest payments required on 2018 Term Loan Facility using a monthly LIBOR curve through February 2025 net of interest rate swap impacts.
|
(c)
|
Represents estimated postretirement, pension and related benefits obligations based on actuarial calculations.
|
(d)
|
Represents committed purchases of raw materials.
|
(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 the Pre‑IPO Tax Assets. 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 LIBOR plus 1.00% per annum. The term of the TRA 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 Revolving Facility as of December 31, 2019.
|
(g)
|
Represents surety bonds, which are renewed annually, and other bank guarantees. If rates were unfavorable, we would use letters of credit under our revolving facility.
|
(h)
|
Represents our undiscounted non-cancelable operating lease future payments as of December 31, 2019.
|
•
|
The notional amount of foreign exchange and commodity contracts;
|
•
|
Letters of credit outstanding under the Revolving Facility of $3.1 million as of December 31, 2019 and $4.5 million as of December 31, 2018; and
|
•
|
Surety bonds and guarantees with other banks totaling $2.9 million.
|
|
For the Year Ended December 31,
|
||||||||||
2019
|
|
2018
|
|
2017
|
|||||||
(Dollars in thousands)
|
|||||||||||
Expenses relating to environmental protection
|
$
|
11,204
|
|
|
$
|
12,355
|
|
|
$
|
7,973
|
|
Capital expenditures related to environmental protection
|
7,251
|
|
|
4,080
|
|
|
2,080
|
|
•
|
new technological developments that provide significantly enhanced benefits over our current technology;
|
•
|
significant negative economic or industry trends;
|
•
|
changes in our business strategy that alter the expected usage of the related assets; and
|
•
|
future economic results that are below our expectations used in the current 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.
|
•
|
sales made by our subsidiaries in currencies other than local currencies;
|
•
|
raw material purchases made by our foreign subsidiaries in currencies other than local currencies; and
|
•
|
investments in and intercompany loans to our foreign subsidiaries and our share of the earnings of those subsidiaries, to the extent denominated in currencies other than the U.S. dollar.
|
|
Page
|
•
|
Tested the effectiveness of controls over the calculation and recording of the TRA liability, including those over the forecasts of revenues and taxable income.
|
•
|
With the assistance of our income tax specialists, we evaluated whether the sources of management’s estimated taxable income were of the appropriate character and sufficient to utilize the deferred tax assets under the relevant tax law and tested the mathematical accuracy of the calculation used to determine the TRA liability.
|
•
|
We evaluated management’s ability to accurately estimate revenues and taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would affect management’s ability to continue accurately estimating revenues and taxable income.
|
•
|
We tested the reasonableness of management’s estimates of revenues and taxable income by jurisdiction by comparing management’s forecast to:
|
◦
|
Historical revenues, cost of sales, and income
|
◦
|
Schedule of future revenues resulting from contracts with certain customers
|
◦
|
Internal communications to management and the Board of Directors
|
◦
|
Industry reports for the Company and the steel industry
|
•
|
We evaluated whether the estimates of future revenues and taxable income were consistent with evidence obtained in other areas of the audit.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
80,935
|
|
|
$
|
49,880
|
|
Accounts and notes receivable, net of allowance for doubtful accounts of $5,474 as of December 31, 2019 and $1,129 as of December 31, 2018
|
247,051
|
|
|
248,286
|
|
||
Inventories
|
313,648
|
|
|
293,717
|
|
||
Prepaid expenses and other current assets
|
40,946
|
|
|
46,168
|
|
||
Total current assets
|
682,580
|
|
|
638,051
|
|
||
Property, plant and equipment
|
733,417
|
|
|
688,842
|
|
||
Less: accumulated depreciation
|
220,397
|
|
|
175,137
|
|
||
Net property, plant and equipment
|
513,020
|
|
|
513,705
|
|
||
Deferred income taxes
|
55,217
|
|
|
71,707
|
|
||
Goodwill
|
171,117
|
|
|
171,117
|
|
||
Other assets
|
104,230
|
|
|
110,911
|
|
||
Total assets
|
$
|
1,526,164
|
|
|
$
|
1,505,491
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
78,697
|
|
|
$
|
88,097
|
|
Short-term debt
|
141
|
|
|
106,323
|
|
||
Accrued income and other taxes
|
65,176
|
|
|
82,255
|
|
||
Other accrued liabilities
|
48,335
|
|
|
50,452
|
|
||
Related party payable - tax receivable agreement
|
27,857
|
|
|
—
|
|
||
Total current liabilities
|
220,206
|
|
|
327,127
|
|
||
Long-term debt
|
1,812,682
|
|
|
2,050,311
|
|
||
Other long-term obligations
|
72,562
|
|
|
72,519
|
|
||
Deferred income taxes
|
49,773
|
|
|
45,825
|
|
||
Related party payable
|
62,014
|
|
|
86,478
|
|
||
Commitments and contingencies – Note 12
|
|
|
|
|
|
||
Stockholders’ (deficit) equity:
|
|
|
|
||||
Preferred stock, par value $0.01, 300,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01, 3,000,000,000 shares authorized, 270,485,308 and 290,537,612 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively
|
2,705
|
|
|
2,905
|
|
||
Additional paid – in capital
|
765,419
|
|
|
819,622
|
|
||
Accumulated other comprehensive (loss) income
|
(7,361
|
)
|
|
(5,800
|
)
|
||
Accumulated deficit
|
(1,451,836
|
)
|
|
(1,893,496
|
)
|
||
Total stockholders’ (deficit) equity
|
(691,073
|
)
|
|
(1,076,769
|
)
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
1,526,164
|
|
|
$
|
1,505,491
|
|
|
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
1,790,793
|
|
|
$
|
1,895,910
|
|
|
$
|
550,771
|
|
Cost of sales
|
750,390
|
|
|
705,698
|
|
|
463,054
|
|
|||
Gross profit
|
1,040,403
|
|
|
1,190,212
|
|
|
87,717
|
|
|||
Research and development
|
2,684
|
|
|
2,129
|
|
|
3,456
|
|
|||
Selling and administrative expenses
|
63,674
|
|
|
62,032
|
|
|
52,506
|
|
|||
Operating income
|
974,045
|
|
|
1,126,051
|
|
|
31,755
|
|
|||
|
|
|
|
|
|
||||||
Other expense (income), net
|
5,203
|
|
|
3,361
|
|
|
(2,104
|
)
|
|||
Related party tax receivable agreement expense
|
3,393
|
|
|
86,478
|
|
|
—
|
|
|||
Interest expense
|
127,331
|
|
|
135,061
|
|
|
30,823
|
|
|||
Interest income
|
(4,709
|
)
|
|
(1,657
|
)
|
|
(395
|
)
|
|||
Income from continuing operations
before provision (benefit) for income taxes
|
842,827
|
|
|
902,808
|
|
|
3,431
|
|
|||
Provision (benefit) for income taxes
|
98,225
|
|
|
48,920
|
|
|
(10,781
|
)
|
|||
Net income from continuing operations
|
744,602
|
|
|
853,888
|
|
|
14,212
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
331
|
|
|
(6,229
|
)
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
744,602
|
|
|
$
|
854,219
|
|
|
$
|
7,983
|
|
|
|
|
|
|
|
||||||
Basic income per share:
|
|
|
|
|
|
||||||
Net income per share
|
$
|
2.58
|
|
|
$
|
2.87
|
|
|
$
|
0.03
|
|
Net Income from continuing operations per share
|
2.58
|
|
|
2.87
|
|
|
0.05
|
|
|||
Weighted average shares outstanding
|
289,057,356
|
|
|
297,748,327
|
|
|
302,225,923
|
|
|||
Diluted income per share:
|
|
|
|
|
|
||||||
Net income per share
|
2.58
|
|
|
2.87
|
|
|
0.03
|
|
|||
Diluted net income from continuing operations per share
|
2.58
|
|
|
2.87
|
|
|
0.05
|
|
|||
Weighted average diluted shares outstanding
|
289,074,601
|
|
|
297,753,770
|
|
|
302,225,923
|
|
|||
|
|
|
|
|
|
||||||
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|||||||
Net income
|
$
|
744,602
|
|
|
$
|
854,219
|
|
|
$
|
7,983
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of
tax of ($67), ($288), and $0, respectively
|
(6,371
|
)
|
|
(18,391
|
)
|
|
23,028
|
|
|||
Commodities and interest rate derivatives, net of
tax of ($1,546), $802, and $0, respectively
|
4,810
|
|
|
(7,698
|
)
|
|
4,819
|
|
|||
Other comprehensive (loss) income, net of tax:
|
(1,561
|
)
|
|
(26,089
|
)
|
|
27,847
|
|
|||
Comprehensive income
|
$
|
743,041
|
|
|
$
|
828,130
|
|
|
$
|
35,830
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flow from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
744,602
|
|
|
$
|
854,219
|
|
|
$
|
7,983
|
|
Adjustments to reconcile net income
to cash provided by operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
61,819
|
|
|
66,413
|
|
|
66,443
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
5,300
|
|
|||
Related party Tax Receivable Agreement expense
|
3,393
|
|
|
86,478
|
|
|
—
|
|
|||
Deferred income tax provision
|
17,503
|
|
|
(37,078
|
)
|
|
(15,695
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
|
23,827
|
|
|
—
|
|
|||
Non-cash interest expense
|
6,344
|
|
|
5,320
|
|
|
6,805
|
|
|||
Other charges, net
|
21,831
|
|
|
15,761
|
|
|
(9,607
|
)
|
|||
Net change in working capital*
|
(47,687
|
)
|
|
(177,754
|
)
|
|
(20,004
|
)
|
|||
Change in long-term assets and liabilities
|
(2,489
|
)
|
|
(583
|
)
|
|
(4,652
|
)
|
|||
Net cash provided by operating activities
|
805,316
|
|
|
836,603
|
|
|
36,573
|
|
|||
Cash flow from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(64,103
|
)
|
|
(68,221
|
)
|
|
(34,664
|
)
|
|||
Cash received from divestitures
|
—
|
|
|
—
|
|
|
27,254
|
|
|||
Proceeds from the sale of fixed assets
|
219
|
|
|
926
|
|
|
5,211
|
|
|||
Net cash used in investing activities
|
(63,884
|
)
|
|
(67,295
|
)
|
|
(2,199
|
)
|
|||
Cash flow from financing activities:
|
|
|
|
|
|
||||||
Short-term debt (reductions) borrowings, net
|
—
|
|
|
(12,607
|
)
|
|
5,110
|
|
|||
Credit Facility borrowings
|
—
|
|
|
—
|
|
|
77,000
|
|
|||
Credit Facility reductions
|
—
|
|
|
(45,692
|
)
|
|
(114,839
|
)
|
|||
Proceeds from the issuance of long-term
debt, net of original issue discount
|
—
|
|
|
2,235,000
|
|
|
—
|
|
|||
Repayment of Senior Notes
|
—
|
|
|
(304,782
|
)
|
|
—
|
|
|||
Repurchase of common stock - related party
|
(250,000
|
)
|
|
(225,000
|
)
|
|
—
|
|
|||
Repurchase of common stock - non-related party
|
(10,868
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments on long-term debt
|
(350,140
|
)
|
|
(56,372
|
)
|
|
(266
|
)
|
|||
Dividends paid to non-related-party
|
(20,613
|
)
|
|
(55,616
|
)
|
|
—
|
|
|||
Dividends paid to related-party
|
(78,010
|
)
|
|
(1,488,649
|
)
|
|
—
|
|
|||
Related-party promissory note repayment
|
—
|
|
|
(750,000
|
)
|
|
—
|
|
|||
Refinancing fees and debt issuance costs
|
—
|
|
|
(27,326
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(709,631
|
)
|
|
(731,044
|
)
|
|
(32,995
|
)
|
|||
Net change in cash and cash equivalents
|
31,801
|
|
|
38,264
|
|
|
1,379
|
|
|||
Effect of exchange rate changes on cash
and cash equivalents
|
(746
|
)
|
|
(1,749
|
)
|
|
376
|
|
|||
Cash and cash equivalents at beginning of period
|
49,880
|
|
|
13,365
|
|
|
11,610
|
|
|||
Cash and cash equivalents at end of period
|
$
|
80,935
|
|
|
$
|
49,880
|
|
|
$
|
13,365
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Net cash paid during the periods for:
|
|
|
|
|
|
||||||
Interest
|
$
|
121,075
|
|
|
$
|
108,006
|
|
|
$
|
25,277
|
|
Income taxes
|
99,278
|
|
|
21,444
|
|
|
3,467
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
||||||
Dividend payable - Promissory Note**
|
—
|
|
|
750,000
|
|
|
—
|
|
|||
* Net change in working capital due to the following components:
|
|
|
|
|
|
||||||
Accounts and notes receivable, net
|
$
|
(404
|
)
|
|
$
|
(139,180
|
)
|
|
$
|
(29,755
|
)
|
Inventories
|
(21,549
|
)
|
|
(126,355
|
)
|
|
(15,649
|
)
|
|||
Prepaid expenses and other current assets
|
3,929
|
|
|
7,116
|
|
|
(10,565
|
)
|
|||
Income taxes payable
|
(18,174
|
)
|
|
67,054
|
|
|
2,762
|
|
|||
Accounts payable and accruals
|
(11,551
|
)
|
|
15,724
|
|
|
33,317
|
|
|||
Interest payable
|
62
|
|
|
(2,113
|
)
|
|
(114
|
)
|
|||
(Increase) decrease in working capital
|
$
|
(47,687
|
)
|
|
$
|
(177,754
|
)
|
|
$
|
(20,004
|
)
|
|
Issued
Shares of
Common
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings (Accumulated
Deficit)
|
|
Total
Stockholders’
Equity (Deficit)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2016
|
302,225,923
|
|
|
$
|
3,022
|
|
|
$
|
851,315
|
|
|
$
|
(7,558
|
)
|
|
$
|
(269,394
|
)
|
|
$
|
577,385
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,983
|
|
|
7,983
|
|
|||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commodity and foreign currency derivatives income (loss), net of tax of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
4,819
|
|
|
—
|
|
|
4,819
|
|
|||||
Foreign currency translation adjustments, net of tax of $0
|
—
|
|
|
—
|
|
|
—
|
|
|
23,028
|
|
|
—
|
|
|
23,028
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
27,847
|
|
|
—
|
|
|
27,847
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2017
|
302,225,923
|
|
|
$
|
3,022
|
|
|
$
|
851,315
|
|
|
$
|
20,289
|
|
|
$
|
(261,411
|
)
|
|
613,215
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
854,219
|
|
|
854,219
|
|
|||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commodity derivatives income (loss), net of tax of $715
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,866
|
)
|
|
—
|
|
|
(6,866
|
)
|
|||||
Commodity derivatives reclassification adjustments, net of tax of $87
|
—
|
|
|
—
|
|
|
—
|
|
|
(832
|
)
|
|
—
|
|
|
(832
|
)
|
|||||
Foreign currency translation adjustments, net of tax of ($288)
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,391
|
)
|
|
—
|
|
|
(18,391
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,089
|
)
|
|
—
|
|
|
(26,089
|
)
|
|||||
Common stock repurchased and retired
(from related party)
|
(11,688,311
|
)
|
|
(117
|
)
|
|
(32,844
|
)
|
|
|
|
(192,039
|
)
|
|
(225,000
|
)
|
||||||
Stock-based compensation
|
|
|
|
|
1,151
|
|
|
|
|
|
|
1,151
|
|
|||||||||
Dividends paid to related party
stockholder ($ 5.14 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,488,649
|
)
|
|
(1,488,649
|
)
|
|||||
Dividends paid to non-related party
stockholders ($0.9345 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,616
|
)
|
|
(55,616
|
)
|
|||||
Related-party promissory note repayment
|
|
|
|
|
|
|
|
|
(750,000
|
)
|
|
(750,000
|
)
|
|||||||||
Balance as of December 31, 2018
|
290,537,612
|
|
|
$
|
2,905
|
|
|
$
|
819,622
|
|
|
$
|
(5,800
|
)
|
|
$
|
(1,893,496
|
)
|
|
$
|
(1,076,769
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
744,602
|
|
|
744,602
|
|
|||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commodity and interest rate derivatives income (loss), net of tax of ($3,418)
|
—
|
|
|
—
|
|
|
—
|
|
|
11,830
|
|
|
—
|
|
|
11,830
|
|
|||||
Commodity derivatives reclassification adjustments, net of tax of $1,872
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,020
|
)
|
|
—
|
|
|
(7,020
|
)
|
|||||
Foreign currency translation adjustments, net of tax of ($67)
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,371
|
)
|
|
—
|
|
|
(6,371
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,561
|
)
|
|
—
|
|
|
(1,561
|
)
|
|||||
Common stock repurchased and retired
(from related party)
|
(19,047,619
|
)
|
|
(190
|
)
|
|
(53,524
|
)
|
|
—
|
|
|
(196,286
|
)
|
|
(250,000
|
)
|
|||||
Common stock repurchased and retired
(from non-related party)
|
(1,004,685
|
)
|
|
(10
|
)
|
|
(2,825
|
)
|
|
|
|
(8,033
|
)
|
|
(10,868
|
)
|
||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
2,146
|
|
|
—
|
|
|
—
|
|
|
2,146
|
|
|||||
Dividends paid to related party
stockholder ($0.34 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78,010
|
)
|
|
(78,010
|
)
|
|||||
Dividends paid to non-related party
stockholders ($0.34 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,613
|
)
|
|
(20,613
|
)
|
|||||
Balance as of December 31, 2019
|
270,485,308
|
|
|
$
|
2,705
|
|
|
$
|
765,419
|
|
|
$
|
(7,361
|
)
|
|
$
|
(1,451,836
|
)
|
|
$
|
(691,073
|
)
|
(1)
|
Business and Summary of Significant Accounting Policies
|
|
Years
|
|
Buildings
|
25-40
|
|
Land improvements
|
20
|
|
Machinery and equipment
|
5-20
|
|
Furniture and fixtures
|
5-10
|
|
|
Years
|
Trade name
|
5-20
|
Technology and know-how
|
5-14
|
Customer related intangible
|
5-15
|
|
For the
Year Ended
December 31, 2019
|
|
For the
Year Ended December 31, 2018 |
||||
|
(Dollars in thousands)
|
||||||
Graphite Electrodes - Three- to five-year take-or-pay contracts
|
$
|
1,437,354
|
|
|
$
|
1,341,557
|
|
Graphite Electrodes - Short-term agreements and spot sales
|
260,979
|
|
|
395,928
|
|
||
By-products and other
|
92,460
|
|
|
158,425
|
|
||
Total Revenues
|
$
|
1,790,793
|
|
|
$
|
1,895,910
|
|
|
Current deferred revenue
|
|
Long-Term deferred revenue
|
||||
|
(Dollars in thousands)
|
||||||
Balance as of December 31, 2017
|
$
|
20,784
|
|
|
$
|
—
|
|
Increases due to cash received
|
15,548
|
|
|
8,241
|
|
||
Revenue recognized
|
(30,803
|
)
|
|
—
|
|
||
Foreign currency impact
|
(149
|
)
|
|
(525
|
)
|
||
Balance as of December 31, 2018
|
5,380
|
|
|
7,716
|
|
||
Increases due to cash received
|
7,961
|
|
|
—
|
|
||
Revenue recognized
|
(4,678
|
)
|
|
—
|
|
||
Revision of estimates
|
—
|
|
|
(694
|
)
|
||
Reclassification between long-term and current
|
3,042
|
|
|
(3,042
|
)
|
||
Foreign currency impact
|
71
|
|
|
(122
|
)
|
||
Balance as of December 31, 2019
|
$
|
11,776
|
|
|
$
|
3,858
|
|
|
Three- to five-year take-or-pay contracts
|
||
|
(Dollars in thousands)
|
|
|
2020
|
$
|
1,251,093
|
|
2021
|
1,211,036
|
|
|
2022
|
1,144,574
|
|
|
2023 and thereafter
|
29,461
|
|
|
Total
|
$
|
3,636,164
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Award type:
|
|
|
|
|
|
|||
Stock options
|
229,250
|
|
|
979,790
|
|
|
—
|
|
Deferred share units
|
31,829
|
|
|
42,243
|
|
|
—
|
|
Restricted stock units
|
260,640
|
|
|
6,740
|
|
|
—
|
|
|
|
Number
of Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||
Outstanding unvested as of December 31, 2018
|
|
27,570
|
|
|
$
|
12.88
|
|
Granted
|
|
292,469
|
|
|
12.72
|
|
|
Cancelled
|
|
(6,084
|
)
|
|
13.36
|
|
|
Vested
|
|
(31,239
|
)
|
|
12.30
|
|
|
Outstanding unvested as of December 31, 2019
|
|
282,716
|
|
|
$
|
12.83
|
|
|
For the Year Ended
December 31,2019 |
|
For the Year Ended
December 31,2018
|
||
Dividend yield
|
2.39% - 3.05%
|
|
|
1.70% - 2.27%
|
|
Expected volatility
|
50
|
%
|
|
45
|
%
|
Risk-free interest rate
|
1.79% - 2.63%
|
|
|
2.84% - 2.98%
|
|
Expected term in years
|
6.5 years
|
|
|
6.5 years
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||
Range of Exercise Prices
|
|
Number
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life in Years
|
|
Weighted
Average
Exercise
Prices
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise
Prices
|
||||||
$11.14
|
-
|
$20.00
|
|
1,113,480
|
|
|
8.5
|
|
$15.17
|
|
181,822
|
|
|
$
|
15.73
|
|
|
|
Number
of Shares
|
|
Weighted-
Average
Exercise
Price
|
|||
Outstanding unvested as of December 31, 2018
|
|
968,720
|
|
|
$
|
15.68
|
|
Granted
|
|
229,250
|
|
|
12.90
|
|
|
Vested
|
|
(188,810
|
)
|
|
15.70
|
|
|
Forfeited
|
|
(77,502
|
)
|
|
14.87
|
|
|
Outstanding unvested as of December 31, 2019
|
|
931,658
|
|
|
$
|
15.06
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
403,916
|
|
|
$
|
429,599
|
|
|
$
|
103,890
|
|
Americas (excluding the United States)
|
348,670
|
|
|
367,561
|
|
|
129,103
|
|
|||
Asia Pacific
|
172,439
|
|
|
131,578
|
|
|
46,329
|
|
|||
Europe, Middle East, Africa
|
865,768
|
|
|
967,172
|
|
|
271,449
|
|
|||
Total
|
$
|
1,790,793
|
|
|
$
|
1,895,910
|
|
|
$
|
550,771
|
|
|
At December 31,
|
||||||
2019
|
|
2018
|
|||||
(Dollars in thousands)
|
|||||||
Long-lived assets (a):
|
|
|
|
||||
United States
|
$
|
174,307
|
|
|
$
|
169,301
|
|
Mexico
|
141,621
|
|
|
146,790
|
|
||
Brazil
|
5,694
|
|
|
3,320
|
|
||
France
|
88,514
|
|
|
91,022
|
|
||
Spain
|
102,577
|
|
|
103,121
|
|
||
Other countries
|
307
|
|
|
151
|
|
||
Total
|
$
|
513,020
|
|
|
$
|
513,705
|
|
(a)
|
Long-lived assets represent fixed assets, net of accumulated depreciation.
|
|
As of
December 31, 2019 |
|
As of
December 31, 2018 |
||||
|
(Dollars in thousands)
|
||||||
2018 Credit Facility (2018 Term Loan and 2018 Revolving Facility)
|
$
|
1,812,204
|
|
|
$
|
2,155,883
|
|
Other Debt
|
619
|
|
|
751
|
|
||
Total Debt
|
1,812,823
|
|
|
2,156,634
|
|
||
Less: Short-term Debt
|
(141
|
)
|
|
(106,323
|
)
|
||
Long-term Debt
|
$
|
1,812,682
|
|
|
$
|
2,050,311
|
|
|
Total
|
||
|
(Dollars in Thousands)
|
||
Balance as of December 31, 2017
|
$
|
171,117
|
|
Adjustments
|
—
|
|
|
Balance as of December 31, 2018
|
171,117
|
|
|
Adjustments
|
—
|
|
|
Balance as of December 31, 2019
|
$
|
171,117
|
|
|
As of December 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
(Dollars in Thousands)
|
|||||||||||||||||||||||
Trade name
|
$
|
22,500
|
|
|
$
|
(9,861
|
)
|
|
$
|
12,639
|
|
|
$
|
22,500
|
|
|
$
|
(7,721
|
)
|
|
$
|
14,779
|
|
Technology and know-how
|
55,300
|
|
|
(29,112
|
)
|
|
26,188
|
|
|
55,300
|
|
|
(23,503
|
)
|
|
31,797
|
|
||||||
Customer related intangible
|
64,500
|
|
|
(19,473
|
)
|
|
45,027
|
|
|
64,500
|
|
|
(15,070
|
)
|
|
49,430
|
|
||||||
Total finite-lived intangible assets
|
$
|
142,300
|
|
|
$
|
(58,446
|
)
|
|
$
|
83,854
|
|
|
$
|
142,300
|
|
|
$
|
(46,294
|
)
|
|
$
|
96,006
|
|
|
For the Year Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Interest incurred on debt
|
$
|
121,010
|
|
|
$
|
100,844
|
|
|
$
|
24,060
|
|
Related Party Promissory Note interest expense
|
—
|
|
|
5,090
|
|
|
—
|
|
|||
Senior Note redemption premium
|
—
|
|
|
4,782
|
|
|
—
|
|
|||
Accretion of fair value adjustment on Senior Notes
|
—
|
|
|
19,414
|
|
|
6,454
|
|
|||
Accretion of original issue discount on 2018 Term Loans
|
2,196
|
|
|
1,455
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
4,125
|
|
|
3,476
|
|
|
309
|
|
|||
Total interest expense
|
$
|
127,331
|
|
|
$
|
135,061
|
|
|
$
|
30,823
|
|
•
|
Level 1 – based upon quoted prices for identical instruments in active markets,
|
•
|
Level 2 – based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are not active, or model-derived valuations of all of whose significant inputs are observable, and
|
•
|
Level 3 – based upon one or more significant unobservable inputs.
|
|
|
|
|
Amount of (Gain)/Loss
Recognized
|
||||||||||
|
|
Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations
|
|
2019
|
|
2018
|
|
2017
|
||||||
Derivatives designated as cash flow hedges:
|
|
(Dollars in thousands)
|
|
|
||||||||||
Commodity derivative contracts
|
|
Cost of sales
|
|
$
|
(8,892
|
)
|
|
$
|
(919
|
)
|
|
$
|
—
|
|
Interest rate swaps
|
|
Interest expense
|
|
(1,050
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
Amount of (Gain)/Loss
Recognized
|
||||||||||
|
|
Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations
|
|
2019
|
|
2018
|
|
2017
|
||||||
Derivatives not designated as hedges:
|
|
(Dollars in thousands)
|
|
|
||||||||||
Foreign currency derivatives
|
|
Cost of sales, Other expense/(income)
|
|
$
|
(506
|
)
|
|
$
|
(522
|
)
|
|
$
|
(1,565
|
)
|
Commodity derivative contracts
|
|
Cost of sales
|
|
(223
|
)
|
|
—
|
|
|
—
|
|
(9)
|
Supplementary Balance Sheet Detail
|
|
As of
December 31, 2019 |
|
As of
December 31, 2018 |
||||
|
(Dollars in thousands)
|
||||||
Inventories:
|
|
|
|
||||
Raw materials and supplies
|
$
|
104,820
|
|
|
$
|
99,935
|
|
Work in process
|
137,230
|
|
|
125,767
|
|
||
Finished goods
|
71,598
|
|
|
68,015
|
|
||
|
$
|
313,648
|
|
|
$
|
293,717
|
|
Prepaid expenses and other current assets:
|
|
|
|
||||
Prepaid expenses
|
$
|
9,986
|
|
|
$
|
10,720
|
|
Value added tax and other indirect taxes receivable
|
13,890
|
|
|
19,242
|
|
||
Spare parts inventory
|
12,738
|
|
|
11,507
|
|
||
Other current assets
|
4,332
|
|
|
4,699
|
|
||
|
$
|
40,946
|
|
|
$
|
46,168
|
|
Property, plant and equipment:
|
|
|
|
||||
Land and improvements
|
$
|
46,548
|
|
|
$
|
45,947
|
|
Buildings
|
71,784
|
|
|
68,680
|
|
||
Machinery and equipment and other
|
567,715
|
|
|
532,084
|
|
||
Construction in progress
|
47,370
|
|
|
42,131
|
|
||
|
$
|
733,417
|
|
|
$
|
688,842
|
|
Other accrued liabilities:
|
|
|
|
||||
Payrolls (including incentive programs)
|
$
|
11,801
|
|
|
$
|
17,284
|
|
Employee benefits
|
7,416
|
|
|
6,977
|
|
||
Deferred Revenue
|
11,776
|
|
|
5,380
|
|
||
Other
|
17,342
|
|
|
20,811
|
|
||
|
$
|
48,335
|
|
|
$
|
50,452
|
|
Other long term obligations:
|
|
|
|
||||
Postretirement benefits
|
$
|
16,528
|
|
|
$
|
16,192
|
|
Pension and related benefits
|
37,431
|
|
|
33,718
|
|
||
Other
|
18,603
|
|
|
22,609
|
|
||
|
$
|
72,562
|
|
|
$
|
72,519
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
1,129
|
|
|
$
|
1,097
|
|
|
$
|
326
|
|
Additions
|
4,636
|
|
|
122
|
|
|
771
|
|
|||
Deductions
|
(291
|
)
|
|
(90
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
5,474
|
|
|
$
|
1,129
|
|
|
$
|
1,097
|
|
(10)
|
Leases
|
|
|
For Year Ended December 31, 2019
|
||
|
(Dollars in thousands)
|
|||
Operating lease cost
|
|
4,816
|
|
|
Short-term lease cost
|
|
14
|
|
|
Variable lease cost
|
|
227
|
|
|
Total lease cost
|
|
$
|
5,057
|
|
|
|
For Year Ended December 31, 2019
|
|
|
(Dollars in thousands)
|
||
RoU assets obtained in exchange for new operating lease liabilities (non-cash)
|
|
4,995
|
|
Operating (use of cash) from operating leases
|
|
(4,724
|
)
|
|
|
As of
December 31, 2019
|
||
|
|
(Dollars in thousands)
|
||
Operating RoU Assets*
|
|
$
|
7,994
|
|
*Amount included in Other assets
|
|
|
||
|
|
|
||
Current operating lease liabilities
|
|
4,475
|
|
|
Non-current operating lease liabilities
|
|
3,598
|
|
|
Total operating lease liabilities**
|
|
$
|
8,073
|
|
**Amounts included in Other accrued liabilities and Other long-term obligations
|
|
|
||
|
|
|
||
Weighted average remaining lease term (in years)
|
|
2.3
|
|
|
Weighted average discount rate - operating leases
|
|
5.61
|
%
|
|
(Dollars in thousands)
|
||
2019
|
$
|
4,474
|
|
2020
|
2,747
|
|
|
2021
|
1,497
|
|
|
2022
|
334
|
|
|
2023
|
269
|
|
|
2024 and thereafter
|
343
|
|
(11)
|
Retirement Plans and Postretirement Benefits
|
|
For the Year Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||||||
|
|
|
|
|
(Dollars in thousands)
|
||||||||||||||||||
Service cost
|
$
|
1,297
|
|
|
$
|
624
|
|
|
$
|
1,315
|
|
|
$
|
674
|
|
|
$
|
1,305
|
|
|
$
|
710
|
|
Interest cost
|
5,070
|
|
|
275
|
|
|
4,709
|
|
|
253
|
|
|
5,352
|
|
|
199
|
|
||||||
Expected return on assets
|
(5,026
|
)
|
|
(424
|
)
|
|
(5,679
|
)
|
|
(330
|
)
|
|
(5,268
|
)
|
|
(299
|
)
|
||||||
Mark-to-market loss (gain)
|
205
|
|
|
3,302
|
|
|
2,473
|
|
|
503
|
|
|
(4,140
|
)
|
|
(53
|
)
|
||||||
Pension costs
|
$
|
1,546
|
|
|
$
|
3,777
|
|
|
$
|
2,818
|
|
|
$
|
1,100
|
|
|
$
|
(2,751
|
)
|
|
$
|
557
|
|
|
As of
December 31, 2019 |
|
As of
December 31, 2018 |
||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Changes in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Net benefit obligation at beginning of period
|
$
|
126,985
|
|
|
$
|
22,332
|
|
|
$
|
139,746
|
|
|
$
|
20,407
|
|
Service cost
|
1,297
|
|
|
624
|
|
|
1,315
|
|
|
674
|
|
||||
Interest cost
|
5,070
|
|
|
275
|
|
|
4,709
|
|
|
253
|
|
||||
Participant contributions
|
—
|
|
|
417
|
|
|
—
|
|
|
392
|
|
||||
Foreign currency exchange changes
|
—
|
|
|
379
|
|
|
—
|
|
|
(339
|
)
|
||||
Actuarial (gain) loss
|
12,868
|
|
|
3,319
|
|
|
(8,297
|
)
|
|
711
|
|
||||
Benefits paid
|
(10,410
|
)
|
|
1,557
|
|
|
(10,488
|
)
|
|
234
|
|
||||
Net benefit obligation at end of period
|
$
|
135,810
|
|
|
$
|
28,903
|
|
|
$
|
126,985
|
|
|
$
|
22,332
|
|
Changes in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
$
|
99,845
|
|
|
$
|
15,354
|
|
|
$
|
109,845
|
|
|
$
|
13,618
|
|
Actual return on plan assets
|
17,689
|
|
|
441
|
|
|
(5,091
|
)
|
|
538
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
377
|
|
|
—
|
|
|
(154
|
)
|
||||
Employer contributions
|
708
|
|
|
834
|
|
|
5,579
|
|
|
726
|
|
||||
Participant contributions
|
—
|
|
|
417
|
|
|
—
|
|
|
392
|
|
||||
Benefits paid
|
(10,410
|
)
|
|
1,557
|
|
|
(10,488
|
)
|
|
234
|
|
||||
Fair value of plan assets at end of period
|
$
|
107,832
|
|
|
$
|
18,980
|
|
|
$
|
99,845
|
|
|
$
|
15,354
|
|
Funded status (underfunded):
|
$
|
(27,978
|
)
|
|
$
|
(9,923
|
)
|
|
$
|
(27,140
|
)
|
|
$
|
(6,978
|
)
|
Amounts recognized in accumulated
other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amounts recognized in the statement
of financial position:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
147
|
|
Current liabilities
|
(427
|
)
|
|
(43
|
)
|
|
(430
|
)
|
|
(117
|
)
|
||||
Non-current liabilities
|
(27,551
|
)
|
|
(9,917
|
)
|
|
(26,710
|
)
|
|
(7,008
|
)
|
||||
Net amount recognized
|
$
|
(27,978
|
)
|
|
$
|
(9,923
|
)
|
|
$
|
(27,140
|
)
|
|
$
|
(6,978
|
)
|
|
As of December 31, 2019
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
U.S. Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,524
|
|
International Plan Assets
|
|
|
|
|
|
|
|
||||||||
Foreign government bonds
|
$
|
—
|
|
|
$
|
995
|
|
|
$
|
—
|
|
|
$
|
995
|
|
Fixed insurance contracts
|
—
|
|
|
—
|
|
|
17,985
|
|
|
17,985
|
|
||||
Total assets in the fair value hierarchy
|
$
|
—
|
|
|
$
|
995
|
|
|
$
|
17,985
|
|
|
$
|
18,980
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
$
|
106,308
|
|
||||||
Total
|
$
|
1,524
|
|
|
$
|
995
|
|
|
$
|
17,985
|
|
|
$
|
126,812
|
|
|
|
|
|
|
|
|
|
||||||||
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
U.S. Plan Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,978
|
|
International Plan Assets
|
|
|
|
|
|
|
|
||||||||
Foreign government bonds
|
$
|
—
|
|
|
$
|
958
|
|
|
$
|
—
|
|
|
$
|
958
|
|
Fixed insurance contracts
|
—
|
|
|
—
|
|
|
14,396
|
|
|
14,396
|
|
||||
Total assets in the fair value hierarchy
|
$
|
—
|
|
|
$
|
958
|
|
|
$
|
14,396
|
|
|
$
|
15,354
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
$
|
97,867
|
|
||||||
Total
|
$
|
1,978
|
|
|
$
|
958
|
|
|
$
|
14,396
|
|
|
$
|
115,199
|
|
|
|
|
|
|
|
|
|
|
Fixed Insurance
Contracts
|
||
Balance at December 31, 2017
|
$
|
12,787
|
|
Gain / contributions / currency impact
|
1,619
|
|
|
Distributions
|
(10
|
)
|
|
Balance at December 31, 2018
|
14,396
|
|
|
Gain / contributions / currency impact
|
3,603
|
|
|
Distributions
|
(14
|
)
|
|
Balance at December 31, 2019
|
$
|
17,985
|
|
Pension Benefit Obligations Key Assumptions
|
As of December 31,
|
||||
|
2019
|
|
2018
|
||
Weighted average assumptions to determine benefit obligations:
|
|
|
|
||
Discount rate
|
2.59
|
%
|
|
3.71
|
%
|
Rate of compensation increase
|
1.50
|
%
|
|
1.74
|
%
|
Pension Cost Key Assumptions
|
|
|
|
||
Weighted average assumptions to determine net cost:
|
|
|
|
||
Discount rate
|
3.71
|
%
|
|
3.20
|
%
|
Expected return on plan assets
|
4.92
|
%
|
|
4.94
|
%
|
Rate of compensation increase
|
1.74
|
%
|
|
1.57
|
%
|
|
Percentage of Plan Assets
as of December 31, 2019 |
||||
|
US
|
|
Foreign
|
||
Equity securities and return seeking assets
|
20
|
%
|
|
—
|
%
|
Fixed income, debt securities, or cash
|
80
|
%
|
|
100
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
2019
|
|
2018
|
||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Accumulated benefit obligation
|
$
|
135,810
|
|
|
$
|
26,829
|
|
|
$
|
126,985
|
|
|
$
|
20,601
|
|
Fair value of plan assets
|
107,832
|
|
|
17,985
|
|
|
99,845
|
|
|
14,396
|
|
|
2019
|
|
2018
|
||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Projected benefit obligation
|
$
|
135,810
|
|
|
$
|
27,944
|
|
|
$
|
126,985
|
|
|
$
|
21,520
|
|
Fair value of plan assets
|
107,832
|
|
|
17,985
|
|
|
99,845
|
|
|
14,396
|
|
|
U.S.
|
|
Foreign
|
||||
|
(Dollars in thousands)
|
||||||
Expected contributions in 2020:
|
|
|
|
||||
Expected employer contributions
|
$
|
4,419
|
|
|
$
|
737
|
|
Expected employee contributions
|
—
|
|
|
—
|
|
||
Estimated future benefit payments reflecting expected future service for the years ending December 31:
|
|
|
|
||||
2020
|
9,271
|
|
|
884
|
|
||
2021
|
9,240
|
|
|
870
|
|
||
2022
|
9,195
|
|
|
905
|
|
||
2023
|
9,145
|
|
|
1,038
|
|
||
2024
|
9,012
|
|
|
2,340
|
|
||
2025-2029
|
43,077
|
|
|
9,168
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
269
|
|
|
684
|
|
|
264
|
|
|
700
|
|
|
333
|
|
|
653
|
|
||||||
Mark-to-market loss (gain)
|
585
|
|
|
100
|
|
|
(1,028
|
)
|
|
47
|
|
|
(1,257
|
)
|
|
742
|
|
||||||
Post-employment benefits (benefit)
cost
|
$
|
854
|
|
|
$
|
784
|
|
|
$
|
(764
|
)
|
|
$
|
748
|
|
|
$
|
(924
|
)
|
|
$
|
1,397
|
|
Postretirement Benefits
|
As of
December 31, 2019 |
|
As of
December 31, 2018 |
||||||||||||
|
|
||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Changes in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Net benefit obligation at beginning of period
|
$
|
7,165
|
|
|
$
|
10,661
|
|
|
$
|
8,461
|
|
|
$
|
12,172
|
|
Service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Interest cost
|
269
|
|
|
684
|
|
|
264
|
|
|
700
|
|
||||
Foreign currency exchange rates
|
|
|
|
340
|
|
|
—
|
|
|
(1,333
|
)
|
||||
Actuarial (gain) loss
|
585
|
|
|
100
|
|
|
(1,028
|
)
|
|
47
|
|
||||
Gross benefits paid
|
(829
|
)
|
|
(831
|
)
|
|
(532
|
)
|
|
(926
|
)
|
||||
Plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net benefit obligation at end of period
|
$
|
7,190
|
|
|
$
|
10,954
|
|
|
$
|
7,165
|
|
|
$
|
10,661
|
|
Changes in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets
at beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
829
|
|
|
831
|
|
|
532
|
|
|
926
|
|
||||
Gross benefits paid
|
(829
|
)
|
|
(831
|
)
|
|
(532
|
)
|
|
(926
|
)
|
||||
Fair value of plan assets at end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status:
|
$
|
(7,190
|
)
|
|
$
|
(10,954
|
)
|
|
$
|
(7,165
|
)
|
|
$
|
(10,661
|
)
|
Amounts recognized in accumulated
other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amounts recognized in the statement of
financial position:
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
(723
|
)
|
|
$
|
(893
|
)
|
|
$
|
(783
|
)
|
|
$
|
(851
|
)
|
Non-current liabilities
|
(6,467
|
)
|
|
(10,061
|
)
|
|
(6,382
|
)
|
|
(9,810
|
)
|
||||
Net amount recognized
|
$
|
(7,190
|
)
|
|
$
|
(10,954
|
)
|
|
$
|
(7,165
|
)
|
|
$
|
(10,661
|
)
|
Postretirement Benefit Costs
|
|
|
|
||
|
2019
|
|
2018
|
||
Weighted average assumptions to determine net cost:
|
|
|
|
||
Discount rate
|
5.57
|
%
|
|
5.07
|
%
|
Health care cost trend on covered charges:
|
|
|
|
||
Initial
|
6.53
|
%
|
|
6.86
|
%
|
Ultimate
|
6.05
|
%
|
|
6.23
|
%
|
Years to ultimate
|
7
|
|
|
7
|
|
|
One Percentage
Point Increase
|
|
One Percentage
Point Decrease
|
||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Effect on total service cost
and interest cost components
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
(42
|
)
|
Effect on benefit obligations
|
$
|
21
|
|
|
$
|
465
|
|
|
$
|
(20
|
)
|
|
$
|
(409
|
)
|
|
U.S.
|
|
Foreign
|
||||
|
(Dollars in thousands)
|
||||||
Expected contributions in 2020:
|
|
|
|
||||
Expected employer contributions
|
$
|
723
|
|
|
$
|
893
|
|
Expected employee contributions
|
—
|
|
|
—
|
|
||
Estimated future benefit payments reflecting expected
future service for the years ending December 31:
|
|
|
|
||||
2020
|
723
|
|
|
893
|
|
||
2021
|
657
|
|
|
908
|
|
||
2022
|
596
|
|
|
904
|
|
||
2023
|
540
|
|
|
910
|
|
||
2024
|
492
|
|
|
924
|
|
||
2025-2029
|
1,984
|
|
|
4,689
|
|
(12)
|
Contingencies
|
(13)
|
Income Taxes
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
U.S.
|
$
|
85,365
|
|
|
$
|
(68,032
|
)
|
|
$
|
(26,981
|
)
|
Non-U.S.
|
757,462
|
|
|
970,840
|
|
|
30,412
|
|
|||
|
$
|
842,827
|
|
|
$
|
902,808
|
|
|
$
|
3,431
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
||||||||||
U.S income taxes:
|
|
|
|
|
|
||||||
Current
|
$
|
16,589
|
|
|
$
|
787
|
|
|
$
|
(1,066
|
)
|
Deferred
|
5,690
|
|
|
(52,145
|
)
|
|
38
|
|
|||
|
22,279
|
|
|
(51,358
|
)
|
|
(1,028
|
)
|
|||
Non-U.S. income taxes:
|
|
|
|
|
|
||||||
Current
|
64,134
|
|
|
85,252
|
|
|
5,924
|
|
|||
Deferred
|
11,812
|
|
|
15,026
|
|
|
(15,677
|
)
|
|||
|
75,946
|
|
|
100,278
|
|
|
(9,753
|
)
|
|||
Total income tax expense (benefit)
|
$
|
98,225
|
|
|
$
|
48,920
|
|
|
$
|
(10,781
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Tax at statutory U.S. federal rate
|
$
|
176,994
|
|
|
$
|
189,590
|
|
|
$
|
1,201
|
|
Impact of U.S. Tax Act - GILTI
|
65,531
|
|
|
93,739
|
|
|
—
|
|
|||
Impact of the 2017 Tax Act - transition tax
|
—
|
|
|
—
|
|
|
39,628
|
|
|||
Impact of the 2017 Tax Act - tax rate change
|
—
|
|
|
—
|
|
|
52,228
|
|
|||
Impact of Tax Receivable Agreement
|
713
|
|
|
18,160
|
|
|
—
|
|
|||
Valuation allowance
|
(14,548
|
)
|
|
(93,125
|
)
|
|
(89,269
|
)
|
|||
State taxes, net of federal tax benefit
|
4,231
|
|
|
1,529
|
|
|
3,437
|
|
|||
U.S. tax impact of foreign earnings (net of foreign tax credits)
|
2,181
|
|
|
792
|
|
|
1,151
|
|
|||
Establishment/resolution of uncertain tax positions
|
(1,293
|
)
|
|
(345
|
)
|
|
(840
|
)
|
|||
Adjustment for foreign income taxed at different rates
|
(76,922
|
)
|
|
(95,822
|
)
|
|
(2,359
|
)
|
|||
Foreign tax credits
|
(56,171
|
)
|
|
(65,046
|
)
|
|
(17,956
|
)
|
|||
Other
|
(2,491
|
)
|
|
(552
|
)
|
|
1,998
|
|
|||
Provision (benefit) for income taxes
|
$
|
98,225
|
|
|
$
|
48,920
|
|
|
$
|
(10,781
|
)
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Postretirement and other employee benefits
|
$
|
18,256
|
|
|
$
|
18,395
|
|
Foreign tax credit and other carryforwards
|
55,103
|
|
|
111,325
|
|
||
Capitalized research and experimental costs
|
5,566
|
|
|
7,695
|
|
||
Environmental reserves
|
1,110
|
|
|
976
|
|
||
Inventory adjustments
|
14,863
|
|
|
14,251
|
|
||
Long-term contract option amortization
|
1,080
|
|
|
1,144
|
|
||
Provision for rationalization charges
|
232
|
|
|
351
|
|
||
Other
|
1,872
|
|
|
4,270
|
|
||
Total gross deferred tax assets
|
98,082
|
|
|
158,407
|
|
||
Less: valuation allowance
|
(13,736
|
)
|
|
(58,446
|
)
|
||
Total deferred tax assets
|
84,346
|
|
|
99,961
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
$
|
56,659
|
|
|
$
|
59,521
|
|
Inventory
|
12,778
|
|
|
7,751
|
|
||
Goodwill and acquired intangibles
|
6,996
|
|
|
3,668
|
|
||
Other
|
2,468
|
|
|
3,138
|
|
||
Total deferred tax liabilities
|
78,901
|
|
|
74,078
|
|
||
Net deferred tax asset
|
$
|
5,445
|
|
|
$
|
25,883
|
|
(14)
|
Stockholders' Equity
|
|
As of
December 31, 2019
|
|
As of
December 31, 2018 |
||||
|
(Dollars in thousands)
|
||||||
Foreign currency translation adjustments, net of tax
|
$
|
(9,293
|
)
|
|
$
|
(2,922
|
)
|
Commodities, foreign currency and interest rate derivatives, net of tax
|
1,932
|
|
|
(2,878
|
)
|
||
Total accumulated comprehensive (loss) income
|
$
|
(7,361
|
)
|
|
$
|
(5,800
|
)
|
(15)
|
Earnings per Share
|
|
For the Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|||
Weighted average common shares outstanding for basic calculation
|
289,057,356
|
|
|
297,748,327
|
|
|
302,225,923
|
|
Add: Effect of equity awards
|
17,245
|
|
|
5,443
|
|
|
—
|
|
Weighted average common shares outstanding for diluted calculation
|
289,074,601
|
|
|
297,753,770
|
|
|
302,225,923
|
|
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||||||||||
|
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
As Reported:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net Sales
|
|
$
|
474,994
|
|
|
$
|
480,390
|
|
|
$
|
420,797
|
|
|
$
|
414,612
|
|
|
$
|
451,899
|
|
|
$
|
456,332
|
|
|
$
|
454,890
|
|
|
$
|
532,789
|
|
Gross profit
|
|
279,470
|
|
|
283,343
|
|
|
242,300
|
|
|
235,290
|
|
|
306,750
|
|
|
290,422
|
|
|
274,610
|
|
|
318,430
|
|
||||||||
Research and development
|
|
637
|
|
|
713
|
|
|
611
|
|
|
723
|
|
|
429
|
|
|
581
|
|
|
518
|
|
|
601
|
|
||||||||
Selling and administrative expenses
|
|
15,226
|
|
|
15,394
|
|
|
15,708
|
|
|
17,346
|
|
|
15,876
|
|
|
16,239
|
|
|
14,234
|
|
|
15,683
|
|
||||||||
Other expense (income), net
|
|
467
|
|
|
863
|
|
|
(688
|
)
|
|
4,561
|
|
|
2,005
|
|
|
(974
|
)
|
|
1,502
|
|
|
828
|
|
||||||||
Related party Tax Receivable
Agreement Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,393
|
|
|
—
|
|
|
61,801
|
|
|
—
|
|
|
24,677
|
|
||||||||
Interest Expense
|
|
33,700
|
|
|
32,969
|
|
|
31,803
|
|
|
28,859
|
|
|
37,865
|
|
|
28,667
|
|
|
33,855
|
|
|
34,674
|
|
||||||||
Interest Income
|
|
(414
|
)
|
|
(731
|
)
|
|
(1,765
|
)
|
|
(1,799
|
)
|
|
(115
|
)
|
|
(391
|
)
|
|
(562
|
)
|
|
(589
|
)
|
||||||||
Net income
|
|
197,436
|
|
|
196,368
|
|
|
175,876
|
|
|
174,922
|
|
|
223,673
|
|
|
201,448
|
|
|
199,466
|
|
|
229,632
|
|
||||||||
Net income per share
|
|
$
|
0.68
|
|
|
$
|
0.68
|
|
|
$
|
0.61
|
|
|
$
|
0.61
|
|
|
$
|
0.74
|
|
|
$
|
0.67
|
|
|
$
|
0.67
|
|
|
$
|
0.79
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the board of directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets of the company that could have a material effect on its financial statements.
|
Item 9B.
|
Other Information
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
Exhibit
Number
|
Description of Exhibit
|
2.1
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3*
|
|
4.4*
|
|
10.1
|
|
10.2
|
|
10.3
|
|
10.4
|
10.5
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16+
|
|
10.17+
|
|
10.21+
|
|
10.22+
|
|
10.24+
|
|
10.25+
|
|
10.26+
|
10.27+
|
|
10.28+
|
|
10.29+
|
|
10.30+
|
|
10.31
|
|
10.32+
|
|
10.33+
|
|
10.34+
|
|
10.35+
|
|
10.36+
|
|
10.37+
|
|
10.38
|
|
10.39+*
|
|
21.1*
|
|
23.1*
|
|
31.1*
|
|
31.2*
|
|
32.1*
|
|
32.2*
|
|
101
|
The following financial information from GrafTech International Ltd.'s Annual Report on Form 10-K for the year ended December 31, 2019 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Stockholders' Equity (Deficit), and (vi) Notes to the Consolidated Financial Statements.
|
104
|
Cover Page Interactive Data file (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Filed herewith
|
+
|
Indicates management contract or compensatory plan or arrangement
|
Item 16.
|
Form 10-K Summary
|
|
GRAFTECH INTERNATIONAL LTD.
|
|
|
|
|
February 21, 2020
|
By:
|
/s/ David J. Rintoul
|
|
|
David J. Rintoul
|
|
Title:
|
President and Chief Executive Officer
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David J. Rintoul
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
February 21, 2020
|
David J. Rintoul
|
|
|
|
|
/s/ Quinn J. Coburn
|
|
Chief Financial Officer, Vice President Finance and Treasurer
(Principal Financial and Accounting Officer)
|
|
February 21, 2020
|
Quinn J. Coburn
|
|
|
|
|
/s/ Denis A. Turcotte
|
|
Chairman and Director
|
|
February 21, 2020
|
Denis A. Turcotte
|
|
|
|
|
/s/ Brian L. Acton
|
|
Director
|
|
February 21, 2020
|
Brian L. Acton
|
|
|
|
|
/s/ Catherine L. Clegg
|
|
Director
|
|
February 21, 2020
|
Catherine L. Clegg
|
|
|
|
|
/s/ Michel L. Dumas
|
|
Director
|
|
February 21, 2020
|
Michel L. Dumas
|
|
|
|
|
/s/ Jeffrey C. Dutton
|
|
Director
|
|
February 21, 2020
|
Jeffrey C. Dutton
|
|
|
|
|
/s/ David Gregory
|
|
Director
|
|
February 21, 2020
|
David Gregory
|
|
|
|
|
/s/ Anthony R. Taccone
|
|
Director
|
|
February 21, 2020
|
Anthony R. Taccone
|
|
|
|
|
Title:
|
Chief Financial Officer, Vice President Finance and Treasurer
|
•
|
the business combination or the transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors;
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our outstanding shares entitled to vote generally in the election of directors at the time the transaction commenced; or
|
•
|
on or after such time, the business combination is approved by the board of directors and authorized at a meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2⁄3% of the outstanding shares entitled to vote generally in the election of directors that are not owned by the interested stockholder.
|
(a)
|
[ ] RSUs shall vest on the first anniversary of the Grant Date;
|
(b)
|
[ ] RSUs shall vest on the second anniversary of the Grant Date;
|
(c)
|
[ ] RSUs shall vest on the third anniversary of the Grant Date;
|
(d)
|
[ ] RSUs shall vest on the fourth anniversary of the Grant Date; and
|
(e)
|
[ ] RSUs shall vest on the fifth anniversary of the Grant Date;
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech International Ltd.
|
|
GrafTech Holdings Inc.
|
|
Delaware
|
|
100
|
%
|
GrafTech USA LLC
|
|
Delaware
|
|
100
|
%
|
Seadrift Coke L.P.
|
|
Delaware
|
|
81.1
|
% (a)
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Holdings Inc.
|
|
GrafTech Finance Inc.
|
|
Delaware
|
|
100
|
%
|
GrafTech Global Enterprises Inc.
|
|
Delaware
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Global Enterprises Inc.
|
|
GrafTech International Holdings Inc.
|
|
Delaware
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech International Holdings Inc.
|
|
GrafTech DE LLC
|
|
Delaware
|
|
100
|
%
|
GrafTech Seadrift Holding Corp.
|
|
Delaware
|
|
100
|
%
|
GrafTech Advanced Graphite Materials LLC
|
|
Delaware
|
|
100
|
%
|
GrafTech Technology LLC
|
|
Delaware
|
|
100
|
%
|
GrafTech NY Inc.
|
|
New York
|
|
100
|
%
|
Graphite Electrode Network LLC
|
|
Delaware
|
|
100
|
%
|
GrafTech Luxembourg I S.a.r.l.
|
|
Luxembourg
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech DE LLC
|
|
GrafTech Canada ULC
|
|
Canada
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Luxembourg I S.a.r.l.
|
|
GrafTech Luxembourg II S.a.r.l.
|
|
Luxembourg
|
|
100
|
%
|
GrafTech Hong Kong Limited
|
|
Hong Kong
|
|
100
|
%
|
GrafTech Germany GmbH
|
|
Germany
|
|
100
|
%
|
GrafTech Korea Ltd.
|
|
Korea
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Luxembourg II S.a.r.l.
|
|
GrafTech Switzerland S.A.
|
|
Switzerland
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Hong Kong Limited
|
|
Shanghai GrafTech Trading Co., Ltd.
|
|
China
|
|
100
|
%
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech Switzerland S.A.
|
|
GrafTech UK Limited
|
|
United Kingdom
|
|
100
|
%
|
Graftech Iberica S.L.
|
|
Spain
|
|
99.99
|
% (b)
|
Graftech Comercial Navarra S.L.
|
|
Spain
|
|
100
|
%
|
GrafTech Mexico S.A. de C.V.
|
|
Mexico
|
|
99.97
|
% (c)
|
GrafTech Comercial de Mexico S. de. R.L. de C.V.
|
|
Mexico
|
|
99.97
|
% (c)
|
GrafTech S.p.A.
|
|
Italy
|
|
100
|
%
|
GrafTech Brasil Participacoes Ltda.
|
|
Brazil
|
|
99.99
|
% (f)
|
GrafTech France S.A.S.
|
|
France
|
|
100
|
%
|
GrafTech South Africa (Pty) Ltd.
|
|
South Africa
|
|
100
|
%
|
GrafTech RUS LLC
|
|
Russia
|
|
99.9
|
% (d)
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech France S.A.S.
|
|
GrafTech France S.N.C.
|
|
France
|
|
99.99
|
% (e)
|
|
|
Jurisdiction of
|
|
Ownership by
|
|
Name of Subsidiary
|
|
Incorporation
|
|
GrafTech France S.N.C.
|
|
GrafTech Commercial France S.N.C.
|
|
France
|
|
99.99
|
% (e)
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
By:
|
|
/s/ David J. Rintoul
|
|
|
David J. Rintoul
President and Chief Executive Officer,
(Principal Executive Officer)
|
|
|
February 21, 2020
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
By:
|
|
/s/ Quinn J. Coburn
|
|
|
Quinn J. Coburn
Chief Financial Officer, Vice President Finance and Treasurer
(Principal Financial and Accounting Officer)
|
|
|
February 21, 2020
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Corporation.
|
By:
|
|
/s/ David J. Rintoul
|
|
|
David J. Rintoul
President and Chief Executive Officer,
(Principal Executive Officer)
|
|
|
February 21, 2020
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Corporation.
|
By:
|
|
/s/ Quinn J. Coburn
|
|
|
Quinn J. Coburn
Chief Financial Officer, Vice President Finance and Treasurer
(Principal Financial and Accounting Officer)
|
|
|
February 21, 2020
|