Supplemental Guarantor Information

9 Months Ended

Sep. 30, 2014


(15)	Guarantor Information

On November 20, 2012, GrafTech International Ltd. (the “Parent”) issued $300 million aggregate principal amount of Senior Notes. The Senior Notes mature on November 15, 2020 and bear interest at a rate of 6.375% per year, payable semi-annually in arrears on May 15 and November 15 of each year. The Senior Notes have been guaranteed on a senior basis by the following wholly-owned direct and indirect subsidiaries of the Parent: GrafTech Finance Inc., GrafTech Holdings Inc., GrafTech USA LLC, Seadrift Coke LLP, Fiber Materials, Inc., Intermat, GrafTech Global Enterprises Inc., GrafTech International Holdings Inc., GrafTech DE LLC, GrafTech Seadrift Holding Corp, GrafTech International Trading Inc., GrafTech Technology LLC, GrafTech NY Inc., and Graphite Electrode Network LLC.

The guarantors of the Senior Notes, solely in their respective capacities as such, are collectively called the “Guarantors.” Our other subsidiaries, which are not guarantors of the Senior Notes, are called the “Non-Guarantors.”

All of the guarantees are unsecured. All of the guarantees are full, unconditional (subject to limited exceptions described below) and joint and several. Each of the Guarantors are 100% owned, directly or indirectly, by the Parent. All of the guarantees of the Senior Notes continue until the Senior Notes have been paid in full, and payment under such guarantees could be required immediately upon the occurrence of an event of default under the Senior Notes. If a Guarantor makes a payment under its guarantee of the Senior Notes, it would have the right under certain circumstances to seek contribution from the other Guarantors.

The Guarantors will be released from the guarantees upon the occurrence of certain events, including the following: the unconditional release or discharge of any guarantee or indebtedness that resulted in the creation of the guarantee of the Senior Notes by such Guarantor; the sale or other disposition, including by way of merger or consolidation or the sale of its capital stock, following which such Guarantor is no longer a subsidiary of the Parent; or the Parent's exercise of its legal defeasance option or its covenant defeasance option as described in the indenture applicable to the Senior Notes. If any Guarantor is released, no holder of the Senior Notes will have a claim as a creditor against such Guarantor. The indebtedness and other liabilities, including trade payables and preferred stock, if any, of each Guarantor are effectively senior to the claim of any holders of the Senior Notes.

Investments in subsidiaries are recorded on the equity basis.

The following tables set forth condensed consolidating balance sheets as of December 31, 2013 and September 30, 2014 and condensed consolidating statements of operations and comprehensive income for the three and nine months ended September 30, 2013 and 2014 and condensed consolidating statements of cash flows for the nine months ended September 30, 2013 and 2014 of the Parent Guarantors and the Non-Guarantors.

Amounts presented in comprehensive income for the three and nine months ended September 30, 2013 have been revised. Previously, the Company did not present comprehensive income of subsidiaries in the guarantor column. This amount has been revised to present $2.9 million in comprehensive loss for the guarantors during the three months ended September 30, 2013 and $4.0 million in comprehensive income during the nine months ended September 30, 2013.



CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 31, 2013
(in thousands)

							Consolidating
					Non-		Entries and
	Parent		Guarantors		Guarantors		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	4,752	$	7,136	$	—		$	11,888
Accounts receivable - affiliates	42,410		28,551		15,824		(86,785		)	—
Accounts receivable - trade	—		48,998		150,568		—			199,566
Inventories	—		174,935		315,479		—			490,414
Prepaid and other current assets	—		22,555		51,235		—			73,790
Total current assets	42,410		279,791		540,242		(86,785		)	775,658

Investment in affiliates	1,709,914		828,012		—		(2,537,926		)	—
Property, plant and equipment	—		540,273		280,712		—			820,985
Deferred income taxes	—		—		10,334		—			10,334
Goodwill	—		293,162		203,648		—			496,810
Notes receivable - affiliate	51,090		7,413		—		(58,503		)	—
Other assets	4,752		53,447		55,862		—			114,061
Total assets	$	1,808,166	$	2,002,098	$	1,090,798	$	(2,683,214	)	$	2,217,848

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable - affiliate	$	—	$	58,206	$	28,579	$	(86,785	)	$	—
Accounts payable - trade	—		41,971		73,241		—			115,212
Short-term debt	—		165		996		—			1,161
Accrued income and other taxes	2,678		4,736		23,273		—			30,687
Rationalizations	—		1,890		16,531		—			18,421
Supply chain financing liability	—		—		9,455		—			9,455
Other accrued liabilities	2,444		12,404		26,091		—			40,939
Total current liabilities	5,122		119,372		178,166		(86,785		)	215,875

Long-term debt - affiliate	—		51,090		7,413		(58,503		)	—
Long-term debt - third party	475,675		50,525		15,393		—			541,593
Other long-term obligations	—		66,590		31,357		—			97,947
Deferred income taxes	6,620		4,607		30,457		—			41,684
Stockholders' equity	1,320,749		1,709,914		828,012		(2,537,926		)	1,320,749
Total liabilities and stockholders' equity	$	1,808,166	$	2,002,098	$	1,090,798	$	(2,683,214	)	$	2,217,848



CONDENSED CONSOLIDATING BALANCE SHEETS
As of September 30, 2014
(in thousands)

							Consolidating
					Non-		Entries and
	Parent		Guarantors		Guarantors		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	1,362	$	9,516	$	—		$	10,878
Accounts receivable - affiliates	39,243		41,619		35,617		(116,479		)	—
Accounts receivable - trade	—		39,252		124,719		—			163,971
Inventories	—		161,791		256,686		—			418,477
Prepaid and other current assets	—		18,156		69,832		—			87,988
Total current assets	39,243		262,180		496,370		(116,479		)	681,314

Investment in affiliates	1,513,267		772,957		—		(2,286,224		)	—
Property, plant and equipment	—		433,350		232,205		—			665,555
Deferred income taxes	—		—		13,614		—			13,614
Goodwill	—		292,749		203,195		—			495,944
Notes receivable - affiliate	44,020		7,413		—		(51,433		)	—
Other assets	4,237		51,473		49,308		—			105,018
Total assets	$	1,600,767	$	1,820,122	$	994,692	$	(2,454,136	)	$	1,961,445

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable - affiliate	$	—	$	74,859	$	41,620	$	(116,479	)	$	—
Accounts payable - trade	—		36,316		62,406		—			98,722
Short-term debt	—		1,130		14		—			1,144
Accrued income and other taxes	343		3,659		22,071		—			26,073
Rationalizations	—		9,239		3,508		—			12,747
Other accrued liabilities	7,225		11,360		25,626		—			44,211
Total current liabilities	7,568		136,563		155,245		(116,479		)	182,897

Long-term debt - affiliate	—		44,020		7,413		(51,433		)	—
Long-term debt - third party	484,820		53,427		1,262		—			539,509
Other long-term obligations	—		59,604		30,380		—			89,984
Deferred income taxes	—		13,241		27,435		—			40,676
Stockholders' equity	1,108,379		1,513,267		772,957		(2,286,224		)	1,108,379
Total liabilities and stockholders' equity	$	1,600,767	$	1,820,122	$	994,692	$	(2,454,136	)	$	1,961,445



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the three months ended September 30, 2013
(in thousands)

										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations				Consolidated

Sales - affiliates	$	—		$	57,727		$	39,196		$	(96,923	)		$	—
Sales - third party	—			122,360			180,724			—				303,084
Net sales	—			180,087			219,920			(96,923		)		303,084
Cost of sales	—			155,803			207,560			(96,923		)		266,440
Gross profit	—			24,284			12,360			—				36,644

Research and development	—			2,994			—			—				2,994
Selling and administrative expenses	—			9,751			17,875			—				27,626
Rationalizations	—			2,424			12,169			—				14,593
Operating income	—			9,115			(17,684		)	—				(8,569		)

Other expense, net	—			(1,476		)	704			—				(772		)
Interest expense - affiliate	—			279			190			(469		)		—
Interest expense - third party	7,849			779			470			—				9,098
Interest income - affiliate	(272		)	(189		)	(8		)	469				—
Interest income - third party	—			—			(49		)	—				(49		)
(Loss) income before income taxes	(7,577		)	9,722			(18,991		)	—			`	(16,846		)

(Benefit) provision for income taxes	(2,743		)	1,904			(8,377		)	—				(9,216		)
Equity in earnings of subsidiary	(2,796		)	(10,614		)	—			13,410				—
Net income (loss)	$	(7,630	)	$	(2,796	)	$	(10,614	)	$	13,410			$	(7,630	)

Statements of Comprehensive Income

Net income (loss)	$	(7,630	)	$	(2,796	)	$	(10,614	)	$	13,410			$	(7,630	)
Other comprehensive (loss) income	5,706			5,706			3,892			(9,598		)		5,706
Comprehensive (loss) income	$	(1,924	)	$	2,910		$	(6,722	)	$	3,812			$	(1,924	)



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the three months ended September 30, 2014
(in thousands)

										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations				Consolidated

Sales - affiliates	$	—		$	68,424		$	38,171		$	(106,595	)		$	—
Sales - third party	—			93,457			167,001			—				260,458
Net sales	—			161,881			205,172			(106,595		)		260,458
Cost of sales	—			157,726			191,683			(106,595		)		242,814
Gross profit	—			4,155			13,489			—				17,644

Research and development	—			2,871			—			—				2,871
Selling and administrative expenses	—			11,347			15,633			—				26,980
Impairments	—			—			—			—				—
Rationalizations	—			(1,592		)	12,436			—				10,844
Operating loss	—			(8,471		)	(14,580		)	—				(23,051		)

Other (income) expense, net	—			461			688			—				1,149
Interest expense - affiliate	—			193			—			(193		)		—
Interest expense - third party	8,055			883			131			—				9,069
Interest income - affiliate	(193		)	—			—			193				—
Interest income - third party	—			—			(144		)	—				(144		)
Loss before income taxes	(7,862		)	(10,008		)	(15,255		)	—			`	(33,125		)

Provision for (benefit from) income taxes	(2,830		)	3,313			1,335			—				1,818
Equity in losses of subsidiary	(29,911		)	(16,590		)	—			46,501				—
Net (loss) income	$	(34,943	)	$	(29,911	)	$	(16,590	)	$	46,501			$	(34,943	)

Statements of Comprehensive Income

Net (loss) income	$	(34,943	)	$	(29,911	)	$	(16,590	)	$	46,501			$	(34,943	)
Other comprehensive income (loss)	(23,247		)	(23,247		)	(21,996		)	45,243				(23,247		)
Comprehensive (loss) income	$	(58,190	)	$	(53,158	)	$	(38,586	)	$	91,744			$	(58,190	)



CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the nine months ended September 30, 2013
(in thousands)

										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations				Consolidated

Sales - affiliates	$	—		$	155,673		$	111,835		$	(267,508	)		$	—
Sales - third party	—			348,148			510,024			—				858,172
Net sales	—			503,821			621,859			(267,508		)		858,172
Cost of sales	—			431,146			560,419			(267,508		)		724,057
Gross profit	—			72,675			61,440			—				134,115

Research and development	—			8,874			—			—				8,874
Selling and administrative expenses	—			32,833			54,667			—				87,500
Rationalizations	—			2,424			12,169			—				14,593
Operating income	—			28,544			(5,396		)	—				23,148

Other (income) expense, net	—			(762		)	1,515			—				753
Interest expense - affiliate	—			1,112			566			(1,678		)		—
Interest expense - third party	23,393			2,374			1,286			—				27,053
Interest income - affiliate	(982		)	(565		)	(131		)	1,678				—
Interest income - third party	—			—			(162		)	—				(162		)
Income before income taxes	(22,411		)	26,385			(8,470		)	—			`	(4,496		)

Provision for income taxes	(8,113		)	6,922			(4,267		)	—				(5,458		)
Equity in earnings of subsidiary	15,260			(4,203		)	—			(11,057		)		—
Net income	$	962		$	15,260		$	(4,203	)	$	(11,057	)		$	962

Statements of Comprehensive Income

Net income	$	962		$	15,260		$	(4,203	)	$	(11,057	)		$	962
Other comprehensive (loss) income	(11,219		)	(11,219		)	(12,216		)	23,435				(11,219		)
Comprehensive (loss) income	$	(10,257	)	$	4,041		$	(16,419	)	$	12,378			$	(10,257	)



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the nine months ended September 30, 2014
(in thousands)

										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations				Consolidated

Sales - affiliates	$	—		$	192,740		$	106,742		$	(299,482	)		$	—
Sales - third party	—			315,387			510,046			—				825,433
Net sales	—			508,127			616,788			(299,482		)		825,433
Cost of sales	—			472,202			591,422			(299,482		)		764,142
Gross profit	—			35,925			25,366			—				61,291

Research and development	—			8,544			—			—				8,544
Selling and administrative expenses	—			35,479			53,545			—				89,024
Impairments	—			121,570			—			—				121,570
Rationalizations	—			(1,540		)	13,301			—				11,761
Operating loss	—			(128,128		)	(41,480		)	—				(169,608		)

Other expense (income), net	—			1,281			621			—				1,902
Interest expense - affiliate	—			629			—			(629		)		—
Interest expense - third party	24,010			2,529			684			—				27,223
Interest income - affiliate	(629		)	—			—			629				—
Interest income - third party	—			—			(257		)	—				(257		)
Loss before income taxes	(23,381		)	(132,567		)	(42,528		)	—			`	(198,476		)

(Benefit from) provision for income taxes	(8,417		)	17,712			(5,878		)	—				3,417
Equity in losses of subsidiary	(186,929		)	(36,650		)	—			223,579				—
Net (loss) income	$	(201,893	)	$	(186,929	)	$	(36,650	)	$	223,579			$	(201,893	)

Statements of Comprehensive Income

Net (loss) income	$	(201,893	)	$	(186,929	)	$	(36,650	)	$	223,579			$	(201,893	)
Other comprehensive income (loss)	(20,936		)	(20,936		)	(19,474		)	40,410				(20,936		)
Comprehensive (loss) income	$	(222,829	)	$	(207,865	)	$	(56,124	)	$	263,989			$	(222,829	)



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2013
(in thousands)
										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations			Consolidated
Net cash provided by operating activities:	$	(5,857	)	$	50,244		$	20,791		$	—		$	65,178

Cash flow from investing activities:
(Loans to) repayments from affiliates	7,015			—			—			(7,015		)	—
Capital expenditures	—			(37,081		)	(25,617		)	—			(62,698		)
Proceeds from derivative instruments	—			(22		)	874			—			852
Insurance recoveries	—			280			2,053			—			2,333
Net cash (used in) provided by investing activities	7,015			(36,823		)	(22,690		)	(7,015		)	(59,513		)

Cash flow from financing activities:
Loans from (repayments to) affiliates	—			(7,015		)	—			7,015			—
Short-term debt borrowings	—			—			(4,082		)	—			(4,082		)
Revolving Facility borrowings	—			67,000			67,000			—			134,000
Revolving Facility reductions	—			(73,500		)	(45,000		)	—			(118,500		)
Principal payments on long term debt	—			(131		)	(58		)	—			(189		)
Supply chain financing	—			—			(14,422		)	—			(14,422		)
Proceeds from exercise of stock options	175			—			—			—			175
Purchase of treasury shares	(844		)	—			—			—			(844		)
Other	(489		)	(16		)	(6,701		)	—			(7,206		)
Net cash used in financing activities	(1,158		)	(13,662		)	(3,263		)	7,015			(11,068		)

Net (decrease) increase in cash and cash equivalents	—			(241		)	(5,162		)	—			(5,403		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(444		)	—			(444		)
Cash and cash equivalents at beginning of period	—			4,425			12,892			—			17,317
Cash and cash equivalents at end of period	$	—		$	4,184		$	7,286		$	—		$	11,470



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2014
(in thousands)
										Consolidating
							Non-			Entries and
	Parent			Guarantors			Guarantors			Eliminations			Consolidated
Net cash (used in) provided by operating activities:	$	(10,274	)	$	50,298		$	42,865		$	—		$	82,889

Cash flow from investing activities:
Repayments from affiliates	7,070			—			—			(7,070		)	—
Capital expenditures	—			(49,756		)	(19,558		)	—			(69,314		)
Payments for (proceeds from) derivatives	—			(51		)	(522		)	—			(573		)
Proceeds from sale of assets	—			1,706			2,373			—			4,079
Insurance recoveries	—			—			2,834			—			2,834
Net cash provided by (used in) investing activities	7,070			(48,101		)	(14,873		)	(7,070		)	(62,974		)

Cash flow from financing activities:
Repayments to affiliates	—			(7,070		)	—			7,070			—
Short-term debt borrowings	—			965			(982		)	—			(17		)
Revolving Facility borrowings	—			151,000			78,000			—			229,000
Revolving Facility reductions	—			(148,000		)	(92,000		)	—			(240,000		)
Principal payments on long term debt	—			(98		)	(60		)	—			(158		)
Supply chain financing	—			—			(9,455		)	—			(9,455		)
Proceeds from exercise of stock options	2,813			—			—			—			2,813
Purchase of treasury shares	(620		)	—			—			—			(620		)
Revolver facility refinancing	—			(2,384		)	(357		)	—			(2,741		)
Other	1,011			—			—			—			1,011
Net cash provided by (used in) financing activities	3,204			(5,587		)	(24,854		)	7,070			(20,167		)

Net increase in cash and cash equivalents	—			(3,390		)	3,138			—			(252		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(758		)	—			(758		)
Cash and cash equivalents at beginning of period	—			4,752			7,136			—			11,888
Cash and cash equivalents at end of period	$	—		$	1,362		$	9,516		$	—		$	10,878