What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-02-22 compared with 2021-02-23 · 62 added, 198 removed, 270 unchanged (49% of the section changed)

1 unchanged sentence

You should carefully read all of the information included in this report and carefully consider, among other matters, the following risk factors, as well as any discussed under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although the risks are organized by headings, and each risk is discussed separately, many are interrelated.

Moreover, the risks below are not the only risks we face and additional risks not currently known to us or that we presently deem immaterial may emerge or become material at any time.

The occurrence of any of the following risks could materially and adversely affect our business, financial condition, results of operations and cash flow, in which case, the market price of our securities could decline.

The following is a summary of our principal Risk Factors.

Risks Factor Summary

Risks related to our business and industry

• Impact of the COVID-19 pandemic

• Cyclical nature of our business

• We may be unable to implement our business strategies

• There may be overcapacity in the graphite electrode market

• Pricing for graphite electrodes is cyclical

• Our business is sensitive to economic conditions

• We are dependent on the EAF steel industry

• We operate in a competitive industry

• Our products are dependent on needle coke supply, raw materials and energy

• Our operations are subject to hazards

• We are subject to a variety of legal, economic, social and political risks

• We could be subject to manufacturing disruptions

• Plant improvements may be delayed or not achieve expected benefits

• We depend on third parties

• We may be subject to information technology failures

• We may not be able to recruit or retain personnel

• Some locations are subject to union negotiations

• We could potentially divest or acquire businesses

• We have significant goodwill

• We depend on our ability to protect our intellectual property

Risks related to our indebtedness

• Our indebtedness could limit our financial and operating activities

• We are subject to covenants related to our 2018 Credit Agreement and 2020 Senior Notes

• Our cash flows may not be sufficient to service our indebtedness

Risks related to tax matters

• Changes to our jurisdictional mix of income could impact us

• We are required to make payments under our Tax Receivable Agreement

Risks related to government agencies

• Health, safety and environmental regulations could impact us

• We are subject to global data and privacy protection laws

Risks related to our common stock

• Our ownership is concentrated

• Certain of our investors have the right to engage or invest in the same or similar businesses

• We may not pay cash dividends on our common stock

• We are subject to provisions that could hinder, delay or prevent a change in control

• Future offerings could be affected by our stock price

• Our stock price could be negatively affected by large sales of our stock

Risks related to our business and industry

The COVID-19 pandemic has had, and is expected to continue to have, an adverse impact on our business, results of operations, financial position and cash flows.

The COVID-19 pandemic and preventative measures taken to contain or mitigate the pandemic have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas and significant disruption in the financial markets and economy both globally and in the United States.

In response to the pandemic and related mitigation measures, we began implementing changes in our business in February 2020 to protect our employees and customers, and to support appropriate health and safety protocols, which included:

(i) canceling travel and eliminating in-person meetings, (ii) working from home where possible, and (iii) establishing a “Safe-Work Playbook” for our sites.

Our plant procedures include temperature measurements where permitted, personal protective equipment, mandatory use of gloves, social distancing, frequent cleaning and disinfecting and the use of daily check sheets to keep team members highly focused on these new procedures.

For example, as a result of the COVID-19 pandemic, the average approximate non-LTA price for graphite electrodes delivered and recognized in revenue in the first quarter of 2021 decreased 35% compared to the first quarter in 2020.

In addition, we expect some cost increases in 2022, driven by recent global cost pressures, particularly for third-party needle coke, energy and freight.

As the pandemic continues, we continue to limit travel and have certain employees working from home on rotations so that all employees are not in our offices at the same time.

While all of these measures have been necessary and appropriate, they have resulted in additional costs and have adversely impacted our business and financial performance.

While the outbreak had begun to subside in certain areas of the world where we operate and serve our customers, the infection rates in some of these areas have experienced a resurgence in the spread of COVID-19 and the infection rates in other areas continue to escalate.

While these measures have been necessary and appropriate, they have resulted in additional costs and have adversely impacted our business and financial performance.

While the COVID-19 pandemic had begun to subside in certain areas of the world where we operate and serve our customers, the infection rates in some of these areas have experienced a resurgence in the spread of COVID-19 and the infection rates in other areas continue to escalate, including as a result of new variants of the virus.

As a result, we are unable to predict the ultimate impact of the COVID-19 pandemic at this time.

9 unchanged sentences

This situation continues to change rapidly and additional impacts may arise that we are not currently aware of.

Our business is cyclical and the selling prices of our products may lead to periods of reduced profitability and net losses in the future.

We have experienced periods of significant net losses.

Our ability to maintain profitability depends on a number of factors, including the growth rate of the graphite electrode industry, the price of our products, the cost to produce our products, the competitiveness of our products and the production capacity at our existing plants.

We may incur significant losses in the future for a number of reasons, including due to the other risks described in this Annual Report, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events.

We may be unable to implement our business strategies, including our initiative to secure and maintain long-term take-or-pay customer contracts, in an effective manner.

We may be unable to implement our business strategies, including our initiative to secure and maintain LTAs, in an effective manner.

Our future financial performance and success largely depend on our ability to successfully implement our business strategies for growth.

We have undertaken, and will continue to undertake, various business strategies to sell a majority of our production capacity through long-term take-or-pay contracts, and improve operating efficiencies and generate cost savings.

cannot assure you that we will successfully implement our business strategies or that implementing these strategies will sustain or improve and not harm our results of operations.

In particular, our ability to successfully implement our strategy to enter into and maintain long-term take-or-pay contracts is subject to certain risks, including customers seeking to renegotiate key terms of their contracts, such as pricing and specified volume commitments, in the event market conditions change during the contract term;

We have undertaken, and will continue to undertake, various business strategies to sell a majority of our production capacity through LTAs, and improve operating efficiencies and generate cost savings.

We cannot assure you that we will successfully implement our business strategies or that implementing these strategies will sustain or improve and not harm our results of operations.

In particular, our ability to successfully implement our strategy to enter into and maintain LTAs is subject to certain risks, including customers seeking to renegotiate key terms of their contracts, such as pricing and specified volume commitments, in the event market conditions change during the contract term;

our inability to extend contracts when they expire;

and a disruption in our access to Seadrift‑produced petroleum needle coke, which we will rely on, in part, to deliver the contracted volumes under our long-term contracts.

Under market conditions where the price of graphite electrodes is trending downwards, it may be unlikely that customers will commit to long-term take-or-pay contracts.

and a disruption in our access to Seadrift‑produced petroleum needle coke, which we will rely on, in part, to deliver the contracted volumes under our LTAs.

Under current market conditions where the spot price of graphite electrodes is below our weighted average contract price for LTA contracted volumes, it may be unlikely that customers will commit to extend or re-enter into LTAs at the current prices of our LTAs.

As a result, we cannot assure you that we will successfully implement this strategy or realize the anticipated benefits of these contracts.

Recently, because of current market conditions, including the effects of the COVID-19 pandemic, certain customers with long-term contracts have struggled to take their committed volumes, which has resulted in some non-performance and disputes, including a few arbitrations, and we have modified some long-term contracts.

Recently, because of current market conditions, including the effects of the COVID-19 pandemic, certain customers with LTAs have struggled to take their committed volumes, which has resulted in some non-performance and disputes, including a few arbitrations, and we have modified some LTAs.

In addition, the costs involved in implementing our strategies may be significantly greater than we currently anticipate.

12 unchanged sentences

Excessive imports into the Americas and EMEA, which markets collectively make up 89% of our net sales, can also exert downward pressure on graphite electrode prices, which negatively affects our sales, margins and profitability.

Pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may continue to decline in the future.

Pricing for graphite electrodes has historically been cyclical and the price of graphite electrodes may decline in the future.

Pricing for graphite electrodes has historically been cyclical, reflecting the demand trends of the global EAF steelmaking industry and the supply of graphite electrodes.

1 unchanged sentence

Historically, between 2007 and 2021, our weighted average realized price of graphite electrodes was approximately $5,700 per MT (on an inflation‑adjusted basis using constant 2021 dollars).

During the last demand trough in 2016, our weighted average realized price of graphite electrodes fell to approximately $2,500 per MT in 2016, on an inflation‑adjusted basis using constant 2018 dollars.

During the last demand trough in 2016, our weighted average realized price of graphite electrodes fell to approximately $2,800 per MT, on an inflation‑adjusted basis using constant 2021 dollars.

Following the significant rationalization of graphite electrode production globally, the resumption of growth in EAF steel production, falling scrap prices, reductions in Chinese steel exports and constrained supply of needle coke, graphite electrode prices reached record highs in 2018.

Current prices have receded from the highs of 2018, and the price of graphite electrodes may continue to decline in the future.

Current prices have receded from the highs of 2018, and the price of graphite electrodes may 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.

Spot prices decreased further in 2020.

Current spot prices are below our weighted average contract price for long-term contracted volumes.

Spot prices decreased further in 2020, bottoming out in the spring of 2021 before beginning to increase.

Despite this increase, current spot prices are below our weighted average contract price for LTA contracted volumes.

Our business, financial condition and operating results could be materially and adversely affected to the extent prices for graphite electrodes decline in the future.

Our business and operating results have been and will continue to be sensitive to economic conditions, and a downturn in economic conditions may materially adversely affect our business.

Our operations and performance are materially affected by global and regional economic conditions.

As described further below, we are dependent on the steel industry, which historically has been highly cyclical and is affected by general economic conditions.

An economic downturn may reduce customer demand, reduce prices for our products or inhibit our ability to produce our products, which would negatively affect our operating results.

Our business and operating results have also been and will continue to be sensitive to declining consumer and business confidence, fluctuating commodity prices, volatile exchange rates and other challenges that can affect the economy.

Our customers may experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing, leading them to delay or cancel plans to purchase our products or seek to renegotiate the terms of their supply contracts, and they may not be able to fulfill their obligations to us in a timely fashion.

Further, suppliers and other business partners may experience similar conditions, which could impact their ability to fulfill their obligations to us.

Also, it could be difficult to find replacements for business partners without incurring significant delays or cost increases.

These events would negatively impact our revenues and results of operations.

We are dependent on the global steel industry generally and the EAF steel industry in particular, and a downturn in these industries may materially adversely affect our business.

We are dependent on the global steel industry generally and the EAF steel industry in particular, which historically have been highly cyclical, and a downturn in these industries may materially adversely affect our business.

We sell our products primarily to the EAF steel production industry.

The steel industry historically has been highly cyclical and is affected significantly by general economic conditions.

The EAF steel production industry historically has been highly cyclical and is affected significantly by general economic conditions.

As a result, we have experienced periods of significant net losses.

Significant customers for the steel industry include companies in the automotive, construction, appliance, machinery, equipment and transportation industries, which are industries that were negatively affected by the general economic downturn and the deterioration in financial markets, including severely restricted liquidity and credit availability, in the recent past.

13 unchanged sentences

Seadrift currently provides the majority of our current petroleum needle coke requirements, and we purchase the remainder from external sources.

We plan to rely on Seadrift‑produced petroleum needle coke to support the production of substantially all of the contracted volumes of graphite electrodes under our long-term take-or-pay contracts.

As a result, a disruption in Seadrift’s production of petroleum needle coke could adversely affect our ability to achieve the anticipated benefits of these contracts if we are forced to purchase petroleum needle coke from external sources at a higher cost to support the production of these contracted volumes.

If a market shortage of petroleum needle coke occurs, we may be unable to acquire sufficient amounts of petroleum needle coke from external sources to support our remaining needle coke requirements currently used in the production of graphite electrodes for sale in the spot market.

We plan to rely on Seadrift‑produced petroleum needle coke to support the production of substantially all of the contracted volumes of graphite electrodes under our LTAs.

As a result, a disruption in Seadrift’s production of petroleum needle coke, like the one that occurred in February 2021 due to a winter storm, could adversely affect our ability to achieve the anticipated benefits of these contracts if we are forced to purchase petroleum needle coke from external sources at a higher cost to support the production of these contracted volumes.

used in the production of graphite electrodes for sale in the spot market.

As a result, a disruption in the supply of petroleum needle coke could have a material adverse effect on our business, financial condition, results of operations and cash flows.

6 unchanged sentences

• 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;

• interruptions or terminations in production by suppliers;

• market and other events and conditions.

1 unchanged sentence

For example, Seadrift may not always be able to obtain an adequate quantity of suitable low‑sulfur decant oil for the manufacture of petroleum needle coke, and capital may not be available to install equipment to allow use of higher sulfur decant oil (which is more readily available in the United States) if supplies of low‑sulfur decant oil become more limited in the future.

Further, recent low-sulfur emissions regulations adopted by the International Maritime Organization may adversely impact pricing for low-sulfur decant oil.

Further, low-sulfur emissions regulations adopted in 2020 by the International Maritime Organization have at times negatively affected pricing for low-sulfur decant oil and they may again in the future cause similar adverse impacts.

We have in the past entered into, and may continue in the future to enter into, derivative contracts and short‑duration fixed-rate purchase contracts to effectively fix a portion of our exposure to certain products.

22 unchanged sentences

• 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 long-term take-or-pay contracts and intellectual property rights, and obtain complete financial or other information under local legal, judicial, regulatory, disclosure and other systems;

• inability to determine or satisfy legal requirements, effectively enforce contract or legal rights, including our rights under our LTAs and intellectual property rights, and obtain complete financial or other information under local legal, judicial, regulatory, disclosure and other systems;

• 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.

16 unchanged sentences

We contract with third parties for certain services relating to the design, construction and maintenance of various components of our production facilities and other systems.

If these third parties fail to comply with their obligations, the facilities may not operate as intended, which may result in delays in the production of our products and materially adversely affect our ability to meet our production targets and satisfy customer requirements or we may be required to recognize impairment charges.

impairment charges.

In addition, production delays could cause us to miss deliveries and breach our contracts, which could damage our relationships with our customers and subject us to claims for damages under our contracts.

2 unchanged sentences

In particular, a significant portion of the goods we manufacture are transported to different countries, which requires sophisticated warehousing, logistics and other resources.

If any of the third parties that we use to transport products are unable to deliver the goods we manufacture in a timely manner, we may be unable to sell these products at full value or at all, which could cause us to miss deliveries and breach our contracts, which could damage our relationships with our customers and subject us to claims

for damages under our contracts.

Any of these events could have a material adverse effect on our business, financial condition, results of operations or cash flows.

6 unchanged sentences

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.

We may not be able to recruit or retain key management and plant operating personnel.

Our success is dependent on the management and leadership skills of our key management and plant operating personnel.

The loss of any member of our reorganized key management team and personnel or an inability to attract, retain, develop and maintain additional personnel could prevent us from implementing our business strategy.

In addition, our future growth and success also depend on our ability to attract, train, retain and motivate skilled managerial, sales, administration, operating and technical personnel.

The loss of one or more members of our key management or plant operating personnel, or the failure to attract, retain and develop additional key personnel, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

If we are unable to successfully negotiate with the representatives of our employees, including labor unions, we may experience strikes and work stoppages.

5 unchanged sentences

A material work stoppage, strike or other union dispute could adversely affect our business, financial condition, results of operations and cash flows.

We may divest or acquire businesses, which could require significant management attention or disrupt our business.

We may divest or acquire businesses to rationalize or expand our businesses and enhance our cash flows.

Any acquisitions that we are able to identify and complete may involve a number of risks, including:

• 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;

• our possible inability to achieve the intended objectives of the transaction, including the inability to achieve cost savings and synergies.

Any divestitures may also involve a number of risks, including the diversion of management’s attention, significant costs and expenses, the loss of customer relationships and cash flow, and the disruption of the affected business or business operations.

Failure to timely complete or consummate an acquisition or a divestiture may negatively affect the valuation of the affected business or business operations or result in restructuring charges.

We have significant goodwill on our balance sheet that is sensitive to changes in the market, which could result in impairment charges.

8 unchanged sentences

We believe that our intellectual property, consisting primarily of patents and proprietary know‑how and information, is important to our growth.

Our intellectual property portfolio is extensive, with over 135 U.S.

and foreign patents and published patent applications, which we believe is more than any of our major competitors in the businesses in which we operate.

Failure to protect our intellectual property may result in the loss of the exclusive right to use our technologies.

17 unchanged sentences

From time to time, we may become subject to legal proceedings, including allegations and claims of alleged infringement or misappropriation by us of the patents and other intellectual property rights of third parties.

We cannot assure

you that the use of our patented technology or proprietary know‑how or information does not infringe the intellectual property rights of others.

We cannot assure you that the use of our patented technology or proprietary know‑how or information does not infringe the intellectual property rights of others.

In addition, attempts to enforce our own intellectual property claims may subject us to counterclaims that our intellectual property rights are invalid, unenforceable or are licensed to the party against whom we are asserting the claim or that we are infringing that party’s alleged intellectual property rights.

11 unchanged sentences

Our credit agreement (as amended, the “2018 Credit Agreement”) provides for (i) an aggregate $2,250 million senior secured term loan facility (the “2018 Term Loan Facility”) and (ii) a $250 million senior secured revolving credit facility (the “2018 Revolving Credit Facility” and, together with the 2018 Term Loan Facility, as amended, the “Senior Secured Credit Facilities”).

As of December 31, 2020, we had approximately $1,420 million of secured indebtedness outstanding including borrowings under the Senior Secured Credit Facilities and our 4.625% Senior Secured Notes due 2028 (the “2020 Senior Notes”).

As of December 31, 2021, we had approximately $1,030 million of secured indebtedness outstanding including borrowings under the Senior Secured Credit Facilities and our 4.625% Senior Secured Notes due 2028 (the “2020 Senior Secured Notes”).

As of December 31, 2021, we had $246.7 million available for borrowing under the 2018 Revolving Credit Facility (taking into account approximately $3.3 million of outstanding letters of credit issued thereunder).

Interest expense for the years ended December 31, 2021 and December 31, 2020 was $68.8 million and $98.1 million, respectively.

Our substantial indebtedness could:

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;

3 unchanged sentences

• 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 an increase in interest rates, a downturn in our operating performance or a decline in general economic conditions;

• 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.

Compliance with our debt obligations under the Senior Secured Credit Facilities and 2020 Senior Notes 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.

The 2018 Credit Agreement and the indenture governing the 2020 Senior Notes include covenants that could restrict or limit our financial and business operations.

The 2018 Credit Agreement and the indenture governing the 2020 Senior 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:

Compliance with our debt obligations under the Senior Secured Credit Facilities and 2020 Senior Secured Notes 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.

The 2018 Credit Agreement and the indenture governing the 2020 Senior Secured Notes include covenants that could restrict or limit our financial and business operations.

The 2018 Credit Agreement and the indenture governing the 2020 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;

9 unchanged sentences

Additionally, our ability to comply with these covenants may be affected by events beyond our control, including general economic and credit conditions and industry downturns.

If we fail to comply with the covenants in the 2018 Credit Agreement and the indenture governing the 2020 Senior 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 Credit Agreement, 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 Credit Agreement and the indenture governing the 2020 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 Credit Agreement, refuse to lend additional amounts to us or require deposit of cash collateral in respect of outstanding letters of credit.

If we were unable to repay or pay the amounts due, the lenders under the 2018 Credit Agreement 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.

1 unchanged sentence

subsidiaries.

Our cash flows may not be sufficient to service our indebtedness, and if we are unable to satisfy our obligations under our indebtedness, we may be required to seek other financing alternatives, which may not be successful.

Our ability to make timely payments of principal and interest on our debt obligations, including our obligations under the Senior Secured Credit Facilities and 2020 Senior Notes, depends on our ability to generate positive cash flows from operations, which is subject to general economic conditions, competitive pressures and certain financial, business and other factors beyond our control.

If our cash flows and capital resources are insufficient to make these payments, we may be required to seek additional financing sources, reduce or delay capital expenditures, sell assets or operations or refinance our indebtedness.

These actions could have a material adverse effect on our business, financial conditions and results of operations.

In addition, we may not be able to take any of these actions, and, even if successful, these actions may not permit us to meet our scheduled debt service obligations.

Our ability to restructure or refinance the debt under the Senior Secured Credit Facilities and the 2020 Senior Notes will depend on, among other things, the condition of the capital markets and our financial condition at the time.

We may not be able to restructure or refinance any of our indebtedness on commercially reasonable terms or at all.

If we cannot make scheduled payments on our debt, we will be in default and the outstanding principal and interest on our debt

could be declared to be due and payable, in which case we could be forced into bankruptcy or liquidation or required to substantially restructure or alter our business operations or debt obligations.

A lowering or withdrawal of the ratings assigned to our debt by rating agencies may increase our future borrowing costs and reduce our access to capital.

Our debt currently has a non-investment grade rating, and any rating assigned to our debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant.

Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing and affect the market value of the 2020 Senior Notes.

Additionally, we enter into various forms of hedging arrangements against currency, interest rate or decant oil price fluctuations.

Financial strength and credit ratings are also important to the availability and pricing of these hedging activities, and a downgrade of our credit ratings may make it more costly for us to engage in these activities.

Disruptions in the capital and credit markets, which may occur at any time, could adversely affect our results of operations, cash flows and financial condition, or those of our customers and suppliers.

Disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to liquidity needed to conduct or expand our businesses or conduct acquisitions or make other discretionary investments, as well as our ability to effectively hedge our currency or interest rate risks and exposures, which could adversely impact our business, results of operations, financial condition and cash flows.

These disruptions may also adversely impact the financial position of our customers and suppliers, which, in turn, could adversely affect our results of operations, financial condition and cash flows.

Risks related to tax matters

Significant changes in our jurisdictional earnings mix or in the tax laws of those jurisdictions could adversely affect our business, financial condition, results or operations and cash flows.

Our future tax rates may be adversely affected by a number of factors, including the enactment of new tax legislation, other changes in tax laws or the interpretation of tax laws, changes in the estimated realization of our net deferred tax assets (arising, among other things, from tax loss carry forwards and our acquisition by Brookfield), changes to the jurisdictions in which profits are determined to be earned and taxed, adjustments to estimated taxes upon finalization of various tax returns, increases in expenses that are not deductible for tax purposes, including write‑offs of acquired in‑process R&D and impairment of goodwill in connection with acquisitions, changes in available tax credits and additional tax or interest payments resulting from tax audits with various tax authorities.

Losses for which no tax benefits can be recorded could materially impact our tax rate and its volatility from period to period.

Any significant change in our jurisdictional earnings mix or in the tax laws in those jurisdictions could increase our tax rates and adversely impact our financial results in those periods.

We are required to make payments under a Tax Receivable Agreement for certain tax benefits we may claim in the future, and the amounts we may pay could be significant.

2 unchanged sentences

(collectively, the “Pre‑IPO Tax Assets”).

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 LIBOR plus 1.00% per annum.

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 made our initial payment of approximately $28 million related to the Tax Receivable Agreement in February 2020.

We made our initial payment of approximately $28 million related to the Tax Receivable Agreement in February 2020 and have since made an additional payment of $22 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 $19.3 million in the aggregate.

The maximum amount over the term of the agreement is approximately $70 million.

This figure does not account for our Pre-IPO Tax Assets attributable to previously taxed income under Section 959 of the Code, the value of which is highly speculative, and certain NOLs in GrafTech Switzerland S.A., which had a nominal value at the time of the IPO.

Payments made by us to Brookfield under the Tax Receivable Agreement generally reduce the amount of overall cash flow that might have otherwise been available to us.

For more information about the Tax Receivable Agreement, see “Results of operations—Critical accounting policies—Related Party Tax Receivable Agreement.”

Risks related to government regulation

2 unchanged sentences

Some of our products (including our raw materials) are subject to extensive environmental and industrial hygiene regulations governing the registration and safety analysis of their component substances.

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 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.

Violations of these laws and regulations, or of the terms and conditions of permits required for our operations, can result in damage claims, reputational harm, the imposition of substantial fines and criminal sanctions and sometimes require the installation of costly pollution control or safety equipment or costly changes in operations to limit pollution or decrease the likelihood of injuries.

18 unchanged sentences

While we take steps to comply with these legal requirements, any changes to such laws may impact our ability to effectively transfer data across borders in support of our business operations and any breach of such laws may lead to administrative, civil or criminal liability, as well as reputational harm to the Company and its employees.

For example, the EU’s GDPR, introduced a number of obligations for

subject companies, including obligations relating to data transfers and the security of personal data they process.

For example, the EU’s GDPR, introduced a number of obligations for subject companies, including obligations relating to data transfers and the security of personal data they process.

We take steps to protect the security and integrity of the information we collect, but there is no guarantee that the steps we have taken will prevent inadvertent or unauthorized use or disclosure of such information, or prevent third parties from gaining unauthorized access to this information despite our efforts.

1 unchanged sentence

The cost of ongoing compliance with global data protection and privacy laws and the potential fines and penalties levied in the event of a breach of such laws may have an adverse effect on our business and operations.

For example, the GDPR currently provides that supervisory authorities in the EU may impose administrative fines for non‑compliance of up to €20,000,000 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.

from such company.

We will need to continue dedicating financial resources and management time to compliance efforts with respect to global data protection and privacy laws, including the GDPR.

13 unchanged sentences

In addition, this concentration of share ownership may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders.

Certain of our stockholders have the right to engage or invest in the same or similar businesses as us.

Our largest stockholder, Brookfield, whose representatives serve on our Board of Directors, has the right to engage or invest in the same or similar businesses as us.

Brookfield has other investments and business activities in addition to their ownership of us.

2 unchanged sentences

In the event that any of our directors and officers who is also a director, officer or employee of Brookfield acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such person’s capacity as our director or officer and such person acts in good faith, then to the fullest extent permitted by law such person is deemed to have fully satisfied such person’s fiduciary duties owed to us and is not liable to us, if Brookfield pursues or acquires the corporate opportunity or if Brookfield does not present the corporate opportunity to us.

We may not pay cash dividends on our common stock.

We currently pay cash dividends on our common stock in accordance with our dividend policy.

We cannot assure you, however, that we will pay 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 or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.

Our 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.

For example, we may or may not be able to, or may decide not to, pay dividends if we are unable, for any reason, to continue our long-term take-or-pay contracts strategy in the future or we experience a significant disruption in our manufacturing operations or our production of petroleum needle coke at Seadrift, that, in either case, inhibits our ability to deliver the contracted volumes under our three- to five-year take-or-pay contracts.

In addition, adverse market conditions may lead us to prioritize repaying the principal on our outstanding indebtedness.

Our ability to pay dividends on our common stock is also limited as a practical matter by our credit

In the future, we may also enter into other credit agreements or other borrowing arrangements or issue debt securities that, in each case, restrict or limit our ability to pay cash dividends on our common stock.

In addition, since we are a holding company with no operations of our own, our ability to pay dividends is dependent on the ability of our subsidiaries to make distributions to us.

Their ability to make such distributions will be subject to their operating results, cash requirements and financial condition.

Any change in the level of our dividends or the suspension of the payment thereof could adversely affect the market price of our common stock.

See “Dividend Policies and Restrictions.”

Certain provisions, including in our Amended Certificate of Incorporation and our Amended By-Laws, could hinder, delay or prevent a change in control, which could adversely affect the price of our common stock.

2 unchanged sentences

• 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;

• 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;

4 unchanged sentences

These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or to change our management and Board of Directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

In addition, in the event of certain changes in control, including if Brookfield’s ownership of our outstanding common stock were to fall below 30%, payments to certain of our senior management may be triggered under certain of our compensation arrangements, which could have an adverse impact on us.

Our Amended Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

4 unchanged sentences

• any action asserting a claim against us that is governed by the internal-affairs doctrine.

This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our

directors, officers, and other employees.

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.

The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders.

The market price of our common stock may be highly volatile and could be subject to wide fluctuations.

In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur.

If the market price of our common stock declines significantly, you may be unable to resell your shares at or above your purchase price, if at all.

The market price of our common stock may fluctuate or decline significantly in the future.

Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

• 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;

• general market, political and economic conditions, including any such conditions and local conditions in the markets in which our customers are located.

These broad market and industry factors may decrease the market price of our common stock, regardless of our actual operating performance.

The stock market in general has from time to time experienced extreme price and volume fluctuations, including in recent months.

In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies.

This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Future offerings of debt or equity securities by us may adversely affect the market price of our common stock.

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or offering debt or other equity securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.

Future acquisitions could require substantial additional capital in excess of cash from operations.

We would expect to finance any future acquisitions through a combination of additional issuances of equity, corporate indebtedness, asset-backed acquisition financing and/or cash from operations.

Issuing additional shares of our common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of our common stock or both.

Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock.

Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity

securities issuable upon conversion.

Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock.

Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings.

Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their stockholdings in us.

The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets.

Sales of substantial amounts of our common stock in the public markets, or the perception that these sales could occur, could cause the market price of our common stock to decline.

In particular, the sale in the public markets of our common stock by Brookfield, which, as of February 16 , 2021, owned approximately 47.8 % of our outstanding common stock, or by our officers and directors, or the perception that these sales may occur, could cause the market price of our common stock to decline.

The sale in the public markets of our common stock by Brookfield, which, as of February 11 , 2022, owned approximately 24% of our outstanding common stock, or by our officers and directors, or the perception that these sales may occur, could cause the market price of our common stock to decline or cause the market price of our common stock to trade at a discount.

Brookfield may from time to time seek to sell or otherwise dispose of some or all of its shares, including by transferring shares to affiliates, distributing shares to its partners, members or beneficiaries, or selling shares in underwritten offerings, block sales, open market transactions or otherwise.

1 unchanged sentence

A decline in the price of our common stock might impede our ability to raise capital through the issuance of additional common stock or other equity securities.

The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings.

As of February 16, 2021, we had an aggregate of 2,717,854,716 shares of common stock authorized but unissued and not otherwise reserved for issuance under our incentive plans.

We may issue all of these shares of common stock without any action or approval by our stockholders, subject to certain exceptions.

We also intend to continue to evaluate acquisition opportunities and may issue common stock in connection with these acquisitions.

Any common stock issued in connection with our incentive plans, acquisitions, the exercise of outstanding stock options or otherwise would dilute the percentage ownership held by public investors.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.

If one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline.

If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.

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.

Although our Board of Directors has authorized a stock repurchase program that does not have an expiration date, the program does not obligate us to acquire any particular amount of shares of common stock, and the stock repurchase program may be suspended or discontinued at any time at our discretion.

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.

In addition, our use of this program will diminish our cash.

We may not pay cash dividends on our common stock.

We currently pay cash dividends on our common stock in accordance with our dividend policy.

We cannot assure you, however, that we will pay 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 or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders.

Unresolved Staff Comments

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors