Graftech International Ltd 10-K for FY2025
Graftech International Ltd (EAF)
10-K
2026-02-13
For: 2025-12-31
View Original
Added on
April 07, 2026
About this 10-K
Graftech International Ltd filed this 10-K on February 13, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $504.13M
- down 6.4% from $538.78M a year earlier
- Net loss
- $219.84M
- compared with a net loss of $131.17M a year earlier
- Diluted EPS
- -$8.45
- compared with -$5.09 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31 , 2025
or
For the transition period from to .
Commission file number: 1-13888
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (216 ) 676-2000
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of June 30, 2025 was $250.3 million, based on the closing price of the registrant’s common stock as reported on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second quarter.
On February 6, 2026, 25,820,110 shares of our common stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement (the “Proxy Statement”) to be filed with the Securities and Exchange Commission (“SEC”) relative to the registrant’s 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.
Table of Contents
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PART I
References herein to the “Company,” “GrafTech,” “we,” “our,” or “us” refer collectively to GrafTech International Ltd. and its subsidiaries.
Presentation of Financial, Market and Industry Data
We present our financial information on a consolidated basis. Unless otherwise noted, when we refer to dollars, we mean U.S. dollars.
Certain market and industry data included in this Annual Report on Form 10-K for the year ended December 31, 2025 (this “Annual Report” or “Report”) has been obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications and third-party forecasts in conjunction with our assumptions about our markets. We cannot guarantee the accuracy or completeness of this market and market share data and have not independently verified it. None of the sources has consented to the disclosure or use of data in this Annual Report. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report.
Cautionary Note Regarding Forward-Looking Statements
This Report may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current views with respect to, among other things, financial projections, plans and objectives of management for future operations, future economic performance and short-term and long-term liquidity. Examples of forward-looking statements include, among others, statements we make regarding future estimated volume, pricing and revenue, and anticipated levels of capital expenditures and cost of goods sold. You can identify these forward-looking statements by the use of forward-looking words such as “will,” “may,” “plan,” “estimate,” “project,” “believe,” “anticipate,” “expect,” “foresee,” “intend,” “should,” “would,” “could,” “target,” “goal,” “continue to,” “positioned to,” “are confident,” or the negative versions of those words or other comparable words. Any forward-looking statements contained in this Report are based upon our historical performance and on our current plans, estimates and expectations considering information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will be achieved. Our expectations and targets are not predictions of actual performance and historically our performance has deviated, often significantly, from our expectations and targets. These forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to:
•our dependence on the global steel industry generally and the electric arc furnace (“EAF”) steel industry, in particular;
•the cyclical nature of our business and the selling prices of our products, which may remain at depressed levels or further decline in the future, and may continue to experience prolonged periods of reduced profitability and net losses or adversely impact liquidity;
•the sensitivity of our business and operating results to economic conditions, including any recession, and the possibility others may not be able to fulfill their obligations to us in a timely fashion or at all;
•the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively increase or maintain existing prices and shift sales to regions with higher average selling prices;
•continued overcapacity of the global graphite electrode industry, which may further adversely affect graphite electrode prices;
•the competitiveness of the graphite electrode industry;
•our dependence on the cost and availability of manufacturing inputs, including raw materials, such as decant oil, petroleum needle coke, energy and freight, and disruptions in availability for such inputs;
•our primary reliance on one facility in Monterrey, Mexico for the manufacturing of connecting pins;
•the cost of electric power and natural gas, particularly in Europe;
•our manufacturing operations are subject to hazards;
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•the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries;
•the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results;
•the possibility that our results of operations could further deteriorate if our manufacturing operations were substantially disrupted for an extended period, including as a result of equipment failure, climate change, regulatory issues, natural disasters, public health crises, such as a global pandemic, political crises or other catastrophic events;
•the risks and uncertainties associated with litigation, arbitration, and like disputes, including disputes related to contractual commitments;
•our dependence on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services;
•the possibility that we are subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, including with respect to our third-party suppliers and business partners;
•the possibility that we are unable to recruit or retain key management and plant operating personnel or successfully negotiate with the representatives of our employees, including labor unions;
•the sensitivity of long-lived assets on our balance sheet to changes in the market;
•our dependence on protecting our intellectual property and the possibility that third parties may claim that our products or processes infringe their intellectual property rights;
•the impact of inflation and our ability to mitigate the effect on our costs;
•the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events;
•uncertain shifts in domestic and foreign trade policies and the possibility that the imposition of current, new or increased custom duties and tariffs and trade barriers in the countries in which we, our customers and our suppliers operate could adversely affect our ability to compete, operations, results of operations and financial condition;
•risks associated with strategic transactions, including acquisitions, divestitures, joint ventures, equity investments, and debt issuances, that could adversely affect our business, operating results and financial condition;
•the possibility that our indebtedness could limit our financial and operating activities or that our cash flows may not be sufficient to service our indebtedness;
•any current or future borrowings may subject us to interest rate risk;
•risks and uncertainties associated with our ability to access the capital and credit markets could adversely affect our results of operations, cash flows and financial condition;
•the possibility that disruptions in the capital and credit markets could adversely affect our customers and suppliers;
•the possibility that restrictive covenants in our financing agreements could restrict or limit our operations; and
•changes in health, safety and environmental regulations applicable to our manufacturing operations and facilities.
These factors should not be construed as exhaustive and should be read in conjunction with the Risk Factors and other cautionary statements that are included in this Report. The forward-looking statements made in this Report relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this Report that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.
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For a more complete discussion of these and other factors, see “Risk Factors” in Part I of this Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Report.
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Item 1.Business
Introduction
GrafTech International Ltd., founded in 1886 and incorporated in Delaware, is a leading manufacturer of high-quality graphite electrode products essential to the production of EAF steel and other ferrous and non-ferrous metals. We believe that we have a competitive portfolio of low-cost ultra-high power (“UHP”) graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We have graphite electrode manufacturing facilities in Calais, France; Pamplona, Spain; Monterrey, Mexico and St. Marys, Pennsylvania (idled in 2024). We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with a number of competitive advantages.
Our only reportable segment, Industrial Materials, is comprised of two major product categories: graphite electrodes and petroleum needle coke products. Our vision is to provide highly engineered graphite electrode products, services and solutions to EAF operators. Based on the high quality of our graphite electrodes, reliability of our petroleum needle coke supply and our excellent customer service, we believe that we are viewed as a preferred supplier to the global EAF steel producer market.
As of December 31, 2025, our stated production capacity was approximately 178 thousand metric tons (“MT”)1 through our primary manufacturing facilities in Calais, Pamplona and Monterrey.
Our principal executive offices are located at 982 Keynote Circle, Brooklyn Heights, Ohio 44131 and our telephone number is (216) 676‑2000. Our website address is www.graftech.com. Information on, or accessible through, our website is not part of this Annual Report. We have included our website address only as an inactive textual reference and do not intend it to be an active link to our website.
Products and Raw Materials
Graphite Electrodes
Graphite electrodes are an industrial consumable product used primarily in EAF steel production, one of the two primary methods of steel production and the steelmaking technology used by all “mini‑mills.” Electrodes act as conductors of electricity in the furnace, generating sufficient heat to melt scrap metal, iron ore-derived products or other raw materials used to produce steel or other metals. We estimate that, on average, the cost of graphite electrodes represents less than 2% of the total production cost of steel in a typical EAF, but they are essential to EAF steel production. Graphite electrodes are currently the only known commercially available products that have the high levels of electrical conductivity and the capability to sustain the high levels of heat generated in EAF steel production. As a result, EAF steel manufacturers require a reliable supply of high-quality graphite electrodes. Graphite electrodes are also used in steel refining ladle furnaces and in other processes, such as the production of titanium dioxide, stainless steel, silicon metals and other ferrous and non‑ferrous metals.
With the growth of EAF steel production, graphite electrode production has become focused on the manufacturing of UHP electrodes, which have low electrical resistivity and strong durability to maximize efficient use of electricity in the EAF and minimize electrode consumption. The production of UHP electrodes requires an extensive proprietary manufacturing process and material science knowledge, including the use of higher quality needle coke blends. We manufacture graphite electrodes ranging in size up to 31.5 inches (800 millimeters) in diameter, over 11 feet (3,400 millimeters) in length, and weighing as much as 5,900 pounds (2.6 MT). In 2024, we expanded our product offerings to include the addition of the 800-millimeter super-sized electrode to our portfolio to serve a small but growing segment of the UHP electrode market. We also manufacture corresponding sizes of graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF. The majority of our connecting pin production is performed at our Monterrey, Mexico facility; however, we also have pin stock production capabilities at our Pamplona, Spain facility to provide an alternative source, if needed, for this critical component. The Company continues to explore opportunities to increase its pin manufacturing capabilities. The total manufacturing time of a UHP graphite electrode and its associated connecting pin is, on average and except for special requests, approximately six months.
1 Production capacity reflects expected maximum production volume during the period through our Calais, Pamplona and Monterrey facilities depending on product mix and expected maintenance outage. Actual production may vary. While maintaining the capability to produce graphite electrodes and pins, production activities at St. Marys were indefinitely idled in 2024, with the exception of graphite electrode and pin machining.
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The size of the electrodes used in EAF steel production varies depending on the size of the furnace, the size of the furnace’s electric transformer and the planned productivity of the furnace. In a typical furnace using alternating electric current and operating at a typical number of production cycles per day, three UHP graphite electrodes are fully consumed (requiring the addition of new electrodes), on average, every eight to ten operating hours. UHP graphite electrodes are consumed at a rate of approximately 1.7 kilograms per MT of steel production, on average, in EAF facilities.
The actual rate of consumption and addition of electrodes for a particular furnace depends primarily on the efficiency and productivity of the furnace. Therefore, demand for graphite electrodes is directly related to the amount and efficiency of EAF steel production. EAF steel production requires significant heat (as high as 5,000° F) to melt the raw materials, primarily scrap metal, in the furnace. Heat is generated as electricity (as much as 150,000 amps) passes through the electrodes and creates an electric arc between the electrodes and the raw materials.
Graphite Electrode Industry - Supply and Demand Trends
Supply trends
We estimate that as of the end of 2025, the graphite electrode industry globally (excluding China) had nameplate capacity to produce approximately 771 thousand MT of graphite electrodes. The industry is fairly consolidated, with the five largest global (excluding China) producers in the industry, GrafTech, Resonac Holdings Corporation, HEG Limited, Graphite India Limited and Tokai Carbon Co., Ltd., collectively, representing approximately 75% of global (excluding China) graphite electrode production capacity. As of December 31, 2025, our stated production capacity was approximately 178 thousand MT through our Calais, Pamplona and Monterrey facilities and represented approximately 23% of the global (excluding China) graphite electrode production capacity.
We believe that no new graphite electrode production facilities have been built outside of China for several years. In recent years, additional production capacity has been generated by optimization and debottlenecking of existing assets and limited brownfield expansion.
We primarily compete in the UHP segment of the graphite electrode market. We estimate that, as of the end of 2025, global (excluding China) UHP graphite electrode capacity was approximately 660 thousand MT, or approximately 85% of the global (excluding China) graphite electrode capacity.
Although graphite electrode production capacity within China exceeds that of the rest of the world combined, the production landscape in China is fragmented, and the quality of Chinese graphite electrodes varies greatly. We estimate that as of the end of 2025, total production capacity within China for the UHP segment of graphite electrodes was approximately 800 thousand MT. We believe that more than half of the UHP electrode capacity in China does not meet the quality standards needed to be exported for use in the most demanding EAF applications. In addition, the imposition of customs duties and other tariffs in key EAF steelmaking regions, including the United States, the European Union (“EU”) and Japan, have further limited the quantity of graphite electrodes exported from China into those regions. However, we estimate that exports of UHP electrodes from China have satisfied approximately one-third of the annual global (excluding China) UHP electrode demand noted in the “Demand trends” section immediately below.
Demand trends
We estimate that annual global (excluding China) UHP graphite electrode demand has been approximately 650 thousand MT, on average, over the past three years. UHP graphite electrodes are primarily used in the EAF steelmaking process, and long-term global growth of EAF steel production has driven increased demand for graphite electrodes over time. EAF steelmaking has historically been the fastest-growing segment of the global steel market. According to data derived from World Steel Association (“WSA”) reporting, global (excluding China) EAF steel production grew at a 2%-3% compound annual growth rate from 2015 to 2024, the most recent year for which WSA has published such figures. This compares to a 1% compound annual growth rate for overall global (excluding China) steel production during this same period. As a result, the EAF method of steelmaking accounted for 51% of the global (excluding China) steel production in 2024, compared to 44% in 2015, with share growth in nearly every region.
EAF steelmaking is more energy efficient and is advantaged in terms of its environmental footprint, compared to steel produced through the basic oxygen furnace (“BOF”) steelmaking model. According to the Steel Manufacturers Association (“SMA”), EAF steelmaking produces 75% fewer carbon dioxide emissions compared to BOF steelmaking. Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and infinitely) recyclable at the end of its useful life. In addition to these advantages, EAF steel producers benefit from their flexibility in
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sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as direct reduced iron and hot briquetted iron, both made directly from iron ore.
Reflecting these and other competitive advantages, we believe EAF steel production will continue to grow at a faster rate than BOF steel production. Based on industry announcements of planned incremental EAF capacity additions and factoring in further production increases at existing EAF steel plants, we estimate this could result in global (excluding China) UHP graphite electrode demand growing at a compound annual growth rate of approximately 3% through 2030.
Petroleum Needle Coke
Petroleum needle coke, a crystalline form of carbon derived from decant oil, is the key raw material we use in the production of graphite electrodes. It is also a primary raw material utilized in the production of synthetic graphite used in anodes for lithium-ion batteries that power electric vehicles (“EV”) and energy storage systems (“ESS”).
Petroleum needle coke is produced through a manufacturing process very similar to a refinery. The production process converts decant oil, a byproduct of the gasoline refining process, into petroleum needle coke. Pitch needle coke, used by some Chinese graphite electrode manufacturers, is made from coal tar pitch, a byproduct of coking metallurgical coal used in BOF steelmaking. For the production of our graphite electrodes, we prefer petroleum needle coke because of the meaningfully shorter bake and graphitizing time required, compared to graphite electrodes produced using pitch needle coke.
We are substantially vertically integrated into petroleum needle coke through our Seadrift facility (“Seadrift”), located in Port Lavaca, Texas, which provides the majority of our petroleum needle coke requirements used to produce our graphite electrodes and insulates us from rapid changes in the petroleum needle coke market. In addition, we believe the quality of Seadrift’s petroleum needle coke is superior for graphite electrode production compared to most of the petroleum needle coke available to our peers on the open market, allowing us to produce high-quality electrodes in a cost‑efficient manner. Seadrift sources all of its decant oil requirements from reputable U.S.-based suppliers. Seadrift has developed a well-diversified pool of decant oil suppliers, which we believe is sufficient to meet our needs.
Graphite electrode producers combine petroleum needle coke and/or pitch needle coke with binders and other ingredients to form graphite electrodes. Petroleum needle coke and pitch needle coke, relative to other varieties of coke, are distinguished by their needle-like structure and their quality, which is measured by the presence of impurities, principally sulfur, nitrogen and ash. Petroleum needle coke and pitch needle coke are typically low in these impurities. Additionally, the needle-like structure of petroleum and pitch needle coke creates expansion along the length of the electrode, rather than the width, which reduces the likelihood of fractures.
Petroleum Needle Coke Industry - Supply and Demand Trends
Supply Trends
We estimate that, as of the end of 2025, the petroleum needle coke industry globally (excluding China) had capacity to produce approximately 750 thousand MT of petroleum needle coke. The global (excluding China) industry is highly concentrated as it is comprised of four producers, Phillips 66, GrafTech (via Seadrift), Petrocokes Japan Ltd. (a subsidiary of Sumitomo Corporation) and ENEOS Holdings, Inc. Our Seadrift facility, with nameplate capacity to produce approximately 140 thousand MT of calcined petroleum needle coke, represents nearly one-fifth of the global (excluding China) production capacity.
Petroleum needle coke production capacity outside of China has remained relatively flat for many years due to the capital intensity, technical know-how and long permitting lead times required to build greenfield needle coke production facilities.
Chinese petroleum needle coke production is expected to grow significantly in the coming years, with a primary focus on serving the anode material markets, as China is currently the largest producer of anode material. Although this may provide sufficient capacity to meet global petroleum needle coke needs for the next several years, demand from emerging non-Chinese anode material producers, particularly in North America and Europe, is expected to increase significantly in the coming years to support the growing EV and ESS markets.
Demand Trends
We estimate that global (excluding China) needle coke demand for use in UHP graphite electrode production has been approximately 550 thousand MT, on average, over the past three years with the majority being petroleum needle coke. With demand for UHP graphite electrodes expected to increase at a compound annual growth rate of approximately 3% through 2030 (see “Graphite Electrode” section above), we expect this to result in a similar increase in demand for needle coke used in graphite electrode production.
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While the vast majority of petroleum needle coke produced globally (excluding China) is currently used in the production of graphite electrodes, its use to produce synthetic graphite used in anode material for the EV and ESS markets is expected to increase significantly with the growth of these markets, as graphite is the key material used for the carbon anode portion of lithium-ion batteries. Although both natural and synthetic graphite are used in anodes for lithium-ion batteries, battery manufacturers prefer synthetic graphite, which is produced using needle coke, because of its advantages in terms of charging rate, capacity and longevity.
While synthetic graphite can be produced from either petroleum needle coke or pitch needle coke, petroleum needle coke has superior characteristics for battery applications, as it does with graphite electrode applications. As a result, demand growth for petroleum needle coke for use in the EV and ESS markets is expected to be higher than that of overall needle coke demand growth. Further, the establishment and growth of a non-Chinese supply chain for battery materials, supported by trade protections and barriers, which we believe will accelerate petroleum needle coke demand, is expected to support higher petroleum needle coke pricing.
Contracts and Customers
Our customers include major steel producers and other ferrous and non-ferrous metal producers in Europe, the Middle East and Africa (collectively, “EMEA”), the Americas, and Asia-Pacific (“APAC”), which sell their products primarily into the automotive, construction, appliance, machinery, equipment and transportation industries.
We sell our products under short-term purchase agreements, multi-year purchase agreements and spot sales.
Our short-term agreements are either annual, semi-annual or quarterly. Because of the long production time, the book building process is largely concentrated in the fourth quarter of each year for the annual short-term agreements as well as for the semi-annual agreements related to the first half of the upcoming year. Spot purchase orders are entered into with deliveries usually starting three or more months later. The price of our short-term agreements is determined through contract negotiations with our customers and is influenced by the then-prevailing price on spot purchase orders as well as the anticipated supply-demand situation at the time of the planned deliveries. There is a lag between the time we negotiate prices for our short-term agreements and when our electrodes are delivered and recognized as revenue.
There is no widely accepted graphite electrode reference price. Pricing has historically been cyclical, reflecting the demand trends of the global EAF steelmaking industry and supply of graphite electrodes. Moreover, as petroleum needle coke represents a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have typically been priced at a spread to petroleum needle coke. Over the period from 2006 to 2025, the average graphite electrode spread over petroleum needle coke was approximately $4,000 per MT, on an inflation-adjusted basis using constant 2025 dollars, although recent spreads have been narrower. In tight demand markets, this spread has increased, resulting in higher graphite electrode prices. Historically, between 2006 and 2025, our weighted-average realized price of graphite electrodes, excluding volume sold under our take-or-pay agreements with initial term of three-to-five years (“LTAs”), was approximately $6,200 per MT, on an inflation-adjusted basis using constant 2025 dollars.
As the substantial majority of our LTAs have expired, our mix of business has shifted towards short-term purchase agreements and spot purchase orders. We will continue to offer multi-year agreements, also known as electrode supply agreements, as an important part of our commercialization strategy and value proposition. Our substantial vertical integration into petroleum needle coke supports our ability to offer contracts with varying durations, providing our customers with flexibility and surety of supply. However, we do not anticipate that multi-year agreements will make up the majority of our portfolio in the future.
2025 Revenue and Production By Region
Approximately 96% of our graphite electrodes were purchased by EAF steel producers in 2025. The remaining portion is primarily used in various other ferrous and non-ferrous melting applications, fused materials, chemical processing, and alloy metals. We sell our products in every major geographic region globally. Sales of our products to buyers outside the United States accounted for approximately 59%, 68% and 67% of net sales in 2025, 2024 and 2023, respectively. Overall, in 2025, we generated 94% of our net sales from EMEA and the Americas.
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The charts below show our revenue by region for 2025 and 2024:
Sales and Customer Service
We differentiate and sell the value of our graphite electrodes primarily based on product quality and performance, delivery reliability and customer technical service.
We have a large customer technical service organization, with supporting application engineering and scientific groups and approximately 30 engineers and specialists around the world serving in this area. We believe that we are one of the industry leaders in providing value-added technical services to our customers.
Our direct sales force currently operates from 13 sales offices located around the world. We sell our graphite electrodes primarily through our direct sales force, independent sales representatives, and distributors, all of whom are trained and experienced with our products.
We have customer technical service personnel based around the world to assist customers to maximize their production and minimize their costs. A portion of our engineers and technicians provide technical service and advice to key steel and other metals customers. These services relate to furnace applications and operation, as well as furnace upgrades to reduce energy consumption, improve raw material costs and increase output.
We believe we have a competitive advantage in offering customers our proprietary ArchiTech® Furnace Productivity System 6.0 (“ArchiTech”), which is an advanced support and technical service advisory system that provides our customers with insights and analysis not available in standard furnace regulation systems. ArchiTech, which has been installed in customer furnaces worldwide, enables our engineers to work with our customers seamlessly to maximize the performance of their furnaces and provide real-time diagnostics and troubleshooting. Our technical services team is regularly listening to our customers’ needs to develop new functionalities for the ArchiTech environment.
Inventory Management
We deploy various demand management and inventory management techniques to seek to ensure that we can meet our customers’ delivery requirements while still maximizing the utilization of our production capacity. We can experience significant variation in our customers’ delivery requirements as their specific needs vary and change throughout the year. We generally seek to maintain appropriate inventory levels, taking into account these factors as well as the significant differences in manufacturing cycle times for graphite electrode products and our customers’ products.
Finished products are usually stored at our manufacturing facilities. Limited quantities of some finished products are also stored at local warehouses around the world to meet customer needs.
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Research and Development
We have nearly 140 years of experience in the research and development (“R&D”) of graphite- and carbon-based solutions. By focusing our management’s attention and R&D spending on the graphite electrode business, we have been able to improve the quality of our graphite electrodes, maintain our position as an industry leader and improve our relationships with strategic customers. Our focus on improving the quality of petroleum needle coke through R&D has led to our petroleum needle coke production at Seadrift being best-in-class for use in the manufacturing of highly durable UHP electrodes. Simultaneously, the R&D team helps to evaluate technology in adjacent markets, including synthetic graphite used in battery applications, where GrafTech may have technological advantages. We believe that the above strengths and capabilities provide us with a competitive advantage.
Intellectual Property
We believe that our intellectual property, consisting primarily of patents and proprietary know-how, provides us with competitive advantages and is important to our growth opportunities. Our intellectual property portfolio is extensive, with approximately 113 U.S. and foreign patents and pending patent applications.
We own, have the right to use or have obtained licenses for various trade names and trademarks used in our businesses. For example, the UCAR trademark is owned by Union Carbide Corporation (“Union Carbide”) (which was acquired by Dow Chemical Company) and is licensed to us on a worldwide, exclusive and royalty-free basis until January 2035. This particular license automatically renews for successive 10-year periods. It permits non-renewal by Union Carbide at the end of any renewal period upon five years notice of non-renewal.
We rely on patent, trademark, copyright and trade secret laws, as well as appropriate agreements to protect our intellectual property. Among other things, we seek to protect our proprietary know-how and information by requiring employees, consultants, strategic partners and others who have access to such proprietary information and know-how to enter into confidentiality or restricted use agreements.
Insurance
We maintain insurance against potential liabilities relating to, among other areas, personal injuries to third parties, loss of or damage to property, business interruptions, directors and officers, cybersecurity incidents and certain environmental matters, that provides coverage, subject to the applicable coverage limits, deductibles and retentions, and exclusions, that we believe is appropriate upon terms and conditions and for premiums that we consider fair and reasonable in the circumstances. There can be no assurance that we will not incur losses beyond the limits of or outside the coverage of our insurance.
Regulatory Matters
As a company with global operations, we are subject to the laws and regulations of the United States and the multiple foreign jurisdictions in which we operate or conduct business as well as the rules, reporting obligations and interpretations of all such requirements and obligations by various governing bodies, which may differ among jurisdictions. These include federal, state, local and foreign environmental laws and regulations, increasingly complex and changing laws and regulations enacted to protect business and personal data in the United States and other jurisdictions, including the EU’s General Data Protection Regulation (“GDPR”), anti-corruption laws, import/export controls, anti-competition laws, U.S. securities laws and a variety of regulations including work-related and community safety laws. We believe we operate in compliance in all material respects with applicable laws and regulations, and maintaining compliance with them is not expected to materially affect our capital expenditures, earnings and competitive position. Estimates of future costs for compliance with U.S. and foreign environmental protection laws and regulations, and for environmental liabilities, are necessarily imprecise due to numerous uncertainties, including the impact of potential new laws and regulations, the availability and application of new and diverse technologies, the extent of insurance coverage, the potential discovery of contaminated properties, or the identification of new hazardous substance disposal sites at which we may be a potentially responsible party (“PRP”) and, in the case of sites subject to the Comprehensive Environmental Response, Compensation and Liability Act and similar state and foreign laws, the final determination of remedial requirements and the ultimate allocation of costs among the PRPs. Subject to the inherent imprecision in estimating such future costs, but taking into consideration our experience to date regarding environmental matters of a similar nature and facts currently known, we estimate that our costs and capital expenditures (in each case, before adjustment for inflation) for environmental protection regulatory compliance programs and for remedial response actions will not be material over the next several years. Furthermore, we establish accruals for environmental liabilities when it is probable that a liability has been or will be incurred, and the amount of the liability can be reasonably estimated. We adjust the accrual as new remediation requirements or other commitments arise, as well as when new information becomes available that changes the prior estimates, and we believe our existing accruals are reasonable.
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Human Capital Resources
Employment
As of December 31, 2025, we had 1,071 employees (excluding contractors), 626 of which were hourly employees. A total of 396 employees were in Mexico, 411 were in Europe, 227 were in the United States, 33 were in Brazil, three were in the Asia Pacific region and one was in the Middle East.
As of December 31, 2025, 658 employees, or approximately 61% of our worldwide employees, were covered by collective bargaining or similar agreements. We believe that, in general, our relationships with our employees’ unions are good and that we will be able to renew or extend our collective bargaining or similar agreements on reasonable terms as they expire. We have not had any material work stoppages or strikes initiated by our employees during the past year.
Health and Safety
The health and safety of our global team is a top priority and is a core value of the Company. Our comprehensive programs strive to achieve zero injuries and no harm done. Our total recordable incident rate in 2025 was 0.41 per 200,000 work hours, compared to 0.59 per 200,000 work hours in 2024. Our global Health, Safety and Environmental Protection (“HS&EP”) policy applies to all employees and governs our actions and decisions every day. We also have a Code of Conduct and Ethics for Suppliers and Contractors that includes HS&EP guidelines required for doing business with GrafTech. GrafTech’s focus on HS&EP is a top priority for all employees. We have built risk recognition into our HS&EP programs. From pre-job planning, safety walks and inspections, planned job observations, or training employees on health and safety best practices, we strive to identify and mitigate risks. In the spirit of continuous improvement, regular inspections, internal reviews and corporate audits are conducted to foster compliance with our high standards.
Workplace Culture
As a global enterprise, we believe a strong workplace culture with unique perspectives drives innovation, collaboration, and excellence. Therefore, our goal is to foster an intentional, inclusive community where people from all backgrounds and experiences feel valued and empowered to contribute. Our global footprint organically lends itself to diversity, and our employee base has varied educational and technical backgrounds and life experiences.
At both the corporate and site levels, we assign responsibilities for upholding policies, procedures, and practices for hiring and talent management. GrafTech affirms its position as an Equal Opportunity Employer and is committed to recruiting, employing, and promoting qualified veterans and disabled individuals, and we aim to ensure our people have equal opportunities related to job promotions, compensation, benefits, and personal development.
Compensation and Total Rewards
We aim to attract and retain top talent from a diverse pool of skilled workers by providing competitive compensation and benefit programs to help meet the needs of our employees. Our programs are designed to support the profitable growth of our business; attract, reward, and retain the talent we need to succeed; support the health and overall well-being of our employees; and reinforce a performance-based culture.
In addition to base compensation, we offer individual and group-based performance bonuses. Benefits packages include, depending on the country, medical, dental, prescription, vision, group life insurance, short- and long-term disability, paid vacation and holidays, and tuition reimbursement. The tuition reimbursement program, in particular, helps employees who want to continue their education or seek specialized job training, and illustrates our commitment to continued learning and focus on professional development.
Employee Training and Development
As committed stakeholders in the professional development of our employees, we look for opportunities to help employees grow, innovate, and impact our business and industry. Each role within our organization has a detailed job profile, including job-specific competencies. These profiles help us measure performance, and they work in conjunction with our performance management system, which enables employees to create individualized career and growth paths. The performance management system connects employees with job-specific professional development training and continuing education opportunities to help them progress along their career and growth path.
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We conduct mid-year and annual performance reviews for all salaried employees to assess both individual job competencies and performance relative to GrafTech’s core competencies. During annual performance reviews, we discuss progress towards personal career goals, refine career aspirations, and connect employees with specific pathways to achievement. Employees are encouraged to work with their manager or human resources to further refine their career and growth paths at each annual review.
Available Information
We make available, free of charge, on or through our website, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (http://www.sec.gov). We maintain our website at https://www.graftech.com. Information on, or accessible through, our website is not part of this Annual Report. We have included our website address only as an interactive textual reference and do not intend it to be an active link to our website.
Item 1A.Risk Factors
Our business, financial condition, results of operations, and cash flow can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below. Please carefully read all of the information included in this Report and carefully consider, among other matters, the following risk factors, as well as any discussed under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. Moreover, the risks below are not the only risks we face and additional risks not currently known to us or that we presently deem immaterial may emerge or become material at any time. The occurrence of any of the following risks could materially and adversely affect our business, financial condition, results of operations, and cash flow, in which case, the market price of our securities could decline.
Risks related to our business and industry
We are dependent on the global steel industry generally and the EAF steel industry in particular, which historically have been highly cyclical, and a downturn in these industries may materially adversely affect our business.
We sell our products primarily to the EAF steel production industry, which is highly cyclical and is affected significantly by general economic conditions. As a result, we have experienced periods of significant net losses.
Significant customers for the steel industry include companies in the automotive, construction, appliance, machinery, equipment and transportation industries, which are industries that were negatively affected by general economic downturns and the deterioration in financial markets, including severely restricted liquidity and credit availability, in the past.
Our customers, including major steel producers, have in the past experienced and may again experience downturns or financial distress that could adversely impact our overall demand and result in less sales.
Pricing for graphite electrodes has historically been cyclical and future declines in price may continue to adversely affect our results.
Pricing for graphite electrodes has historically been cyclical, reflecting the demand trends of the global EAF steelmaking industry and the supply of graphite electrodes. In addition, as petroleum needle coke reflects a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have historically been priced at a spread to petroleum needle coke, which in the past has increased in tight demand markets. Between 2006 and 2025, our weighted-average realized price of graphite electrodes was approximately $6,200 per MT (on an inflation‑adjusted basis using constant 2025 dollars).
During the last demand trough in 2016, our weighted-average realized price of graphite electrodes fell to approximately $3,000 per MT, on an inflation‑adjusted basis using constant 2025 dollars. Following the significant rationalization of graphite electrode production globally, the resumption of growth in EAF steel production, falling scrap prices, reductions in Chinese steel exports and constrained supply of needle coke, graphite electrode prices reached record highs in 2018.
Prices as of December 31, 2025 have receded from the highs of 2018, and the price of graphite electrodes may continue to decline in the future. Beginning in 2023 and continuing through 2025, spot prices began decreasing given the softer commercial environment. Spot prices for the year ended December 31, 2025 were approximately 4,100 per MT on a weighted-average basis. Our business, financial condition and operating results have been, and are being, materially and adversely affected by the
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depressed spot price of graphite electrodes throughout 2024 and 2025 and could be materially and adversely affected further to the extent prices for graphite electrodes remain at depressed levels or continue to decline or remain at current levels in the future.
If we are unable to implement price increases in certain regions, or if these increases lead to loss of market share, our results of operations, cash flow, liquidity, and financial condition could be materially adversely affected.
We operate in a highly competitive industry and, as a result, we may not be successful in raising or maintaining our existing prices. General economic, competitive or market-specific conditions may limit our ability to raise prices, maintain existing prices or otherwise impact our plans with respect to implementing price increases. In addition, we may lose customers who choose to source their graphite electrodes from a competitor who has not increased prices or who lowers their prices. If we are unable to successfully execute future price increases, there may be material adverse effects on our market share, results of operations, cash flow, liquidity and financial condition.
Global graphite electrode overcapacity has adversely affected graphite electrode prices in the past, and continues to do so, which is negatively impacting our sales, margins and profitability, and may continue to do so in the future.
Overcapacity in the graphite electrode industry has adversely affected pricing in the past, and continues to do so. Global graphite electrode production capacity that outpaces demand for graphite electrodes adversely affects the price of graphite electrodes. Excess production capacity, particularly in China, is resulting in manufacturers currently pricing a significant portion of their electrode sales at or below market prices. Excessive imports into the Americas and EMEA, which markets collectively made up 94% of our net sales for the year ended December 31, 2025, can also exert downward pressure on graphite electrode prices, which negatively affects our sales, margins and profitability.
The graphite electrode industry is highly competitive. Our market share, net sales or net income could decline due to vigorous price and other competition.
Competition in the graphite electrode industry is based primarily on price, quality/performance, local presence, product portfolio, delivery reliability and customer service. Graphite electrodes, in particular, are subject to rigorous price competition. Competition could prevent implementation of price increases, including those described above, require price reductions or require increased spending on R&D, marketing and sales that could adversely affect us. In such a competitive market, changes in market conditions, including customer demand and technological development, as well as increased exports by Chinese EAF steel and graphite electrode suppliers, could adversely affect our competitiveness, sales and/or profitability.
We are dependent on the supply of petroleum needle coke and extended disruptions in supply could negatively impact our operations.
Petroleum needle coke is our key raw material used in the production of graphite electrodes. At full operating levels, Seadrift provides a substantial portion of our petroleum needle coke requirements, with third-party purchases making up a small portion of the balance. A disruption in Seadrift’s production of petroleum needle coke could require us to obtain additional petroleum needle coke from third-party sources. There is no assurance that we would be able to obtain acceptable alternative sources on a cost-effective or timely basis, or at all. An extended interruption of suitable petroleum needle coke for our operations could have a material adverse effect on our business, financial condition or operating results.
We rely primarily on one facility in Monterrey, Mexico for the manufacturing of connecting pins, a necessary component of our graphite electrodes. Our results of operations could deteriorate if this facility would become unable to provide us with the required volume of connecting pins.
We manufacture graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF. For the past several years, all of our connecting pin production was performed at our Monterrey, Mexico facility. While we have added pin stock capability at our Pamplona, Spain facility, we primarily rely on one production location for this critical component. If our Monterrey, Mexico facility were to become unable to provide us with connecting pins in required volumes, at suitable quality levels, or in a cost-effective manner, we would be required to shift production to our Pamplona, Spain facility or identify and obtain additional replacement manufacturing sources. There is no assurance that we would be able to obtain acceptable alternative sources on a cost-effective or timely basis, or at all. An extended interruption in the supply of connecting pins would result in the loss of sales, which could have a material adverse effect on our business, financial condition or operating results.
We are dependent on the cost and availability of manufacturing inputs, including raw materials (in addition to petroleum needle coke, energy and freight). Our results of operations could deteriorate if such inputs increase in cost or are substantially disrupted for an extended period of time.
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We purchase raw materials from a variety of sources. In many cases, we purchase them under short‑term contracts or on the spot market, in each case at fluctuating prices. The availability and price of raw materials may be subject to curtailment or change due to:
•limitations, which may be imposed under new legislation or regulation;
•suppliers’ allocations to meet demand from other purchasers during periods of shortage;
•interruptions or terminations in production by suppliers; and
•market and other events and conditions.
Petroleum and coal products, including decant oil and coal tar pitch, which are our principal raw materials other than petroleum needle coke, energy and freight, have been subject to significant price fluctuations. For example, Seadrift may not always be able to obtain an adequate quantity of suitable low‑sulfur decant oil for the manufacture of petroleum needle coke, and capital may not be available to install equipment to allow use of higher sulfur decant oil (which is more readily available in the United States) if supplies of low‑sulfur decant oil become more limited in the future. Further, low-sulfur emissions regulations adopted in 2020 by the International Maritime Organization have at times negatively affected pricing for low-sulfur decant oil and they may again in the future cause similar adverse impacts.
We have in the past entered into, and may continue in the future to enter into, derivative contracts and short‑duration, fixed-rate purchase contracts to effectively fix a portion of our exposure to certain products. These hedging strategies may not be available or successful in eliminating our exposure. A substantial increase in raw material, energy and freight prices that cannot be mitigated or passed on to customers or a continued interruption in supply, particularly in the supply of decant oil, could have a material adverse effect on our business, financial condition, results of operations and cash flows. These hedges may be insufficient or ineffective in protecting against the impact of these fluctuations.
Our business and our customers are subject to market changes in the cost of electricity and natural gas that could adversely affect our business.
We are in an energy intensive industry that requires both natural gas and electricity in our manufacturing process. We primarily rely on third parties for the supply of our energy resources consumed in the manufacture of our products. The prices for third-party electricity and natural gas are subject to volatile market conditions, particularly in Europe. These market conditions often are affected by factors beyond our control, and we may be unable to raise the price of our products to mitigate the effects of increased energy costs in our manufacturing processes. In addition, our customers are subject to these same market conditions.
Failure to retain our existing senior management team or the inability to attract and retain qualified personnel could hurt our business and inhibit our ability to operate and grow successfully.
Our success will continue to depend to a significant extent on the strength of our executive management team and the ability to recruit, hire and retain other key management and plant operating personnel, including factory and production workers and other staff to support our growth and operational initiatives and replace those who retire or resign. Failure to retain our leadership team and workforce and to attract and retain other important management and technical personnel could place a constraint on our global growth and operational initiatives, possibly resulting in inefficient and ineffective management and operations, which would likely harm our revenues, operations and product development efforts and eventually result in a decrease in profitability.
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Our operations are subject to hazards which could result in significant liability to us.
Our operations are subject to hazards associated with manufacturing and the related use, storage, transportation and disposal of raw materials, products and wastes. These hazards include explosions, fires, severe weather (including but not limited to hurricanes or other adverse weather that may be increasing as a result of climate change) and natural disasters, industrial accidents, mechanical failures, discharges or releases of toxic or hazardous substances or gases, transportation interruptions, human error and terrorist activities. These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment as well as environmental damage, and may result in suspension of operations and the imposition of civil and criminal liabilities, including penalties and damage awards. While we believe our insurance policies are in accordance with customary industry practices, such insurance does not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We may incur losses beyond the limits, or outside the coverage, of our insurance policies. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. Costs associated with unanticipated events in excess of our insurance coverage could have a material adverse effect on our business, competitive or financial position or our ongoing results of operations.
We are subject to a variety of legal, economic, social and political risks associated with our substantial operations in multiple countries, which could have a material adverse effect on our financial and business operations.
A majority of our net sales are derived from sales outside the United States, and a substantial majority of our operations and our property, plant and equipment and other long‑lived assets are located outside the United States. As a result, we are subject to risks associated with operating in multiple countries, including:
•currency fluctuations and devaluations in currency exchange rates, including impacts of transactions in various currencies, translation of various currencies into dollars for U.S. reporting and financial covenant compliance purposes, and impacts on results of operations due to the fact that the costs of our non‑U.S. operations are primarily incurred in local currencies while their products are primarily sold in dollars and euros;
•imposition of or increase in customs duties and other tariffs or the loss of the protection thereof;
•imposition of or increases in currency exchange controls, including imposition of or increases in limitations on conversion of various currencies into dollars, euros, or other currencies, making of intercompany loans by subsidiaries or remittance of dividends, interest or principal payments or other payments by subsidiaries;
•imposition of or increases in revenue, income or earnings taxes and withholdings and other taxes on remittances and other payments by subsidiaries;
•inflation, deflation and stagflation in any country in which we have a manufacturing facility;
•imposition of or increases in investment or trade restrictions by the United States or other jurisdictions or trade sanctions adopted by the United States;
•compliance with laws on anti-corruption, export controls, customs, sanctions, environmental and other laws governing our operations, including in challenging jurisdictions;
•inability to determine or satisfy legal requirements, effectively enforce contract or legal rights, including our intellectual property rights, and obtain complete financial or other information under local legal, judicial, regulatory, disclosure and other systems; and
•nationalization or expropriation of assets, and other risks that could result from a change in government or government policy, or from other political, social or economic instability.
Any of these risks could have a material adverse effect on our business, financial condition, results of operations or cash flows, and we may not be able to mitigate these effects.
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Our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period for any reason.
Our manufacturing operations are subject to disruption due to equipment failure, extreme weather conditions, floods, hurricanes and tropical storms and similar events, major industrial accidents, including fires or explosions, cybersecurity incidents, strikes and lockouts, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, public health crises and other events. These events may also impact the operations of one or more of our suppliers. For example, the potential physical impacts of climate change on our operations are uncertain and will likely be particular to the geographic circumstances. These physical impacts may include changes in rainfall and storm patterns, shortages of water or other natural resources, changing sea levels, changes in the frequency of natural or human induced disasters, including earthquakes, tsunamis, storms, hurricanes, floods, fires, droughts, tornadoes and other extreme weather events or conditions, and changing global average temperatures. For instance, our Seadrift facility in Texas and our Calais facility in France are located in geographic areas less than 50 feet above sea level. As a result, any future rising sea levels could have an adverse impact on their operations and on their suppliers. In the event manufacturing operations are substantially disrupted at one of our primary operating facilities, we may not have the ability to increase production at our remaining operating facilities in order to compensate without considerable time and expense. To the extent any of these events occur, our business, financial condition and operating results could be materially and adversely affected.
Plant operational improvements may be delayed or may not achieve the expected benefits.
Our ability to complete future operational improvements may be delayed, interrupted or otherwise limited by the need to obtain environmental and other regulatory approvals, unexpected cost increases, financial constraints, availability of labor and materials, unforeseen hazards such as weather conditions, and other risks customarily associated with construction projects. Moreover, the costs of these activities could have a negative impact on our results of operations. In addition, these operational improvements may not achieve the expected benefits as a result of changes in market conditions, raw material shortages or other unforeseen contingencies.
We depend on third parties for certain construction, maintenance, engineering, transportation, warehousing and logistics services.
We contract with third parties for certain services relating to the design, construction and maintenance of various components of our production facilities and other systems. If these third parties fail to comply with their obligations, the facilities may not operate as intended, which may result in delays in the production of our products and materially adversely affect our ability to meet our production targets and satisfy customer requirements or we may be required to recognize impairment charges. In addition, production delays could cause us to miss deliveries and breach our contracts, which could damage our relationships with our customers and subject us to claims for damages under our contracts. Any of these events could have a material adverse effect on our business, financial condition, results of operations or cash flows.
We also rely primarily on third parties for the transportation of the products we manufacture. In particular, a significant portion of the goods we manufacture are transported to different countries, which requires sophisticated warehousing, logistics and other resources. If any of the third parties that we use to transport products are unable to deliver the goods we manufacture in a timely manner, we may be unable to sell these products at full value or at all, which could cause us to miss deliveries and breach our contracts, which could damage our relationships with our customers and subject us to claims for damages under our contracts. Any of these events could have a material adverse effect on our business, financial condition, results of operations or cash flows.
We may be subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, which could compromise our information and expose us to liability.
Our information technology systems are an important element for effectively operating our business. Information technology systems or processes, and the information technology systems or processes of our customers, our third-party business partners, our vendors or other parties that have been entrusted with our information, including risks associated with any failure to maintain or upgrade our systems, network disruptions and breaches of data security could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information or our financial reporting, leading to increased costs. It is possible that technological developments could adversely affect the functionality of our computer systems and require further action and substantial funds to prevent or repair computer malfunctions. Our computer systems, including our back‑up systems, could be damaged or interrupted by power outages, computer and telecommunications failures, computer viruses, cybercrimes, internal or external security breaches, events such as fires, earthquakes, floods, tornadoes and hurricanes, errors by our employees, or other cybersecurity incidents. Cybersecurity incidents and similar attacks vary in their form and can include the deployment of harmful malware or ransomware, denial-of-service attacks, and other attacks, which may affect
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business continuity and threaten the availability, confidentiality and integrity of our systems and information. Cybersecurity incidents can also include employee or personnel failures, fraud, phishing or other social engineering attempts or other methods to cause confidential information, payments, account access or access credentials, or other data to be transmitted to an unintended or unauthorized recipient. Cybersecurity threat actors also may attempt to exploit vulnerabilities in software that is commonly used by companies in cloud-based services and bundled software. Although we have taken steps to address these concerns by implementing network security, back‑up systems and internal control measures, these steps may be insufficient or ineffective. Security and/or privacy breaches, cybersecurity incidents, acts of vandalism or terror, misplaced, corrupted, altered or lost data, programming, and/or human error or other similar events with respect to our information technology systems or processes, or the information technology systems or processes of third-parties that have been entrusted with our information, could have a material adverse effect on our business strategy, financial condition, results of operations or cash flows, including major disruptions to business operations, loss of intellectual property, release of confidential information, alteration or corruption of data or systems, costs related to remediation or the payment of ransom, litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs and possible prolonged negative publicity.
If we are unable to successfully negotiate with the representatives of our employees, including labor unions, we may experience strikes and work stoppages.
We are party to collective bargaining agreements and similar agreements with our employees. As of December 31, 2025, 658 employees, or approximately 61% of our worldwide employees, were covered by collective bargaining or similar agreements. Although we believe that, in general, our relationships with our employees are good, we cannot predict the outcome of current and future negotiations and consultations with employee representatives, which could have a material adverse effect on our business. We may not succeed in renewing or extending these agreements on terms satisfactory to us. Although we have not had any material work stoppages or strikes initiated by our employees during the past decade, they may occur in the future during renewal or extension negotiations or otherwise. A material work stoppage, strike or other union dispute could adversely affect our business, financial condition, results of operations and cash flows.
Our ability to grow and compete effectively depends on protecting our intellectual property. Failure to protect our intellectual property could adversely affect our business.
We believe that our intellectual property, consisting primarily of patents and proprietary know‑how and information, is important to our growth. Our intellectual property portfolio is extensive, with approximately 113 U.S. and foreign patents and pending patent applications, which we believe is more than any of our major competitors in the businesses in which we operate. Failure to protect our intellectual property may result in the loss of the exclusive right to use our technologies. We rely on patent, trademark, copyright and trade secret laws and confidentiality and restricted-use agreements to protect our intellectual property. However, some of our intellectual property is not covered by any patent or patent application or any such agreement. Intellectual property protection does not protect against technological obsolescence due to developments by others or changes in customer needs.
Patents are subject to complex factual and legal considerations. Accordingly, the validity, scope and enforceability of any particular patent can be uncertain. Therefore, we cannot assure that:
•any of the U.S. or non‑U.S. patents now or hereafter owned by us, or that third parties have licensed to us or may in the future license to us, will not be circumvented, challenged or invalidated;
•any of the U.S. or non‑U.S. patents that third parties have non‑exclusively licensed to us, or may non‑exclusively license to us in the future, will not be licensed to others; or
•any of the patents for which we have applied or may in the future apply will be issued at all or with the breadth of claim coverage we seek.
Moreover, patents, even if valid, only provide protection for a specified limited duration. In addition, effective patent, trademark and trade secret protection may be limited or unavailable or we may not apply for it in the United States or in any of the other countries in which we operate.
The protection of our intellectual property rights may be achieved, in part, by prosecuting claims against others who we believe have misappropriated our technology or have infringed upon our intellectual property rights, as well as by defending against misappropriation or infringement claims brought by others against us. Our involvement in litigation to protect or defend our rights in these areas could result in a significant expense to us, adversely affect the development of sales of the related products, and divert the efforts of our technical and management personnel, regardless of the outcome of such litigation.
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We cannot assure that agreements designed to protect our proprietary know‑how and information will not be breached, that we will have adequate remedies for any such breach, or that our strategic alliance suppliers and customers, consultants, employees or others will not assert rights against us with respect to intellectual property arising out of our relationships with them.
Third parties may claim that our products or processes infringe their intellectual property rights, which may cause us to pay unexpected litigation costs or damages or prevent us from selling our products or services.
From time to time, we may become subject to legal proceedings, including allegations and claims of alleged infringement or misappropriation by us of the patents and other intellectual property rights of third parties. We cannot assure you that the use of our patented technology or proprietary know‑how or information does not infringe the intellectual property rights of others. In addition, attempts to enforce our own intellectual property claims may subject us to counterclaims that our intellectual property rights are invalid, unenforceable or are licensed to the party against whom we are asserting the claim or that we are infringing that party’s alleged intellectual property rights. We may also be obligated to indemnify affiliates or other partners who are accused of violating third-parties’ intellectual property rights by virtue of those affiliates or partners’ agreements with us, and this could increase our costs in defending such claims and our damages.
Legal proceedings involving intellectual property rights, regardless of merit, are highly uncertain and can involve complex legal and scientific analyses, can be time consuming, expensive to litigate or settle and can significantly divert resources, even if resolved in our favor. Our failure to prevail in such matters could result in loss of intellectual property rights or judgments awarding substantial damages and injunctive or other equitable relief against us. If we were to be held liable or discover or be notified that our products or processes potentially infringe or otherwise violate the intellectual property rights of others, we may face a loss of reputation and may not be able to exploit some or all of our intellectual property rights or technology. If necessary, we may seek licenses to intellectual property of others. However, we may not be able to obtain the necessary licenses on terms acceptable to us or at all. Our failure to obtain a license from a third-party for that intellectual property necessary for the production or sale of any of our products could cause us to incur substantial liabilities and/or suspend the production or shipment of products or the use of processes requiring the use of that intellectual property. We may be required to substantially re‑engineer our products or processes to avoid infringement.
Any of the foregoing may require considerable effort and expense, result in substantial increases in operating costs, delay or inhibit sales or preclude us from effectively competing in the marketplace, which in turn could have a material adverse effect on our business and financial results.
We currently benefit from U.S. and EU anti-dumping duties and tariffs against certain Chinese and Indian imports that if reduced or not extended could have a material adverse effect on our business, financial condition and results of operations.
These anti-dumping duties and tariffs are generally subject to periodic reviews and challenges, which can result in their revocation or reduction. There can be no assurance that these anti-dumping duties and tariffs will be continued in the future or that such anti-dumping duties and tariffs will adequately combat unfairly traded imports. If these anti-dumping duties and tariffs were to be revoked or reduced in the future, our business, financial condition and results of operations would be adversely impacted.
Implementation of tariffs and changes to or uncertainties related to tariffs and trade agreements could adversely affect our business.
The U.S. government has imposed tariffs on certain foreign goods from a variety of countries and regions, including China and India, that it perceives as engaging in unfair trade practices, and raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods from other countries. In response, many of these foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S. Uncertainties with respect to tariffs, trade agreements or any potential trade wars could negatively affect the global economy and could affect demand for our products and could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, we may lose customers who choose our competitor’s products over our own as a result of such trade barriers. Changes in tariffs and trade barriers could also result in adverse changes in the cost and availability of our raw materials, and our ability to manufacture globally to support global sales which could lead to increased costs that we may not be able to effectively pass on to customers, each of which could materially adversely affect our operating margins, results of operations and cash flows.
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Risks related to our indebtedness
Our indebtedness could limit our financial and operating activities and adversely affect our ability to incur additional debt to fund future needs and our ability to fulfill our obligations under our existing and future indebtedness.
Our credit agreement (as amended, the “2018 Credit Agreement”) currently provides for a $225 million senior secured revolving credit facility (the “2018 Revolving Credit Facility”). As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant in our 2018 Revolving Credit Facility, our operating performance resulted in a reduction of the availability under our 2018 Revolving Credit Facility.
As of December 31, 2025, we had approximately $1.1 billion of secured indebtedness outstanding including borrowings under our new 4.625% notes due 2029 (the “New 4.625% Notes”) and our new 9.875% notes due 2029 (the “New 9.875% Notes”, together with the New 4.625% Notes, the “New Notes”). As of December 31, 2025, we had $106.4 million available for borrowing under the 2018 Revolving Credit Facility (taking into account approximately $9.0 million of outstanding letters of credit issued thereunder).
Our indebtedness could:
•require us to dedicate a substantial portion of our cash flow to the payment of principal and interest, thereby reducing the funds available for operations and future business opportunities;
•make it more difficult for us to satisfy our obligations;
•limit our ability to borrow additional money if needed for other purposes, including working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes, on satisfactory terms or at all;
•limit our ability to adjust to changing economic, business and competitive conditions;
•place us at a competitive disadvantage with competitors who may have less indebtedness or greater access to financing;
•cause us to reduce or delay capital expenditures or sell assets or operations to meet our scheduled debt service obligations;
•make us more vulnerable to a downturn in our operating performance or a decline in general economic conditions; and
•make us more susceptible to changes in credit ratings, which could impact our ability to obtain financing in the future and increase the cost of such financing.
Compliance with our debt obligations under the 2018 Revolving Credit Facility, the New Notes and the Initial First Lien Term Loan Facility (as defined below), and any future indebtedness could materially limit our financial or operating activities, or hinder our ability to adapt to changing industry conditions, which could result in our losing market share, a decline in our revenue or a negative impact on our operating results.
The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes include covenants that could restrict or limit our financial and business operations.
The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes contain a number of restrictive covenants that, subject to certain exceptions and qualifications, restrict or limit our ability and the ability of our subsidiaries to, among other things:
•incur, repay or refinance indebtedness;
•create liens on or sell our assets;
•make investments or engage in mergers or acquisitions;
•pay dividends or repurchase stock; and
•engage in certain affiliate transactions.
The 2018 Revolving Credit Facility also contains certain affirmative covenants and contains a financial covenant that requires us to maintain a senior secured first lien net leverage ratio not greater than 4.00:1.00, tested quarterly, to the extent outstanding
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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.
These covenants and restrictions could affect our ability to operate our business and may limit our ability to react to market conditions or take advantage of potential business opportunities as they arise. Additionally, our ability to comply with these covenants may be affected by events beyond our control, including general economic and credit conditions and industry downturns.
If we fail to comply with the covenants in the 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New 4.625% Notes and the New 9.875% Notes, and are unable to obtain a waiver or amendment, an event of default would result, and the lenders and noteholders could, among other things, declare outstanding amounts due and payable or, with respect to the 2018 Revolving Credit Facility and the Initial First Lien Term Loan Facility (with respect to the Delayed Draw Commitments thereunder), refuse to lend additional amounts to us or require deposit of cash collateral in respect of outstanding letters of credit. If we were unable to repay or pay the amounts due, the lenders under the 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the noteholders could, among other things, proceed against the collateral granted to them to secure the indebtedness, which includes substantially all of our and our U.S. subsidiaries’ assets and certain assets of certain of our non-U.S. subsidiaries.
Risks related to our legal and regulatory environment
Stringent health, safety and environmental laws and regulations applicable to our manufacturing operations and facilities could result in substantial costs related to compliance, sanctions or material liabilities and may affect the availability of raw materials.
We are subject to stringent environmental, health and safety laws and regulations relating to our current and former properties (including former onsite landfills over which we have retained ownership), other properties that neighbor ours or to which we sent wastes for treatment or disposal, as well as our current raw materials, products, and operations. Some of our products (including our raw materials) are subject to extensive environmental and industrial hygiene regulations governing the registration and safety analysis of their component substances. Coal tar pitch, which is classified as a substance of very high concern under the EU’s Registration, Evaluation, Authorization and Restriction of Chemical Regulation (“REACH”) regulations, is used in certain of our processes but in a manner that we believe does not currently require us to obtain a specific authorization under the REACH guidelines. Violations of these laws and regulations, or of the terms and conditions of permits required for our operations, can result in damage claims, reputational harm, the imposition of substantial fines and sanctions and require the installation of costly pollution control or safety equipment or costly changes in operations to limit pollution or decrease the likelihood of injuries. In addition, we are currently conducting remediation and/or monitoring at certain current and former properties and may become subject to material liabilities in the future for the investigation and cleanup of contaminated properties, including with respect to emerging contaminants or for properties on which we have ceased operations. We have been in the past, and could be in the future, subject to claims alleging personal injury, death or property damage resulting from exposure to hazardous substances, accidents or otherwise for conditions creating an unsafe workplace. Further, noncompliance or alleged noncompliance with or stricter enforcement of, or changes in interpretations of, existing laws and regulations, adoption of more stringent new laws and regulations, discovery of previously unknown contamination or imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities or reputational harm that have a material adverse impact on our operations, costs or results of operations. It is also possible that the impact of safety and environmental regulations on our suppliers could affect the availability and cost of our raw materials.
For example, legislators, regulators and others, as well as many companies, are considering ways to reduce emissions of greenhouse gases (“GHGs”) due to scientific, political and public concern that GHG emissions are altering the atmosphere in ways that are affecting, and are expected to continue to affect, the global climate. The EU has established GHG regulations and is revising its emission trading system for the period after 2020 in a manner that may require us to incur additional costs. The United States has required annual reporting of GHG emissions from certain large sources beginning in 2011 and various and regional state efforts to reduce GHG emissions have also been implemented. Further measures in the United States, EU and many other countries, may be enacted in the future. In particular, in December 2015, more than 190 countries participating in the United Nations Framework Convention on Climate Change reached an international agreement related to curbing GHG emissions (the “Paris Agreement”). Further, GHG regulations under the Paris Agreement or otherwise may take the form of a national or international cap‑and‑trade emissions permit system, a carbon tax, emissions controls, reporting requirements, or other regulatory initiatives. For more information, see the section entitled “Business.”
The further regulation of GHG emissions or other environmental regulations in countries in which we operate or market our products could impose additional costs, both direct and indirect, on our business, and on the businesses of our customers and suppliers, such as increased energy and insurance rates, higher taxes, new environmental compliance program expenses,
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including capital improvements, environmental monitoring and the purchase of emission credits, and other administrative costs necessary to comply with current and potential future requirements or limitations that may be imposed, as well as other unforeseen or unknown costs. To the extent that similar requirements and limitations are not imposed globally, this regulation may impact our ability to compete with companies located in countries that do not have these requirements or limitations. We may also experience a change in competitive position relative to industry peers, changes in prices received for products sold and changes to profit or loss arising from increased or decreased demand for our products. The impact of any future GHG regulatory requirements on our global business will be dependent upon the design of the regulatory schemes that are ultimately adopted and, as a result, we are unable to predict their significance to our operations at this time.
Global data and privacy protection laws applicable to us require substantial costs related to compliance, and any failure to comply could result in significant liability to us, including fines and penalties.
We collect data, including personally identifiable information of our employees, in the course of our business activities and transfer such data between our affiliated entities, to and from our business partners and to third‑party service providers, which may be subject to global data privacy laws and cross‑border transfer restrictions. While we take steps to comply with these legal requirements, any changes to such laws may impact our ability to effectively transfer data across borders in support of our business operations and any breach of such laws may lead to administrative, civil or criminal liability, as well as reputational harm to the Company and its employees. For example, the GDPR introduced a number of obligations for subject companies, including obligations relating to data transfers and the security of personal data they process. We take steps to protect the security and integrity of the information we collect, but there is no guarantee that the steps we have taken will prevent inadvertent or unauthorized use or disclosure of such information, or prevent third parties from gaining unauthorized access to this information despite our efforts. Any such incident could result in legal claims or proceedings, liability under laws that protect the privacy of personally identifiable information (including the GDPR) and damage to our reputation.
The cost of ongoing compliance with global data protection and privacy laws and the potential fines and penalties levied in the event of a breach of such laws may have an adverse effect on our business and operations. For example, the GDPR currently provides that supervisory authorities in the EU may impose administrative fines for non‑compliance of up to €20.0 million or 4% of the subject company’s annual, group‑wide turnover (whichever is higher) and individuals who have suffered damage as a result of a subject company’s non‑compliance with the GDPR also have the right to seek compensation from such company. We will need to continue dedicating financial resources and management time to compliance efforts with respect to global data protection and privacy laws, including the GDPR.
Risks related to our common stock
Certain provisions, including in our Amended Certificate of Incorporation and our Amended By-Laws, could hinder, delay or prevent a change in control, which could adversely affect the price of our common stock.
Our Amended Certificate of Incorporation and Amended By-Laws contain provisions that could make it more difficult for a third-party to acquire us without the consent of our Board of Directors, including:
•provisions in our Amended Certificate of Incorporation and Amended By-Laws that prevent stockholders from calling special meetings of our stockholders, except where the Delaware General Corporation Law (“DGCL”) confers the right to fix the date of such meetings upon stockholders;
•advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings;
•provisions in our Amended Certificate of Incorporation provide for a classified Board of Directors such that only one of three classes of directors is elected each year, which prevents our stockholders from replacing the majority of our directors at once;
•no provision in our Amended Certificate of Incorporation or Amended By-Laws provides for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election;
•under our Amended Certificate of Incorporation, our Board of Directors has authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders; and
•nothing in our Amended Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock.
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These provisions may make it difficult and expensive for a third-party to pursue a tender offer, change in control or takeover attempt that is opposed by our Board of Directors. Stockholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to such stockholders. These anti-takeover provisions could substantially impede the ability of stockholders to benefit from a change in control or to change our management and Board of Directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.
Our Amended Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our Amended Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:
•any derivative action or proceeding brought on our behalf;
•any action asserting a breach of fiduciary duty;
•any action asserting a claim against us arising under the DGCL, our Amended Certificate of Incorporation or our Amended By-Laws; and
•any action asserting a claim against us that is governed by the internal-affairs doctrine.
This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find the exclusive forum provision in our Amended Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our business.
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder value. Stock repurchases could also increase the volatility of the trading price of our stock and will diminish our cash reserves.
Although our Board of Directors has authorized a stock repurchase program that does not have an expiration date, the program does not obligate us to acquire any particular amount of shares of common stock, and the stock repurchase program may be suspended or discontinued at any time at our discretion. We did not repurchase any shares of common stock under this program in 2025. We cannot guarantee that the program will be fully consummated or that it will enhance long-term stockholder value. The 2018 Revolving Credit Facility, the Initial First Lien Term Loan Facility and the indentures governing the New Notes limit our ability to make repurchases under the stock repurchase program. The program could affect the trading price of our stock, and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock. In addition, our use of this program will diminish our cash.
Item 1B.Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
Risk Management and Strategy
We have an overarching cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats that includes documented policies and procedures and incorporates a layered cybersecurity defense. We utilize a variety of technologies that are designed to target detection of malicious attempts to infiltrate our information systems. We also utilize an endpoint threat detection and response tool which uses artificial intelligence to alert our managed security service provider. On a regular basis, we hire a third-party cybersecurity service provider that performs a penetration test on our information systems and the Company seeks to address material vulnerabilities that are found. We also utilize a third-party cybersecurity training company to educate our employees about cybersecurity threats. On a regular basis, we send out test phishing emails with a follow up email explaining to end users the “red flags” in these emails. Where appropriate, we utilize dual-factor authentication on our information systems. On an annual basis, we receive system and organization control reports from many of our key external IT vendors as these will reveal material potential security issues these companies have had in the past year.
We have experienced cybersecurity threats to our information technology infrastructure and have experienced non-material cybersecurity incidents, attempts to breach our systems, fraudulent activity and other similar incidents. As of the filing of this Annual Report, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, results of operations, or financial condition. However, future security, privacy breaches, cybersecurity incidents, acts of vandalism or terror, misplaced, corrupted, altered or lost data, programming, human error or other similar events with respect to our information technology systems or processes or the information technology systems or, processes of third-parties that have been entrusted with our information, could have a material adverse effect on our business strategy, financial condition, results of operations or cash flows. Risks related to cybersecurity events are detailed in the section of this Annual Report titled “Risk Factors—Risks related to our business and industry—We may be subject to information technology systems failures, cybersecurity incidents, network disruptions and breaches of data security, which could compromise our information and expose us to liability.”
Governance
The Board of Directors oversees risks from cybersecurity threats through the same framework it uses to oversee the management of our risk exposure in general. Cybersecurity risks, including risks associated with any failure to maintain or upgrade our systems, network disruptions, lost or stolen data, and security and/or privacy breaches with respect to our information technology systems or processes, or the information technology systems or processes of third-parties that have been entrusted with our information, have been specifically incorporated into our enterprise risk management processes. These risks are scored based on impact, likelihood and established controls. Action plans are then established for each of the identified risks and are incorporated into objectives. These risks are then tracked and integrated into reporting and disclosure processes. These risks are reviewed at least annually by a committee made up of representatives from finance, internal audit, treasury, operations, legal and others. Management at least annually provides to the Board of Directors updated information concerning cybersecurity threats, as well as management’s efforts to mitigate such threats. The Board of Directors then is responsible for overseeing that management responds appropriately. The Audit Committee, which is made up solely of independent directors, is responsible for overseeing Company policies and practices with respect to cybersecurity issues.
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Item 2.Properties
The Company uses the following principal physical properties in connection with the manufacturing, sales and services of graphite electrodes and pins, and corporate administrative operations, all of which serve its only reportable segment, Industrial Materials. The total capacity utilization, reflecting production volume as a percentage of production capacity, of our graphite electrode manufacturing facilities in Calais, France, Monterrey, Mexico and Pamplona, Spain, was 63% and 55% for the years ended December 31, 2025 and December 31, 2024, respectively. Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. Our properties located in St. Marys, Pennsylvania, Port Lavaca, Texas, Monterrey, Mexico and Pamplona, Spain are encumbered by our Initial First Lien Term Loan Facility, 2018 Credit Agreement, our New 4.625% Notes and our New 9.875% Notes. The Company considers that its properties are generally in good condition, well maintained, and are suitable and adequate to carry on the Company’s business.
| Location of Facility | Primary Use | Owned or Leased | ||||||||||||
| Americas | ||||||||||||||
| Brooklyn Heights, Ohio | Corporate Headquarters | Leased | ||||||||||||
| Monterrey, Mexico | Graphite Electrode and Pin Manufacturing Facility, Sales and Service Office | Owned | ||||||||||||
| St. Marys, Pennsylvania | Graphite Electrode Manufacturing Facility, Sales and Service Office | Owned | ||||||||||||
| Port Lavaca, Texas | Petroleum Needle Coke Manufacturing Facility (Seadrift) | Owned | ||||||||||||
| Salvador, Bahia, Brazil | Graphite Electrode Machine Shop, Sales and Service Office | Owned | ||||||||||||
| Europe | ||||||||||||||
| Calais, France | Graphite Electrode Manufacturing Facility, Sales and Service Office | Owned | ||||||||||||
| Pamplona, Spain | Graphite Electrode Manufacturing Facility, Sales and Service Office | Owned | ||||||||||||
| Bussigny, Switzerland | Global Sales and Production Planning Office | Leased | ||||||||||||
Item 3.Legal Proceedings
We are involved in various investigations, lawsuits, claims, demands, labor disputes and other legal proceedings, including with respect to environmental and human exposure or other personal injury matters, arising out of or incidental to the conduct of our business. While it is not possible to determine the ultimate disposition of each of these matters and proceedings, we do not believe that their ultimate disposition will have a material adverse effect on our financial position, results of operations or cash flows. Additionally, we are involved in the following legal proceedings.
Brazil Clause IV
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). Companies in Brazil have settled claims arising out of these provisions and, in May 2015, the litigation was remanded by the Brazilian Supreme Court in favor of the employees union. After denying an interim appeal by the Bahia region employers on June 26, 2019, the Brazilian Supreme Court finally ruled in favor of the employees union on September 26, 2019. The employers union has determined not to seek annulment of such decision. Separately, on October 1, 2015, a related action was filed by current and former employees against our subsidiary in Brazil to recover amounts under such provisions, plus interest thereon, which amounts together with interest could be material to us. If the Brazilian Supreme Court proceeding above had been determined in favor of the employers union, it would also have resolved this proceeding in our favor. In the first quarter of 2017, the state court initially ruled in favor of the employees. We appealed this state court ruling, and the appellate court issued a decision in our favor on May 19, 2020. The employees have further appealed and, on December 16, 2020, the court upheld the decision in favor of GrafTech Brazil. On February 22, 2021, the employees filed a further appeal and, on April 28, 2021, the court rejected the employees’ appeal in favor of GrafTech Brazil. The employees filed a further appeal and on September 12, 2022, we filed our response in opposition. We intend to vigorously defend our position. As of December 31, 2025, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought.
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Item 4.Mine Safety Disclosures
Not applicable.
Supplemental Item. Information about our Executive Officers
The following table sets forth information with respect to our current executive officers, including their ages.
| Name | Age | Position | ||||||||||||
| Timothy K. Flanagan | 48 | Chief Executive Officer and President | ||||||||||||
| Rory O’Donnell | 48 | Chief Financial Officer and Senior Vice President | ||||||||||||
| Jeremy J. Clemens | 53 | Vice President, Operations | ||||||||||||
| Andrew J. Renacci | 38 | Chief Legal Officer and Corporate Secretary | ||||||||||||
| Iñigo Perez Ortiz | 53 | Senior Vice President, Commercial and CTS | ||||||||||||
Timothy K. Flanagan became Chief Executive Officer and President in March 2024. Mr. Flanagan had previously served as the Company’s Interim Chief Executive Officer and President since November 2023. He joined the Company as Chief Financial Officer, Senior Vice President of Finance and Treasurer in November 2021. Mr. Flanagan previously served as Executive Vice President, Chief Financial Officer of Cleveland-Cliffs Inc. (NYSE: CLF) “Cleveland-Cliffs”, a flat-rolled steel producer and supplier of iron ore pellets, from January 2017 to February 2019. Prior to being promoted to Executive Vice President, Chief Financial Officer of Cleveland-Cliffs, he held a variety of financial leadership roles at Cleveland-Cliffs Inc. since joining in 2008, including being responsible for the accounting, reporting, treasury and financial planning and analysis functions and serving as the Vice President, Corporate Controller and Chief Accounting Officer from March 2012 to December 2016. Before joining the Company, Mr. Flanagan served as Chief Financial Officer of Benesch, Friedlander, Coplan & Aronoff LLP, an AmLaw 200 law firm, from June 2019 to November 2021. He has a Bachelor of Science degree in Accounting from the University of Dayton.
Rory O’Donnell became Chief Financial Officer and Senior Vice President in September 2024. Mr. O’Donnell previously served as Senior Vice President, Controller and Principal Accounting Officer of Covia Corporation, a provider of mineral-based and material solutions for the industrial and energy markets, since February 2019. While at Covia Corporation, he also served as Interim Chief Financial Officer from August 2022 to July 2023. At Covia Corporation, Mr. O’Donnell was responsible for internal and external financial reporting and compliance, tax planning and compliance, and managing working capital, among other responsibilities. Prior to Covia Corporation, Mr. O’Donnell served as Senior Vice President, Controller at Signet Jewelers Limited (NYSE: SIG), a retailer of diamond jewelry, from 2014 to 2019. Before joining Signet Jewelers Limited, Mr. O’Donnell served as Director, Accounting & Reporting at Cleveland-Cliffs. Mr. O’Donnell began his career at KPMG LLP, a professional services firm. Mr. O’Donnell has a Bachelor of Science degree in Accounting from the University of Dayton and is a Certified Public Accountant licensed in Ohio.
Jeremy J. Clemens became Vice President, Operations in April 2024. Mr. Clemens joined GrafTech in October 2021 as Director of Continuous Improvement and then served as the Vice President of Supply Chain beginning in November 2022. Mr. Clemens previously served as the Director of Operations and Supply Chain of Applied Industrial Technologies (NYSE: AIT), a provider of advanced motion, power, control and automation solutions to critical industrial infrastructure, from 2017 to 2021. Prior to that, Mr. Clemens was the Vice President of Operations of Phillips Manufacturing, a manufacturer of components for the construction and building industry, from 2012 to 2017. Mr. Clemens holds a Bachelor of Science degree in Mechanical Engineering from the University of Dayton.
Andrew J. Renacci was appointed Chief Legal Officer and Corporate Secretary in May 2025. Mr. Renacci had previously served as the Company’s Interim Chief Legal Officer and Corporate Secretary since January 2025. Prior to that, Mr. Renacci served as GrafTech’s Senior Corporate Counsel from April 2021 to January 2025, where he was responsible for advising GrafTech in matters related to corporate governance, executive compensation, capital markets, sustainability, human capital, securities laws, stock exchange rules and regulations, periodic reporting responsibilities and strategic transactions. Prior to joining GrafTech, Mr. Renacci spent approximately nine years in the corporate and securities group at Squire Patton Boggs (US) LLP, an international law firm, where he advised clients in the chemicals, manufacturing and entertainment and recreation industries on similar matters. Mr. Renacci holds a bachelor’s degree from the University of Michigan and a Juris Doctor from Cleveland State University College of Law. He is admitted to practice law in the State of Ohio.
Iñigo Perez Ortiz joined the Company as Senior Vice President, Commercial and CTS in February 2020. Mr. Perez most recently served as Vice President, Europe and Asia, Sales and Customer Service at Alcoa, a global industry leader in bauxite,
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alumina, and aluminum products, a position he held since 2017. Previously at Alcoa, Mr. Perez was Commercial Director, Europe and Asia Pacific from 2011 to 2017, Sales Manager, Europe from 2007 to 2011 and Sales Office Manager from 2002 to 2007. Prior to his career at Alcoa, Mr. Perez served in a variety of senior commercial roles at Autopulit S.A., Warner Electric and Babcock Wilcox Espanola, S.A. Mr. Perez holds a Master in Industrial Plants Management, Lean Manufacturing and Engineering degree from Polytechnic University of Barcelona, an Executive Master of Business Administration degree from Instituto de Empresa and a Mining Engineer degree from the University of the Basque Country.
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PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is listed on the New York Stock Exchange (“NYSE”) under the trading symbol “EAF.”
Holders
As of December 31, 2025, there were eight registered holders of record of our common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
Dividend Policies and Restrictions
In the first and second quarters of 2023, we paid a quarterly cash dividend of $0.01 per common share. On August 2, 2023, our Board of Directors elected to suspend the quarterly cash dividend of $0.01 per common share.
There can be no assurance that we will resume paying dividends in the future in these amounts or at all. Our Board of Directors may change the timing and amount of any future dividend payments, if reinstated, or eliminate the payment of future dividends in its sole discretion, without any prior notice to our stockholders. Our ability to pay dividends will depend upon many factors, including our financial position and liquidity, results of operations, legal requirements, restrictions that are imposed by the terms of our current credit facilities, restrictions that may be imposed by the terms of our future credit facilities and other debt obligations and other factors deemed relevant by our Board of Directors.
For further discussion of the factors that may affect our business and our ability to pay dividends, see “Risk Factors—Risks related to our business and industry” in Part 1, Item 1A, Risk Factors.
Equity Compensation Plan Information
The information about our common stock that may be issued under our Omnibus Equity Incentive Plan as of December 31, 2025 is set forth in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Report under the caption “Equity Compensation Plan Information.”
Issuer Purchases of Equity Securities
On July 31, 2019, we announced that our Board of Directors approved the repurchase of up to $100.0 million of our common stock in open market purchases, including under Rule 10b5-1 and/or Rule 10b-18 plans. On November 4, 2021, we announced that our Board of Directors approved the repurchase of an additional $150.0 million of our common stock under this program. Approximately $99.0 million of the total $250.0 million authorized remained available for stock repurchases as of December 31, 2025. The stock repurchase program has no expiration date. During the quarter ended December 31, 2025, there was no share repurchase activity.
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Performance Graph
The following graph compares the cumulative total shareholder return of our common stock, the Russell 2000 Index and the NYSE Arca Steel Index (TR). The graph assumes the investing of $100 from December 31, 2020 through December 31, 2025, with dividends assumed to be reinvested when received. The performance reflected below is not necessarily indicative of future performance.
Item 6.[Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and the accompanying notes and other financial information appearing elsewhere in this Annual Report. Discussion and analysis regarding our financial condition and results of operations for 2024 as compared to 2023 is included in Item 7 of our Annual Report for the year-ended December 31, 2024, filed with the SEC on February 14, 2025. Information in this section is intended to assist the reader in obtaining an understanding of our Consolidated Financial Statements, the changes in certain key items in those financial statements from year-to-year, the primary factors that accounted for those changes, any known trends or uncertainties that we are aware of that may have a material effect on our future performance, as well as how certain accounting principles affect our Consolidated Financial Statements. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those forward-looking statements as a result of many factors, including those discussed in “Risk Factors” and elsewhere in this Annual Report.
Reverse Stock Split
On August 29, 2025 (the “Effective Date”), we effected a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-10 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 10 shares of common stock issued and outstanding, or held by the Company as treasury stock, immediately prior to the Effective Date were automatically combined and converted into one new share of common stock. The Reverse Stock Split was implemented primarily to maintain compliance with the NYSE’s minimum bid price requirement. In addition, the number of authorized shares of the Company’s common stock and preferred stock were proportionally reduced.
The Reverse Stock Split is retroactively reflected in the consolidated financial statements for all periods presented in the accompanying financial statements, including all share and per share amounts. The Reverse Stock Split did not effect the total dollar amount of common stock or total stockholders’ deficit.
Operational and Commercial Update
Sales volume for 2025 was approximately 109 thousand MT and increased 6% compared to 2024.
In 2025, our weighted-average realized price was approximately $4,100 per MT and decreased approximately 13% compared to 2024. The year-over-year decline reflected the substantial completion in 2024 of our LTAs, as well as persistent competitive pressures across all of our principal commercial regions. These impacts were partially mitigated by our initiative to actively shift more sales volume to the United States, which remains the strongest region for graphite electrode pricing.
Production volume for 2025 was approximately 112 thousand MT, increasing 15% compared to 2024.
Capital Structure and Liquidity
As of December 31, 2025, we had liquidity of $340.0 million, consisting of $101.6 million of availability under our 2018 Revolving Credit Facility, $100.0 million of availability under our Initial First Lien Term Loan Facility (with respect to the Delayed Draw Commitments thereunder, which we intend to draw in full prior to its expiration in July 2026) and cash and cash equivalents of $138.4 million. As of December 31, 2025, we had total debt of approximately $1.1 billion.
Outlook
In 2025, global (excluding China) steel production was relatively flat compared to 2024, as geopolitical uncertainty, particularly as it relates to global trade and tariffs, had a significant impact on broader steel industry trends. In addition, steel exports from China reached a record high in 2025, further constraining steel production in the rest of the world.
As we enter 2026, industry analyst projections indicate a modest recovery in global (excluding China) steel demand is expected for the year. In the United States, where the steel industry has experienced relative stability, steel production is expected to increase further in the near-term, supported by favorable domestic trade policies. In the European Union, where the steel industry has been relatively challenged, we continue to see signs of a potential recovery. In addition to the anticipated growth in steel demand within the European Union in 2026, steel production in Europe is expected to be further supported by increased trade protections as we proceed through the year. Reflecting these dynamics, hot-rolled coil steel pricing is expected to increase in 2026 in most regions.
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As we closely monitor these developments and assess their potential impact on the commercial environment for graphite electrodes, we currently project that global (excluding China) demand for graphite electrodes will increase slightly in 2026, compared to 2025, including projected demand increases within all of the key regions in which we operate.
For GrafTech, we expect to achieve a 5-10% year-over-year increase in our sales volume for 2026 on a full-year basis, as we continue to gain market share reflecting our compelling customer value proposition and our ongoing focus on delivering on the needs of our customers. Of our anticipated 2026 sales volume, to date, we have approximately 65% committed in our order book following the completion of the customer negotiations that occur in the fourth quarter of each year. Specific to the first quarter of 2026, we expect a year-over-year increase in our sales volume of approximately 10%.
While we are encouraged by our ongoing strong volume performance, industry-wide pricing levels remain unsustainably low. Challenging pricing dynamics, most notably aggressive competitor pricing behavior, increased further during the fourth quarter of 2025 and we expect that pressure to continue into 2026. As a result, we will continue to execute actions to accelerate our path to normalized levels of profitability and support our ability to invest in our business. This includes further optimizing our order book by continuing to shift the geographic mix of our sales volume to regions where there is an opportunity to capture higher average selling prices, particularly in the United States, while also maintaining our disciplined approach of foregoing volume opportunities where margins are unacceptably low. We estimate that the higher mix of United States volume in 2025 compared to the prior year boosted our weighted-average selling price approximately $135 per MT on a full-year basis.
As it relates to costs, we will continue to expand on our initiatives to improve our cost structure. With our 2025 cost performance, we have achieved a cumulative decline in our cash cost of goods sold per metric ton of 31% since the end of 2023. As we look to implement additional measures to enhance the efficiency of our production schedules and further optimize production costs, we expect to build on this achievement with a low single-digit percentage-point decline in our cash cost of goods sold per MT for 2026 compared to 2025.
Further, we will continue to prudently manage our working capital levels and capital expenditures. For 2026, reflecting our anticipated volume growth, we expect a modest increase in our net working capital levels for the full year, most notably in the first half of the year reflecting the timing of planned plant maintenance and other timing factors. We anticipate our full-year 2026 capital expenditures will be approximately $35 million, which we believe is an adequate level to maintain our assets at current utilization levels.
Longer term, we remain confident that the steel industry’s efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes. We also anticipate the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, to accelerate driven by its utilization in producing synthetic graphite used in anodes for lithium-ion batteries that power electric vehicles and energy storage systems. We believe that the near-term actions we are taking, supported by an industry-leading position and our sustainable competitive advantages, including our substantial vertical integration into petroleum needle coke via our Seadrift facility, will optimally position GrafTech to benefit from that long-term growth.
Key metrics used by management to measure performance
In addition to measures of financial performance presented in our Consolidated Financial Statements in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain other financial measures and operating metrics to analyze the performance of our Company. The “non‑GAAP” financial measures consist of EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow and cash cost of goods sold per MT, which help us evaluate growth trends, establish budgets, assess operational efficiencies and evaluate our overall financial performance. The key operating metrics consist of sales volume, production volume, production capacity and capacity utilization.
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Key financial measures
| (in thousands, except per share amounts) | 2025 | 2024 | ||||||||||||
| Net sales | $ | 504,134 | $ | 538,782 | ||||||||||
| Net loss | (219,835) | (131,165) | ||||||||||||
Loss per share(1)(2) | (8.45) | (5.09) | ||||||||||||
EBITDA(3) | (11,374) | (11,411) | ||||||||||||
Adjusted net loss(3) | (167,076) | (106,144) | ||||||||||||
Adjusted loss per share(1)(2)(3) | (6.42) | (4.12) | ||||||||||||
Adjusted EBITDA(3) | (9,088) | 1,632 | ||||||||||||
(1) All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements for further discussion.
(2) Loss per share represents diluted loss per share. Adjusted loss per share represents adjusted diluted loss per share.
(3) Non-GAAP financial measure; see below for information and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Key operating measures
In addition to measures of financial performance presented in accordance with GAAP, we use certain operating metrics to analyze the performance of our company. The key operating metrics consist of sales volume, production volume, production capacity and capacity utilization. These metrics align with management's assessment of our revenue performance and profit margin, and will help investors understand the factors that drive our profitability.
Sales volume reflects the total volume of graphite electrodes sold for which revenue has been recognized during the period. For a discussion of our revenue recognition policy, see “—Critical accounting policies—Revenue recognition” in this section. Sales volume helps investors understand the factors that drive our net sales.
Production volume reflects graphite electrodes produced during the period. Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary. Capacity utilization reflects production volume as a percentage of production capacity. Production volume, production capacity and capacity utilization help us understand the efficiency of our production and evaluate cost of goods sold.
| (in thousands, except percentages) | 2025 | 2024 | ||||||||||||
| Sales volume (MT) | 109.2 | 103.2 | ||||||||||||
| Production volume (MT) | 112.3 | 97.3 | ||||||||||||
Production capacity (MT)(1)(2) | 178.0 | 178.0 | ||||||||||||
Capacity utilization(3) | 63 | % | 55 | % | ||||||||||
(1) Production capacity reflects expected maximum production volume during the period depending on product mix and expected maintenance outage. Actual production may vary
(2) Includes graphite electrode facilities in Calais, France; Monterrey, Mexico; and Pamplona, Spain.
(3) Capacity utilization reflects production volume as a percentage of production capacity.
Non-GAAP financial measures
In addition to providing results that are determined in accordance with GAAP, we have provided certain financial measures that are not in accordance with GAAP. EBITDA, adjusted EBITDA, adjusted net loss, adjusted loss per share, free cash flow, adjusted free cash flow and cash cost of goods sold per MT are non-GAAP financial measures.
We define EBITDA, a non‑GAAP financial measure, as net loss plus interest expense, minus interest income, plus income taxes and depreciation and amortization. We define adjusted EBITDA, a non-GAAP financial measure, as EBITDA adjusted by any pension and other post-employment benefit (“OPEB”) expenses, rationalization and rationalization-related expenses, non‑cash gains or losses from foreign currency remeasurement of non‑operating assets and liabilities in our foreign subsidiaries where the functional currency is the U.S. dollar, stock-based compensation expense, proxy contest expenses and Tax Receivable Agreement adjustments. Adjusted EBITDA is the primary metric used by our management and our Board of Directors to establish budgets and operational goals for managing our business and evaluating our performance.
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We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it is useful to present to investors, because we believe that it facilitates evaluation of our period‑to‑period operating performance by eliminating items that are not operational in nature, allowing comparison of our recurring core business operating results over multiple periods unaffected by differences in capital structure, capital investment cycles and fixed asset base. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance and debt‑service capabilities.
Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• adjusted EBITDA does not reflect our cash expenditures for capital equipment or other contractual commitments,
including any capital expenditure requirements to augment or replace our capital assets;
• adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
• adjusted EBITDA does not reflect tax payments or the income tax benefit that may represent a reduction in cash available to us;
• adjusted EBITDA does not reflect expenses relating to our pension and OPEB plans;
• adjusted EBITDA does not reflect rationalization or rationalization-related expenses;
• adjusted EBITDA does not reflect stock-based compensation expense;
• adjusted EBITDA does not reflect proxy contest expenses;
• adjusted EBITDA does not reflect Tax Receivable Agreement adjustments; and
• other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
We define adjusted net loss, a non‑GAAP financial measure, as net loss, excluding the items used to calculate adjusted EBITDA and further excluding debt modification costs, less the tax effect of those adjustments and non-cash income tax expense related to the establishment of a deferred tax valuation allowance. We define adjusted loss per share, a non‑GAAP financial measure, as adjusted net loss divided by the weighted average diluted common shares outstanding during the period.
We believe adjusted net loss and adjusted loss per share are useful to present to investors because we believe that they assist investors’ understanding of the underlying operational profitability of the Company.
We define free cash flow, a non-GAAP financial measure, as net cash provided by or used in operating activities less capital expenditures. We define adjusted free cash flow, a non-GAAP financial measure, as free cash flow adjusted by payments made for debt modification costs. We use free cash flow and adjusted free cash flow as critical measures in the evaluation of liquidity in conjunction with related GAAP amounts. We also use these measures when considering available cash, including for decision-making purposes related to dividends and discretionary investments. Further, these measures help management, the Board of Directors, and investors evaluate the Company's ability to generate liquidity from operating activities.
We define cash cost of goods sold per MT, a non-GAAP financial measure, as cost of goods sold less depreciation and amortization less cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes and less rationalization-related expenses, with this total divided by our sales volume measured in MT. We believe this is an important measure as it is used by our management and Board of Directors to evaluate our costs on a per MT basis.
In evaluating these non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to the adjustments in the reconciliations presented below. Our presentations of these non-GAAP financial measures should not be construed as suggesting that our future results will be unaffected by these expenses or any unusual or non‑recurring items. When evaluating our performance, you should consider these non-GAAP financial measures alongside other measures of financial performance and liquidity, including our net loss, loss per share, cash flow from operating activities, cost of goods sold and other GAAP measures.
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The following tables reconcile our non-GAAP key financial measures to the most directly comparable GAAP measures:
| Reconciliation of Net Loss to Adjusted Net Loss | ||||||||||||||
| (dollars in thousands; except per share data) | 2025 | 2024 | ||||||||||||
| Net loss | $ | (219,835) | $ | (131,165) | ||||||||||
| Diluted loss per common share: | ||||||||||||||
Net loss per share(1) | $ | (8.45) | $ | (5.09) | ||||||||||
Weighted average common shares outstanding(1) | 26,004,964 | 25,766,825 | ||||||||||||
| Net loss | $ | (219,835) | $ | (131,165) | ||||||||||
| Adjustments, pre-tax: | ||||||||||||||
Pension and OPEB expenses(2) | (1,129) | 2,270 | ||||||||||||
Rationalization expenses(3) | — | 3,156 | ||||||||||||
Rationalization-related expenses(4) | — | 2,655 | ||||||||||||
Foreign currency remeasurement(5) | 2,254 | (1,949) | ||||||||||||
Stock-based compensation expense(6) | 4,952 | 6,035 | ||||||||||||
Proxy contest expenses(7) | — | 752 | ||||||||||||
Tax Receivable Agreement adjustment(8) | (3,791) | 124 | ||||||||||||
Debt modification costs(9) | 6,293 | 18,369 | ||||||||||||
| Total non-GAAP adjustments pre-tax | $ | 8,579 | $ | 31,412 | ||||||||||
Valuation allowance adjustment10) | (42,624) | — | ||||||||||||
Income tax impact on non-GAAP adjustments(11) | (1,556) | 6,391 | ||||||||||||
| Adjusted net loss | $ | (167,076) | $ | (106,144) | ||||||||||
(1)All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements for further discussion.
(2)Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience. We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year.
(3)Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024.
(4)Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024.
(5)Non-cash losses (gains) from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar.
(6)Non-cash expense for stock-based compensation awards.
(7)Expenses associated with our proxy contest.
(8)Prior to 2025, represents expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that have been utilized. In 2025, represents the write-off of the remaining liability for pre-IPO tax assets that are not expected to be realized.
(9)Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Consolidated Statements of Operations.
(10)Represents non-cash income tax expense recorded in the second quarter of 2025 related to the establishment of a full valuation allowance against the Company’s U.S. and Switzerland deferred tax assets.
(11)The tax impact on the non-GAAP adjustments.
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| Reconciliation of Loss Per Share to Adjusted Loss Per Share | ||||||||||||||
| 2025 | 2024 | |||||||||||||
Loss per share(1) | $ | (8.45) | $ | (5.09) | ||||||||||
| Adjustments per share: | ||||||||||||||
Pension and OPEB expenses(2) | (0.04) | 0.09 | ||||||||||||
Rationalization expenses(3) | — | 0.12 | ||||||||||||
Rationalization-related expenses(4) | — | 0.10 | ||||||||||||
Foreign currency remeasurement(5) | 0.08 | (0.07) | ||||||||||||
Stock-based compensation expense(6) | 0.19 | 0.23 | ||||||||||||
Proxy contest expenses(7) | — | 0.03 | ||||||||||||
Tax Receivable Agreement adjustment(8) | (0.14) | — | ||||||||||||
Debt modification costs(9) | 0.24 | 0.71 | ||||||||||||
| Total non-GAAP adjustments pre-tax per share | 0.33 | 1.21 | ||||||||||||
Valuation allowance adjustment(10) | (1.64) | — | ||||||||||||
Income tax impact on non-GAAP adjustments per share(11) | (0.06) | 0.24 | ||||||||||||
| Adjusted loss per share | $ | (6.42) | $ | (4.12) | ||||||||||
(1)All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements for further discussion.
(2)Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience. We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year.
(3)Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024.
(4)Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024.
(5)Non-cash losses (gains) from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar.
(6)Non-cash expense for stock-based compensation awards.
(7)Expenses associated with our proxy contest.
(8)Prior to 2025, represents expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that have been utilized. In 2025, represents the write-off of the remaining liability for pre-IPO tax assets that are not expected to be realized.
(9)Debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Consolidated Statements of Operations.
(10)Represents non-cash income tax expense recorded in the second quarter of 2025 related to the establishment of a full valuation allowance against the Company’s U.S. and Switzerland deferred tax assets.
(11)The tax impact on the non-GAAP adjustments.
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| Reconciliation of Net Loss to Adjusted EBITDA | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Net loss | $ | (219,835) | $ | (131,165) | ||||||||||
| Add: | ||||||||||||||
| Depreciation and amortization | 61,643 | 62,245 | ||||||||||||
| Interest expense | 104,057 | 85,313 | ||||||||||||
| Interest income | (6,632) | (5,701) | ||||||||||||
| Income taxes | 49,393 | (22,103) | ||||||||||||
| EBITDA | (11,374) | (11,411) | ||||||||||||
| Adjustments: | ||||||||||||||
Pension and OPEB expenses(1) | (1,129) | 2,270 | ||||||||||||
Rationalization expenses(2) | — | 3,156 | ||||||||||||
Rationalization-related expenses(3) | — | 2,655 | ||||||||||||
Foreign currency remeasurement(4) | 2,254 | (1,949) | ||||||||||||
Stock-based compensation expense(5) | 4,952 | 6,035 | ||||||||||||
Proxy contest expenses(6) | — | 752 | ||||||||||||
Tax Receivable Agreement adjustment(7) | (3,791) | 124 | ||||||||||||
| Adjusted EBITDA | $ | (9,088) | $ | 1,632 | ||||||||||
(1)Net periodic benefit cost for our pension and OPEB plans, including a mark-to-market adjustment, representing actuarial gains and losses that result from the remeasurement of plan assets and obligations due to changes in assumptions or experience. We recognize the actuarial gains and losses in connection with the annual remeasurement in earnings in the fourth quarter of each year.
(2)Severance and contract termination costs associated with the cost rationalization and footprint optimization plan announced in February 2024.
(3)Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024.
(4)Non-cash losses (gains) from foreign currency remeasurement of non-operating assets and liabilities of our non-U.S. subsidiaries where the functional currency is the U.S. dollar.
(5)Non-cash expense for stock-based compensation awards.
(6)Expenses associated with our proxy contest.
(7)Prior to 2025, represents expense adjustment for future payment to our sole pre-IPO stockholder for tax assets that have been utilized. In 2025, represents the write-off of the remaining liability for pre-IPO tax assets that are not expected to be realized.
| Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow and Adjusted Free Cash Flow | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Net cash used in operating activities | $ | (81,616) | $ | (40,093) | ||||
| Capital expenditures | (38,885) | (34,309) | ||||||
| Free cash flow | (120,501) | (74,402) | ||||||
Debt modification costs(1) | 6,001 | 18,249 | ||||||
| Adjusted free cash flow | $ | (114,500) | $ | (56,153) | ||||
(1)Cash payments of debt modification costs related to the December 2024 debt transactions, which are recognized in interest expense on the Consolidated Statements of Operations and recognized in net cash used in operating activities on the Consolidated Statements of Cash Flows.
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| Reconciliation of Cost of Goods Sold to Cash Cost of Goods Sold per MT | ||||||||
| (dollars in thousands) | 2025 | 2024 | ||||||
| Cost of goods sold | $ | 501,496 | $ | 533,757 | ||||
| Less: | ||||||||
Depreciation and amortization(1) | 55,224 | 55,602 | ||||||
Cost of goods sold - by-products and other(2) | 30,512 | 32,801 | ||||||
Rationalization-related expenses(3) | — | 2,655 | ||||||
| Cash cost of goods sold | 415,760 | 442,699 | ||||||
| Sales volume (in thousands of MT) | 109.2 | 103.2 | ||||||
| Cash cost of goods sold per MT | $ | 3,807 | $ | 4,290 | ||||
(1) Reflects the portion of depreciation and amortization that is recognized in cost of goods sold.
(2) Primarily reflects cost of goods sold associated with the portion of our sales that consists of deliveries of by-products of the manufacturing processes.
(3) Other non-cash costs, primarily inventory and fixed asset write-offs, associated with the cost rationalization and footprint optimization plan announced in February 2024.
Results of Operations
Results of operations for 2025 as compared to 2024
The tables presented in our period-over-period comparisons summarize our Consolidated Statements of Operations and illustrate key financial indicators used to assess the consolidated financial results. Throughout our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), insignificant changes may be deemed not meaningful and are generally excluded from the discussion.
| Increase/ Decrease | % Change | |||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||||||||||||||
| Net sales | $ | 504,134 | $ | 538,782 | $ | (34,648) | (6) | % | ||||||||||||||||||
| Cost of goods sold | 501,496 | 533,757 | (32,261) | (6) | % | |||||||||||||||||||||
| Lower of cost or market inventory valuation adjustment | 18,315 | 24,878 | (6,563) | (26) | % | |||||||||||||||||||||
| Gross loss | (15,677) | (19,853) | 4,176 | (21) | % | |||||||||||||||||||||
| Research and development | 6,475 | 5,706 | 769 | 13 | % | |||||||||||||||||||||
| Selling and administrative expenses | 54,914 | 46,510 | 8,404 | 18 | % | |||||||||||||||||||||
| Rationalization expenses | — | 3,156 | (3,156) | NM | ||||||||||||||||||||||
| Operating loss | (77,066) | (75,225) | (1,841) | 2 | % | |||||||||||||||||||||
| Other income, net | (4,049) | (1,569) | (2,480) | 158 | % | |||||||||||||||||||||
| Interest expense | 104,057 | 85,313 | 18,744 | 22 | % | |||||||||||||||||||||
| Interest income | (6,632) | (5,701) | (931) | 16 | % | |||||||||||||||||||||
| Loss before income taxes | (170,442) | (153,268) | (17,174) | 11 | % | |||||||||||||||||||||
| Income tax expense (benefit) | 49,393 | (22,103) | 71,496 | (323) | % | |||||||||||||||||||||
| Net loss | $ | (219,835) | $ | (131,165) | $ | (88,670) | 68 | % | ||||||||||||||||||
NM = Not Meaningful.
Net sales decreased $34.6 million, or 6%, in 2025 compared to 2024. The decline primarily reflected a 13% decrease in our weighted-average realized price, partially offset by a 6% increase in sales volume.
Cost of goods sold decreased $32.3 million, or 6%, in 2025 compared to 2024. Our ongoing initiatives to reduce our production costs resulted in an 11% reduction in our cash costs on a per MT basis for the year ended December 31, 2025 compared to 2024. The prior year included the recognition of an incremental $18.8 million of fixed manufacturing costs (including depreciation) related to low production levels. In addition, inventory written down in prior periods due to the lower of cost or
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market (“LCM”) inventory valuation adjustments had a $3.2 million favorable impact on cost of goods sold in 2025 compared to 2024. These decreases were partially offset by the impact of increased volume.
LCM inventory valuation adjustment represents a write-down of inventory recorded in 2025 and 2024. The net realizable value of certain of our inventories fell below their carrying amounts as of December 31, 2025 and 2024, and as a result, we recorded LCM inventory valuation adjustments of $18.3 million and $24.9 million, respectively, in order to state our inventories at market.
Selling and administrative expenses increased $8.4 million, or 18%, in 2025 compared to 2024. In 2024, this included $9.2 million for the reimbursement of legal fees in connection with the favorable outcome of an arbitration, which was recorded as a reduction in selling and administrative expenses. Excluding this one-time reimbursement, selling and administrative expenses decreased approximately $1.2 million.
Rationalization expenses represent severance and contract termination costs, incurred in 2024, related to the cost rationalization and footprint optimization plan announced in February 2024.
Other income, net increased $2.5 million, or 158% in 2025, compared to 2024. In 2025, we recognized $2.9 million of mark-to-market gains on our pension and OPEB plans compared to mark-to-market losses of $0.7 million in 2024. In addition, 2025 included a $3.8 million gain related to the write-off of the remaining Tax Receivable Agreement liability. These items were partially offset by the recognition of $2.3 million of foreign currency remeasurement losses in 2025 compared to $1.9 million of foreign currency remeasurement gains recognized in 2024.
Interest expense increased $18.7 million, or 22%, in 2025 compared to 2024. Interest expense for 2025 included a full year of interest expense incurred on our Initial First Lien Term Loan Facility and our Delayed Draw First Lien Term Loan Facility which was issued in December 2024. In addition, interest expense in 2024 included $7.4 million of gains amortized out of accumulated other comprehensive income related to interest rate swaps that matured in 2024. These increases were partially offset by a $12.1 million reduction in debt modification costs in 2025 compared to 2024. See Note 7, “Interest Expense,” to the Consolidated Financial Statements for additional details.
Income Tax Expense (Benefit). The following table summarizes the income tax expense (benefit) in 2025 and 2024:
| (dollars in thousands) | 2025 | 2024 | |||||||||
| Income tax expense (benefit) | $ | 49,393 | $ | (22,103) | |||||||
| Loss before income taxes | $ | (170,442) | $ | (153,268) | |||||||
| Effective income tax rate | (29.0) | % | 14.4 | % | |||||||
The difference in effective income tax rate from 2025 to 2024 is primarily due to the recording deferred income tax expense of $42.6 million relating to establishing full valuation allowances against the Company’s previously realizable U.S. and Switzerland deferred tax assets in 2025.
Currency Translation and Transactions
We translate the assets and liabilities of our non‑U.S. subsidiaries into U.S. dollars for consolidation and reporting purposes in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters. Foreign currency translation adjustments are generally recorded as part of stockholders’ deficit and identified as part of accumulated other comprehensive loss on the Consolidated Balance Sheets until such time as their operations are sold or substantially or completely liquidated.
We account for our Russian, Swiss, Luxembourg, United Kingdom and Mexican subsidiaries using the U.S. dollar as the functional currency, as sales and purchases are predominantly U.S. dollar‑denominated. Our remaining subsidiaries use their local currency as their functional currency.
We also record foreign currency transaction gains and losses from non‑permanent intercompany loan balances as part of cost of goods sold.
Significant changes in currency exchange rates impacting us are described under “Effects of Changes in Currency Exchange Rates” and “Results of Operations” in this section.
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Effects of Changes in Currency Exchange Rates
When the currencies of non‑U.S. countries in which we have a manufacturing facility decline (or increase) in value relative to the U.S. dollar, this has the effect of reducing (or increasing) the U.S. dollar equivalent cost of goods sold and other expenses with respect to those facilities. In certain countries in which we have manufacturing facilities, and in certain export markets, we sell in currencies other than the U.S. dollar. Accordingly, when these currencies increase (or decline) in value relative to the U.S. dollar, this has the effect of increasing (or reducing) net sales. The result of these effects is to increase (or decrease) operating and net loss.
Many of the countries in which we have a manufacturing facility or commercial activities have been subject to significant economic and political changes, which have significantly impacted currency exchange rates. We cannot predict changes in currency exchange rates in the future or whether those changes will have net positive or negative impacts on our net sales, cost of goods sold or net loss.
The impact of these changes in the average exchange rates of other currencies against the U.S. dollar on our net sales was an increase of $5.6 million in 2025, a decrease of $1.1 million in 2024 and an increase of $1.5 million in 2023, compared to the prior years.
The impact of these changes on our cost of goods sold was an increase of $3.6 million in 2025, a decrease of $8.5 million in 2024 and an increase of $12.4 million in 2023.
As part of our cash management, we also have intercompany loans between our subsidiaries. These loans are deemed to be temporary and, as a result, remeasurement gains and losses on these loans are recorded as currency gains or losses in cost of goods sold on the Consolidated Statements of Operations.
We have in the past and may in the future use various financial instruments to manage certain exposures to risks caused by currency exchange rate changes, as described under “Quantitative and Qualitative Disclosures about Market Risk.”
Liquidity and Capital Resources
Our sources of funds have consisted principally of cash flow from operations and debt, including our credit facilities (subject to continued compliance with the financial covenants and representations). Our uses of those funds (other than for operations) have consisted principally of capital expenditures, debt repayment, dividends, share repurchases and other general purposes. On an ongoing basis, we expect to evaluate and consider strategic transactions, including acquisitions, divestitures, joint ventures, equity investments, debt issuances, refinancing of our existing debt or repurchases of our outstanding debt obligations in open market or privately negotiated transactions, as well as other strategic transactions. These transactions may require cash expenditures, which may be funded through a combination of cash on hand, proceeds from the issuance of debt or from equity offerings. An improving economy, while resulting in improved results of operations, could increase our cash requirements to purchase inventories, make capital expenditures and fund payables and other obligations until increased accounts receivable are converted into cash. A downturn, including any recession or deterioration of the steel or graphite electrode markets, could significantly and negatively impact our results of operations and cash flows, which, coupled with increased borrowings, could negatively impact our credit ratings, our ability to comply with debt covenants, our ability to secure additional financing and the cost and availability of such financing. Disruptions in the U.S. and international financial markets could adversely affect our liquidity and the cost and availability of financing to us in the future.
We believe that we have adequate liquidity to meet our needs for at least the next twelve months. As of December 31, 2025, we had liquidity of $340.0 million, consisting of $101.6 million of availability under our 2018 Revolving Credit Facility (after giving effect to $13.8 million of letters of credit), $100.0 million of availability under our Initial First Lien Term Loan Facility (with respect to the Delayed Draw Commitments thereunder) and cash and cash equivalents of $138.4 million. As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder (see below and Note 5, “Debt and Liquidity”), our operating performance as of December 31, 2025 and 2024 resulted in a reduction of the availability under the 2018 Revolving Credit Facility. We had long-term debt of $1.1 billion as of December 31, 2025 and 2024. As of December 31, 2024, we had liquidity of $464.2 million, consisting of cash and cash equivalents of $256.2 million, $108.0 million of availability under our 2018 Revolving Credit Facility (after giving effect to $7.4 million of letters of credit) and $100.0 million of availability under our Initial First Lien Term Loan Facility (with respect to the Delayed Draw Commitments thereunder).
As of December 31, 2025 and 2024, $45.6 million and $60.0 million, respectively, of our cash and cash equivalents were located outside of the U.S. We repatriate funds from our foreign subsidiaries through intercompany dividends and loan repayment. All of our subsidiaries face the customary statutory limitation that distributed dividends may not exceed the amount of accumulated earnings. Upon repatriation to the United States, the foreign source portion of dividends we receive from our
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foreign subsidiaries is not subject to U.S. federal income tax because the amounts were either previously taxed or are exempted from tax by Section 245A of the Internal Revenue Service Code (the “Code”).
Cash flow and plans to manage liquidity. Our cash flow typically fluctuates significantly between quarters due to various factors. These factors include customer order patterns, fluctuations in working capital requirements, timing of tax and interest payments and other factors. During the fourth quarter of 2024, the Company consummated a series of financing transactions to extend the maturities on its outstanding debt and help to manage its liquidity. These transactions are described under “Financing Transactions” in this section.
Uses of Liquidity
In July 2019, our Board of Directors authorized a program to repurchase up to $100.0 million of our outstanding common stock. In November 2021, our Board of Directors authorized the repurchase of an additional $150.0 million of stock repurchases under this program. We may purchase shares from time to time on the open market, including under Rule 10b5-1 and/or Rule 10b-18 plans. The amount and timing of repurchases are subject to a variety of factors including liquidity, stock price, applicable legal requirements, other business objectives and market conditions. In 2025, we did not repurchase any shares of our common stock. As of December 31, 2025, we had $99.0 million remaining under our stock repurchase authorization. Our ability to repurchase shares is restricted by certain covenants in our debt instruments.
In order to seek to minimize our credit risks, we may reduce our sales of, or refuse to sell (except for prepayment, cash on delivery or under letters of credit or parent guarantees), our products to some customers and potential customers. Our unrecovered trade receivables worldwide have not been material during the last two years individually or in the aggregate.
In the event that operating cash flows fail to provide sufficient liquidity to meet our business needs, including capital expenditures, any such shortfall would need to be made up by borrowings under the First Lien Term Loans and 2018 Revolving Credit Facility, to the extent available, or other liquidity options described above. The Company also maintains access to credit and capital markets and may incur additional debt or issue equity securities from time to time, which may provide an additional source of liquidity. However, there can be no guarantee that we would be able to access the credit or capital markets on commercially satisfactory terms or at all.
Cash flows
The following table summarizes our cash flow activities:
| (in thousands) | 2025 | 2024 | |||||||||||||||
| Cash flow (used in) provided by: | |||||||||||||||||
| Operating activities | $ | (81,616) | $ | (40,093) | |||||||||||||
| Investing activities | (38,331) | (34,209) | |||||||||||||||
| Financing activities | (341) | 155,718 | |||||||||||||||
| Net change in cash and cash equivalents | $ | (120,288) | $ | 81,416 | |||||||||||||
Net cash used in operating activities increased $41.5 million in 2025 compared to 2024. The increase was primarily due to a $40.2 million decrease in cash provided by working capital. Cash flow used for inventories was $8.6 million in 2025, primarily due to the timing of raw material receipts near the end of the period, as well as lower than anticipated fourth quarter sales volume. This compares to cash flow provided by inventories in 2024 of $68.8 million, which reflected the Company’s initiatives to manage working capital levels. Cash flow used for accounts payable and accruals decreased $21.2 million in 2025, compared to 2024 primarily due to the timing of payments. Cash flow provided by accounts receivable increased $19.3 million compared to 2024 primarily due to improved collections and less investment due to lower weighted-average selling prices in the fourth quarter of 2025 compared to the prior year.
Net cash used in investing activities increased $4.1 million in 2025 compared to 2024 primarily due to the timing of capital expenditures made in the ordinary course of business.
Net cash (used in) provided by financing activities was a cash use of $0.3 million in 2025, compared to a source of cash of $155.7 million in 2024. The change was primarily due to the issuance of $175.0 million of our First Lien Term Loans in 2024, partially offset by the $18.9 million of cash paid for deferred financing fees in 2024 related to the issuance.
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Financing Transactions
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 the New 4.625% Notes and the New 9.875% Notes, respectively.
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 (as amended, 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, the Guarantors, GrafTech Finance, 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,
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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 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, 2025 and 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; 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.
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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 continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding Existing 4.625% Notes may declare all of the Existing 4.625% Senior Notes to be due and payable immediately. We were in compliance with all of our debt covenants as of December 31, 2025 and 2024.
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, 2025 and 2024.
Following the Exchange Offer, approximately $3.8 million aggregate principal amount of Existing 9.875% Notes remains outstanding.
Initial First Lien Term Loan Facility; Delayed Draw First Lien Term Loan 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 Company expects to draw the $100 million of available Delayed Draw Commitments prior to its expiration.
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
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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.
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 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
In February 2018, the Company entered into a credit agreement (as amended, the “2018 Credit Agreement”), which provided for (i) a $2,250 million senior secured term facility (the “2018 Term Loan Facility”) after giving effect to the June 2018 amendment (the “First Amendment”) that increased the aggregate principal amount of the 2018 Term Loan Facility from $1,500 million to $2,250 million and (ii) a $330 million senior secured revolving credit facility after giving effect to the May 2022 amendment that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the “2018 Revolving Credit Facility”). GrafTech Finance Inc. (“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à.r.l. (“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) were co-borrowers under the 2018 Revolving Credit Facility. 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, 2025, 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 revolving 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, 2025 and 2024, the availability under our 2018 Revolving Credit Facility was $101.6 million and $108.0 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, 2025 and 2024 resulted in our inability to access the full amount of commitments under the facility. As of December 31, 2025 and 2024, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $13.8 million and $7.4 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.
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
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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.
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, 2025 and 2024.
Material Cash Requirements. The following table summarizes our contractual and other material cash obligations as of December 31, 2025:
| Payments Due by Year Ending December 31, | |||||||||||||||||||||||||||||
| (in thousands) | Total | 2026 | 2027-2028 | 2029-2030 | 2031+ | ||||||||||||||||||||||||
| Contractual and Other Obligations | |||||||||||||||||||||||||||||
| Long-term debt (a) | $ | 1,125,000 | $ | — | $ | 5,588 | $ | 1,119,412 | $ | — | |||||||||||||||||||
| Interest on long-term debt (b) | 341,279 | 86,913 | 170,155 | 84,211 | — | ||||||||||||||||||||||||
| Total contractual obligations | 1,466,279 | 86,913 | 175,743 | 1,203,623 | — | ||||||||||||||||||||||||
| Pension plan contributions (c) | 4,027 | 4,027 | — | — | — | ||||||||||||||||||||||||
| Total contractual and other obligations (d) | $ | 1,470,306 | $ | 90,940 | $ | 175,743 | $ | 1,203,623 | $ | — | |||||||||||||||||||
(a)Represents our total debt from our New and Existing 9.875% Notes, our New and Existing 4.625% Notes and our Initial First Lien Term Loans (see "Financing Transactions" in this section for full details of these obligations).
(b)Represents estimated interest payments on the Existing 9.875% Notes and the Existing 4.625% Notes through December 15, 2028, interest payments on the New 9.875% Notes and the New 4.625% Notes through December 23, 2029, as well as estimated interest payments on our Initial First Lien and Delayed Draw Term Loans through 2029.
(c)Represents estimated contributions under our defined benefit pension plans. Contributions in future periods will be dependent upon regulatory requirements, the plans' funded ratios, plan investment performance, discount rates, actuarial assumptions, plan amendments, our contribution objectives and other factors. We anticipate funding those contributions with cash on hand or cash generated from operations. It is not practical to estimate the required contributions beyond 2026 at the present time.
(d)In addition, letters of credit of $13.8 million were issued under the 2018 Revolving Credit Facility as of December 31, 2025.
Critical accounting policies
Critical accounting policies are those that require difficult, subjective or complex judgments by management, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. We use and rely on estimates in determining the economic useful lives of our assets, obligations under our employee benefit plans, provisions for doubtful accounts, provisions for restructuring charges and contingencies, tax valuation allowances, evaluation of other intangible assets, pension and OPEB and various other recorded or disclosed amounts, including inventory valuations. Estimates require us to use our judgment. While we believe that our estimates for these matters are reasonable, if the actual amount is significantly different than the estimated amount, our assets, liabilities or results of operations may be overstated or understated. The following accounting policies are deemed to be critical.
Impairment of long‑lived assets. We may record impairment losses on long‑lived assets used in operations when events and circumstances indicate that the assets might be impaired and the future undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Assets to be disposed are reported at the lower of the carrying amount or fair value less estimated costs to sell. Estimates of the future cash flows are subject to significant uncertainties and assumptions. If the actual value is significantly less than the estimated fair value, our assets may be overstated. Future events and circumstances, some of which are described below, may result in an impairment charge:
•new technological developments that provide significantly enhanced benefits over our current technology;
•significant negative economic or industry trends;
•changes in our business strategy that alter the expected usage of the related assets; and
43
•future economic results that are below our expectations used in the current assessments.
As of December 31, 2025, we tested our long-lived assets for impairment and determined that their carrying value was recoverable.
Accounting for income taxes. We are required to estimate our income taxes in each of the jurisdictions in which we are subject to taxation. This process requires us to make the following assessments:
•estimate our actual current tax liability in each jurisdiction;
•estimate our temporary differences resulting from differing treatment of items for tax and accounting purposes (which result in deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) that we include within the Consolidated Balance Sheets); and
•assess the likelihood that our DTAs will be recovered from future taxable income and, if we believe that recovery is not more likely than not, a valuation allowance is established.
If our estimates are incorrect, our DTAs or DTLs may be overstated or understated.
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. Consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence include a strong earnings history, an event or events that would increase the Company's taxable income or reduce expenses, or tax planning strategies that would create the ability to realize deferred tax assets. Examples of negative evidence include cumulative losses in recent years or a history of tax attributes expiring unused. In circumstances where the negative evidence outweighs the positive evidence, the Company has established or maintained valuation allowances on the jurisdiction’s net deferred tax assets. 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.
At the end of the second quarter of 2025, the Company’s cumulative losses in the United States and Switzerland in recent years, when assessed with other positive and negative evidence, represented sufficient negative evidence to require full valuation allowances on its U.S. and Switzerland previously realizable deferred tax assets.
As of December 31, 2025, we had a valuation allowance of $92.2 million against certain DTAs, including full valuation allowances of $69.9 million and $20.3 million against our U.S. and Switzerland DTAs, respectively. Until we determine that we will generate sufficient jurisdictional taxable income to realize our net operating losses and DTAs, we will continue to maintain a valuation allowance.
Revenue recognition. Revenue is recognized when a customer obtains control of promised goods, in an amount that reflects the consideration which we expect to receive in exchange for those goods.
To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, the following five steps are performed: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five‑step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Our revenue streams primarily consist of short-term purchase agreements, multi-year purchase agreements and spot sales directly with steel manufacturers. The promises of delivery of graphite electrodes represent the distinct performance obligations to which the contract consideration is allocated, based upon the electrode stand‑alone selling prices for the class of customers at the time the agreements are executed. The performance obligations are considered to be satisfied at a point in time when control of the electrodes has been transferred to the customer. The Company has elected to treat the transportation of the electrodes from our premises to the customer’s facilities as a fulfillment activity, and outbound freight cost is accrued when the graphite electrode performance obligation is satisfied. Any variable consideration is recognized up to its unconstrained amount (i.e., up to the amount for which it is probable that a significant reversal of the variable revenue will not occur).
See Note 2, "Revenue from Contracts with Customers," to the Consolidated Financial Statements for additional information.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, primarily from changes in interest rates and currency exchange rates. From time to time, we enter into transactions that have been authorized according to documented policies and procedures in order to manage these risks. These transactions primarily relate to the financial instruments described below. Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not use financial instruments for trading purposes.
With respect to the First Lien Term Loans and if we draw under our 2018 Revolving Credit Facility, we are exposed to changes in interest rates. Borrowings under the 2018 Revolving Credit Facility bear interest (i) with respect to the new revolving loans denominated in U.S. dollars, at the option of GrafTech Finance, Adjusted Term SOFR plus 3.50% per annum or ABR plus 2.50% per annum and (ii) with respect to new revolving loans denominated in euros, the Adjusted EURIBOR Rate plus 3.50% per annum. 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.
Our exposure to changes in currency exchange rates results primarily from:
•sales made by our subsidiaries in currencies other than local currencies;
•raw material purchases made by our foreign subsidiaries in currencies other than local currencies; and
•investments in and intercompany loans to our foreign subsidiaries and our share of the earnings of those subsidiaries, to the extent denominated in currencies other than the U.S. dollar.
Currency rate management. We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency derivatives, which include, but are not limited to, forward exchange contracts and purchased currency options, attempt to hedge global currency exposures. Forward exchange contracts are agreements to exchange different currencies at a specified future date and at a specified rate. Purchased currency options are instruments which give the holder the right, but not the obligation, to exchange different currencies at a specified rate at a specified date or over a range of specified dates. Forward exchange contracts and purchased currency options are carried at fair value.
Our outstanding foreign currency derivatives were in net unrealized pre-tax gain positions of $0.2 million and $0.1 million as of December 31, 2025 and 2024, respectively.
Sensitivity analysis. We use sensitivity analysis to quantify potential impacts that market rate changes may have on the underlying exposures as well as on the fair values of our derivatives. The sensitivity analysis for the derivatives represents the hypothetical changes in value of the hedge position and does not reflect the related gain or loss on the forecasted underlying transaction.
As of December 31, 2025, a 10% appreciation or depreciation in the value of the U.S. dollar against foreign currencies from the prevailing market rates would have impacted the fair value of our foreign currency hedge portfolio $1.5 million.
A hypothetical increase or decrease in interest rates of 100 basis points would have impacted our interest expense by $1.8 million in 2025.
For further information related to the financial instruments described above, see Note 1, “Business and Summary of Significant Accounting Policies” and Note 8, “Fair Value Measurements and Derivative Instruments” in the Notes to the Consolidated Financial Statements for additional information.
45
Item 8. Financial Statements and Supplementary Data
| Page | |||||
See the Table of Contents located at the beginning of this Report for more detailed page references to information contained in this Item.
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of GrafTech International Ltd.:
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of GrafTech International Ltd. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, 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, 2025, 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, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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.
Valuation Allowance for Deferred Tax Assets - Refer to Note 13 to the financial statements
Critical Audit Matter Description
As described within Note 13 to the financial statements, 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. Future realization of deferred tax assets depends on the existence of sufficient taxable income within the carryback or carryforward period of the appropriate character under the relevant tax law. Sources of taxable income include future reversals of deferred tax assets and liabilities, future taxable income (exclusive of the reversals of deferred tax assets and liabilities), taxable income in prior carryback years (if permitted under the tax law, and tax planning strategies). Consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. At the end of the second quarter of 2025, the Company’s 3-year cumulative losses in the U.S. and Switzerland, when assessed with other positive and negative evidence, represented sufficient negative evidence to require full valuation allowances on its U.S. and Switzerland previously realizable deferred tax assets. As of December 31, 2025, the Company had valuation allowances recorded in the U.S. and Switzerland of $69.9 million and $20.3 million, respectively.
We identified the evaluation of the Company’s assessment to record a valuation allowance in the current year as a critical audit matter due to the materiality and complex nature of the auditor judgment.
How the Critical Audit Matter Was Addressed in the Audit
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 income taxes, including management’s controls over the realizability of deferred tax assets.
•We obtained an understanding of management's estimate regarding the valuation allowance on the deferred tax assets including the method, assumptions, and data used to develop the estimate by reviewing managements prepared memorandum and supporting schedules.
•We tested the company’s assessment of the realizability of deferred tax assets and the resulting valuation allowance, our audit procedures included, among others, testing the evaluation and accuracy of the Company’s 3 year cumulative losses in both the US and Switzerland and the Company's calculation of future taxable income from the reversal of existing temporary taxable differences.
•We involved our tax professionals to assist in evaluating the application of tax law in the Company's consideration of the sources of future taxable income.
/s/ DELOITTE & TOUCHE LLP
February 13, 2026
We have served as the Company’s auditor since 2015.
48
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts and notes receivable, net of allowance for doubtful accounts of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment | |||||||||||
| Less: accumulated depreciation | |||||||||||
| Net property, plant and equipment | |||||||||||
| Deferred income taxes | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued income and other taxes | |||||||||||
| Other accrued liabilities | |||||||||||
| Tax Receivable Agreement | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other long-term obligations | |||||||||||
| Deferred income taxes | |||||||||||
| Tax Receivable Agreement long-term | |||||||||||
| Commitments and contingencies – Note 12 | |||||||||||
| Stockholders’ deficit: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ deficit | ( | ( | |||||||||
| Total liabilities and stockholders’ deficit | $ | $ | |||||||||
See accompanying Notes to the Consolidated Financial Statements
(1) All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” for further information.
49
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Dollars in thousands, except per share data)
| 2025 | 2024 | 2023 | |||||||||||||||
| STATEMENTS OF OPERATIONS | |||||||||||||||||
| Net sales | $ | $ | $ | ||||||||||||||
| Cost of goods sold | |||||||||||||||||
| Lower of cost or market inventory valuation adjustment | |||||||||||||||||
| Gross (loss) profit | ( | ( | |||||||||||||||
| Research and development | |||||||||||||||||
| Selling and administrative expenses | |||||||||||||||||
| Rationalization expenses | |||||||||||||||||
| Goodwill impairment charges | |||||||||||||||||
| Operating loss | ( | ( | ( | ||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||
| Interest expense | |||||||||||||||||
| Interest income | ( | ( | ( | ||||||||||||||
| Loss before income taxes | ( | ( | ( | ||||||||||||||
| Income tax expense (benefit) | ( | ( | |||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
| Basic loss per common share: | |||||||||||||||||
Net loss per share(1) | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average common shares outstanding(1) | |||||||||||||||||
| Diluted loss per common share: | |||||||||||||||||
Net loss per share(1) | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average common shares outstanding(1) | |||||||||||||||||
| STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
Foreign currency translation adjustments, net of tax of $ | ( | ||||||||||||||||
Commodities, interest rate and foreign currency derivatives, net of tax of $ | ( | ( | ( | ||||||||||||||
| Other comprehensive income (loss), net of tax: | ( | ( | |||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | |||||||||||
See accompanying Notes to the Consolidated Financial Statements
(1) All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” for further information.
50
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flow from operating activities: | |||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
| Adjustments to reconcile net loss to cash (used in) provided by operations: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Deferred income tax expense (benefit) | ( | ( | |||||||||||||||
| Non-cash stock-based compensation expense | |||||||||||||||||
| Non-cash interest expense (benefit) | ( | ||||||||||||||||
| Goodwill impairment charges | |||||||||||||||||
| Lower of cost or market inventory valuation adjustment | |||||||||||||||||
| Other adjustments | ( | ||||||||||||||||
| Net change in working capital* | |||||||||||||||||
| Change in Tax Receivable Agreement | ( | ( | ( | ||||||||||||||
| Net cash (used in) provided by operating activities | ( | ( | |||||||||||||||
| Cash flow from investing activities: | |||||||||||||||||
| Capital expenditures | ( | ( | ( | ||||||||||||||
| Proceeds from the sale of fixed assets | |||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Cash flow from financing activities: | |||||||||||||||||
| Proceeds from Initial First Lien Term Loan due 2029 | |||||||||||||||||
| Proceeds from issuance of long-term debt, net of original issuance discount | |||||||||||||||||
| Principal payments on long-term debt | ( | ( | |||||||||||||||
| Debt issuance and modification costs | ( | ( | |||||||||||||||
| Interest rate swap settlements | |||||||||||||||||
| Payments for taxes related to net share settlement of equity awards | ( | ( | ( | ||||||||||||||
| Dividends paid | ( | ||||||||||||||||
| Principal payments under finance lease obligations | ( | ( | ( | ||||||||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||||||||
| Cash and cash equivalents at end of period | $ | $ | $ | ||||||||||||||
See accompanying Notes to the Consolidated Financial Statements
51
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
| 2025 | 2024 | 2023 | |||||||||||||||
| Supplemental disclosures of cash flow information: | |||||||||||||||||
| Net cash paid during the periods for: | |||||||||||||||||
Interest(1) | $ | $ | $ | ||||||||||||||
| Income taxes | |||||||||||||||||
| Non-cash investing activities: | |||||||||||||||||
| Change in capital expenditures in accounts payable | ( | ( | |||||||||||||||
| Non-cash financing activities: | |||||||||||||||||
Exchange Existing | ( | ||||||||||||||||
Exchange Existing | ( | ||||||||||||||||
New | |||||||||||||||||
New | |||||||||||||||||
| * Net change in working capital due to the following components: | |||||||||||||||||
| Accounts and notes receivable, net | $ | $ | $ | ||||||||||||||
| Inventories | ( | ||||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Income taxes payable | ( | ( | ( | ||||||||||||||
| Accounts payable and accruals | ( | ( | ( | ||||||||||||||
| Interest payable | ( | ||||||||||||||||
| Net change in working capital | $ | $ | $ | ||||||||||||||
(1) Includes cash received/paid from the monthly settlements and the termination of our interest rate swaps in the year ended December 31, 2023.
See accompanying Notes to the Consolidated Financial Statements
52
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY
(Dollars in thousands, except share data)
Issued Shares of Common Stock(1) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ (Deficit) Equity | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax of $( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Commodity, interest rate and foreign currency derivatives reclassification adjustments, net of tax of $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax of $( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Total other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Payments for taxes related to net share settlement of equity awards | ( | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends paid ($ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency derivatives income, net of tax of $( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Commodity, interest rate and foreign currency derivatives reclassification adjustments, net of tax of $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax of $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Total other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Payments for taxes related to net share settlement of equity awards | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency derivatives income, net of tax of $( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Commodity, interest rate and foreign currency derivatives reclassification adjustments, net of tax of $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Total other comprehensive loss | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Payments for taxes related to net share settlement of equity awards | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
See accompanying Notes to the Consolidated Financial Statements
(1) All share and per share data for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” for further information.
53
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except as otherwise noted)
(1)Business and Summary of Significant Accounting Policies
Discussion of Business and Structure
GrafTech is a leading manufacturer of high-quality graphite electrode products essential to the production of EAF steel and other ferrous and non-ferrous metals. References herein to “GTI,” “we,” “our,” or “us” refer collectively to the Company and its subsidiaries. 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: graphite electrodes and petroleum needle coke products. Petroleum needle coke is our key raw material used in the production of our graphite electrodes. The Company's vision is to provide highly engineered graphite electrode products, services and solutions to electric arc furnace operators.
Summary of Significant Accounting Policies
The Consolidated Financial Statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
Cash and Cash Equivalents
Cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or less. These investments include certificates of deposit, money market funds and commercial paper.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods.
To achieve this core principle, the following five steps are performed: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) a performance obligation is satisfied.
The Company sells the majority of its products directly to steel manufacturers located in various jurisdictions. The Company’s contracts consist of short-term purchase agreements, multi-year purchase agreements and spot sales. Collectability is assessed based on the customer’s ability and intention to pay, reviewing a variety of factors including the customer’s historical payment experience and published credit and financial information.
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 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. In most cases, control transfer is deemed to happen at the delivery point of the products defined under the incoterms, usually at time of loading the truck or the vessel. 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.
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods to the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer are excluded from the transaction price.
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. Historically, these
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
reversals have been insignificant. Additionally, when termination fees are invoiced under certain provisions of our revenue contracts, they are accounted for as an element of variable consideration that is constrained, i.e., not recognized, until collected.
Contracts that contain multiple distinct performance obligations require an allocation of the transaction price to each performance obligation based on a relative stand-alone selling price basis. The Company regularly reviews market conditions and internally approved pricing guidelines to determine stand-alone selling prices for the different types of its customer contracts. The stand-alone prices as known at contract inception are utilized as the basis to allocate the transaction price to the distinct performance obligations. The allocation of the transaction price to the performance obligations remains unchanged if stand-alone selling prices change after contract inception.
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is principally determined using the first-in, first-out (“FIFO”) or average cost, which approximates FIFO, methods. Elements of cost in inventory include raw materials, energy costs, direct labor, manufacturing overhead and depreciation of manufacturing fixed assets. In each of the last three years, the market value of our inventories fell below their carrying amounts, and as a result, we recorded LCM inventory valuation adjustments of $18.3 million, $24.9 million and $12.4 million in 2025, 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. The Company recognizes abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) as current period charges. As a result of reduced production levels, we expensed fixed manufacturing costs of $3.3 million, $22.1 million and $62.4 million that would have otherwise been inventoried in 2025, 2024 and 2023, respectively.
Property, Plant and Equipment
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 (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. The ranges of estimated useful lives are as follows:
| Years | |||||
| Buildings | |||||
| Land improvements | |||||
| Machinery and equipment | |||||
| Furniture and fixtures | |||||
The carrying value of fixed assets is assessed when events and circumstances indicating impairment are present. 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 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 47.7 million in 2023. Accounts payable associated with capital expenditures totaled $10.2 million and $10.0 million as of December 31, 2025 and 2024, respectively.
Leases
The Company determines if an arrangement is a lease at inception. When an arrangement contains a lease, the Company then determines if it meets any of the criteria to be classified as a finance lease. Leases with a term of 12 months or less are not recorded on the balance sheet.
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Right of Use (“RoU”) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. RoU assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. In order to compute the lease liability, when the rate implicit in the lease is not readily determinable, the Company discounts the lease payments using its estimated incremental borrowing rate for secured fixed rate debt over the same term, derived from information available at the lease commencement date. The Company's lease terms include the option to extend the lease when it is reasonably certain that option will be exercised.
Lease and non-lease components are treated as a single lease component, except for leases of warehouse space where they will be accounted for separately. 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
Trade accounts receivable primarily arise from sales of goods to customers and distributors in the normal course of business.
Allowance for Doubtful Accounts
Debt Issuance Costs
Deferred financing costs are amortized over the terms of the related debt using the effective interest method. If the terms of renewed or modified debt instruments are deemed to be substantially different, all unamortized financing costs associated with the modified debt are charged to earnings in the current period. If the terms are not substantially different, the costs associated with the renewal are capitalized and amortized over the remaining term of the debt instrument. For modifications affecting a line of credit, fees paid to a creditor and any third party costs will be capitalized and amortized over the remaining term of the new arrangement. Any unamortized deferred financing costs associated with the old arrangement are either deferred and amortized over the life of the new arrangement or written off, depending upon the nature of the modification and cost. 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. In 2025, the Company incurred $6.3 million of post-closure 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
We do not use derivative financial instruments for trading purposes. They are used to manage well-defined commercial risks associated with commodity purchases, interest rates and currency exchange rate risks. On the date that a derivative contract for a hedging instrument is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge), (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge), (3) a hedge of a net investment in a foreign operation (a net investment hedge) or (4) a contract not designated as a hedging instrument.
For a fair value hedge, both the effective and ineffective portions of the change in the fair value of the derivative are 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. 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. 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. For contracts not designated as hedging instruments, changes in fair value are adjusted through the statement of operations.
We formally document our hedge relationships, including the identification of the hedging instruments and the related hedged items, as well as our risk management objectives and strategies for undertaking the hedge transaction. Derivatives are recorded
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes
We file a consolidated U.S. federal income tax return for GTI and its eligible domestic subsidiaries. Our non-U.S. subsidiaries file income tax returns in their respective local jurisdictions. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax benefit carry forwards. Deferred tax assets and liabilities at the end of each period are determined using enacted tax rates. A valuation allowance is established or maintained, when, based on currently available information and other factors, it is more likely than not that all or a portion of a deferred tax asset will not be realized.
Under the guidance on accounting for uncertainty in income taxes, we recognize the benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also provides guidance on derecognition, classification, interest and penalties on income taxes, and accounting in interim periods.
The Company treats taxes due on future U.S. inclusions in taxable income related to Global Intangible Low Tax Income (“GILTI”) as a current period expense when incurred. See Note 13, “Income Taxes” for more information.
Retirement Plans and Post-Employment Benefits
We use actuarial methods and assumptions to account for our defined benefit pension plans and our post-employment benefits. We recognize in earnings the change in the fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each year with a mark-to-market adjustment (“MTM Adjustment”) and whenever a plan is remeasured (e.g., due to a significant curtailment, settlement, etc.). Pension and post-employment benefits expense includes the MTM Adjustment, actuarially computed cost of benefits earned during the current service period, the interest cost on accrued obligations, the expected return on plan assets and adjustments due to plan settlements and curtailments. Contributions to the qualified U.S. retirement plan are made in accordance with the requirements of the Employee Retirement Income Security Act of 1974.
Additional information with respect to benefits plans is set forth in Note 11, “Retirement Plans and Post-Employment Benefits.”
Stock-based Compensation
The Company recognizes stock-based compensation expense based on the grant date fair value of the award over the period during which an employee or director is required to provide service in exchange for the award. Stock-based awards include stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) and deferred share units (”DSUs”). The fair value of RSUs and DSUs is primarily based on the closing market price of a share of the Company's common stock on the date of grant, modified as appropriate to take into account the features of such grants. The fair value of PSUs is determined using a Monte Carlo valuation on the date of grant. Stock options are granted with an exercise price equal to the closing price of the Company's common shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. The Company accounts for forfeitures as they occur. See Note 3, “Stock-Based Compensation” for additional information.
Environmental, Health and Safety Matters
Our operations are governed by laws addressing protection of the environment and worker safety and health. These laws provide for civil and criminal penalties and fines, as well as injunctive and remedial relief, for noncompliance and require remediation at sites where hazardous substances have been released into the environment.
We have been in the past, and may become in the future, the subject of formal or informal enforcement actions or proceedings regarding noncompliance with these laws or the remediation of Company-related substances released into the environment. Historically, such matters have been resolved by negotiation with regulatory authorities resulting in commitments to
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
compliance, abatement or remediation programs and in some cases payment of penalties. Historically, neither the commitments undertaken nor the penalties imposed on us have been material.
Environmental considerations are part of all significant capital expenditure decisions. , compliance and management expenses were approximately $6.6 million, $9.4 million and $12.1 million in 2025, 2024 and 2023, respectively. A charge to income is recorded when it is probable that a liability has been incurred and the cost can be reasonably estimated. The accrued liability relating to environmental expenses was $3.7 million and $3.9 million as of December 31, 2025 and 2024, respectively.
Foreign Currency Translation and Remeasurement
We translate the financial statements of foreign subsidiaries, whose local currency is their functional currency, to U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for each period for revenues, expenses, gains and losses. Differences arising from exchange rate changes are included in AOCL on the Consolidated Balance Sheets until such time as the operations of such non-U.S. subsidiaries are sold or substantially or completely liquidated.
For our Russian, Swiss, Luxembourg, United Kingdom and Mexican subsidiaries, whose functional currency is the U.S. 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 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.
We have non-dollar denominated intercompany loans between some of our foreign subsidiaries. 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 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 cost of goods sold, on the Consolidated Statements of Operations.
Other Intangible Assets and Goodwill
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 accelerated depreciation method. The estimated useful lives for each major category of amortizable intangible assets are:
| Years | |||||
| Trade names | |||||
| Technology and know-how | |||||
| Customer-related intangibles | |||||
The carrying value of intangible assets is assessed when events and circumstances indicating impairment are present. 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. Additional information about goodwill and other intangibles is set forth in Note 6, “Other Intangible Assets and Goodwill.”
Major Maintenance and Repair Costs
We perform scheduled major maintenance of the storage and processing units at our Seadrift plant (referred to as “overhaul”). Time periods between overhauls vary by unit. We also perform significant maintenance and repair shutdown of the plant (referred to as “turnaround”) every other year.
Costs of overhauls and turnarounds include plant personnel, contract services, materials and rental equipment. We defer these costs when incurred and use the straight-line method to amortize them over the period of time estimated to lapse until the next scheduled overhaul of the applicable storage or processing unit. Under this policy, $0.3 million was deferred in 2025 and $4.1 million was deferred in 2024. Amortization of deferred maintenance costs totaled $7.1 million, $6.2 million and $7.5 million in
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Loss per share
The calculation of basic loss per share is based on the weighted average number of common shares outstanding. Diluted loss per share reflects the assumed conversion of all dilutive common stock equivalents as appropriate using the treasury stock method. See Note 15, “Loss per Share.”
Use of Estimates
Subsequent Events
Recently Adopted Accounting Standards
In December 2023, the FASB issued Accounting Standards Update (“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. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. We adopted this ASU on a prospective basis for this Annual Report, as presented in Note 13, “Income Taxes.”
Recently Issued Accounting Pronouncements Not Yet Adopted
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.
Reverse Stock Split
On August 29, 2025 (the “Effective Date”), we effected a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-10 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 10 shares of common stock issued and outstanding, or held by the Company as treasury stock, immediately prior to the Effective Date was automatically combined and converted into one new share of common stock. The Reverse Stock Split was implemented primarily to maintain compliance with the NYSE’s minimum bid price requirement. In addition, the number of authorized shares of the Company’s common stock and preferred stock were proportionally reduced.
The Reverse Stock Split is retroactively reflected in these condensed consolidated financial statements for all periods presented in the accompanying financial statements, including all share and per share amounts. The Reverse Stock Split did not effect the total dollar amount of common stock or total stockholders’ deficit.
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(2) Revenue from Contracts with Customers
Disaggregation of Revenue
The following table provides information about disaggregated revenue by type of product and contract:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Graphite electrodes | $ | $ | $ | ||||||||||||||
| By-products and other | |||||||||||||||||
| Total Revenues | $ | $ | $ | ||||||||||||||
In the first quarter of 2025, the Company updated its presentation of disaggregated revenue to align with how management evaluates its commercial and financial performance. Due to the immaterial amount of remaining take or pay contracts with initial terms of three to five years (“LTAs”), we no longer show these revenues as a separate line item.
Contract Balances
Substantially all the Company's receivables relate to contracts with customers. Accounts receivable are recorded when the right to consideration becomes unconditional. Payment terms on invoices primarily range from 30 to 90 days depending on the customary business practices of the jurisdictions in which we do business.
The Company did not
Deferred revenue is included in “Other accrued liabilities” on the Consolidated Balance Sheets. We did not have any deferred revenue as of December 31, 2025 and our deferred revenue balance was $11.2 million as of December 31, 2024. The decrease in deferred revenue was driven by revenue recognized during 2025, upon final resolution of a customer contingency.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(3) Stock-Based Compensation
The Company’s Omnibus Equity Incentive Plan permits the granting of options and other stock-based awards (including RSUs, deferred restricted stock units (“DRSUs”), PSUs and DSUs). As of December 31, 2025, the aggregate number of shares authorized under the plan since its initial adoption was 1.5 million. 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 up to minimum statutory rates. At December 31, 2025, 44 thousand common stock shares were available for future issuance.
Stock-based compensation expense was $5.0 million, $6.0 million and $4.4 million in 2025, 2024 and 2023, respectively. A majority of the expense, $3.9 million in 2025, $5.3 million in 2024 and $4.0 million in 2023, 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, $0.3 million and $0.2 million in 2025, 2024 and 2023, respectively, relating to the issuance of common stock for the exercise/vesting of equity awards.
Stock Options. Non-qualified stock options may be granted to our employees and directors. Stock options 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 . 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 10 years from the date of grant. Stock option exercises are satisfied through the issuance of common shares. Compensation expense for stock options is based on the fair value of the stock option on the date of the grant. We calculate the fair value of stock options using the Black-Scholes option-pricing model. The weighted average assumptions used in our Black-Scholes option pricing model for options granted in 2023 were as follows:
| 2023 | ||||||||
| Dividend yield | ||||||||
| Expected volatility | % | |||||||
| Risk-free interest rate | ||||||||
| Expected term in years | ||||||||
Dividend Yield. Our dividend yield estimate is based on our expected dividends and the stock price on the grant date.
Expected Volatility. We estimate the volatility of our common stock at the date of grant based on the historical volatility of the Company’s stock. The volatility factor we use is based on our historical closing prices since our stock has been publicly traded.
Risk-Free Interest Rate. We base the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.
Expected Term In Years. The expected life of awards granted represents the time period that the awards are expected to be outstanding. We determined the expected term of the grants using the “simplified” method as described by the SEC, since we do not have a history of stock option awards to provide a reliable basis for estimating such term.
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The following table summarizes activity related to stock options during 2025:
| Number of Options | Weighted- Average Exercise Price Per Share | Aggregate Intrinsic Value (thousands) | Weighted Average Remaining Term (Years) | |||||||||||||||||||||||
Outstanding at December 31, 2024 | $ | |||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Exercised | ||||||||||||||||||||||||||
| Forfeited or expired | ( | |||||||||||||||||||||||||
Outstanding at December 31, 2025 | $ | $ | ||||||||||||||||||||||||
Vested and Expected to vest as of December 31, 2025 | $ | $ | ||||||||||||||||||||||||
Exercisable at December 31, 2025 | $ | $ | ||||||||||||||||||||||||
Outstanding options have exercise prices ranging from $48.30 per share to $200.00 per share.
A summary of the status and changes of unvested stock options and the related average price per share follows:
| Number of Options | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding unvested as of December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited | ( | |||||||||||||
Outstanding unvested as of December 31, 2025 | $ | |||||||||||||
We recognized stock-based compensation expense of $0.3 million, $0.6 million and $0.8 million in 2025, 2024 and 2023, respectively, relating to stock options. As of December 31, 2025, there was $0.2 million of total unrecognized compensation cost related to unvested stock options, which is expected to be amortized over a weighted average period of 1.0 year. The total fair value of options vested was $0.5 million in 2025 and $0.7
RSUs - Employees. RSUs constitute an agreement to deliver shares of common stock to the participant at the end of a vesting period. 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 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 unvested but outstanding shares subject to RSU awards for employees and the related average price per share follows:
| Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding unvested as of December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Cancelled | ( | |||||||||||||
| Vested | ( | |||||||||||||
Outstanding unvested as of December 31, 2025 | $ | |||||||||||||
During 2025, 2024 and 2023, we recognized stock-based compensation expense of $3.1 million, $3.2 million and $1.7 million, respectively, relating to RSU awards for employees. The total fair value of RSU awards vested during 2025, 2024 and 2023 was $3.0 million, $1.8 million and $0.9 million, respectively. As of December 31, 2025, $4.8 million of expense with respect to
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non-vested RSUs has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 1.7 years.
PSUs. Executive officers and selected other employees receive PSU awards. Payouts, in the form of unrestricted common stock, vary between 0 % and 200 % based on the degree to which the Company’s total shareholder return relative to a peer group’s performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods with measurement periods after 12-, 24-, and 36-months. No payout will occur unless threshold performance is achieved. The final payout for PSUs granted in 2024 and 2025 is subject to a 3.5x value cap. The following table summarizes the activity related to PSUs during 2025:
| Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding as of December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ||||||||||||||
| Forfeited | ( | |||||||||||||
Outstanding as of December 31, 2025 | $ | |||||||||||||
The fair value of grants of PSUs is determined using a Monte Carlo valuation. Total compensation expense for PSUs was $0.4 million, $1.2 million and $0.7 million in 2025, 2024 and 2023, respectively. As of December 31, 2025, there was $1.0 million of unrecognized compensation cost related to PSUs.
RSUs and DRSUs - Non-Employee Directors. Non-employee directors receive annual grants of service-based RSUs that are expected to vest six months after the date of grant, subject generally to a non-employee director’s continued service on the Company’s Board of Directors. Compensation expense for RSUs and DRSUs 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. Non-employee directors have the option to elect to defer receipt of their vested RSUs and instead be granted service-based DRSUs that are equivalent in value to the RSUs. DRSUs will be paid out either as soon as practicable following the date of termination of the director’s service as a director (but in any event no later than the last day of the calendar year in which such termination occurs) in a single lump sum or in substantially equal 20% installments on the first five annual anniversaries of the date of termination of service as a director. The following table summarizes RSU and DRSU activity during 2025 for our non-employee directors:
| Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding as of December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested and delivered | ( | |||||||||||||
Outstanding vested and deferred as of December 31, 2025 | $ | |||||||||||||
The Company recognized $0.7 million of expense in both 2025 and 2024 and $0.6 million of expense in 2023 related to these awards.
DSUs. DSUs are primarily granted to our non-employee directors in lieu of cash retainers and vest immediately upon grant. All whole DSUs will be settled in shares of our common stock after the Director's termination of service on the Board of Directors and any fractional shares will be settled in cash. The following table summarizes DSU activity during 2025:
63
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||
Outstanding as of December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Distributed | ( | |||||||||||||
Outstanding vested and deferred as of December 31, 2025 | $ | |||||||||||||
During 2025, 2024 and 2023, we recognized stock-based compensation expense of $0.6 million, $0.3 million and $0.6 million, respectively, relating to DSU awards. The total fair value of DSU awards vested was $0.6 million in 2025, $0.3 million in 2024 and $0.5 million in 2023.
All share and per share data in the discussion above for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” for further information.
64
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(4) Segment Reporting
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. We utilize the majority of the needle coke that we produce internally to manufacture our graphite electrodes and as a result approximately 91 % of our revenues from external customers are derived from the sale of graphite electrodes. For the year ended December 31, 2025, one customer accounted for approximately 11 % of the Company’s consolidated net sales. No single customer accounted for 10% or more of the Company's net sales in 2024 or 2023.
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, which is also reported on the Consolidated Statements of Operations and Comprehensive Loss as consolidated net loss. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.
The chief operating decision maker uses net loss 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, 2025, 2024 and 2023:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||
| Net sales | $ | $ | $ | ||||||||
Cash cost of goods sold(1) | |||||||||||
| Other segment expenses | |||||||||||
| Lower of cost or market inventory valuation adjustment | |||||||||||
| Research and development | |||||||||||
| Selling and administrative expenses | |||||||||||
| Rationalization expenses | |||||||||||
| Goodwill impairment charges | |||||||||||
| Other (income) expense, net | ( | ( | |||||||||
| Interest expense | |||||||||||
| Interest income | ( | ( | ( | ||||||||
| Income tax expense (benefit) | ( | ( | |||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||
65
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:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Net sales: | |||||||||||||||||
| United States | $ | $ | $ | ||||||||||||||
| Americas (excluding the United States) | |||||||||||||||||
| Asia Pacific | |||||||||||||||||
| Europe, Middle East, Africa | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
| December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Long-lived assets (a): | |||||||||||
| United States | $ | $ | |||||||||
| Mexico | |||||||||||
| Brazil | |||||||||||
| France | |||||||||||
| Spain | |||||||||||
| Other countries | |||||||||||
| Total | $ | $ | |||||||||
(a)Long-lived assets represent fixed assets, net of accumulated depreciation.
(5) Debt and Liquidity
The following table presents our long-term debt:
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||
| Initial First Lien Term Loans due 2029 | $ | $ | |||||||||
Existing | |||||||||||
New | |||||||||||
Existing | |||||||||||
New | |||||||||||
| Unamortized debt discount and issuance costs | ( | ( | |||||||||
| Total long-term debt | $ | $ | |||||||||
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”).
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.
66
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 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, 2025 and 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.
67
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 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, 2025 and 2024.
Following the Exchange Offer, approximately $1.8 million aggregate principal amount of Existing 4.625 % Notes remain outstanding.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 2025 and 2024.
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.
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
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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
In February 2018, the Company entered into a credit agreement (as amended, the “2018 Credit Agreement”), which provided for (i) a $2,250 million senior secured term facility (the “2018 Term Loan Facility”) after giving effect to the June 2018 amendment (the “First Amendment”) that increased the aggregate principal amount of the 2018 Term Loan Facility from $1,500 million to $2,250 million and (ii) a $330 million senior secured revolving credit facility after giving effect to the May 2022 amendment that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the “2018 Revolving Credit Facility”). GrafTech Finance Inc. (“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à.r.l. (“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) were co-borrowers under the 2018 Revolving Credit Facility. 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, 2025, 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, 2025 and 2024, the availability under our 2018 Revolving Credit Facility was $101.6 million and $108.0 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, 2025 and 2024 resulted in our inability to access the full amount of commitments under the facility. As of December 31, 2025 and 2024, there were no 13.8 million and $7.4 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively.
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.
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 %
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 2025 and 2024.
Maturities on long-term debt instruments as of December 31, 2025 are as follows:
| (in thousands) | |||||
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| Total | $ | ||||
(6) Intangible Assets and Goodwill
Intangible Assets
The following table summarizes intangible assets with determinable useful lives by major category which are included in "Other assets" on our Consolidated Balance Sheets:
December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||||||||
| Trade names | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Technology | ( | ( | |||||||||||||||||||||||||||||||||
| Customer relationships | ( | ( | |||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Amortization expense of intangible assets was $7.3 million, $8.0 million and $9.2 million in 2025, 2024 and 2023, respectively. Estimated annual amortization expense for the next five years will approximate $6.7 million in 2026, $6.1 million in 2027, $5.5 million in 2028, $4.9 million in 2029 and $2.9 million in 2030.
Goodwill
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.
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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 Operations. The goodwill impairment was caused primarily by reduced sales of graphite electrodes due to softening demand and the deterioration of the electrode spot pricing.
(7) Interest Expense
The components of interest expense are as follows:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Interest incurred on debt | $ | $ | $ | ||||||||||||||
| Accretion of original issue discount | |||||||||||||||||
| Amortization of debt issuance costs | |||||||||||||||||
| Debt modification costs | |||||||||||||||||
| Amortization of interest rate swap deferred gains | ( | ( | |||||||||||||||
| Unrealized loss on termination of de-designated interest rate swap | |||||||||||||||||
| Realized gain on termination of de-designated interest rate swap | ( | ||||||||||||||||
| Total interest expense | $ | $ | $ | ||||||||||||||
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, in 2024, 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.
The Company incurred $6.3 million of fees and expenses related to post-closure costs attributable to the modification, which were expensed as incurred in 2025.
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 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 loss (“AOCL”) in connection with our designated swap. The gains deferred
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 9.86 % as of December 31, 2025. The Company pays a ticking fee associated with the undrawn Delayed Draw Commitments in an amount equal to 3.75 % per annum.
See Note 5, “Debt and Liquidity” for details of our debt.
(8) Fair Value Measurements and Derivative Instruments
Fair Value Measurements
Depending on the inputs, we classify each fair value measurement as follows:
•Level 1 – Quoted market prices in active markets for identical assets or liabilities.
•Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable.
•Level 3 – Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use.
The following tables present the classification of our assets and liabilities measured at fair value on a recurring basis (in thousands):
| December 31, 2025 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign currency derivatives | $ | $ | $ | $ | |||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency derivatives | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2024 | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign currency derivatives | $ | $ | $ | $ | |||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency derivatives | $ | $ | $ | $ | |||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, short-term notes and accounts receivable, accounts payable and other current payables, are shown in the table above. The carrying value of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.
The fair value of our debt as of December 31, 2025 and 2024 was $946.6 million and $905.8 million, respectively. The fair values were determined using Level 1 quoted market prices for the same or similar debt instruments.
Additional fair value information related to our pension funds' assets can be found in Note 11, “Retirement Plans and Post-Employment Benefits.”
Derivative Instruments
In the normal course of business, we are exposed to certain risks related to fluctuations in currency exchange rates. We use derivative financial instruments, primarily foreign currency derivatives, and have in the past used commodity derivative contracts and interest rate swaps as part of our overall strategy to manage risks from these market fluctuations.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Certain of our derivative contracts contain provisions that require us to provide collateral. Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not anticipate nonperformance by any of the counterparties to our instruments.
Foreign currency derivatives
We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency instruments, which include, but are not limited to, forward exchange contracts and purchased currency options, are used to hedge global currency exposures such as foreign currency denominated debt, receivables, payables, sales and purchases.
Foreign currency forward and swap contracts are used to mitigate the foreign exchange risk of balance sheet items. These derivatives are fair value hedges. 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.
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. These derivatives are designated as cash flow hedges. The resulting unrealized gains or losses from these derivatives are recorded in AOCL and subsequently, when realized, are reclassified to net sales or cost of goods sold in the Consolidated Statements of Operations when the hedged exposures affect earnings.
Commodity derivative contracts
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. There were no commodity derivative contracts outstanding as of December 31, 2025.
Interest rate swap contracts
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. Upon discontinuance of a designated cash flow hedging relationship, when interest payments are still probable of occurring, the fair value at the date of discontinuance is deferred into AOCL and amortized into interest expense based upon the term of the cash flow hedging relationship. There were no interest rate swaps outstanding as of December 31, 2025.
All derivatives are recorded on the balance sheet at fair value. If the derivative is designated and effective as a cash flow hedge, changes in the fair value of the derivative are recognized in AOCL until the hedged item is recognized in earnings. The ineffective portion of a derivative's fair value, if any, is recognized in earnings immediately. If a derivative is not a hedge, changes in its fair value are adjusted through earnings. The fair values of the outstanding derivatives are recorded on the balance sheet as assets (if the derivatives are in a gain position) or liabilities (if the derivatives are in a loss position). The fair values will also be classified as short-term or long-term depending upon their maturity dates.
The notional amounts of our outstanding derivative instruments as of December 31, 2025 and 2024 were as follows:
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||
| Notional Amount | Notional Amount | ||||||||||
| Derivative instruments not designated as hedges: | |||||||||||
| Foreign currency derivatives | $ | $ | |||||||||
As of December 31, 2025, net realized pre-tax gains of $0.1 million related to our foreign currency derivatives were reported in AOCL and will be released to earnings within the next 12 months. No ineffectiveness expense was recorded in 2025, 2024 or 2023.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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, 2025, 2024 and 2023:
| Amount of (Gain)/Loss Recognized | ||||||||||||||||||||||||||
| (in thousands) | Location of Realized (Gain)/Loss Recognized in the Consolidated Statement of Operations | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Derivatives designated as cash flow hedges: | ||||||||||||||||||||||||||
| Foreign currency derivatives | Cost of goods sold | $ | ( | $ | $ | |||||||||||||||||||||
| Commodity derivative contracts | Cost of goods sold | ( | ( | |||||||||||||||||||||||
| Interest rate swaps | Interest expense | ( | ( | |||||||||||||||||||||||
Pre-tax gains and losses on non-designated derivatives recognized in earnings are as follows:
| Amount of (Gain)/Loss Recognized | ||||||||||||||||||||||||||
| (in thousands) | Location of Realized (Gain)/Loss Recognized in the Consolidated Statement of Operations | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Derivatives not designated as hedges: | ||||||||||||||||||||||||||
| Foreign currency derivatives | Cost of goods sold | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Interest rate swaps | Interest expense | ( | ||||||||||||||||||||||||
The following table summarizes the fair value of our outstanding derivatives not designated as hedges (on a gross basis) and balance sheet classification as of December 31, 2025 and 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | Fair Value | Fair Value | |||||||||
| Prepaid and other current assets | |||||||||||
| Foreign currency derivatives | $ | $ | |||||||||
| Other accrued liabilities | |||||||||||
| Foreign currency derivatives | ( | ( | |||||||||
| Net asset | $ | $ | |||||||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(9)Supplementary Balance Sheet Detail
The following tables present supplementary balance sheet details:
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||
| Inventories: | |||||||||||
| Raw materials and supplies | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| $ | $ | ||||||||||
| Prepaid expenses and other current assets: | |||||||||||
| Prepaid expenses | $ | $ | |||||||||
| Value-added tax and other indirect taxes receivable | |||||||||||
| Spare parts inventory | |||||||||||
| Other current assets | |||||||||||
| $ | $ | ||||||||||
| Property, plant and equipment: | |||||||||||
| Land and improvements | $ | $ | |||||||||
| Buildings | |||||||||||
| Machinery and equipment and other | |||||||||||
| Construction in progress | |||||||||||
| $ | $ | ||||||||||
| Other accrued liabilities: | |||||||||||
| Payrolls (including incentive programs) | $ | $ | |||||||||
| Employee benefits | |||||||||||
| Deferred revenue | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
| Other long-term obligations: | |||||||||||
| Post-employment benefits | $ | $ | |||||||||
| Pension and related benefits | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
The following table presents an analysis of the allowance for doubtful accounts for the years ended December 31:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of year | $ | $ | $ | ||||||||||||||
| Write-offs | ( | ||||||||||||||||
| Charge (credit) to income | ( | ( | |||||||||||||||
| Translation adjustment/other | |||||||||||||||||
| Balance at end of year | $ | $ | $ | ||||||||||||||
Supplier Finance Program (“SFP”) Obligations
GrafTech Mexico S.A. De C.V. (“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 from the financial intermediary prior to the invoice due date for a discounted amount. GrafTech Mexico’s responsibility is limited to
76
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
making payment on the terms originally negotiated with its supplier, regardless of whether the supplier elects to receive early payment.
SFP obligations are included in on the Consolidated Balance Sheets and upon settlement, are reflected as cash flow from operating activities in the Consolidated Statements of Cash Flows. See below for a rollforward of our SFP obligations.
| (in thousands) | |||||
| Confirmed obligations outstanding as of December 31, 2023 | $ | ||||
| Invoices confirmed during the year | |||||
| Confirmed invoices paid during the year | ( | ||||
| Confirmed obligations outstanding as of December 31, 2024 | $ | ||||
| Invoices confirmed during the year | |||||
| Confirmed invoices paid during the year | ( | ||||
| Translation | ( | ||||
| Confirmed obligations outstanding as of December 31, 2025 | $ | ||||
(10)Leases
The Company leases certain transportation and mobile manufacturing equipment such as railcars and forklifts, as well as real estate.
The components of lease expense are as follows:
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Operating lease cost | $ | $ | $ | |||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of lease assets | ||||||||||||||||||||
| Interest on lease liabilities | ||||||||||||||||||||
| Short-term lease cost | ||||||||||||||||||||
| Variable lease cost | ||||||||||||||||||||
| Total lease cost | $ | $ | $ | |||||||||||||||||
Supplemental cash-flow and other information related to leases is as follows:
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||||||
| Operating cash outflows - payments on operating leases | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Operating cash outflows - interest payments on finance leases | ( | ( | ( | |||||||||||||||||
| Financing cash outflows - payments on finance lease obligations | ( | ( | ( | |||||||||||||||||
| Right-of-use assets obtained in exchange for operating lease obligations | ||||||||||||||||||||
| Right-of-use assets obtained in exchange for finance lease obligations | ||||||||||||||||||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Supplemental balance sheet information related to leases is as follows:
| December 31, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||||||||
| Location | |||||||||||||||||
| Operating Leases | |||||||||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||||||||
| Current operating lease liabilities | |||||||||||||||||
| Non-current operating lease liabilities | |||||||||||||||||
| Total operating lease liabilities | $ | $ | |||||||||||||||
| Finance Leases | |||||||||||||||||
| Property, plant and equipment | $ | $ | |||||||||||||||
| Accumulated depreciation | Accumulated depreciation | ||||||||||||||||
| Finance lease assets, net | $ | $ | |||||||||||||||
| Other liabilities and accrued items | $ | $ | |||||||||||||||
| Finance lease liabilities | |||||||||||||||||
| Total principal payable on finance leases | $ | $ | |||||||||||||||
| Weighted-Average Remaining Lease Term | |||||||||||||||||
| Operating leases | |||||||||||||||||
| Finance leases | |||||||||||||||||
| Weighted-Average Discount Rate | |||||||||||||||||
| Operating leases | % | % | |||||||||||||||
| Finance leases | % | % | |||||||||||||||
As of December 31, 2025, future minimum lease payments under noncancellable operating leases were as follows:
| (in thousands) | Finance Leases | Operating Leases | ||||||||||||
| 2026 | ||||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| 2029 | ||||||||||||||
| 2030 | ||||||||||||||
| 2031 and thereafter | ||||||||||||||
| Total lease payments | $ | $ | ||||||||||||
| Less: Imputed interest | ( | ( | ||||||||||||
| Present value of lease payments | $ | $ | ||||||||||||
As of December 31, 2025, the Company has not entered into any material lease commitments that have yet to commence.
(11)Retirement Plans and Post-Employment Benefits
Retirement Plans
On February 26, 1991, we formed our own retirement plan covering substantially all our U.S. employees. Under our plan, covered employees earned benefit payments based primarily on their service credits and wages subsequent to February 26, 1991.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Prior to that date, substantially all our U.S. employees were participants in the U.S. retirement plan of Union Carbide Corporation (“Union Carbide”). While service credit was frozen, covered employees continued to earn benefits under the Union Carbide plan based on their final average wages through February 26, 1991, adjusted for salary increases (not to exceed six percent per annum) through January 26, 1995, the date Union Carbide ceased to own a minimum 50 % of the equity of GTI. The Union Carbide plan is responsible for paying retirement and death benefits earned as of February 26, 1991.
Effective January 1, 2002, we established a defined contribution plan for U.S. employees. Certain employees had the option to remain in our defined benefit plan for an additional period of up to five years . Employees not covered by this option had their benefits under our defined benefit plan frozen as of December 31, 2001, and began participating in the defined contribution plan.
Effective March 31, 2003, we curtailed our qualified benefit plan and the benefits were frozen as of that date for the U.S. employees who had the option to remain in our defined benefit plan. We also closed our non-qualified U.S. defined benefit plan for the participating salaried workforce. The employees began participating in the defined contribution plan as of April 1, 2003.
In 2025, GrafTech offered a limited-time and amount, voluntary lump sum distribution (“2025 Voluntary Lump Sum”). Total lump sums under the 2025 Voluntary Lump Sum were not to exceed $24.0 million. Lump sum payments were distributed in December 2025 and resulted in a $0.8 million settlement gain.
Pension coverage for employees of foreign subsidiaries is provided, to the extent deemed appropriate, through separate plans. Obligations under such plans are systematically provided for by depositing funds with trustees, under insurance policies or by book reserves.
The components of our net pension cost related to our defined benefit pension plans are set forth in the following table:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| U.S. | Foreign | U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||||||||||||||
| ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Settlement gain | ( | ||||||||||||||||||||||||||||||||||
| Mark-to-market (gain) loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Net periodic benefit (credit) cost | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
The mark-to-market gain in 2025 was primarily due to favorable asset returns in the United States and favorable changes in the discount rate in Switzerland, partially offset by unfavorable changes in the discount rate in other countries. 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 compared to expectations in both the foreign and U.S. plans, partially offset by increase in U.S. discount rates. The reconciliation of the beginning and ending balances of our pension plans’ benefit obligations, fair value of assets, and funded status at December 31, 2025 and 2024 are shown below.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||||||||||||||
| U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||
| Changes in Benefit Obligation: | |||||||||||||||||||||||
| Net benefit obligation at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Service cost | |||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Participant contributions | |||||||||||||||||||||||
| Plan settlements | ( | ( | |||||||||||||||||||||
| Foreign currency exchange changes | ( | ||||||||||||||||||||||
| Actuarial loss (gain) | ( | ( | |||||||||||||||||||||
| Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
| Net benefit obligation at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Changes in Plan Assets: | |||||||||||||||||||||||
| Fair value of plan assets at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
| Actual return on plan assets | |||||||||||||||||||||||
| Foreign currency exchange rate changes | ( | ||||||||||||||||||||||
| Plan settlements | ( | ( | |||||||||||||||||||||
| Employer contributions | |||||||||||||||||||||||
| Participant contributions | |||||||||||||||||||||||
| Benefits paid | ( | ( | ( | ( | |||||||||||||||||||
| Fair value of plan assets at end of period | $ | $ | $ | $ | |||||||||||||||||||
| Funded status (underfunded): | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Amounts recognized in the statement of financial position: | |||||||||||||||||||||||
| Other accrued liabilities | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
| Other long-term obligations | ( | ( | ( | ( | |||||||||||||||||||
| Net amount recognized | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The accumulated benefit obligation for all defined benefit pension plans was $99.4 million and $121.8 million as of December 31, 2025 and 2024, respectively.
Plan Assets
The accounting guidance on fair value measurements specifies a hierarchy based on the observability of inputs used in valuation techniques (Level 1, 2 and 3). See Note 8, “Fair Value Measurements and Derivative Instruments" for a discussion of the fair value hierarchy.
The following describes the methods and significant assumptions used to estimate the fair value of the investments:
•Cash and cash equivalents – Valued at cost. Cash equivalents are valued at net asset value as provided by the administrator of the fund.
•Equity securities – Valued using the closing price reported on the active market on which the individual securities are traded.
•Fixed income securities – Valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded.
•Other - Primarily a tactical, multi-asset “fund of funds” that allocates across various asset classes rather than being strictly limited to equity or fixed income.
•Foreign government bonds – Valued by the trustees using various pricing services of financial institutions.
•Fixed insurance contracts – Valued at the present value of the guaranteed payment streams.
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
•Collective trusts – Valued at the net asset value provided by the administrator of the fund (the practical expedient). 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 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.
The fair value of other plan assets by category is summarized below:
| (in thousands) | December 31, 2025 | ||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| U.S. Plan Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Equity securities | |||||||||||||||||||||||
| Fixed income securities | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| International Plan Assets | |||||||||||||||||||||||
| Foreign government bonds | |||||||||||||||||||||||
| Fixed insurance contracts | |||||||||||||||||||||||
| Total international plan assets | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Plan - Investments measured at net asset value | $ | ||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| U.S. Plan Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| International Plan Assets | |||||||||||||||||||||||
| Foreign government bonds | |||||||||||||||||||||||
| Fixed insurance contracts | |||||||||||||||||||||||
| Total international plan assets | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Plan - Investments measured at net asset value | $ | ||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The following table presents the changes for those financial instruments classified within Level 3 of the valuation hierarchy for international plan pension assets for the years ended December 31, 2025 and 2024:
| (in thousands) | Fixed Insurance Contracts | ||||
Balance at December 31, 2023 | $ | ||||
| ( | |||||
| Distributions | ( | ||||
Balance at December 31, 2024 | |||||
| Distributions | ( | ||||
Balance at December 31, 2025 | $ | ||||
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
We annually re-evaluate assumptions and estimates used in projecting pension assets, liabilities and expenses. These assumptions and estimates may affect the carrying value of pension assets, liabilities and expenses in our Consolidated Financial Statements. Assumptions used to determine net pension costs and projected benefit obligations are:
| Pension Benefit Obligations Key Assumptions | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted average assumptions to determine benefit obligations: | |||||||||||
| Discount rate | % | % | |||||||||
| Rate of compensation increase | % | % | |||||||||
| Pension Cost Key Assumptions | |||||||||||
| Weighted average assumptions to determine net cost: | |||||||||||
| Discount rate | % | % | |||||||||
| Expected return on plan assets | % | % | |||||||||
| Rate of compensation increase | % | % | |||||||||
We adjust our discount rate annually in relation to the rate at which the benefits could be effectively settled. Discount rates are set for each plan in reference to the yields available on AA-rated corporate bonds of appropriate currency and duration. The appropriate discount rate is derived by developing an AA-rated corporate bond yield curve in each currency. The discount rate for a given plan is the rate implied by the yield curve for the duration of that plan’s liabilities. In certain countries, where little public information is available on which to base discount rate assumptions, the discount rate is based on government bond yields or other indices and approximate adjustments to allow for the differences in weighted durations for the specific plans and/or allowance for assumed credit spreads between government and AA-rated corporate bonds.
The expected return on assets assumption represents our best estimate of the long-term return on plan assets and generally was estimated by computing a weighted average return of the underlying long-term expected returns on the different asset classes, based on the target asset allocations. The expected return on assets assumption is a long-term assumption that is expected to remain the same from one year to the next unless there is a significant change in the target asset allocation, the fees and expenses paid by the plan or market conditions.
The rate of compensation increase is based on the long-term inflation rate projection of the jurisdictions where we have active plans and on any incremental change due to merit or productivity.
Plan Assets. The following table presents our retirement plan weighted average asset allocations at December 31, 2025, by asset category :
| Percentage of Plan Assets | |||||||||||
| U.S. | Foreign | ||||||||||
| Equity securities | % | % | |||||||||
| Fixed income, debt securities, or cash | % | % | |||||||||
| Total | % | % | |||||||||
Investment Policy and Strategy. The investment policy and strategy of the U.S. plan is to invest approximately 20 % in equities and return seeking assets and approximately 80 % in fixed income securities. Rebalancing is undertaken monthly. To the extent we maintain plans in other countries, target asset allocation is 100 % fixed income investments. For each plan, the investment policy is set within both asset return and local statutory requirements.
82
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Information for our pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2025 and 2024 follows:
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||
| Accumulated benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
| Fair value of plan assets | |||||||||||||||||||||||
Information for our pension plans with a projected benefit obligation in excess of plan assets at December 31, 2025 and 2024 follows:
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| U.S. | Foreign | U.S. | Foreign | ||||||||||||||||||||
| Projected benefit obligation | $ | $ | $ | $ | |||||||||||||||||||
| Fair value of plan assets | |||||||||||||||||||||||
Following is our projected future pension plan cash flow by year:
| (in thousands) | U.S. | Foreign | |||||||||
| Expected contributions in 2026: | |||||||||||
| Expected employer contributions | $ | $ | |||||||||
| Expected employee contributions | |||||||||||
| Estimated future benefit payments: | |||||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Next five years | |||||||||||
Post-Employment Benefit Plans
We have legacy post-employment medical coverage and life insurance benefits for eligible retired employees in the United States and in certain foreign jurisdictions. Effective December 31, 2005, all U.S. post-employment medical coverage plans were frozen.
The post-employment benefit plans are un-funded and our periodic contributions correspond to the amount of benefits paid in the period. Our funding contributions were $1.5 million and $1.4 million in 2025 and 2024, respectively.
The estimated liability for post-employment benefit plans was $12.1 million and $12.5 million as of December 31, 2025 and 2024, respectively. The Company recognized expense of $0.3 million, $0.5 million and $2.0 million in 2025, 2024 and 2023, respectively, in the Consolidated Statement of Operations for post-employment benefits. Included in post-employment benefit expense are mark-to-market gains of $0.5 million and $0.4 million in 2025 and 2024, respectively, compared to mark-to-market losses of $1.1 million in 2023.
Savings Plan
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 $1.4 million, $1.6 million and $3.0 million in 2025, 2024 and 2023, respectively.
83
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(12)Commitments and Contingencies
Legal Proceedings
We are involved in various investigations, lawsuits, claims, demands, labor disputes and other legal proceedings, including with respect to environmental and human exposure or other personal injury matters, arising out of or incidental to the conduct of our business. While it is not possible to determine the ultimate disposition of each of these matters and proceedings, we do not believe that their ultimate disposition will have a material adverse effect on our financial position, results of operations or cash flows. Additionally, we are involved in the following legal proceedings.
Brazil Clause IV
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). Companies in Brazil have settled claims arising out of these provisions and, in May 2015, the litigation was remanded by the Brazilian Supreme Court in favor of the employees union. After denying an interim appeal by the Bahia region employers on June 26, 2019, the Brazilian Supreme Court finally ruled in favor of the employees union on September 26, 2019. The employers union has determined not to seek annulment of such decision. Separately, on October 1, 2015, a related action was filed by current and former employees against our subsidiary in Brazil to recover amounts under such provisions, plus interest thereon, which amounts together with interest could be material to us. If the Brazilian Supreme Court proceeding above had been determined in favor of the employers union, it would also have resolved this proceeding in our favor. In the first quarter of 2017, the state court initially ruled in favor of the employees. We appealed this state court ruling, and the appellate court issued a decision in our favor on May 19, 2020. The employees have further appealed and, on December 16, 2020, the court upheld the decision in favor of GrafTech Brazil. On February 22, 2021, the employees filed a further appeal and, on April 28, 2021, the court rejected the employees’ appeal in favor of GrafTech Brazil. The employees filed a further appeal and on September 12, 2022, we filed our response in opposition. We intend to vigorously defend our position. As of December 31, 2025, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought.
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. federal income tax and Swiss tax that we and our subsidiaries realize as a result of the utilization of 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. 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
In the second quarter of 2025, we recorded a full valuation allowance against our U.S. deferred tax assets as it is more likely than not that we will not be able to utilize U.S. deferred tax assets. These deferred taxes include the remaining pre-IPO tax assets covered by the Tax Receivable Agreement for which the related foreign tax credits are more likely than not to expire prior to being utilized. As a result, the remaining $3.8 million Tax Receivable Agreement liability was written off to Other expense (income), net in the second quarter of 2025 in the Consolidated Statements of Operations.
As of December 31, 2024, the 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.
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 $32.4 million including approximately $19.2 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. On October 3, 2025, GrafTech Brazil received a summons
84
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
to acknowledge the decision issued by the Regional Judgment Office, which fully upheld the assessment issued against GrafTech Brazil, without any reductions. The Company believes that the IRS assessment and decision by the Regional Judgment Office 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 and plans to appeal the Regional Judgment Office’s decision within the time prescribed.
(13)Income Taxes
Loss before income taxes was derived from the following sources:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| U.S. | $ | ( | $ | ( | $ | ( | |||||||||||
| Foreign | ( | ( | ( | ||||||||||||||
| Loss before income taxes | $ | ( | $ | ( | $ | ( | |||||||||||
Income tax expense (benefit) consisted of the following:
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current | ||||||||||||||||||||
| Federal | $ | $ | $ | ( | ||||||||||||||||
| State and local | ||||||||||||||||||||
| Foreign | ||||||||||||||||||||
| Total current tax expense | ||||||||||||||||||||
| Deferred | ||||||||||||||||||||
| Federal | ( | ( | ||||||||||||||||||
| State and local | ( | ( | ||||||||||||||||||
| Foreign | ( | ( | ||||||||||||||||||
| Total deferred tax expense (benefit) | ( | ( | ||||||||||||||||||
| Income tax expense (benefit) | $ | $ | ( | $ | ( | |||||||||||||||
85
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
With the adoption of ASU 2023-09, a reconciliation of income taxes for 2025 at the U.S. statutory rate to income tax expense follows:
| (dollars in thousands) | 2025 | |||||||
| Amount | % | |||||||
| Loss before income taxes | $ | ( | ||||||
| U.S. federal tax at statutory rate | $ | ( | % | |||||
| State and local income taxes, net of federal income tax effect | ||||||||
| Change in valuation allowance | ( | % | ||||||
| Other | ( | % | ||||||
| Foreign tax effects: | ||||||||
| Switzerland: | ||||||||
| Statutory tax rate difference between U.S. and Switzerland | ( | % | ||||||
| Changes in valuation allowance | ( | % | ||||||
| Investment impairment in subsidiaries | ( | % | ||||||
| Other | % | |||||||
| Other foreign jurisdictions | ( | % | ||||||
| Change in valuation allowance | ( | % | ||||||
| Other permanent items | % | |||||||
| Effective tax rate | $ | ( | % | |||||
Prior to the adoption of ASU 2023-09, a reconciliation of income taxes for 2024 and 2023 at the U.S. statutory rate to income tax benefit follows:
| (dollars in thousands) | 2024 | 2023 | |||||||||
| U.S. federal tax at statutory rate | $ | ( | $ | ( | |||||||
| Impact of U.S. Tax Cuts and Jobs Act of 2017 - GILTI | |||||||||||
| Impact of Tax Receivable Agreement | ( | ||||||||||
| Valuation allowance | ( | ||||||||||
| State taxes, net of federal tax benefit | ( | ||||||||||
| U.S. tax impact of foreign earnings (net of foreign tax credits) | |||||||||||
| Establishment/resolution of uncertain tax positions | ( | ||||||||||
| Adjustment for foreign income taxed at different rates | |||||||||||
| Foreign tax credits | ( | ||||||||||
| Impact of non-deductible goodwill impairment | |||||||||||
| Other | ( | ( | |||||||||
| Income tax benefit | $ | ( | $ | ( | |||||||
Net cash paid (refunds received) for income taxes consisted of the following:
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| U.S. Federal | $ | $ | ( | $ | ||||||||||||||||
| U.S. State and local | ( | |||||||||||||||||||
| Foreign | ||||||||||||||||||||
| Net cash paid for income taxes | $ | $ | $ | |||||||||||||||||
86
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Net cash paid for income taxes exceeded 5% of total net income tax paid in the following jurisdictions:
| (in thousands) | 2025 | |||||||
| Foreign | ||||||||
| Brazil | $ | |||||||
| Germany | ||||||||
| Italy | ||||||||
| Mexico | ||||||||
| Spain | ||||||||
Switzerland(1) | ||||||||
| Other | ||||||||
(1) Includes Switzerland cantonal capital tax paid in lieu of income tax when losses occur.
The tax effects of temporary differences that give rise to significant components of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are set forth in the following table:
| (in thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Post-employment and other employee benefits | $ | $ | |||||||||
| Operating losses | |||||||||||
| Capital loss and foreign tax credit | |||||||||||
| Disallowed interest carryforward | |||||||||||
| Inventory adjustments | |||||||||||
| Long-term contract option amortization | |||||||||||
| Other | |||||||||||
| Total gross deferred tax assets | |||||||||||
| Less: valuation allowance | ( | ( | |||||||||
| Total deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
| Fixed assets | $ | $ | |||||||||
| Goodwill and acquired intangibles | |||||||||||
| Other | |||||||||||
| Total deferred tax liabilities | |||||||||||
| Net deferred tax (liability) asset | $ | ( | $ | ||||||||
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. Consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence include a strong earnings history, an event or events that would increase the Company's taxable income or reduce expenses, or tax planning strategies that would create the ability to realize deferred tax assets. Examples of negative evidence include cumulative losses in recent years or a history of tax attributes expiring unused. In circumstances where the negative evidence outweighs the positive evidence, the Company has established or maintained valuation allowances on the jurisdiction’s net deferred tax assets. 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.
At the end of the second quarter of 2025, the Company’s cumulative losses in the U.S. and Switzerland in recent years, when assessed with other positive and negative evidence, represented sufficient negative evidence to require full valuation allowances on its U.S. and Switzerland previously realizable deferred tax assets. As of December 31, 2025, the Company’s U.S. and Switzerland operations had valuation allowances recorded of $69.9 million and $20.3 million, respectively.
87
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Valuation allowance activity for 2025, 2024 and 2023 is as follows:
| (in thousands) | |||||
| Balance as of December 31, 2022 | $ | ||||
| Credited to income | ( | ||||
| Translation adjustment | ( | ||||
Balance as of December 31, 2023 | |||||
| Charged to income | |||||
| Translation adjustment | ( | ||||
Balance as of December 31, 2024 | |||||
| Charged to income | |||||
| Translation adjustment | |||||
Balance as of December 31, 2025 | $ | ||||
The increase in the valuation allowance in 2025 was primarily attributable to the full valuation allowances on the U.S. and Switzerland deferred tax assets, in amount of $51.7 million and $20.3 million respectively. 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.
As of December 31, 2025, the Company had a total foreign tax credit carryforward of $4.9 million. These tax credit carryforwards begin to expire in 2027. In addition, the Company had state net operating and capital loss carryforwards of $332.0 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 $20.9 million as of December 31, 2025. The Company also has U.S. state tax credits of $0.2 million as of December 31, 2025. The Company's U.S. interest limitations and federal loss carryforwards on a gross basis were $202.2 million and $13.3 million, respectively, as of December 31, 2025. These carryforwards do not expire. The Company’s foreign loss carryforwards on a gross basis were $218.8 million, primarily attributable to losses in Switzerland, which can be carried forward for seven years. Nevertheless, the Company recorded full valuation allowances against its deferred tax assets in the U.S. and Switzerland.
As of December 31, 2025 and 2024, the Company had no No
The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. All U.S. federal tax years prior to 2022 are generally closed by statute or have been audited and settled with the applicable domestic tax authorities. Other jurisdictions are generally closed for years prior to 2020.
As of December 31, 2025, the Company has accumulated undistributed earnings generated by its foreign subsidiaries of approximately $1.0 billion. Because $1.0 billion of such earnings have previously been subject to taxation by way of the transition tax on foreign earnings required by the Tax Cuts and Jobs Act of 2017, as well as the current and previous years’ GILTI inclusion, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of GrafTech's foreign investments would generally be limited to foreign withholding and state taxes. The Company intends, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs.
(14)Stockholders' (Deficit) Equity
The following information should be read in conjunction with the Consolidated Statement of Stockholders’ (Deficit) Equity.
Common Stock Repurchases
On July 31, 2019, the Company announced that its Board of Directors approved the repurchase of up to $100.0 million of its common stock in open market purchases, including under Rule 10b5-1 and/or Rule 10b-18 plans. On November 4, 2021, the Company announced that its Board of Directors approved the repurchase of an additional $150.0 million of its common stock under this program. The stock repurchase program does not have an expiration date.
88
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company did not
As of December 31, 2025, approximately $99.0 million remained available for stock repurchases under this authorization.
Accumulated other comprehensive loss
The balance in our AOCL is set forth in the following table:
| (in thousands) | December 31, 2025 | December 31, 2024 | |||||||||||||||
| Foreign currency translation adjustments, net of tax | $ | ( | $ | ( | |||||||||||||
| Foreign currency derivatives, net of tax | |||||||||||||||||
| Total AOCL | $ | ( | $ | ( | |||||||||||||
(15) Loss per Share
All share and per share data in the table and discussion below for all periods presented reflect the 1-for-10 reverse stock split, which became effective on August 29, 2025. See Note 1, “Business and Summary of Significant Accounting Policies” for further information
The following table presents a reconciliation of the numerator and denominator of basic and diluted loss per share:
| (dollars in thousands; except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Numerator for basic and diluted loss per share: | |||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted average common shares outstanding for basic calculation | |||||||||||||||||
| Weighted average common shares outstanding for diluted calculation | |||||||||||||||||
| Basic loss per share | $ | ( | $ | ( | $ | ( | |||||||||||
| Diluted loss per share | $ | ( | $ | ( | $ | ( | |||||||||||
Basic loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding. Diluted loss per share is calculated by dividing net loss 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 per share calculation for the years ended December 31, 2025, 2024 and 2023 excludes the dilutive effect of approximately 61,774 , 4,833 and 4,120 shares, respectively, primarily related to restricted stock units, as their inclusion would have been anti-dilutive due to the Company's net loss.
89
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(16) Other (Income) Expense, net
The following table presents the details of other (income) expense, net:
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Non-service pension and other post-employment (income) expense | $ | ( | $ | $ | |||||||||||||
| Bank charges | |||||||||||||||||
| Foreign currency remeasurement | ( | ||||||||||||||||
| Tax Receivable Agreement adjustment | ( | ||||||||||||||||
| Other | ( | ( | |||||||||||||||
| Total other (income) expense, net | $ | ( | $ | ( | $ | ||||||||||||
Non-service pension and other post-employment (income) expense includes the components of pension and post-employment costs other than service cost. Non-service pension and other post-employment (income) expense included a mark-to-market gain of $2.9 million in 2025, compared to mark to market losses of $0.7 million and $3.0 million in 2024 and 2023, respectively. See Note 11, “Retirement Plans and Post-Employment Benefits” for further discussion.
90
Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.Controls and Procedures
Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these controls and procedures were effective as of December 31, 2025.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process, designed by, or under the supervision of, the chief executive officer and chief financial officer and effected by the Board of Directors, management and other personnel of a company, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets of the company;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the Board of Directors; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets of the company that could have a material effect on its financial statements.
Internal control over financial reporting has inherent limitations which may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the level of compliance with related policies or procedures may deteriorate.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2025. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 has been audited by Deloitte & Touche LLP, our independent registered public accounting firm, as stated in their report, which is presented elsewhere in this Annual Report.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B.Other Information
Rule 10b5-1 Trading Arrangements
None of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act ) adopted terminated
91
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information regarding our executive officers is set forth in the Supplemental Item to Part I of this Report under the caption “Supplemental Item. Information about our Executive Officers” and is incorporated herein by reference.
We adopted a Code of Conduct and Ethics that applies to our employees, directors and officers, including our Chief Executive Officer and President and our Chief Financial Officer and Senior Vice President. A copy of the Code of Conduct and Ethics is publicly available on our website at https://www.graftech.com/investors/default.aspx#governance. Any waiver (including an implicit waiver) from a provision of our Code of Conduct and Ethics granted to, or any amendment (other than technical, administrative or other non-substantive amendments) of the Code of Conduct and Ethics that applies to, our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions will be promptly disclosed as required by applicable U.S. federal securities laws and the listing standards of the NYSE on our website at https://www.graftech.com/investors/default.aspx#governance or in a report on Form 8-K filed electronically with the SEC at www.sec.gov.
The remaining information required by this Item is incorporated herein by reference from the sections entitled “Proposal 1 Elect Two Directors for a Three-Year Term or Until Their Successors are Elected and Qualified,” “Director Skills and Qualifications Criteria” and “Committees of the Board of Directors” in our Proxy Statement for the Annual Meeting of Stockholders expected to be held on or about May 7, 2026.
We will provide disclosure of delinquent Section 16(a) reports, if any, in our Proxy Statement in a section entitled “Delinquent Section 16(a) Reports,” and such disclosure, if any, is incorporated herein by reference.
The Company has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers and employees, that the Company believes is reasonably designed to promote compliance with insider trading laws, rules and regulations and the NYSE listing standards. The foregoing summary of the Company’s insider trading policy does not purport to be complete and is qualified in its entirety by reference to the full text thereof attached hereto as Exhibit 19.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from the sections entitled “Compensation Discussion and Analysis,” “Compensation Tables and Related Information,” “CEO Pay Ratio,” “Director Compensation Program,” “2026 Director Compensation Table,” “Risk Oversight,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in the Proxy Statement.
92
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information regarding security ownership of certain beneficial owners and management required by this item is incorporated by reference from the section entitled “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.
Equity Compensation Plan Information
The following table provides information about our common stock that may be issued under our Omnibus Equity Incentive Plan as of December 31 , 2025
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||||||||||
| Equity compensation plans approved by security holders | 1,144,589(1) | $118.08(2) | 44,100 | |||||||||||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
| Total | 1,144,589(1) | $118.08(2) | 44,100 | |||||||||||||||||
(1) This amount represents 167,150 shares of common stock subject to outstanding stock options, 484,311 shares of common stock subject to outstanding restricted stock units, 99,368 shares of stock subject to outstanding deferred share units, 260,581 shares of stock subject to outstanding performance shares units (assuming target level of performance), and 133,179 shares of stock subject to outstanding deferred restricted stock units.
(2) The weighted-average exercise price does not take into account shares of common stock subject to outstanding restricted stock units, outstanding deferred share units, outstanding performance stock units, or outstanding deferred restricted stock units.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from the sections entitled “Certain Relationships and Related Party Transactions,” “Director Independence” and “Committees of the Board of Directors” in the Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference from the section entitled “Independent Auditor Fees and Other Matters” in the Proxy Statement.
PART IV
Item 15.Exhibit and Financial Statement Schedules
(a) The following documents are filed as part of this Report:
(1) Financial Statements
The following financial statements are set forth under Part II, Item 8 of this Annual Report:
•Report of Independent Registered Public Accounting Firm;
•Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024;
•Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended December 31, 2025, December 31, 2024 and December 31, 2023;
•Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2025, December 31, 2024 and December 31, 2023;
93
•Consolidated Statements of Stockholders’ (Deficit) Equity for the fiscal years ended December 31, 2025, December 31, 2024 and December 31, 2023; and
•Notes to the Consolidated Financial Statements.
(2) Financial Statement Schedules
All schedules have been omitted because the required information is included in the consolidated financial statements or the notes thereto, or because it is not required.
(3) Exhibits
The exhibits listed in the following table have been filed or furnished, as applicable, with this Annual Report, or have been incorporated herein by reference.
94
| 10.3 | ||||||||
| 10.4+ | ||||||||
| 10.5+ | ||||||||
| 10.6+ | ||||||||
| 10.7+ | ||||||||
| 10.8+ | ||||||||
| 10.9+ | ||||||||
| 10.10 | Second Amendment to the Credit Agreement, dated February 17, 2021, among GrafTech International Ltd., GrafTech Finance Inc., GrafTech Luxembourg II S.À.R.L., GrafTech Switzerland SA, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders and issuing banks party thereto (incorporated herein by reference to Exhibit 10.1 to GrafTech International Ltd.’s Current Report on Form 8-K filed February 19, 2021). | |||||||
| 10.11 | ||||||||
| 10.12+ | ||||||||
| 10.13+ | ||||||||
| 10.14+ | ||||||||
| 10.15+ | ||||||||
| 10.16+ | ||||||||
| 10.17+ | ||||||||
| 10.18+ | ||||||||
| 10.19+ | ||||||||
| 10.20+ | ||||||||
| 10.21+ | ||||||||
95
| 10.22+ | ||||||||
| 10.23+ | ||||||||
| 10.24+ | ||||||||
| 10.25+ | ||||||||
| 10.26+ | ||||||||
| 10.27+ | ||||||||
| 10.28+ | ||||||||
| 10.29+ | ||||||||
| 10.30+ | ||||||||
| 10.31+ | ||||||||
| 10.32 | ||||||||
| 10.33 | ||||||||
| 10.34 | ||||||||
| 19 | ||||||||
| 21 | ||||||||
| 23* | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 97 | ||||||||
| 101 | The following financial information from GrafTech International Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations and Comprehensive Loss; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Stockholders’ (Deficit) Equity; and (v) Notes to the Consolidated Financial Statements. | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
96
____________________________
* Filed herewith
** Furnished herewith
+ Indicates management contract or compensatory plan or arrangement
97
Item 16.Form 10-K Summary
None.
98
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GRAFTECH INTERNATIONAL LTD. | ||||||||
| February 13, 2026 | By: | /s/ Timothy K. Flanagan | ||||||
| Timothy K. Flanagan | ||||||||
| Chief Executive Officer and President | ||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signatures | Title | Date | ||||||||||||
| /s/ Timothy K. Flanagan | Chief Executive Officer and President and Director (Principal Executive Officer) | February 13, 2026 | ||||||||||||
| Timothy K. Flanagan | ||||||||||||||
| /s/ Rory O’Donnell | Chief Financial Officer and Senior Vice President (Principal Financial Officer and Principal Accounting Officer) | February 13, 2026 | ||||||||||||
| Rory O’Donnell | ||||||||||||||
| /s/ Henry R. Keizer | Chairman and Director | February 13, 2026 | ||||||||||||
| Henry R. Keizer | ||||||||||||||
| /s/ Debra Fine | Director | February 13, 2026 | ||||||||||||
| Debra Fine | ||||||||||||||
| /s/ Jean-Marc Germain | Director | February 13, 2026 | ||||||||||||
| Jean-Marc Germain | ||||||||||||||
| /s/ Eric V. Roegner | Director | February 13, 2026 | ||||||||||||
| Eric V. Roegner | ||||||||||||||
| /s/ Sachin Shivaram | Director | February 13, 2026 | ||||||||||||
| Sachin Shivaram | ||||||||||||||
99
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-225113 on Form S-8 of our report dated February 13, 2026, relating to the financial statements of GrafTech International Ltd. and the effectiveness of GrafTech International Ltd.’s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2025.
/s/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
February 13, 2026
EXHIBIT 31.1
CERTIFICATION
I, Timothy K. Flanagan, certify that:
1.I have reviewed this Annual Report on Form 10-K of GrafTech International Ltd. (the “Registrant”);
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
| By: | /s/ Timothy K. Flanagan | |||||||
| Timothy K. Flanagan Chief Executive Officer and President (Principal Executive Officer) | ||||||||
| February 13, 2026 | ||||||||
EXHIBIT 31.2
CERTIFICATION
I, Rory O'Donnell, certify that:
1.I have reviewed this Annual Report on Form 10-K of GrafTech International Ltd. (the “Registrant”);
2.Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
3.Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
4.The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
(d)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
5.The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
| By: | /s/ Rory O'Donnell | |||||||
| Rory O'Donnell Chief Financial Officer and Senior Vice President (Principal Financial and Accounting Officer) | ||||||||
| February 13, 2026 | ||||||||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In accordance with the rules and regulations of the Securities and Exchange Commission (the "Commission"), the following Certification shall not be deemed to be filed with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, notwithstanding any general incorporation by reference of the Annual Report of GrafTech International Ltd. (the “Corporation”) on Form 10-K for the period ended December 31, 2025, as filed with the Commission on the date hereof (the “Report”), into any other document filed with the Commission.
In connection with the Report, I, Timothy K. Flanagan, Chief Executive Officer and President of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
| By: | /s/ Timothy K. Flanagan | |||||||
| Timothy K. Flanagan Chief Executive Officer and President (Principal Executive Officer) | ||||||||
| February 13, 2026 | ||||||||
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In accordance with the rules and regulations of the Securities and Exchange Commission (the "Commission"), the following Certification shall not be deemed to be filed with the Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, notwithstanding any general incorporation by reference of the Annual Report of GrafTech International Ltd. (the “Corporation”) on Form 10-K for the period ended December 31, 2025, as filed with the Commission on the date hereof (the “Report”), into any other document filed with the Commission.
In connection with the Report, I, Rory O'Donnell, Chief Financial Officer and Senior Vice President certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
| By: | /s/ Rory O'Donnell | |||||||
| Rory O'Donnell Chief Financial Officer and Senior Vice President (Principal Financial and Accounting Officer) | ||||||||
| February 13, 2026 | ||||||||