What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-14 compared with 2024-02-14 · 438 added, 357 removed, 1243 unchanged (39% of the section changed)

5 unchanged sentences

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ Equity (Deficit)

Consolidated Statements of Stockholders’ (Deficit) Equity

Notes to the Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of GrafTech International Ltd.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive (loss) income, stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive (loss) income, stockholders' (deficit) equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Refer to Notes 1 and 6 to the financial statements

Accounting for Debt Financing Transactions - Refer to Note 5 and Note 7 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The Company determines the fair value of its reporting units using the income and market approaches.

The determination of the fair value using the income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA), capital expenditures, and discount rates.

The determination of the fair value using the market approach requires management to make significant estimates and assumptions related to the forecasts of future revenues, EBITDA, and multiples that are applied to management’s forecasted EBITDA estimates.

The goodwill balance of $171.1 million as of December 31, 2023, which entirely related to the Graphite Electrode reporting unit, was fully impaired as part of the Company’s annual assessment and an impairment charge of $171.1 million was recorded within the Consolidated Statement of Operations for the year ended December 31, 2023.

Given the nature of the reporting unit’s operations, the sensitivity of the reporting unit to changes in the economy, the reporting unit’s historical performance, and the difference between its fair value and the carrying value, auditing management’s judgments regarding forecasts of future revenues, EBITDA, and capital expenditures, as well as the selection of the discount rate and the multiples applied to management’s forecasted EBITDA estimates for the reporting unit, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

As described within Notes 5 and 7 to the financial statements, on December 23, 2024, the Company consummated the offers to exchange any and all of its 4.625% senior secured notes due 2028 and its 9.875% senior secured notes due 2028, for new 4.625% second lien notes due 2029 and new 9.875% second lien notes due 2029, respectively.

The Company also received the requisite consents from holders of the existing notes to adopt the proposed amendments to the Existing Notes indenture that 1) eliminated substantially all of the restrictive covenants as well as certain events of default and related provisions and 2) released all of the collateral securing the Existing Notes.

In addition, concurrent with the exchange offer the Company issued $175M of new senior secured first lien term loans and obtained commitments for an additional $100M of senior secured first lien delayed draw term loans.

We identified the evaluation of the Company’s accounting for debt modification and the underlying accounting treatment of the fees and expenses as a critical audit matter due to a high degree of auditor effort in performing procedures related to the Company’s calculations inherently required in determining proper accounting treatment and presentation of debt.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues and EBITDA (“forecasts”), and the selection of the discount rate and selection of multiples applied to management’s forecasted EBITDA estimates (“market multiples”) for the Graphite Electrode reporting unit included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, such as controls related to management’s forecasts and the selection of the discount rate and market multiples used.

• We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasts by comparing the current forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in industry reports for the various industries the reporting unit operates within.

• With the assistance of our fair value specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the market multiples by evaluating the selected comparable publicly traded companies and the adjustments made for differences in growth prospects and risk profiles between the reporting unit and the comparable publicly traded companies.

We tested the underlying source information and mathematical accuracy of the calculations.

Our audit procedures related to the transaction included the following, among others:

• We obtained an understanding and tested the effectiveness of controls related to accounting over financial reporting, including management’s controls over the debt cycle and accounting for transactions.

• We obtained and read debt agreements and amendments and evaluated the terms and conditions of the agreements and assessed the reasonableness of management’s application of the appropriate accounting authoritative guidance.

• We evaluated the documentation supporting the modification accounting conclusion and tested the calculation of present value of the cash flows under the terms of the amendment and determined if it was considered substantially different from the present value of the remaining cash flow of the original debt instrument.

• We evaluated the accounting treatment and tested the underlying amounts associated with the fees and expenses directly attributable to the modification and the classification of those expenses.

/s/ DELOITTE & TOUCHE LLP

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Deferred income taxes 53,139 31,542

Goodwill — 171,117

Other assets 51,639 60,440

Total assets $ 1,224,274 $ 1,288,889

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current liabilities:

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Other accrued liabilities 55,432 91,702

Related party payable - Tax Receivable Agreement 5,417 4,631

Tax Receivable Agreement 2,022 5,417

Total current liabilities 139,929 190,543

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Deferred income taxes 23,971 33,206

Related party payable - Tax Receivable Agreement long-term 5,737 10,921

Tax Receivable Agreement long-term 3,802 5,737

Commitments and contingencies – Note 12

Stockholders’ equity:

Stockholders’ (deficit) equity:

Preferred stock, par value $ 0.01 , 300,000,000 shares authorized, none issued

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Accumulated deficit ( 793,453 ) ( 662,390 )

Total stockholders’ equity 78,247 337,715

Total liabilities and stockholders’ equity $ 1,288,889 $ 1,604,178

Total stockholders’ (deficit) equity ( 78,902 ) 78,247

Total liabilities and stockholders’ (deficit) equity $ 1,224,274 $ 1,288,889

See accompanying Notes to the Consolidated Financial Statements

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Lower of cost or market inventory valuation adjustment 24,878 12,431 —

Gross profit 36,212 554,877 644,453

Gross (loss) profit ( 19,853 ) 36,212 554,877

Research and development 5,706 5,520 3,641

Selling and administrative expenses 46,510 74,012 76,977

Rationalization expenses 3,156 — —

Goodwill impairment charges — 171,117 —

Operating (loss) income ( 75,225 ) ( 214,437 ) 474,259

Other expense (income), net 4,679 ( 10,147 ) ( 16,220 )

Other (income) expense, net ( 1,569 ) 4,679 ( 10,147 )

Interest expense 85,313 58,087 36,568

Interest income ( 5,701 ) ( 3,439 ) ( 4,480 )

(Loss) income before (benefit) provision for income taxes ( 273,764 ) 452,318 456,406

(Benefit) provision for income taxes ( 18,514 ) 69,356 68,076

(Loss) income before income taxes ( 153,268 ) ( 273,764 ) 452,318

Income tax (benefit) expense ( 22,103 ) ( 18,514 ) 69,356

Net (loss) income $ ( 131,165 ) $ ( 255,250 ) $ 382,962

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Net (loss) income $ ( 131,165 ) $ ( 255,250 ) $ 382,962

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments, net of

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( 7,516 ) ( 13,554 ) 6,398

Other comprehensive (loss) income, net of tax:

Other comprehensive loss, net of tax:

( 31,901 ) ( 3,388 ) ( 626 )

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Net (loss) income $ ( 131,165 ) $ ( 255,250 ) $ 382,962

Adjustments to reconcile net (loss) income to cash provided by operations:

Adjustments to reconcile net (loss) income to cash (used in) provided by operations:

Depreciation and amortization 62,245 56,889 55,496

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Net change in working capital* 40,254 107,562 ( 99,575 )

Change in related party Tax Receivable Agreement ( 4,398 ) ( 3,828 ) ( 21,568 )

Change in Tax Receivable Agreement ( 5,330 ) ( 4,398 ) ( 3,828 )

Change in long-term assets and liabilities ( 13,631 ) ( 1,963 ) ( 19,309 )

Net cash provided by operating activities 76,561 324,628 443,040

Net cash (used in) provided by operating activities ( 40,093 ) 76,561 324,628

Cash flow from investing activities:

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Cash flow from financing activities:

Interest rate swap settlements 27,453 6,423 ( 4,170 )

Debt issuance and modification costs ( 8,152 ) ( 2,232 ) ( 3,109 )

Proceeds from the issuance of long-term debt, net of original issuance discount 438,552 — —

Proceeds from Initial First Lien Term Loan due 2029 175,000 — —

Proceeds from issuance of long-term debt, net of original issuance discount — 438,552 —

Principal payments on long-term debt ( 137 ) ( 433,841 ) ( 110,124 )

Debt issuance and modification costs ( 18,945 ) ( 8,152 ) ( 2,232 )

Interest rate swap settlements — 27,453 6,423

Repurchase of common stock — — ( 60,000 )

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Proceeds from exercise of stock options — — 225

Dividends paid to non-related party ( 3,854 ) ( 7,770 ) ( 7,439 )

Dividends paid to related party ( 1,280 ) ( 2,559 ) ( 3,206 )

Dividends paid — ( 5,134 ) ( 10,329 )

Principal payments under finance lease obligations ( 82 ) ( 36 ) —

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Change in capital expenditures in accounts payable ( 4,006 ) ( 9,431 ) 7,748

Non-cash financing activities:

Exchange Existing 9.875% Notes ( 446,167 ) — —

Exchange Existing 4.625% Notes ( 498,245 ) — —

New 9.875% Notes 446,167 — —

New 4.625% Notes 498,245 — —

* Net change in working capital due to the following components:

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Net change in working capital $ 40,254 $ 107,562 $ ( 99,575 )

(1) Includes cash received/paid from the monthly settlements and the 2023 termination of our interest rate swaps.

(1) Includes cash received/paid from the monthly settlements and the 2023 termination of our interest rate swaps in the years ended December 31, 2023 and 2022.

See accompanying Notes to the Consolidated Financial Statements

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(Dollars in thousands, except share data)

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Stockholders’

Equity (Deficit)

(Deficit) Equity

Balance as of December 31, 2021 263,255,708 $ 2,633 $ 761,412 $ ( 7,444 ) $ ( 733,199 ) $ 23,402

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Other comprehensive income (loss):

Commodity and interest rate derivatives income, net of tax of $( 6,662 )

Commodity, interest rate and foreign currency derivatives income, net of tax of $( 5,060 )

— — — 15,829 — 15,829

Commodity derivatives reclassification adjustments, net of tax of $( 1,970 )

Commodity, interest rate and foreign currency derivatives reclassification adjustments, net of tax of $ 2,469

— — — ( 9,431 ) — ( 9,431 )

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— — — ( 7,024 ) — ( 7,024 )

Total other comprehensive income — — — 12,197 — 12,197

Total other comprehensive loss — — — ( 626 ) — ( 626 )

Repurchase of common stock ( 6,662,421 ) ( 67 ) ( 18,721 ) — ( 41,212 ) ( 60,000 )

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Payments for taxes related to net share settlement of equity awards ( 22,293 ) — ( 63 ) — ( 167 ) ( 230 )

Dividends paid to related party ($ 0.04 per share)

— — — — ( 3,206 ) ( 3,206 )

Dividends paid to non-related party ($ 0.04 per share)

Dividends paid ($ 0.04 per share)

— — — — ( 10,329 ) ( 10,329 )

Balance as of December 31, 2022 256,597,342 $ 2,566 $ 745,164 $ ( 8,070 ) $ ( 401,945 ) $ 337,715

Net income — — — — 382,962 382,962

Net loss — — — — ( 255,250 ) ( 255,250 )

Other comprehensive income (loss):

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Total other comprehensive loss — — — ( 3,388 ) — ( 3,388 )

Repurchase of common stock ( 6,662,421 ) ( 67 ) ( 18,721 ) — ( 41,212 ) ( 60,000 )

Stock-based compensation 258,153 2 4,431 — — 4,433

Options exercised 25,000 — 225 — — 225

Payments for taxes related to net share settlement of equity awards ( 23,625 ) — ( 68 ) — ( 61 ) ( 129 )

Dividends paid to related party ($ 0.04 per share)

— — — — ( 2,559 ) ( 2,559 )

Dividends paid to non-related party ($ 0.04 per share)

Dividends paid ($ 0.02 per share)

— — — — ( 5,134 ) ( 5,134 )

Balance as of December 31, 2023 256,831,870 $ 2,568 $ 749,527 $ ( 11,458 ) $ ( 662,390 ) $ 78,247

Net income — — — — ( 255,250 ) ( 255,250 )

Net loss — — — — ( 131,165 ) ( 131,165 )

Other comprehensive income (loss):

Commodity, interest rate and foreign currency derivatives income, net of tax of $( 474 )

Foreign currency derivatives income, net of tax of $( 13 )

— — — 85 — 85

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Payments for taxes related to net share settlement of equity awards ( 78,084 ) — ( 220 ) — 102 ( 118 )

Dividends paid to related party ($ 0.02 per share)

— — — — ( 1,280 ) ( 1,280 )

Dividends paid to non-related party ($ 0.02 per share)

— — — — ( 3,854 ) ( 3,854 )

Balance as of December 31, 2024 257,263,710 $ 2,572 $ 755,338 $ ( 43,359 ) $ ( 793,453 ) $ ( 78,902 )

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References herein to “GTI,” “we,” “our,” or “us” refer collectively to the Company and its subsidiaries.

On August 15, 2015, GTI became an indirect wholly owned subsidiary of Brookfield.

In April 2018, we completed our IPO of 38,097,525 shares of our common stock held by Brookfield at a price of $ 15.00 per share.

We did not receive any proceeds related to the IPO.

Our common stock is listed on the NYSE under the symbol “EAF.” Brookfield has since distributed a portion of its GrafTech common stock to the owners in the Brookfield consortium and sold shares of GrafTech common stock in public and private transactions, resulting in a reduction of Brookfield's ownership of outstanding shares of GrafTech common stock to approximately 11.0 % and 24.9 % as of December 31, 2023 and 2022, respectively.

Our common stock is listed on the NYSE under the symbol “EAF.”

The Company’s only reportable segment, Industrial Materials, is comprised of its two major product categories:

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All intercompany transactions have been eliminated in consolidation.

Cash Equivalents

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or less.

Cash equivalents consist of certificates of deposit, money market funds and commercial paper.

These investments include certificates of deposit, money market funds and commercial paper.

Revenue Recognition

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The promises of delivery of graphite electrodes represent the distinct performance obligations of the Company's contracts.

A small portion of the Company's sales consist of deliveries of by-products of the manufacturing processes, such as graphite powders, naphta and gasoil.

A small portion of the Company's sales consist of deliveries of by-products of the manufacturing processes to different customers, such as graphite powders, naphta and gasoil.

Given their nature, the Company’s performance obligations are satisfied at a point in time when control of the products has been transferred to the customer.

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The Company has elected to treat the transportation activity as a fulfillment activity instead of as a distinct performance obligation, and outbound freight cost is accrued when the product delivery promises are satisfied.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods to the customer.

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Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

The estimated variable consideration is reflected through revenue reversal accruals that are based on the Company's experience, as well as anticipated performance.

The estimated variable consideration is

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

reflected through revenue reversal accruals that are based on the Company's experience, as well as anticipated performance.

Historically, these reversals have been insignificant.

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Under the most commonly negotiated terms, the accounting is such that it treats these modified contracts as the termination of the existing contract and the creation of a new contract.

See Note 2, “Revenue from Contracts with Customers” for more information.

Inventories are stated at the lower of cost or net realizable value.

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Elements of cost in inventory include raw materials, energy costs, direct labor, manufacturing overhead and depreciation of manufacturing fixed assets.

As of December 31, 2023, the market value of our inventories fell below their carrying amounts, and as a result, we recorded a LCM inventory valuation adjustment of $ 12.4 million in order to state our inventories at market.

In 2024 and 2023, the market value of our inventories fell below their carrying amounts, and as a result, we recorded a LCM inventory valuation adjustments of $ 24.9 million and $ 12.4 million for the years ended December 31, 2024 and 2023, respectively, in order to state our inventories at market.

The Company allocates fixed production overhead to the cost of conversion based on normal capacity utilization of the production facilities.

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Property, Plant and Equipment

Expenditures for property, plant and equipment are recorded at cost.

Maintenance and repairs of property and equipment are expensed as incurred.

Property, plant and equipment are carried at cost.

Routine or ongoing maintenance and repairs of property and equipment are expensed as incurred.

Expenditures for replacements and betterments are capitalized and the replaced assets are retired.

Gains and losses from the sale of property, plant and equipment are included in cost of goods sold or other expense (income), net on the Consolidated Statements of Operations.

Gains and losses from the sale of property, plant and equipment are included in cost of goods sold or other (income) expense, net on the Consolidated Statements of Operations.

The Company depreciates its assets using the straight-line method over the estimated useful lives of the assets.

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Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets.

If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

If the assets are considered to be not recoverable, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Depreciation expense was $ 54.3 million, $ 47.7 million and $ 45.4 million in 2024, 2023 and 2022, respectively.

Accounts payable associated with capital expenditures totaled $ 10.0 million and $ 14.0 million as of December 31, 2024 and 2023, respectively.

GRAFTECH INTERNATIONAL LTD.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Depreciation expense was $ 47.7 million, $ 45.4 million and $ 55.0 million in 2023, 2022 and 2021, respectively.

Accounts payable associated with capital expenditures totaled $ 14.0 million and $ 23.4 million as of December 31, 2023 and 2022, respectively.

The Company determines if an arrangement is a lease at inception.

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Leases may include variable lease and variable non-lease components costs, which are accounted for as variable lease expense in the Consolidated Statements of Operations.

See Note 10, “Leases” for more information.

Accounts Receivable

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The balance of any unamortized financing costs on extinguished debt is expensed upon extinguishment.

In 2024, the Company incurred $18.9 million of debt issuance costs that were capitalized and are being amortized into interest expense over the term of the related debt, as well as $18.4 million of modification costs that were recorded in Interest expense on the Consolidated Statements of Operations.

See Note 5, “Debt and Liquidity” and Note 7, “Interest Expense” for more information .

Derivative Financial Instruments

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For a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded in accumulated other comprehensive loss ("AOCL") in the Consolidated Balance Sheet.

When the underlying hedged transaction is realized, the gain or loss included in AOCL is recorded in earnings and reflected in the Consolidated Statement of Operations on the same line as the gain or loss on the hedged item attributable to the hedged risk.

When the underlying hedged transaction is realized, the gain or loss included in AOCL is recorded in earnings and reflected in the

GRAFTECH INTERNATIONAL LTD.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Operations on the same line as the gain or loss on the hedged item attributable to the hedged risk.

For a net investment hedge, the effective portion of the change in the fair value of the derivative is recorded in cumulative translation adjustment, which is a component of AOCL in the Consolidated Balance Sheet and is de-recognized upon liquidation or sale of the entity.

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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 net operating losses ("NOLs"), previously taxed income under Section 959 of the Internal Revenue Code of 1986, as amended from time to time (the "Code"), foreign tax credits, and certain NOLs in Swissco (collectively, 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 the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10 %.

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.

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A charge to income is recorded when it is probable that a liability has been incurred and the cost can be reasonably estimated.

When payments are fixed or determinable, the liability is discounted using a rate at which the payments could be effectively settled.

The accrued liability relating to environmental remediation was $ 4.4 million as of both December 31, 2023 and 2022.

Our environmental liabilities do not take into consideration possible recoveries of insurance proceeds.

Because of the uncertainties associated with environmental remediation activities at sites where we may be potentially liable, future expenses to remediate sites could be considerably higher than the accrued liability.

The accrued liability relating to environmental expenses was $ 3.9 million and $ 4.4 million as of December 31, 2024 and 2023, respectively.

Foreign Currency Translation and Remeasurement

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dollar, we remeasure non-monetary balance sheet accounts and the related income statement accounts at historical exchange rates.

Resulting gains and losses arising from the fluctuations in currency for monetary accounts are recognized in other expense (income), net, in the Consolidated Statements of Operations.

Resulting gains and losses arising from the fluctuations in currency for monetary accounts are recognized in cost of goods sold in the Consolidated Statements of Operations.

Gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in earnings as incurred.

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These loans are subject to remeasurement gains and losses due to changes in currency exchange rates.

One of these loans has been deemed to be essentially permanent prior to settlement and, as a result, remeasurement gains and losses on this loan were recorded as a component of AOCL on the Consolidated Balance Sheets.

The remaining loans are deemed to be temporary and, as a result, remeasurement gains and losses on these loans are recorded as currency (gains) losses in other expense (income), net, on the Consolidated Statements of Operations.

One of these loans has been deemed to be essentially permanent in duration prior to settlement and, as a result, remeasurement gains and losses on this loan were recorded as a component of AOCL on the Consolidated Balance Sheets.

The remaining loans are deemed to be not permanent in nature and, as a result, remeasurement gains and losses on these loans are recorded as currency (gains) losses in other (income) expense, net, on the Consolidated Statements of Operations.

GRAFTECH INTERNATIONAL LTD.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Intangible Assets

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired.

We do not recognize deferred income taxes for the difference between the assigned value and the tax basis related to nondeductible goodwill.

Goodwill is not amortized;

however, impairment testing is performed annually or more frequently if circumstances indicate that impairment may have occurred.

We perform the annual goodwill impairment test at December 31.

The annual goodwill impairment testing may begin with a qualitative assessment of potential impairment indicators in order to determine whether it is necessary to perform the quantitative goodwill impairment test.

Other amortizable intangible assets, which consist primarily of trademarks and trade names, technology and know-how and customer-related intangibles, are amortized over their estimated useful lives using the straight line or sum-of-the-years digits method.

Other Intangible Assets and Goodwill

The estimated useful lives for each major category of amortizable intangible assets are:

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If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Additional information about goodwill and other intangibles is set forth in Note 6, “Goodwill and Other Intangible Assets.”

Additional information about goodwill and other intangibles is set forth in Note 6, “Other Intangible Assets and Goodwill.”

Prior to 2024, the Company performed an annual impairment test for its goodwill, which was fully impaired during 2023, leaving no balance.

Major Maintenance and Repair Costs

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Under this policy, $ 4.1 million was deferred in 2024 and $ 0.7 million was deferred in 2023.

Amortization of deferred maintenance costs totaled $ 7.5 million, $ 4.7 million and $ 4.6 million in 2023, 2022 and 2021, respectively.

Amortization of deferred maintenance costs totaled $ 6.2 million, $ 7.5 million and $ 4.7 million in 2024, 2023 and 2022, respectively, and are classified as a component of cost of goods sold on the Consolidated Statements of Operations.

(Loss) Earnings per share

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Actual results could differ from our estimates .

Reclassifications and Adjustments

Certain items previously reported in specific financial statement captions within the Consolidated Statements of Operations have been reclassified between lines to conform to the current presentation.

In addition, specific financial statement captions within the Consolidated Statements of Cash Flows have been reclassified between lines within cash flow from operating activities to conform to the current presentation.

Subsequent Events

We evaluate events that occur after the balance sheet date but before financial statements are issued to determine if a material event requires our amending the financial statements or disclosing the event.

GRAFTECH INTERNATIONAL LTD.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Subsequent Events

Recently Adopted Accounting Standards

In September 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations , which requires disclosures intended to enhance the transparency of supplier finance programs.

The amendments in this ASU require buyers in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively.

The Company adopted this guidance on January 1, 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures.

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The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted.

Although the ASU only modifies the Corporation's required income tax disclosures, the Corporation is currently evaluating the impact of adopting this guidance on the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

Under this ASU, a public entity would be required to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses.

This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

This ASU allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently assessing the impact of this ASU on its financial statements and disclosures, but does not expect it to be material.

GRAFTECH INTERNATIONAL LTD.

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Accounts receivable are recorded when the right to consideration becomes unconditional.

Payment terms on invoices range from 30 to 120 days depending on the customary business practices of the jurisdictions in which we do business.

Payment terms on invoices primarily range from 20 to 120 days depending on the customary business practices of the jurisdictions in which we do business.

Certain short-term and longer-term sales contracts require up-front payments prior to the Company’s fulfillment of any performance obligation.

9 unchanged sentences

The amount of revenue recognized in 2024 that was included in the December 31, 2023 current deferred revenue balance was $ 26.0 million.

The increase in the December 31, 2023 current deferred revenue balance versus the prior year was primarily driven by the net difference between up-front payments received and the related shipments.

The decrease in the December 31, 2024 current deferred revenue balance versus the prior year was primarily due to revenue recognized in the current year, partially offset by customer prepayments.

The amount of revenue recognized in 2023 that was included in the December 31, 2022 deferred revenue current balance was $ 13.0 million.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Transaction Price Allocated to the Remaining Performance Obligations

The following table presents estimated revenues expected to be recognized in the corresponding period below related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of reporting period.

The revenue associated with our LTAs is expected to be approximately as follows:

(Dollars in millions)

Estimated LTA revenue $ 100 -$ 135 (1)

(1) Includes expected termination fees from a few customers that have failed to meet certain obligations under their LTAs.

The majority of the LTAs are defined as pre-determined fixed annual volume contracts while a small portion are defined with a specified volume range.

For 2024, the contractual revenue amounts above are based upon the minimum volume for those contracts with specified ranges.

The actual revenue realized from these contracted volumes may vary in timing and total due to contract non-performance, force majeure notices, arbitrations, credit risk associated with certain customers facing financial challenges and customer demand related to contracted volume ranges.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(3) Stock-Based Compensation

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Shares issued upon vesting or exercise are new share issuances.

Upon the vesting or payment of stock awards, an employee may elect receipt of the full share amount and either pay the resulting taxes or have the Company withhold shares to cover the tax obligation.

Upon the vesting or payment of stock awards, an employee may elect receipt of the full share amount and either pay the resulting taxes or have the Company withhold shares to cover the tax obligation up to minimum statutory rates.

At December 31, 2024, 4.8 million common stock shares were available for future issuance.

Stock-based compensation expense was $ 6.0 million, $ 4.4 million and $ 2.3 million in 2024, 2023 and 2022, respectively.

A majority of the expense, $ 4.0 million in 2023, $ 2.1 million in 2022 and $ 14.6 million in 2021, was recorded as selling and administrative expenses in the Consolidated Statement of Operations, with the remaining expenses incurred as cost of goods sold.

Stock-based compensation expense for 2021 included $ 14.7 million, recorded in the second quarter of 2021, due to the Change in Control accelerated vesting provisions of certain of the Company’s awards.

For the purpose of these grants, a Change in Control occurred when Brookfield and any affiliates thereof ceased to own stock of the Company that constituted at least thirty percent ( 30 %) or thirty-five percent ( 35 %), as applicable, of the total fair market value or total voting power of the stock of the Company.

Out of the $ 14.7 million recorded with the Change in Control, $ 0.9 million accelerated at the 35 % ownership level and the remaining $ 13.8 million accelerated at the 30 % ownership level.

A majority of the expense, $ 5.3 million in 2024, $ 4.0 million in 2023 and $ 2.1 million in 2022, was classified as selling and administrative expenses in the Consolidated Statement of Operations, with the remaining expenses classified as cost of goods sold.

The Company derives a tax deduction measured by the excess of the market value over the grant price at the date stock-based compensation awards are exercised or vest.

The Company recognized tax expense of $ 0.2 million in 2023 and tax benefits of less than $ 0.1 million and $ 1.8 million in 2022 and 2021, respectively, relating to the issuance of common stock for the exercise/vesting of equity awards.

The Company recognized tax expense of $ 0.3 million and $ 0.2 million in 2024 and 2023, respectively, and a tax benefit of less than $ 0.1 million in 2022, relating to the issuance of common stock for the exercise/vesting of equity awards.

Stock Options.

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Stock options granted prior to 2023 vest over a five-year period, with one-fifth of the award vesting on the anniversary date of the grant in each of the five years following the grant date.

No stock options were granted in 2024.

All stock options expire 10 years from the date of grant.

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The weighted average assumptions used in our Black-Scholes option pricing model for options granted in 2023 and 2022 were as follows:

2023 2022 2021

Dividend yield 0.71 % - 0.83 %

0.40 % - 0.56 %

0.32 % - 0.35 %

Expected volatility 58.16 % 58.14 %

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1.93 % - 2.89 %

1.1 % - 1.21 %

Expected term in years 6.0 years 6.5 years 6.5 years

Expected term in years 6.0 years 6.5 years

Dividend Yield .

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2,027,611 $ 11.27

Granted 519,482 5.51

Exercised — —

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Outstanding options have exercise prices ranging from $ 4.83 per share to $ 20.00 per share.

A summary of the status and changes of stock options and the related average price per share follows:

A summary of the status and changes of unvested stock options and the related average price per share follows:

of Options Weighted-

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582,994 $ 4.04

Granted 519,482 3.01

Vested ( 174,225 ) 3.87

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As of December 31, 2024, there was $ 1.0 million of total unrecognized compensation cost related to unvested stock options, which is expected to be amortized over a weighted average period of 1.8 years.

The total fair value of options vested was $ 0.7 million in 2023, $ 0.3 million in 2022 and $ 6.6 million in 2021.

There were 25,000 and 39,700 options exercised during 2022 and 2021, respectively.

No options were exercised during 2023.

Cash received from option exercises during 2022 and 2021 was $ 0.2 million and $ 0.4 million, respectively.

The total fair value of options vested was $ 0.7 million in both 2024 and 2023 and $ 0.3 million in 2022.

There were 25,000 options exercised in 2022.

No options were exercised in 2024 or 2023.

Cash received from option exercises during 2022 was $ 0.2 million.

RSUs - Employees.

1 unchanged sentence

Compensation expense for RSUs is based on the closing price of our common stock on the date of grant, less forfeitures or cancellations of awards throughout the vesting period.

RSUs granted in 2023 vest over a three-year period, with one-third of the award vesting on the anniversary date of the grant in each of the next three years .

RSUs granted in 2023 and after vest over a three-year period, with one-third of the award vesting on the anniversary date of the grant in each of the next three years .

RSUs granted prior to 2023 vest over a five-year period, with one-fifth of the award vesting on the anniversary date of the grant in each of the five years following the grant date.

A summary of the status and changes of shares subject to RSU awards for employees and the related average price per share follows:

A summary of the status and changes of unvested but outstanding shares subject to RSU awards for employees and the related average price per share follows:

of Shares Weighted-

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During 2024, 2023 and 2022, we recognized stock-based compensation expense of $ 3.2 million, $ 1.7 million and $ 0.7 million, respectively, relating to RSU awards for employees.

The total fair value of RSU awards vested during 2023, 2022 and 2021 was $ 0.9 million, less than $ 0.1 million and $ 10.8 million, respectively.

The total fair value of RSU awards vested during 2024, 2023 and 2022 was $ 1.8 million, $ 0.9 million and less than $ 0.1 million, respectively.

As of December 31, 2024, $ 6.4 million of expense with respect to non-vested RSUs has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 2.0 years.

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No payout will occur unless threshold performance is achieved.

The final payout for PSUs granted in 2024 is subject to a 3.5x value cap.

The following table summarizes the activity related to PSUs during 2024:

1 unchanged sentence

Outstanding as of December 31, 2023

348,015 $ 7.23

Granted 1,477,084 1.06

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The fair value of grants of PSUs is determined using a Monte Carlo valuation.

Total compensation expense for PSUs in 2023 was $ 0.7 million.

Total compensation expense for PSUs in 2024 and 2023 was $ 1.2 million and $ 0.7 million, respectively.

As of December 31, 2024, there was $ 1.9 million of unrecognized compensation cost related to PSUs.

7 unchanged sentences

Outstanding as of December 31, 2023

130,923 $ 4.25

Granted 395,480 1.72

2 unchanged sentences

389,438 $ 2.42

The Company recognized $ 0.6 million of expense related to these awards in 2023.

The Company recognized $ 0.7 million and $ 0.6 million of expense related to these awards in 2024 and 2023, respectively.

DSUs are primarily granted to our non-employee directors in lieu of cash retainers and vest immediately upon grant.

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During 2024, 2023 and 2022, we recognized stock-based compensation expense of $ 0.3 million, $ 0.6 million and $ 1.0 million, respectively, relating to DSU awards.

The total fair value of DSU awards vested was $ 0.5 million in 2023 and $ 1.0 million in both 2022 and 2021.

The total fair value of DSU awards vested was $ 0.3 million in 2024, $ 0.5 million in 2023 and $ 1.0 million in 2022.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(4) Segment Reporting

Our Industrial Materials segment, our only reportable segment, manufactures high-quality graphite electrodes essential to the production of EAF steel and other ferrous and non-ferrous metals.

Our Industrial Materials segment, our only operating and reportable segment, manufactures high-quality graphite electrodes essential to the production of EAF steel and other ferrous and non-ferrous metals.

Petroleum needle coke, a crystalline form of carbon derived from decant oil, is a key raw material used in the production of graphite electrodes.

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No single customer accounted for 10% or more of the Company's net sales in 2024, 2023 or 2022.

The accounting policies of our Industrial Materials segment are the same as those described in Note 1, “Business and Summary of Significant Accounting Policies.” Our chief operating decision maker is our chief executive officer.

The chief operating decision maker assesses performance for our Industrial Materials segment and decides how to allocate resources based on net (loss) income, which is also reported on the Consolidated Statements of Operations and Comprehensive (Loss) Income as consolidated net (loss) income.

The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.

The chief operating decision maker uses net (loss) income to evaluate growth trends, establish budgets, assess operational efficiencies and evaluate our overall financial performance.

The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2024, 2023 and 2022:

Year Ended December 31,

2024 2023 2022

(Dollars in thousands)

Net sales $ 538,782 $ 620,500 $ 1,281,250

Cash cost of goods sold (1)

442,699 507,233 636,082

Other segment expenses 91,058 64,624 90,291

Lower of cost or market inventory valuation adjustment 24,878 12,431 —

Research and development 5,706 5,520 3,641

Selling and administrative expenses 46,510 74,012 76,977

Rationalization expenses 3,156 — —

Goodwill impairment charges — 171,117 —

Other (income) expense, net ( 1,569 ) 4,679 ( 10,147 )

Interest expense 85,313 58,087 36,568

Interest income ( 5,701 ) ( 3,439 ) ( 4,480 )

Income tax (benefit) expense ( 22,103 ) ( 18,514 ) 69,356

Net (loss) income $ ( 131,165 ) $ ( 255,250 ) $ 382,962

(1) Cash cost of goods sold is defined as cost of goods sold less depreciation and amortization and less cost of goods sold associated with the portion of our sales that consist of deliveries of by-products of the manufacturing processes, and is the significant expense the chief operating decision maker uses to evaluate segment expenses.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following tables summarize information as to the Company's operations in different geographic areas:

17 unchanged sentences

(a) Long-lived assets represent fixed assets, net of accumulated depreciation.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(5) Debt and Liquidity

3 unchanged sentences

(Dollars in thousands)

2018 Term Loan Facility $ — $ 433,708

2020 Senior Secured Notes 500,000 500,000

2023 Senior Secured Notes 450,000 —

Initial First Lien Term Loans due 2029 175,000 —

Existing 4.625% Senior Notes due 2028 1,755 500,000

New 4.625% Second Lien Notes due 2029 498,245 —

Existing 9.875% Senior Notes due 2028 3,833 450,000

New 9.875% Second Lien Notes due 2029 446,167 —

Other debt — 139

3 unchanged sentences

Long-term debt $ 1,086,915 $ 925,511

On December 23, 2024 (the “Settlement Date”), the Company consummated offers by GrafTech Finance Inc.

(“GrafTech Finance”) and GrafTech Global Enterprises Inc.

(“GrafTech Global” and, together with GrafTech Finance, the “Issuers”), each a subsidiary of the Company, to exchange (each an “Exchange Offer” and, together, the “Exchange Offers”) any and all of (i) GrafTech Finance’s 4.625% senior secured notes due 2028 (the “Existing 4.625% Notes”) and (ii) GrafTech Global’s 9.875% senior secured notes due 2028 (the “Existing 9.875% Notes” and, together with the Existing 4.625% Notes, the “Existing Notes”), for new 4.625% second lien notes due 2029 (the “New 4.625% Notes”) and new 9.875% second lien notes due 2029, respectively (the “New 9.875% Notes”).

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company and the Issuers also consummated the solicitation of consents (with respect to each series of Existing Notes, a “Consent Solicitation” and, collectively, the “Consent Solicitations”), on the terms and subject to the conditions set forth in a confidential exchange offer memorandum and consent solicitation statement (the “Offering Memorandum”) from certain eligible holders of each series of the Existing Notes (the “Existing Noteholders”) (with respect to each series of Existing Notes, a “Consent” and, collectively, the “Consents”) pursuant to which amendments were entered into to the indenture governing the Existing 4.625% Notes (as amended, the “Existing 4.625% Notes Indenture”), and the indenture governing the Existing 9.875% Notes (the “Existing 9.875% Notes Indenture” and, together with the Existing 4.625% Notes Indenture, the “Existing Notes Indentures”), that (i) eliminated substantially all of the restrictive covenants as well as certain events of default and related provisions and definitions in the Existing Notes Indentures and (ii) released all of the collateral securing the Existing Notes.

Issuance of New Notes due 2029

On December 23, 2024, GrafTech Finance issued New 4.625% Notes in an aggregate principal amount of $ 498.2 million and GrafTech Global issued New 9.875% Notes in an aggregate principal amount of $ 446.2 million in exchange for $ 498.2 million of GrafTech Finance’s Existing 4.625% Notes and $ 446.2 million of GrafTech Global’s Existing 9.875% Notes, respectively, validly tendered and accepted in connection with the Exchange Offers.

The New Notes are the Issuers’ second lien obligations.

The New 4.625% Notes were issued pursuant to an indenture, dated as of the Settlement Date (the “New 4.625% Notes Indenture”), by and among GrafTech Finance, the Company, each subsidiary guarantor from time to time party thereto (collectively, the “Subsidiary Guarantors,” and, together with the Company, the “Guarantors”), and U.S.

Bank Trust Company, National Association, as trustee (the “New Trustee”) and collateral agent (the “New Notes Collateral Agent”).

The New 4.625% Notes will pay interest of 4.625% semiannually per annum.

The New 9.875% Notes were issued pursuant to an indenture, dated as of the Settlement Date (the “New 9.875% Notes Indenture” and, together with the New 4.625% Notes Indenture, the “New Notes Indentures”), by and among GrafTech Global, GrafTech Finance, the Guarantors, the New Trustee and the New Notes Collateral Agent.

The New 9.875% Notes will pay interest of 9.875% semiannually per annum.

GrafTech Finance may redeem some or all of the New 4.625% Notes at the redemption prices and on the terms specified in the New 4.625% Notes Indenture.

If, at any time prior to December 23, 2026, all or a portion of the outstanding principal amount of the New 4.625% Notes are prepaid, repaid, redeemed or accelerated (or deemed accelerated), including as a result of GrafTech Finance filing for bankruptcy or becoming subject to any other insolvency proceeding, GrafTech Finance will be required to pay the applicable New 4.625% Notes Redemption Price (as defined in the New 4.625% Notes Indenture).If the Company or GrafTech Finance experiences specific kinds of changes in control or the Company or any of the restricted subsidiaries sells certain of its assets, then GrafTech Finance must offer to repurchase the New 4.625% Notes on the terms set forth in the New 4.625% Notes Indenture.

On and after December 23, 2026, GrafTech Global may redeem some or all of the New 9.875% Notes at the redemption prices and on the terms specified in the New 9.875% Notes Indenture.

At any time prior to December 23, 2026, GrafTech Global may also at its option and on one or more occasions redeem up to 40 % of the aggregate principal amount of the notes issued with the proceeds from certain equity offerings, at a redemption price of 109.875 % of the aggregate principal amount of the notes, together with accrued and unpaid interest, if any, to, but not including, the date of redemption.

In addition, at any time prior to December 23, 2026, GrafTech Global may at its option on one or more occasions redeem all or a part of the notes, at a redemption price equal to 100 % of the principal amount of the notes redeemed, plus a “make-whole” premium, together with accrued and unpaid interest, if any, to, but not including, the date of redemption.

If, at any time prior to December 23, 2028, all or a portion of the outstanding principal amount of the New 9.875% Notes are prepaid, repaid, redeemed or accelerated (or deemed accelerated), including as a result of GrafTech Global filing for bankruptcy or becoming subject to any other insolvency proceeding, GrafTech Global will be required to pay the applicable New 9.875% Notes Redemption Price or the Applicable Premium (each as defined in the New 9.875% Notes Indenture), as applicable.If the Company or GrafTech Global experiences specific kinds of changes in control or the Company or any of the restricted subsidiaries sells certain of its assets, then GrafTech Global must offer to repurchase the New 9.875% Notes on the terms set forth in the New 9.875% Notes Indenture.

The New Notes Indentures contain certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.

Pursuant to the New

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Notes Indentures, if our pro forma consolidated total net leverage ratio is no greater than 2.50 to 1.00, we can make restricted payments so long as no default or event of default has occurred and is continuing.

If our pro forma consolidated total net leverage ratio is greater than 2.50 to 1.00, we can make restricted payments pursuant to certain baskets.

We were in compliance with all of our debt covenants in the New Notes Indentures as of December 31, 2024.

The New 4.625% Notes are guaranteed, jointly and severally, on a senior secured second-priority basis by the domestic Guarantors (the “U.S.

Guarantors”) that guarantee the Existing 4.625% Notes and certain other foreign subsidiary Guarantors of the Company (the “Foreign Guarantors”).

The New 9.875% Notes are guaranteed, jointly and severally, on a senior secured second-priority basis by the U.S.

Guarantors that guarantee the Existing 9.875% Notes and the Foreign Guarantors.

In accordance with the terms of the New Notes Indentures, the New Trustee is obligated to first enforce the guarantees of the U.S.

Guarantors prior to any guarantees of the Foreign Guarantors, subject to certain terms described therein.

The New Notes are secured by a perfected second-priority security interest in all of the assets and property of the Issuers and the Guarantors that currently secure the Existing Notes, and certain other assets and property of the Foreign Guarantors as set forth in the New Notes Indentures (the “Collateral”).

The New Notes and each guarantee constitute:

senior obligations that rank pari passu in right of payment with all of our and the Guarantors’ existing and future senior indebtedness, including the First Lien Term Loans (as defined below) and the 2018 Revolving Credit Facility (as defined herein);

provided, that the First Lien Term Loans and the 2018 Revolving Credit Facility are senior in right of payment to the New Notes with respect to proceeds of the Foreign Guarantor facility located in Calais, France (the “Calais Facility”) solely to the extent that such facility does not constitute Collateral;

secured on a second-priority basis, subject to certain exceptions and permitted liens, on the Collateral that secures the First Lien Term Loans and the 2018 Revolving Credit Facility on a first-priority basis;

effectively junior to all of our and the Guarantors’ obligations under the First Lien Term Loans and the 2018 Revolving Credit Facility (and other indebtedness secured on a first-priority basis on the Collateral pari passu with the liens securing the First Lien Term Loans and the 2018 Revolving Credit Facility) to the extent of the value of the Collateral securing the First Lien Term Loans and the 2018 Revolving Credit Facility (and such other indebtedness secured on a first-priority basis on the Collateral);

effectively senior to all of our and the Guarantors’ future debt that is secured by liens on the Collateral securing the New Notes that are junior to those securing the New Notes and to any of our and the Guarantors’ unsecured indebtedness, in each case, to the extent of the value of the Collateral securing the New Notes and the guarantees;

and structurally subordinated to all of our existing and future indebtedness and other liabilities, including trade payables, of each of our subsidiaries that do not issue or guarantee the New Notes.

Existing 4.625% Notes due 2028

In December 2020, GrafTech Finance issued $ 500.0 million aggregate principal amount of Existing 4.625 % Notes in a private offering.

All of the net proceeds from the Existing 4.625% Notes were used to partially repay borrowings under our 2018 Term Loan Facility.

GrafTech Finance may redeem some or all of the Existing 4.625% Notes at the redemption prices and on the terms specified in the Existing 4.625% Notes Indenture.

Prior to the Settlement Date, if the Company or GrafTech Finance experienced specific kinds of changes in control or the Company or any of its restricted subsidiaries sold certain of its assets, then GrafTech Finance was required to offer to repurchase the Existing 4.625% Notes on the terms set forth in the Existing 4.625% Notes Indenture.

Prior to the Settlement Date, the Existing 4.625% Notes Indenture contained certain covenants that, among other things, limited the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.

Pursuant to the Existing 4.625% Notes Indenture, prior to the Settlement Date, if our pro forma consolidated first lien net leverage ratio was no greater than 2.00 to 1.00, we could make restricted payments so long as no default or event of default had occurred and was continuing.

Prior to the Settlement Date, if our pro forma consolidated first lien net leverage ratio was greater than 2.00 to 1.00, we could make restricted payments pursuant to certain baskets.

In connection with the consummation of the Consent Solicitations, substantially all of the restrictive covenants and related provisions and definitions in the Existing 4.625% Notes Indenture were removed, effective as the Settlement Date.

The Existing 4.625% Notes Indenture contains certain events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Finance, all outstanding Existing 4.625% Notes will become due and payable immediately without further action or notice.

If any other type of event of default occurs and is

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

continuing, then the trustee or the holders of at least 30 % in principal amount of the then outstanding Existing 4.625% Notes may declare all of the Existing 4.625% Notes to be due and payable immediately.

We were in compliance with all of our debt covenants as of December 31, 2024 and 2023.

Following the Exchange Offer, approximately $ 1.8 million aggregate principal amount of Existing 4.625% Notes remain outstanding.

Existing 9.875% Notes due 2028

In June 2023, GrafTech Global issued $ 450 million aggregate principal amount of Existing 9.875 % Notes, including $ 11.4 million of original issue discount.

The Existing 9.875% Notes were issued at an issue price of 97.456 % of the principal amount thereof in a private offering.

The net proceeds from the Existing 9.875% Notes were used to repay borrowings under our 2018 Term Loan Facility.

GrafTech Global may redeem some or all of the Existing 9.875% Notes at the redemption prices and on the terms specified in the Existing 9.875% Notes Indenture.

Prior to the Settlement Date, if the Company or GrafTech Global experienced specific kinds of changes in control or the Company or any of its restricted subsidiaries sold certain of its assets, then GrafTech Global was required to offer to repurchase the Existing 9.875% Notes on the terms set forth in the Existing 9.875% Notes Indenture.

Prior to the Settlement Date, the Existing 9.875% Notes Indenture contained certain covenants that, among other things, limited the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.

Pursuant to the Existing 9.875% Notes Indenture, prior to the Settlement Date, if our pro forma consolidated first lien net leverage ratio was no greater than 2.00 to 1.00, we could make restricted payments so long as no default or event of default had occurred and was continuing.

Prior to the Settlement Date, if our pro forma consolidated first lien net leverage ratio was greater than 2.00 to 1.00, we could make restricted payments pursuant to certain baskets.

In connection with the consummation of the Consent Solicitations, substantially all of the restrictive covenants and related provisions and definitions in the Existing 9.875% Notes Indenture were removed, effective as the Settlement Date.

The Existing 9.875% Notes Indenture contains certain events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Global, all outstanding Existing 9.875% Notes will become due and payable immediately without further action or notice.

If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30 % in principal amount of the then outstanding Existing 9.875% Notes may declare all of the Existing 9.875% Notes to be due and payable immediately.

We were in compliance with all of our debt covenants as of December 31, 2024 and 2023.

Following the Exchange Offer, approximately $ 3.8 million aggregate principal amount of Existing 9.875% Notes remains outstanding.

Initial First Lien Term Facility;

Delayed Draw First Lien Term Facility

Concurrent with the settlement of the Exchange Offers, on the Settlement Date, Barclays Bank plc (the “Fronting Lender”), agreed to provide GrafTech Global $ 175 million of new senior secured first lien term loans (the “Initial First Lien Term Loans”) and provided commitments (the “Delayed Draw Commitments”) with respect to $ 100 million of new senior secured first lien delayed draw term loans (together with the Initial First Lien Term Loans, the “First Lien Term Loans”).

The First Lien Term Loans are governed by a new credit agreement, dated as of the Settlement Date, by and among GrafTech, as holdings, GrafTech Global, as borrower, GLAS USA LLC, as administrative agent, GLAS Americas LLC, as collateral agent, and the lenders from time to time party thereto (the “First Lien Term Loan Credit Agreement”).

The Initial First Lien Term Loans were drawn in a single drawing on the Settlement Date.

The Delayed Draw Commitments are available to the Company until July 23, 2026, subject to the satisfaction of customary conditions precedent thereto.

The First Lien Term Loans will mature on December 23, 2029, and are guaranteed by the Guarantors.

The First Lien Term Loans are pari passu in right of payment with the 2018 Revolving Credit Facility and the New Notes, but the First Lien Term Loans and the 2018 Revolving Credit Facility are senior in right of payment to the New Notes with respect to the proceeds of the Calais Facility.

The First Lien Term Loans and the 2018 Revolving Credit Facility are secured on a pari passu basis by perfected first-priority security interests in the Collateral.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The First Lien Term Loans bear interest at the option of GrafTech Global, at a rate equal to (i) Term SOFR (as defined in the First Lien Term Loan Credit Agreement) (subject to a 2.00 % floor) plus 6.00 % per annum or (ii) the ABR (as defined in the First Lien Term Loan Credit Agreement) plus 5.00 % per annum.

The Company will pay a ticking fee with respect to undrawn Delayed Draw Commitments in an amount equal to 3.75 % per annum of the amount of such undrawn and outstanding commitments.

The First Lien Term Loans are prepayable in whole or in part at the option of the Company (i) prior to the 24-month anniversary of the Settlement Date, subject to payment of a customary “make-whole” premium (which includes a 2.00 % prepayment premium), (ii) on or after the 24-month anniversary of the Settlement Date through, but excluding, the 36-month anniversary of the Settlement Date, subject to a 2.00 % prepayment premium, and (iii) on or after the 36-month anniversary of the Settlement Date, without a prepayment premium.

If the Company sells certain of its assets, then GrafTech Global may be required to offer to prepay the First Lien Term Loans and/or other indebtedness of GrafTech Global and/or its subsidiaries.

The First Lien Term Loan Credit Agreement contains certain covenants that, among other things, limit the Company’s ability to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase certain debt, incur or suffer to exist certain liens, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect certain fundamental changes.

The First Lien Term Loan Credit Agreement also contains certain events of default (with grace periods, as applicable) that permit the agent to accelerate the First Lien Term Loans, and provide that, upon the occurrence of certain events of default arising from bankruptcy or insolvency, all First Lien Term Loans will become due and payable immediately without further action or notice.

2018 Term Loan and 2018 Revolving Credit Facility

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(“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à.r.l.

(“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) are co-borrowers under the 2018 Revolving Credit Facility.

The 2018 Revolving Credit Facility matures on May 31, 2027.

The net proceeds from the 2023 Senior Secured Notes were used to repay outstanding borrowings under our 2018 Term Loan Facility.

(“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) were co-borrowers under the 2018 Revolving Credit Facility.

In December 2024, the 2018 Credit Agreement was further amended to provide for a $ 225 million senior secured first lien revolving credit facility, reducing the revolving commitments under the 2018 Credit Agreement by $ 105 million.

On June 26, 2023, GrafTech repaid the term loans under the 2018 Term Loan Facility with proceeds from the Existing 9.875% Notes issuance.

As of December 31, 2024, there are no outstanding term loans under the 2018 Term Loan Facility.

Until at least $ 275 million of First Lien Term Loans have been borrowed by the Company, the Company is not permitted to have more than $ 15 million in aggregate principal amount of revovling loans outstanding at any time under the 2018 Revolving Credit Facility.

The Company’s ability to borrow under the 2018 Revolving Credit Facility is subject to certain customary conditions precedent, including that the Company must not have more than $ 100 million of unrestricted cash and cash equivalents after giving effect to the applicable borrowing.

The 2018 Revolving Credit Facility matures on November 30, 2028, subject to a springing maturity date 91 days prior to the maturity date of certain other reference indebtedness.

As of December 31, 2024 and 2023, the availability under our 2018 Revolving Credit Facility was $ 108.0 million and $ 112.4 million, respectively.

As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder, our operating performance as of December 31, 2023 resulted in a reduction under the facility.

As of December 31, 2024 and 2023, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $ 7.4 million and $ 3.1 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.

The 2018 Revolving Credit Facility bears interest, at our option, at a rate equal to either (i) the Adjusted Term SOFR Rate and Adjusted EURIBOR Rate (each, as defined in the 2018 Credit Agreement), plus an applicable margin initially equal to 3.00 % per annum or (ii) the ABR Rate, plus an applicable margin initially equal to 2.00 % per annum, in each case with two 25 basis point step downs based on achievement of certain senior secured first lien net leverage ratios.

In addition, we are required to pay a quarterly commitment fee on the unused commitments under the 2018 Revolving Credit Facility in an amount equal to 0.25 % per annum.

The 2018 Revolving Credit Facility is guaranteed by each of our domestic subsidiaries, subject to certain customary exceptions, and by GrafTech Luxembourg I S.à.r.l., a Luxembourg société à responsabilité limitée and an indirect wholly owned subsidiary of GrafTech, Luxembourg HoldCo, and Swissco (collectively, the “Guarantors”) with respect to all obligations under the 2018 Revolving Credit Facility of each of our foreign subsidiaries that is a Controlled Foreign Corporation (within the meaning of Section 956 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)).

Any obligations under the 2018 Revolving Credit Facility are secured, subject to certain exceptions, by:

(i) a pledge of all of the equity securities of each domestic Guarantor and of each other direct, wholly owned domestic subsidiary of GrafTech and any Guarantor, (ii) a pledge on no more than 65 % of the equity interests of each subsidiary that is a Controlled Foreign Corporation (within the meaning of Section 956 of the Code), and (iii) security interests in, and mortgages on, personal property and material real property of each domestic Guarantor, subject to permitted liens and certain exceptions specified in the 2018 Revolving Credit Facility.

The obligations of each foreign subsidiary of GrafTech that is a Controlled Foreign Corporation under the 2018 Revolving Credit Facility are secured by (i) a pledge of all of the equity securities of each Guarantor that is a Controlled Foreign Corporation and of each direct, wholly owned subsidiary of any Guarantor that is a Controlled Foreign

Borrowings under the 2018 Revolving Credit Facility bear interest (i) with respect to new revolving loans denominated in U.S.

dollars, at the option of GrafTech Finance, Adjusted Term SOFR plus 3.50 % per annum or ABR (as defined in the 2018 Revolving Credit Agreement) plus 2.50 % per annum and (ii) with respect to new revolving loans denominated in euros, the Adjusted EURIBOR Rate (as defined in the 2018 Revolving Credit Agreement) plus 3.50 % per annum.

Undrawn commitments under the New Revolving Credit Facility bear a commitment fee of 0.25 % per annum.

Lenders holding all of the Company’s existing revolving commitments who agreed to provide commitments under the 2018 Revolving Credit Facility were paid a customary extension fee, in connection with the December 2024 amendment.

GRAFTECH INTERNATIONAL LTD.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Corporation, and (ii) security interests in certain receivables and personal property of each Guarantor that is a Controlled Foreign Corporation, subject to permitted liens and certain exceptions specified in the 2018 Revolving Credit Facility.

The 2018 Revolving Credit Facility contains customary representations and warranties and customary affirmative and negative covenants applicable to GrafTech and restricted subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions.

The 2018 Revolving Credit Facility contains a financial covenant that requires GrafTech to maintain a senior secured first lien net leverage ratio not greater than 4.00 to 1.00 when the aggregate principal amount of borrowings under the 2018 Revolving Credit Facility and outstanding letters of credit issued under the 2018 Revolving Credit Facility (except for undrawn letters of credit in an aggregate amount equal to or less than $ 35.0 million), taken together, exceed 35 % of the total amount of commitments under the 2018 Revolving Credit Facility.

The 2018 Revolving Credit Facility also contains customary events of default.

We were in compliance with all of our debt covenants as of December 31, 2023 and 2022.

2020 Senior Secured Notes

In December 2020, GrafTech Finance issued $ 500.0 million aggregate principal amount of 4.625 % senior secured notes due 2028 (the “2020 Senior Secured Notes”) in a private offering.

The 2020 Senior Secured Notes and related guarantees are secured on a pari passu basis by the collateral securing the 2018 Revolving Credit Facility and the 2023 Senior Secured Notes.

All of the net proceeds from the 2020 Senior Secured Notes were used to partially repay borrowings under our 2018 Term Loan Facility.

The 2020 Senior Secured Notes pay interest in arrears on June 15 and December 15 of each year, with the principal due in full on December 15, 2028.

Prior to December 15, 2023, up to 40 % of the 2020 Senior Secured Notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 104.625 % of the principal amount thereof, together with accrued and unpaid interest, if any.

The 2020 Senior Secured Notes could have been redeemed, in whole or in part, at any time prior to December 15, 2023 at a price equal to 100 % of the principal amount of the notes redeemed plus a premium together with accrued and unpaid interest, if any, to, but not including, the redemption date.

Thereafter, the 2020 Senior Secured Notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

The indenture governing the 2020 Senior Secured Notes (the “ 2020 Indenture”) contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.

Pursuant to the Indenture, if our pro forma consolidated first lien net leverage ratio is no greater than 2.00 to 1.00, we can make restricted payments so long as no default or event of default has occurred and is continuing.

If our pro forma consolidated first lien net leverage ratio is greater than 2.00 to 1.00, we can make restricted payments pursuant to certain baskets.

The 2020 Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Finance, all outstanding 2020 Senior Secured Notes will become due and payable immediately without further action or notice.

If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30 % in principal amount of the then outstanding 2020 Senior Secured Notes may declare all of the 2020 Senior Secured Notes to be due and payable immediately.

The 2018 Revolving Credit Facility has customary negative covenants and events of default and is required to be prepaid in the case of certain mandatory prepayments of the First Lien Term Loans.

The 2018 Revolving Credit Facility also includes a financial covenant requiring that the Company have a Senior Secured First Lien Net Leverage Ratio of no more than 4.00 to 1.00, tested quarterly, to the extent outstanding revolving loans and letters of credit (subject to certain exclusions) exceed 51.3 % of the amount of commitments then-existing under the 2018 Revolving Credit Facility.

We were in compliance with all of our debt covenants as of December 31, 2024 and 2023.

2023 Senior Secured Notes

In June 2023, GrafTech Global Enterprises Inc.

issued $ 450 million aggregate principal amount of 9.875 % senior secured notes due 2028 (the “2023 Senior Secured Notes”), including $ 11.4 million of original issue discount.

The 2023 Senior Secured Notes were issued at an issue price of 97.456 % of the principal amount thereof in a private offering.

The 2023 Senior Secured Notes and related guarantees are secured on a pari passu basis by the collateral securing the 2018 Revolving Credit Facility and the 2020 Senior Secured Notes.

The net proceeds from the 2023 Senior Secured Notes were used to repay borrowings under our 2018 Term Loan Facility.

The 2023 Senior Secured Notes pay interest in arrears on June 15 and December 15 of each year, with the principal due in full on December 15, 2028.

Prior to December 15, 2025, up to 40 % of the 2023 Senior Secured Notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 109.875 % of the principal amount thereof, together with accrued and unpaid interest, if any.

The 2023 Senior Secured Notes may be redeemed, in whole or in part, at any time

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

prior to December 15, 2025 at a price equal to 100 % of the principal amount of the notes redeemed plus a premium together with accrued and unpaid interest, if any, to, but not including, the redemption date.

Thereafter, the 2023 Senior Secured Notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

The indenture governing the 2023 Senior Secured Notes (the “2023 Indenture”) contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets.

Pursuant to the 2023 Indenture, if our pro forma consolidated first lien net leverage ratio is no greater than 2.00 to 1.00, we can make restricted payments so long as no default or event of default has occurred and is continuing.

If our pro forma consolidated first lien net leverage ratio is greater than 2.00 to 1.00, we can make restricted payments pursuant to certain baskets.

The 2023 Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Global Enterprises Inc., all outstanding 2023 Senior Secured Notes will become due and payable immediately without further action or notice.

If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30 % in principal amount of the then outstanding 2023 Senior Secured Notes may declare all of the 2023 Senior Secured Notes to be due and payable immediately.

We were in compliance with all of our debt covenants as of December 31, 2023.

Maturities on long-term debt instruments as of December 31, 2024 are as follows:

(Dollars in thousands)

2029 1,119,412

2030 and thereafter —

Total $ 1,125,000

(6) Goodwill and Other Intangible Assets

Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities.

The Company has two reporting units, Graphite Electrodes and Needle Coke.

The acquisition of the Company by Brookfield in 2015 generated a goodwill amount of $ 171.1 million, which was allocated entirely to the Graphite Electrode reporting unit.

Goodwill is tested for impairment annually as of December 31 and between annual tests whenever events or circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

For the 2023 annual impairment testing, the Company performed a quantitative assessment of the fair value of the reporting unit, using a combination of the income approach and the market approach (Level 3 in the fair value hierarchy) from a market participant’s perspective.

The valuation of the Graphite Electrode reporting unit is performed with cash flows that are adjusted to present this reporting unit as purchasing petroleum needle coke entirely from third parties at anticipated market prices.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The income approach was based on discounted projected debt-free cash flows for the graphite electrode reporting unit.

The forecast of cash flows included several assumptions regarding future sales growth, revenues, earnings before interest, taxes, depreciation and amortization (“EBITDA”), capital expenditures and working capital changes.

In addition to the estimates of future cash flows, the income approach involves the determination of the discount rate based upon market participant’s assumptions.

The market approach fair value was based on valuation multiples that were applied to the graphite electrode reporting unit’s actual and projected EBITDA.

The multiples were derived under the guideline public company method from analyzing market multiples of EBITDA for a group of comparable public companies.

The techniques used in the Company’s assessment incorporate a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date.

Key assumptions relate to customer demand and sales growth, graphite electrode and needle coke pricing trends, operating costs and capital expenditures.

Assumptions in estimating future cash flows are subject to a degree of judgment.

The testing determined that the fair value of the Graphite Electrode reporting unit was less than its carrying amount by more than the amount of goodwill.

As a result, we recorded a full impairment charge of $ 171.1 million, which was recorded in Goodwill impairment charges in the Consolidated Statements of Income.

The goodwill impairment was caused primarily by reduced sales of graphite electrodes due to softening demand and the deterioration of the electrode spot pricing.

For the 2022 and 2021 annual goodwill impairment testing, the Company performed a qualitative assessment first to determine whether it was more likely than not that the fair value of the Graphite Electrode reporting unit was less than its carrying amount.

We assessed relevant events and circumstances, including industry, market and macroeconomic conditions, as well as Company and reporting unit-specific factors.

Based on this review, we determined that it was not more likely than not that the fair value of the Graphite Electrode reporting unit was less than its carrying amount and concluded that the quantitative goodwill impairment test was not required.

No impairment of goodwill resulted from our annual impairment tests in 2022 and 2021.

Intangible Assets

(6) Other Intangible Assets and Goodwill

Other Intangible Assets

The following table summarizes acquired intangible assets with determinable useful lives by major category which are included in "Other assets" on our Consolidated Balance Sheets:

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Estimated annual amortization expense for the next five years will approximate $ 7.3 million in 2025, $ 6.7 million in 2026, $ 6.1 million in 2027, $ 5.5 million in 2028 and $ 4.9 million in 2029.

In 2023, the Company performed a quantitative assessment of the fair value of the reporting unit, using a combination of the income approach and the market approach (Level 3 in the fair value hierarchy) from a market participant’s perspective for its annual goodwill impairment testing.

The valuation of the Graphite Electrode reporting unit was performed with cash flows that were adjusted to present this reporting unit as purchasing petroleum needle coke entirely from third parties at anticipated market prices.

GRAFTECH INTERNATIONAL LTD.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The income approach was based on discounted projected debt-free cash flows for the Graphite Electrode reporting unit.

In addition to the estimates of future cash flows, the income approach involves the determination of the discount rate based upon market participant’s assumptions.

The market approach fair value was based on valuation multiples that were applied to the Graphite Electrode reporting unit’s actual and projected EBITDA.

The multiples were derived under the guideline public company method from analyzing market multiples of EBITDA for a group of comparable public companies.

The techniques used in the Company’s assessment incorporate a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date.

Key assumptions relate to customer demand and sales growth, graphite electrode and needle coke pricing trends, operating costs and capital expenditures.

Assumptions in estimating future cash flows are subject to a degree of judgment.

The testing determined that the fair value of the Graphite Electrode reporting unit was less than its carrying amount by more than the amount of goodwill.

As a result, we recorded a full impairment charge of $ 171.1 million, which was recorded in Goodwill impairment charges in the Consolidated Statements of Income.

The goodwill impairment was caused primarily by reduced sales of graphite electrodes due to softening demand and the deterioration of the electrode spot pricing.

For the 2022 annual goodwill impairment testing, the Company performed a qualitative assessment first to determine whether it was more likely than not that the fair value of the Graphite Electrode reporting unit was less than its carrying amount.

We assessed relevant events and circumstances, including industry, market and macroeconomic conditions, as well as Company and reporting unit-specific factors.

No impairment of goodwill resulted from our annual impairment test in 2022.

(7) Interest Expense

The following table presents an analysis of interest expense:

The components of interest expense are as follows:

Year Ended December 31,

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Accretion of original issue discount 2,163 2,524 1,200

Amortization of debt issuance and modification costs 4,631 3,475 8,642

Amortization of debt issuance costs 3,193 4,631 3,475

Debt modification costs 18,370 — —

Amortization of interest rate swap deferred gains ( 7,384 ) ( 5,480 ) —

Unrealized (gain) loss on termination of de-designated interest rate swap 7,111 ( 7,111 ) —

Unrealized loss (gain) on termination of de-designated interest rate swap — 7,111 ( 7,111 )

Realized gain on termination of de-designated interest rate swap — ( 6,918 ) ( 4,605 )

Total interest expense $ 85,313 $ 58,087 $ 36,568

In June 2023, the net proceeds from the issuance of the 2023 Senior Secured Notes were used to repay the $ 433.7 million of principal outstanding on the 2018 Term Loan Facility.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The financing transactions entered in 2024 (described in further detail in Note 5, “Debt and Liquidity”) were accounted for as a modification of the existing debt under ASC 470-50, Debt—Modifications and Extinguishments.

As a result, the Company incurred $ 37.3 million of fees and expenses directly attributable to the modification.

Of these costs, $ 18.4 million related to third-party costs was expensed as incurred and is included in Interest expense on the Consolidated Statements of Operations and $ 18.9 million related to lender fees was capitalized as debt issuance costs and is being amortized over the remaining term of the related debt.

In June 2023, the net proceeds from the issuance of the Existing 9.875% Notes were used to repay the $ 433.7 million of principal outstanding on the 2018 Term Loan Facility.

The repayment of the 2018 Term Loan Facility was accounted for as a debt extinguishment and triggered $ 1.2 million of accelerated accretion of the original issue discount and $ 1.9 million of accelerated amortization of debt issuance costs.

The 2023 Senior Secured Notes were accounted for as new debt and the related discount and debt issuance costs were deferred.

The Existing 9.875% Notes were accounted for as new debt and the related discount and debt issuance costs were deferred.

In connection with the repayment of the 2018 Term Loan Facility in June 2023, we terminated the outstanding interest rate swap contracts that were in place to fix the cash flows associated with the risk in variability in the one-month USD London Interbank Offered Rate (“USD LIBOR”) for the 2018 Term Loan Facility.

As a result of the swaps termination, we recorded in interest expense realized gains of $ 6.9 million relative to our de-designated swap and we deferred realized gains of $ 13.5 million in accumulated other comprehensive income (“AOCI”) in connection with our designated swap.

The gains deferred into AOCI for the designated swap will amortize into interest expense until August 2024, consistent with the term of the discontinued cash-flow hedging relationship.

The 2023 Senior Secured Notes and the 2020 Senior Secured Notes carry fixed interest rates of 9.875 % and 4.625 %, respectively.

As a result of the swaps termination, we recorded in interest expense realized gains of $ 6.9 million relative to our de-designated swap and we deferred realized gains of $ 13.5 million in accumulated other comprehensive loss (“AOCL”) in connection with our designated swap.

The gains deferred into AOCL for the designated swap were amortized into interest expense through August 2024, consistent with the term of the discontinued cash-flow hedging relationship.

The Existing 9.875% Notes and the New 9.875% Notes carry fixed interest rates of 9.875 %.

The Existing 4.625% Notes and the New 4.625% Notes carry fixed interest rates of 4.625 %.

The Initial First Lien Term Loan had an effective interest rate of 10.33 % as of December 31, 2024.

The 2018 Term Loan Facility, which was paid off in its entirety in June 2023, had an effective interest rate of 7.38 % as of December 31, 2022.

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In connection with this, the Company recorded $ 0.5 million of accelerated accretion of the original issue discount and $ 0.8 million of accelerated amortization of the debt issuance cost.

In 2021, the Company made voluntary prepayments of $ 400.0 million under its 2018 Term Loan Facility.

In connection with this, the Company recorded $ 2.3 million of accelerated accretion of the original issue discount and $ 3.7 million of accelerated amortization of the debt issuance costs.

The Company also recorded $ 1.6 million of modification costs related to the 2018 Term Loan Facility repricing in the first quarter of 2021.

See Note 5, “Debt and Liquidity” for details of our debt and Note 8, “Fair Value Measurements and Derivative Instruments” for additional details on our interest rate swaps and embedded derivative.

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Foreign currency derivatives $ 630 $ — $ 630 $ —

Interest rate swap contracts 27,384 — 27,384 —

Total assets at fair value $ 630 $ — $ 630 $ —

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Gains and losses from these derivatives are recorded in cost of goods sold and they are largely offset by the financial impact of translating foreign currency-denominated payables and receivables.

In the first quarter of 2022 and in the second, third and fourth quarters of 2023, we entered into foreign currency derivatives with maturities of one month to 12 months in order to protect against the risk that cash flows associated with certain sales and purchases denominated in a currency other than the U.S.

At various times throughout the last three years, we entered into foreign currency derivatives with maturities of one month to 12 months in order to protect against the risk that cash flows associated with certain sales and purchases denominated in a currency other than the U.S.

dollar will be adversely affected by future changes in foreign exchange rates.

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Commodity derivative contracts

We have entered into commodity derivative contracts for refined oil products.

These contracts were entered into to protect against the risk that eventual cash flows related to these products will be adversely affected by future changes in prices.

From time to time, we enter into commodity derivative contracts for refined oil products.

These contracts are entered into to protect against the risk that eventual cash flows related to these products will be adversely affected by future changes in prices.

The unrealized gains or losses related to commodity derivative contracts designated as cash flow hedges are recorded in AOCL and subsequently, when realized, are reclassified to the Consolidated Statement of Operations when the hedged item impacts earnings, which is when the finished product is sold.

The last of our commodity derivative contracts matured as of June 30, 2022 and we have not entered into any new contracts as of December 31, 2023.

Interest rate swap contracts

We have utilized interest rate swaps in the past to limit exposure to market fluctuations on our variable-rate debt.

We have utilized interest rate swaps in the past to limit exposure to market fluctuations on variable-rate debt.

For each derivative agreement that is designated as a cash flow hedge, the unrealized gain or loss is recorded in AOCL and, when realized, is recorded in interest expense.

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The embedded derivative was treated as a cash flow hedge.

In the first quarter of 2022, in connection with the partial repayment of principal on our 2018 Term Loan Facility and our probability assessment of the variable-rate debt remaining outstanding through the term of the swaps, we de-designated one interest rate swap contract with a $ 250.0 million notional amount, originally scheduled to mature in the third quarter of 2024.

The fair value of the embedded derivative at the de-designation date was a gain of $ 6.6 million and was recorded in AOCL and is being amortized into interest expense over the remaining life of the swap.

The fair value of the embedded derivative at the de-designation date was a gain of $ 6.6 million and was recorded in AOCL and was amortized into interest expense over the remaining life of the swap.

In the third quarter of 2022, we redeemed $ 67.0 million of our $ 250.0 million notional amount de-designated interest rate swap.

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The net cash received included a $ 23.1 million gain on the embedded derivatives, partially offset by a $ 2.8 million loss on the settlement of our debt host liability as of the termination date.

As of December 31, 2022, the debt host liability was $ 3.8 million, with $ 2.3 million included in "Other accrued liabilities" and $ 1.5 million included in "Other long-term obligations" on the Consolidated Balance Sheets.

As of December 31, 2023, a cumulative loss of $ 1.8 million related to the debt host liability was recorded in AOCL and will be amortized into interest expense using the effective interest method through August 2024.

Out of the $ 23.1 million gain on the embedded derivatives, $ 6.9 million for the de-designated swap was recorded in interest expense and $ 16.2 million for the designated swap was recorded in AOCI and will be amortized into interest expense using the effective interest method through August 2024.

Out of the $ 23.1 million gain on the embedded derivatives, $ 6.9 million for the de-designated swap was recorded in interest expense and $ 16.2 million for the designated swap was recorded in AOCL and was amortized into interest expense using the effective interest method through August 2024.

All derivatives are recorded on the balance sheet at fair value.

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Foreign currency derivatives $ — $ 10,684

Interest rate swap contracts — 250,000

Derivative instruments not designated as hedges:

Foreign currency derivatives $ 11,918 $ 41,863

Interest rate swap contracts — 183,000

The following table summarizes the fair value of our outstanding derivatives designated as hedges (on a gross basis) and balance sheet classification as of December 31, 2024 and 2023:

4 unchanged sentences

Foreign currency derivatives $ — $ 386

Interest rate swap contracts — 10,246

Total $ — $ 386

Interest rate swap contracts $ — $ 5,575

Total $ — $ 5,575

Total asset $ — $ 386

As a result of the settlement of commodity derivative contracts and interest rate swaps, as of December 31, 2023, net realized pre-tax gains of $ 2.5 million and $ 9.2 million, respectively, were reported in AOCL and will be released to earnings within the next 12 months.

As of December 31, 2023, net realized pre-tax losses of $ 0.4 million related to our foreign currency derivatives were reported in AOCL and will be released to earnings within the next 12 months.

In addition, we recorded $ 0.8 million of ineffectiveness income to cost of goods sold in the Consolidated Statements of Operations in 2022 related to the settlement of commodity derivative contracts.

As of December 31, 2024, net realized pre-tax gains of $ 0.2 million related to our foreign currency derivatives were reported in AOCL and will be released to earnings within the next 12 months.

In addition, we recorded $ 0.8 million of ineffectiveness income in cost of goods sold in the Consolidated Statements of Operations in 2022 related to the settlement of commodity derivative contracts.

No ineffectiveness expense was recorded in 2024 or 2023.

See the table below for amounts recognized on the effective portion of our commodity derivative contracts in the Statement of Operations.

The realized (gains) losses on cash flow hedges are recognized in the Statements of Operations when the hedged item impacts earnings and are as follows for the years ended December 31, 2023, 2022 and 2021:

Amount of (Gain)/Loss

Location of Realized (Gain)/Loss Recognized in the Consolidated Statement of Operations 2023 2022 2021

The realized losses (gains) on cash flow hedges are recognized in the Statements of Operations when the hedged item impacts earnings and are as follows for the years ended December 31, 2024, 2023 and 2022:

Amount of Loss/(Gain)

Location of Realized Loss/(Gain) Recognized in the Consolidated Statement of Operations 2024 2023 2022

Derivatives designated as cash flow hedges:

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Pre-tax gains and losses on non-designated derivatives recognized in earnings are as follows:

Amount of (Gain)/Loss

Location of Realized (Gain)/Loss Recognized in the Consolidated Statement of Operations 2023 2022 2021

Amount of Loss/(Gain)

Location of Realized Loss/(Gain) Recognized in the Consolidated Statement of Operations 2024 2023 2022

Derivatives not designated as hedges:

1 unchanged sentence

Foreign currency derivatives Cost of goods sold, other expense (income), net $ 492 $ ( 314 ) $ ( 938 )

Commodity derivative contracts Cost of goods sold — — ( 1,399 )

Interest rate swaps Interest expense — ( 2,957 ) ( 11,716 )

4 unchanged sentences

Prepaid and other current assets

Interest rate swap contracts $ — $ 7,492

Foreign currency derivatives $ 296 $ 244

Interest rate swap contracts — 4,071

Other accrued liabilities

Foreign currency derivatives ( 248 ) ( 519 )

Net (liability) asset $ ( 275 ) $ 11,373

Net asset (liability) $ 48 $ ( 275 )

GRAFTECH INTERNATIONAL LTD.

46 unchanged sentences

(“GrafTech Mexico”) participates in an electronic vendor voucher payment program supported by the Mexican Government through one of its national banks, whereby suppliers can factor their invoices through a financial intermediary.

This program gives GrafTech Mexico’s suppliers the option to settle trade receivables by obtaining payment for a discounted amount from the financial intermediary prior to the invoice due date.

This program gives GrafTech Mexico’s suppliers the option to settle trade receivables by obtaining payment for a discounted amount from the financial intermediary prior to the invoice due date for a discounted amount.

GrafTech Mexico’s responsibility is limited to making payment on the terms originally negotiated with its supplier, regardless of whether the supplier elects to receive early payment.

7 unchanged sentences

Confirmed obligations outstanding as of December 31, 2023 $ 4,636

Invoices confirmed during the year 17,821

Confirmed invoices paid during the year ( 16,871 )

Confirmed obligations outstanding as of December 31, 2024 $ 5,586

GRAFTECH INTERNATIONAL LTD.

87 unchanged sentences

Net periodic benefit (credit) cost $ ( 730 ) $ 2,624 $ ( 661 ) $ 5,173 $ 491 $ ( 6,994 )

The mark-to-market loss in 2023 was the result of an unfavorable change in the discount rate on our foreign plans.

The mark-to-market loss in 2024 was primarily due to a decrease in the discount rate for our foreign plans, as well as unfavorable asset returns in both the foreign and U.S.

plans, partially offset by increase in U.S.

discount rates.

The mark-to-market loss in 2023 was primarily due to unfavorable changes in the discount rate on our foreign and U.S.

plans, partially offset by favorable asset returns in the U.S.

The mark-to-market gain in 2022 was primarily the result of a favorable change in the discount rate, partially offset by a worse than expected return on plan assets.

The mark-to-market gain in 2021 was the result of a favorable change in the discount rate and favorable foreign currency translation, as well as a better than expected return on plan assets, particularly for the U.S.

The reconciliation of the beginning and ending balances of our pension plans’ benefit obligations, fair value of assets, and funded status at December 31, 2024 and 2023 are shown below.

GRAFTECH INTERNATIONAL LTD.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The reconciliation of the beginning and ending balances of our pension plans’ benefit obligations, fair value of assets, and funded status at December 31, 2023 and 2022 are shown below.

December 31, 2024

8 unchanged sentences

Foreign currency exchange changes — ( 2,748 ) — 2,983

Actuarial loss (gain) 1,516 3,694 ( 24,202 ) ( 7,293 )

Actuarial (gain) loss ( 3,550 ) 1,676 1,516 3,694

Benefits paid ( 9,686 ) ( 1,091 ) ( 10,392 ) ( 1,076 )

26 unchanged sentences

The net asset value is primarily based on quoted market prices of the underlying securities for which quoted market prices of the underlying securities of the funds.

Some of the underlying investments include securities for which quoted market prices are not

Some of the underlying investments include securities for which quoted market prices are not available and are valued using data obtained by the trustee from the best available source or market value.

This method may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

Furthermore, although we believe its valuation method is appropriate and consistent with other market participants, the use of

GRAFTECH INTERNATIONAL LTD.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

available and are valued using data obtained by the trustee from the best available source or market value.

This method may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

Furthermore, although we believe its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

different methodologies or assumptions to determine fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The fair value of other plan assets by category is summarized below (dollars in thousands):

92 unchanged sentences

The estimated liability for post-employment benefit plans was $ 12.5 million and $ 14.3 million as of December 31, 2024 and 2023, respectively.

The Company recognized expense of $ 2.0 million in 2023, income of $ 0.9 million in 2022 and expense of $ 0.5 million in 2021 in the Consolidated Statement of Operations for post-employment benefits.

Included in post-employment benefit expense are mark-to-market losses of $ 1.1 million in 2023 and mark-to-market gains of $ 1.6 million and $ 0.1 million in 2022 and 2021, respectively.

The Company recognized expense of $ 0.5 million and $ 2.0 million in 2024 and 2023, respectively, and income of $ 0.9 million in 2022 in the Consolidated Statement of Operations for post-employment benefits.

Included in post-employment benefit expense are mark-to-market gains of $ 0.4 million in 2024, mark-to-market losses of $ 1.1 million in 2023 and mark-to-market gains of $ 1.6 million in 2022.

Our employee savings plan provides eligible employees the opportunity for long-term savings and investment.

The plan allows employees to contribute up to 5 % of pay as a basic contribution and an additional 45 % of pay as supplemental contribution.

The Company's contributions to our savings plan were $ 3.0 million in both 2023 and 2022 and $ 2.5 million in 2021.

The Company's contributions to our savings plan were $ 1.6 million in 2024 and $ 3.0 million in both 2023 and 2022.

GRAFTECH INTERNATIONAL LTD.

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In June of 2023, the Claimants again revised their calculation of alleged damages to approximately $ 188.2 million, including interest, for the period covering the first quarter of 2020 through the first quarter of 2023.

We believe we have valid defenses to these claims.

We intend to vigorously defend them and enforce our rights under the LTAs.

On April 16, 2024, we were formally notified that on March 14, 2024 the sole arbitrator appointed by the International Chamber of Commerce issued the final award in the arbitration in which he entirely dismissed all of the Claimants’ claims against the two Company subsidiaries, and ordered Claimants to pay an aggregate of approximately $ 9.2 million to the Company in legal fees and other related expenses, and ordered the Company to pay approximately $ 60,000 to the Claimants in legal fees and expenses.

The Claimants paid the Company approximately $ 9.2 million during the second quarter of 2024, which is recorded in selling and administrative expenses on the Condensed Consolidated Statements of Operations.

Pending litigation in Brazil has been brought by employees seeking to recover additional amounts and interest thereon under certain wage increase provisions applicable in 1989 and 1990 under collective bargaining agreements to which employers in the Bahia region of Brazil were a party (including our subsidiary in Brazil).

14 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Stockholder Class Action

On January 25, 2024, a stockholder of the Company filed a class action complaint on behalf of a putative class consisting of purchasers of GrafTech common stock between February 8, 2019 and August 3, 2023 in the United States District Court for the Northern District of Ohio.

The complaint, as amended, names the Company, certain past and present executive officers, and three entities associated with Brookfield Corporation and its affiliates (together, “Brookfield”) as defendants.

The complaint alleges that certain public filings and statements made by the Company contained material misrepresentations or omissions relating to the circumstances before and after the prior temporary suspension of the Company’s graphite electrode manufacturing facility located in Monterrey, Mexico, in September 2022.

The complaint seeks unspecified compensatory damages, costs and expenses, and unspecified equitable or injunctive relief.

On May 15, 2024, the Court appointed the University of Puerto Rico Retirement System as the lead plaintiff.

On October 7, 2024, the plaintiff filed an amended complaint.

At this stage of the proceedings, it is too early to determine if the matter would reasonably be expected to have a material adverse effect on our financial condition.

Product Warranties

11 unchanged sentences

Balance as of December 31, 2024

Related Party Tax Receivable Agreement

Tax Receivable Agreement

On April 23, 2018, the Company entered into the Tax Receivable Agreement that provides Brookfield, as the sole Pre-IPO stockholder, the right to receive future payments from us for 85 % of the amount of cash savings, if any, in U.S.

1 unchanged sentence

On April 10, 2023, the Tax Receivable Agreement was amended and restated to change the applicable interest rate from LIBOR plus 1.00 % per year to the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10 %.

On April 10, 2023, the Tax Receivable Agreement was amended and restated to change the applicable interest rate from LIBOR plus 1.00 % per year to the one-month period SOFR plus 1.10 %.

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.

As of December 31, 2023, total Tax Receivable Agreement liability was $ 11.1 million, of which $ 5.4 million was classified as a current liability in "Related party payable - Tax Receivable Agreement" on the Consolidated Balance Sheets and $ 5.7 million was classified as a long-term liability in "Related party payable - Tax Receivable Agreement long-term" on the Consolidated Balance Sheets.

As of December 31, 2024, total Tax Receivable Agreement liability was $ 5.8 million, of which $ 2.0 million was classified as a current liability in Tax Receivable Agreement on the Consolidated Balance Sheets and $ 3.8 million was classified as a long-term liability in Tax Receivable Agreement long-term on the Consolidated Balance Sheets.

As of December 31, 2023, the total Tax Receivable Agreement liability was $ 11.1 million, of which $ 5.4 million was classified as a current liability and $ 5.7 million was classified as a long-term liability.

Long-term Incentive Plan

The long-term incentive plan ("LTIP") was adopted by the Company in August 2015 and amended and restated in March 2018.

The purpose of the plan was to retain senior management of the Company, to incentivize them to make decisions with a long-term view and to influence behavior in a way that is consistent with maximizing value for the pre-IPO stockholder of the Company in a prudent manner.

Each participant was allocated a number of profit units, with a maximum of 30,000 profit units ("Profit Units") available under the plan.

Awards of Profit Units generally vested in equal increments over a five-year period beginning on the first anniversary of the grant date of the Profit Units, subject to continued employment with the Company through each vesting date.

If a participant ceased to provide services prior to any applicable vesting date for any reason, other than a termination for cause, then the participant forfeited all unvested Profit Units and any vested Profit Units remained outstanding.

If a participant had been terminated for cause, both vested and unvested Profit Units would have been forfeited.

Upon a Change in Control (as defined in the LTIP), the Profit Units entitled the participant to a payment based on a percentage of the sum of (i) all net "Sale Proceeds" (as defined in the LTIP) received by Brookfield Capital IV L.P.

and its affiliates ("Brookfield Capital IV") less (ii) the "Threshold Value" (as defined in the LTIP), with such payment amount being determined by the Company's Board of Directors in its sole discretion.

In the event that, in connection with a Change in Control, Brookfield Capital IV disposes of less than 100 % of its ownership interest in the Company, the amount of the Sale Proceeds in excess of the Threshold Value shall be determined on a pro-rata basis by reference to the percentage of ownership interest disposed, as determined by the Board of Directors of the Company.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The May 2021 secondary offering of our common stock by Brookfield Capital IV constituted a Change in Control under the LTIP.

A Change in Control under the LTIP is defined as, among other things, a transaction or series of transactions (including, without limitation, the consummation of a combination, share purchases, recapitalization, redemption, issuance of capital stock, consolidation, reorganization or otherwise) pursuant to which following a public offering of the Company’s stock, Brookfield Capital IV ceases to have a beneficial ownership interest in at least 30 % of the Company’s outstanding voting securities (effective on the first of such date).

Upon completion of the May 2021 secondary offering, Brookfield beneficially owned approximately 24 % of the Company's outstanding voting securities.

Accordingly, the Company settled the vested Profit Units in lump sum payments within 30 days following the Change in Control.

In the second quarter 2021, the settlement of the Profit Units resulted in the recording of a pre-tax charge of $ 73.4 million, of which $ 30.7 million was recorded in cost of goods sold and $ 42.7 million was recorded in selling and administrative expense.

To date, $ 71.8 million of the charges have been settled in cash by the Company while the remainder of the liability, related to payroll taxes, is expected to be paid in subsequent quarters, which will satisfy all obligations under the LTIP.

Mexico Value-Added Tax (“VAT”)

4 unchanged sentences

Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time.

GrafTech Commercial Mexico filed an administrative appeal against the tax assessment with the MTA's appeals office.

GrafTech Commercial

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Mexico filed an administrative appeal against the tax assessment with the MTA’s appeals office.

In November 2022, the MTA’s appeals office concluded its review and confirmed the tax assessment.

5 unchanged sentences

On January 31, 2024, the MTA filed an appeal for review.

On March 15, 2024, GrafTech Commercial Mexico filed the Tax Adhesive Appeal for Review before the Collegiate Court in Administrative Matters who has authority to hear the MTA’s appeal.

The MTA’s appeal and the Adhesive appeal are still pending to be resolved.

In March 2022, the MTA opened another audit of the VAT filings of GrafTech Commercial Mexico for the period January 1 to December 31, 2018.

In the proposed assessment received in January 2023, the MTA is alleging the same improper use of certain VAT exemption rules on purchases from a foreign affiliate and has provided notice of its intent to assess approximately $ 51.0 million, including penalties, inflation and interest.

Interest would continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation would continue to accrue with the passage of time.

In Mexico, each tax assessment requires a separate claim.

6 unchanged sentences

On January 24, 2024, the MTA filed its response.

On that same day, GrafTech Commerical Mexico submitted before PRODECON the favorable ruling it obtained on January 8, 2024 in connection with the 2019 preceding for the MTA’s consideration.

On that same day, GrafTech Commercial Mexico submitted before PRODECON the favorable ruling it obtained on January 8, 2024 in connection with the 2019 proceeding for the MTA’s consideration.

On February 1, 2024, the MTA confirmed its position, holding that GrafTech Commercial Mexico was required to withhold the VAT.

GrafTech Commercial Mexico plans to challenge the assessment.

The $ 51.0 million includes interest and inflation.

Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time.

As evidenced by the favorable court decision issued on January 8, 2024, GrafTech Commercial Mexico’s application of the VAT exemption rules is appropriate and, accordingly, GrafTech Commercial Mexico does not believe that it is probable that it will incur a loss related to this matter for either of the two periods under the MTA's audit.

The Company intends to vigorously defend its position in these proceedings.

On March 20, 2024, a meeting was held at PRODECON where the parties confirmed their final positions.

No agreement between the parties was reached, the conclusive agreement procedure came to an end, and the tax audit process resumed.

On July 10, 2024, the MTA concluded the tax audit and determined that there is no tax deficiency to be assessed for the period January 1, 2018 to December 31, 2018.

As evidenced by the favorable court decision issued on January 8, 2024 with respect to the 2019 proceeding and the MTA’s conclusion of the tax audit for the 2018 proceeding, GrafTech Commercial Mexico’s application of the VAT exemption rules is appropriate and, accordingly, GrafTech Commercial Mexico does not believe that it is probable that it will incur a loss related to this matter for the 2019 proceeding under the MTA’s audit.

The Company intends to vigorously defend its position in the 2019 proceeding.

Brazil Income Tax Audit

On October 23, 2024, GrafTech Brasil Participações Ltda.

received an income tax assessment notice from the Brazilian Internal Revenue Service (“IRS”) totaling approximately $ 28.8 million including approximately $ 17.1 million of interest and penalties, resulting from an audit carried out between 2023 and 2024, related to the period from 2019 to 2020.

In this assessment, two issues were raised by the tax auditor.

The first item disallowed the investment tax incentive (75% reduction of income tax), under the allegation that the Company did not have a negative tax debt certificate.

The second disallowed the use of the VAT benefit (called Desenvolve) to increase the investment tax incentive.

The Company believes that the IRS assessment is incorrect and does not believe that it is probable that it will incur a loss related to these matters.

The Company intends to vigorously defend its position regarding both items.

GRAFTECH INTERNATIONAL LTD.

2 unchanged sentences

(13) Income Taxes

(Loss) income before the (benefit) provision for income taxes was derived from the following sources:

(Loss) income before income taxes was derived from the following sources:

Year Ended December 31,

3 unchanged sentences

Foreign ( 73,929 ) ( 161,943 ) 397,211

(Loss) income before (benefit) provision for income taxes $ ( 273,764 ) $ 452,318 $ 456,406

The (benefit) provision for income taxes consisted of the following:

(Loss) income before income taxes $ ( 153,268 ) $ ( 273,764 ) $ 452,318

Income tax (benefit) expense consisted of the following:

Year Ended December 31,

9 unchanged sentences

( 4,326 ) ( 5,742 ) 52,464

(Benefit) provision for income taxes $ ( 18,514 ) $ 69,356 $ 68,076

The provision for income taxes represented a benefit for the year ended December 31, 2023 compared to an expense for the year ended December 31, 2022.

Total pre-tax earnings shifted from a profit position to a loss position and the Company recorded a goodwill impairment charge that is not tax deductible.

Income tax (benefit) expense $ ( 22,103 ) $ ( 18,514 ) $ 69,356

A reconciliation of income taxes at the U.S.

statutory rate to the (benefit) provision for income taxes follows:

statutory rate to income tax (benefit) expense follows:

Year Ended December 31,

15 unchanged sentences

Other ( 2,487 ) ( 1,669 ) ( 3,624 )

(Benefit) provision for income taxes $ ( 18,514 ) $ 69,356 $ 68,076

Income tax (benefit) expense $ ( 22,103 ) $ ( 18,514 ) $ 69,356

GRAFTECH INTERNATIONAL LTD.

10 unchanged sentences

Long-term contract option amortization 845 881

Previously taxed income — 8,304

Other 4,406 1,198

4 unchanged sentences

Fixed assets $ 50,247 $ 51,474

Inventory — 14,649

Goodwill and acquired intangibles 6,676 6,418

2 unchanged sentences

Total deferred tax liabilities 58,845 62,027

Net deferred tax liability $ ( 1,664 ) $ ( 33,105 )

Net deferred tax asset (liability) $ 29,168 $ ( 1,664 )

At each reporting period, the Company assesses the need for valuation allowances against deferred tax assets and whether it is more likely than not that deferred tax benefits will be realized in each jurisdiction.

4 unchanged sentences

However, the recognition of the valuation allowance does not limit the Company's ability to utilize these tax assets on a tax return in the future should taxable income be realized in sufficient amount to realize the assets.

As of December 31, 2024, we had a valuation allowance of $ 19.3 million against certain deferred tax assets.

Our losses in certain tax jurisdictions in recent periods represented sufficient negative evidence to require a full valuation allowance.

However, our U.S.

losses in recent periods and the potential for U.S.

losses in 2025 may lead to a cumulative U.S.

loss and may represent sufficient negative evidence to require a full valuation allowance on U.S.

DTAs, which would materially increase our expenses in the period the allowance is recognized and materially adversely affect our financial condition and results of operations.

If cumulative losses are incurred, we will evaluate additional evidence such as our projections for growth and market recovery to determine if a valuation allowance is required.

We also have a partial valuation allowance related to certain U.S.

state net operating and capital losses where realizability is unlikely due to discontinued operations or the ability of our U.S.

subsidiaries to generate capital gains.

Until we determine that we will generate sufficient jurisdictional taxable income to realize our net operating losses and deferred tax assets, we continue to maintain a valuation allowance.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Valuation allowance activity for the years ended December 31, 2024, 2023 and 2022 is as follows:

7 unchanged sentences

Balance as of December 31, 2023

Credited to income ( 268 )

Charged to income 10,396

Translation adjustment ( 44 )

Balance as of December 31, 2024

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The decrease in the valuation allowance in 2023 was primarily attributable to changes in expected future utilization, state law changes and expiration of U.S.

state NOL carryforwards during the year.

The increase in the valuation allowance in 2024 was primarily attributable to generating additional state net operating and capital losses during the year that we may not be able to utilize.

The reduction in the valuation allowance in 2023 resulted primarily from changes in expected future utilization, state law changes and expiration of U.S.

2 unchanged sentences

These tax credit carryforwards begin to expire in 2027.

In addition, the Company had state NOL carryforwards of $ 148.2 million (net of federal benefit), which can be carried forward from five to 20 years.

These state NOL carryforwards resulted in a deferred tax asset of $ 10.6 million as of December 31, 2023.

In addition, the Company had state net operating and capital loss carryforwards of $ 335.2 million (net of federal benefit), which can be carried forward from five to 20 years.

These state carryforwards resulted in a deferred tax asset of $ 21.6 million as of December 31, 2024.

The Company also has U.S.

3 unchanged sentences

These carryforwards do not expire.

As of December 31, 2023, the Company had no unrecognized tax benefits.

As of December 31, 2024 and 2023, the Company had no unrecognized tax benefits.

No material amounts of accrued interest or penalties have been recorded as of December 31, 2024 or 2023.

17 unchanged sentences

cash generation to be sufficient to meet future U.S.

(14) Stockholders' Equity

The following information should be read in conjunction with the Consolidated Statement of Stockholders' Equity (Deficit).

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(14) Stockholders' (Deficit) Equity

The following information should be read in conjunction with the Consolidated Statement of Stockholders' (Deficit) Equity.

Common Stock Repurchases

2 unchanged sentences

The stock repurchase program does not have an expiration date.

The Company did not repurchase any of its common stock in 2023.

The Company repurchased 6,662,421 shares of its common stock for $ 60.0 million in 2022 and 4,658,544 shares of its common stock for $ 50.0 million in 2021, under the stock repurchase program.

The Company did not repurchase any of its common stock in 2024 or 2023.

The Company repurchased 6,662,421 shares of its common stock for $ 60.0 million in 2022 under the stock repurchase program.

The amount and timing of repurchases are subject to a variety of factors including liquidity, stock price, applicable legal requirements, other business objectives and market conditions.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 , approximately $ 99.0 million remained available for stock repurchases under this authorization.

The Company paid quarterly dividends of $ 0.01 per share through the second quarter of 2023.

The Company paid quarterly dividends of $ 0.01 per share throughout 2022 and in the first and second quarters of 2023.

On August 2, 2023, the Company’s Board of Directors elected to suspend the quarterly cash dividend of $ 0.01 per common share.

20 unchanged sentences

Basic (loss) earnings per share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding, which included 545,151 , 290,449 and 243,006 shares of participating securities in 2024, 2023 and 2022, respectively.

Diluted (loss) earnings per share is calculated by dividing net (loss) income by the sum of the weighted average number of common shares outstanding plus the additional common shares that would have been outstanding if potentially dilutive securities had been issued.

The weighted average common shares outstanding for the diluted (loss) earnings per share calculation for the year ended December 31, 2023 excludes the dilutive effect of approximately 41,198 shares, primarily related to restricted stock units, as their inclusion would have been anti-dilutive due to the Company's net loss.

Additionally, the weighted average common shares outstanding for the diluted (loss) earnings per share calculation excludes consideration of 3,033,561 , 2,240,655 and 1,499,128 equivalent shares in 2023, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

See Note 14, "Stockholders' Equity" for details of the Company's common stock repurchases in 2023, 2022 and 2021.

Diluted (loss) earnings per share is calculated by dividing net (loss) income by the sum of the weighted average

GRAFTECH INTERNATIONAL LTD.

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(16) Other Expense (Income), net

number of common shares outstanding plus the additional common shares that would have been outstanding if potentially dilutive securities had been issued.

The weighted average common shares outstanding for the diluted (loss) earnings per share calculation for the years ended December 31, 2024 and 2023 excludes the dilutive effect of approximately 48,334 and 41,198 shares, respectively, primarily related to restricted stock units, as their inclusion would have been anti-dilutive due to the Company's net loss.

Additionally, the weighted average common shares outstanding for the diluted (loss) earnings per share calculation excludes 5,056,264 , 3,033,561 and 2,240,655 equivalent shares in 2024, 2023 and 2022, respectively, as their effect would have been anti-dilutive.

See Note 14, "Stockholders' (Deficit) Equity" for details of the Company's common stock repurchases in 2024, 2023 and 2022.

(16) Other (Income) Expense, net

The following table presents the details of other expense (income), net:

2 unchanged sentences

(Dollars in thousands)

Brazil value-added tax credit $ — $ — $ ( 11,511 )

Non-service pension and other post-employment expense (income) $ 344 $ 3,771 $ ( 9,950 )

Bank charges 783 757 938

Non-cash (gains) losses on foreign currency remeasurement ( 1,949 ) 710 28

Other ( 747 ) ( 559 ) ( 1,163 )

Total other expense (income), net $ 4,679 $ ( 10,147 ) $ ( 16,220 )

In May 2021, the Brazilian Supreme Court ruled definitely to exclude the ICMS (state value-added tax) from the basis of calculation of certain federal value-added taxes, specifically the tax relative to the program of social integration ("PIS") and to the contribution for the financing of social security ("COFINS"), and confirmed the methodology for calculating the PIS-COFINS tax credit to which taxpayers are entitled.

The Company's Brazilian subsidiary had previously filed a legal claim on this matter and is entitled to receive tax credits and interest dating back to five years preceding the date of the claim.

The overpayments, plus interest, of PIS-COFINS related to the period from June 2005 to August 2021 represented $ 11.5 million, net of legal fees.

In the fourth quarter of 2021, the Company's subsidiary obtained approval by the Brazilian Tax Authorities to start offsetting the PIS-COFINS credit against the current federal value-added tax payable and recorded the one-time credit as a realizable gain.

As of December 31, 2023, the Company has offset the entire amount of this credit.

Total other (income) expense, net $ ( 1,569 ) $ 4,679 $ ( 10,147 )

Non-service pension and other post-employment expense (income) includes the components of pension and post-employment costs other than service cost.

Non-service pension and other post-employment expense (income) included mark-to-market losses of $ 3.0 million in 2023, compared to mark-to-market gains of $ 9.6 million and $ 3.8 million, respectively, in 2022 and 2021.

Non-service pension and other post-employment expense (income) included mark-to-market losses of $ 0.7 million and $ 3.0 million in 2024 and 2023, respectively, compared to mark-to-market gains of $ 9.6 million in 2022.

See Note 11, "Retirement Plans and Post-Employment Benefits" for further discussion.

GRAFTECH INTERNATIONAL LTD.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(17) Rationalization Expenses

In the first quarter of 2024, we announced a set of initiatives designed to reduce our cost structure and optimize our manufacturing footprint.

As part of these initiatives, we indefinitely suspended production activities at our St.

Marys, Pennsylvania facility, with the exception of graphite electrode and pin machining.

In addition, we indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint.

As a result, our graphite electrode production capacity has been reduced to approximately 178 thousand metric tons (“MT”) in 2024.

In parallel, we adopted measures for additional overhead reductions to reduce our selling and administrative expenses.

Collectively, these initiatives resulted in a reduction of our global headcount by approximately 130 employees, or 10 % of our workforce.

Rationalization charges of $ 3.2 million related to severance and contract terminations will be paid in cash and we expect the substantial majority to be paid by the end of the second quarter of 2025.

Rationalization-related charges of $ 2.7 million represent the non-cash write-off of inventory and fixed assets.

Substantially all charges relative to this plan were recorded during the first quarter of 2024 and wind-down activities were completed by the end of the second quarter of 2024.

The following table summarizes costs incurred related to these initiatives:

(Dollars in thousands)

Recorded in Cost of Goods Sold

Inventory write-offs $ 2,202 $ —

Fixed asset write-offs 453 —

Total rationalization-related expenses $ 2,655 $ —

Recorded in Rationalization Expenses

Severance and related costs $ 2,814 $ —

Contract terminations 342 —

Total rationalization expenses $ 3,156 $ —

The following table presents a roll-forward of the liability incurred for employee termination benefits and contract termination costs incurred in connection with the rationalization initiatives described above.

Balance Sheet Line Item

Other Accrued Liabilities Other Long-Term Obligations

(Dollars in thousands)

Balance as of December 31, 2023 $ — $ —

Charges incurred 2,479 677

Payments and settlements ( 2,161 ) ( 15 )

Adjustments 367 ( 370 )

Balance as of December 31, 2024 $ 685 $ 292

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data