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Guarantor Information | 9 Months Ended
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Sep. 30, 2016
Consolidating Financials [Abstract] |
Supplemental Guarantor Information | 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, 2015 and September 30, 2016 and condensed consolidating statements of operations and comprehensive income for the periods January 1 and July 1 through August 14, 2015(Predecessor), the period August 15 through September 30, 2015 (Successor), and the three and nine months ended September 30, 2016 (Successor) and condensed consolidating statements of cashflows for the periods January 1 through August 14, 2015 (Predecessor), August 15 through September 30, 2015 and the nine months ended September 30, 2016 (Successor) of the Parent Guarantors and the Non-Guarantors.
CONDENSED CONSOLIDATING BALANCE SHEETS
As of December 31, 2015
(in thousands)
|  |  |  |  |  |  |  | Consolidating |  |
|  |  |  |  |  | Non- |  | Entries and |  |
|  | Parent |  | Guarantors |  | Guarantors |  | Eliminations |  | Consolidated
ASSETS |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 646 |  |  | $ | 6,281 |  |  | $ | — |  |  | $ | 6,927 |
Accounts receivable - affiliates |  | 51,592 |  |  | 9,803 |  |  | 19,505 |  |  | (80,900 | ) |  | — |
Accounts receivable - trade |  | — |  |  | 7,599 |  |  | 74,791 |  |  | — |  |  | 82,390 |
Inventories |  | — |  |  | 54,613 |  |  | 163,517 |  |  | — |  |  | 218,130 |
Prepaid and other current assets |  | — |  |  | 7,913 |  |  | 13,244 |  |  | — |  |  | 21,157 |
Current assets of discontinued operations |  | — |  |  | 81,638 |  |  | 17,520 |  |  | (877 | ) |  | 98,281 |
Total current assets |  | 51,592 |  |  | 162,212 |  |  | 294,858 |  |  | (81,777 | ) |  | 426,885 |
Investment in affiliates |  | 1,068,027 |  |  | 668,113 |  |  | — |  |  | (1,736,140 | ) |  | — |
Property, plant and equipment |  | — |  |  | 209,633 |  |  | 341,530 |  |  | — |  |  | 551,163 |
Deferred income taxes |  | — |  |  | — |  |  | 15,326 |  |  | — |  |  | 15,326 |
Goodwill |  | — |  |  | 72,399 |  |  | 99,660 |  |  | — |  |  | 172,059 |
Notes receivable - affiliate |  | — |  |  | 46,074 |  |  | — |  |  | (46,074 | ) |  | — |
Other assets |  | — |  |  | 79,367 |  |  | 73,246 |  |  | — |  |  | 152,613 |
Long-term assets of discontinued operations |  | — |  |  | 99,457 |  |  | 4,518 |  |  | — |  |  | 103,975 |
Total Assets |  | $ | 1,119,619 |  |  | $ | 1,337,255 |  |  | $ | 829,138 |  |  | $ | (1,863,991 | ) |  | $ | 1,422,021 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |
Accounts payable - affiliate |  | $ | 159 |  |  | $ | 71,099 |  |  | $ | 9,642 |  |  | $ | (80,900 | ) |  | $ | — |
Accounts payable - trade |  | — |  |  | 11,191 |  |  | 28,956 |  |  | — |  |  | 40,147 |
Short-term debt |  | — |  |  | 4,636 |  |  | 136 |  |  | — |  |  | 4,772 |
Accrued income and other taxes |  | — |  |  | 2,824 |  |  | 3,109 |  |  | — |  |  | 5,933 |
Rationalizations |  | — |  |  | 995 |  |  | 200 |  |  | — |  |  | 1,195 |
Other accrued liabilities |  | 2,444 |  |  | 4,847 |  |  | 13,703 |  |  | — |  |  | 20,994 |
Short-term liabilities of discontinued operations |  | — |  |  | 18,384 |  |  | 5,575 |  |  | (877 | ) |  | 23,082 |
Total current liabilities |  | 2,603 |  |  | 113,976 |  |  | 61,321 |  |  | (81,777 | ) |  | 96,123 |
Long-term debt - affiliate |  | 38,661 |  |  | — |  |  | 7,413 |  |  | (46,074 | ) |  | — |
Long-term debt - third party |  | 267,827 |  |  | 93,758 |  |  | 870 |  |  | — |  |  | 362,455 |
Other long-term obligations |  | — |  |  | 60,508 |  |  | 33,810 |  |  | — |  |  | 94,318 |
Deferred income taxes |  | — |  |  | 248 |  |  | 57,182 |  |  | — |  |  | 57,430 |
Long-term liabilities of discontinued operations |  | — |  |  | 738 |  |  | 429 |  |  | — |  |  | 1,167 |
Stockholders' equity |  | 810,528 |  |  | 1,068,027 |  |  | 668,113 |  |  | (1,736,140 | ) |  | 810,528 |
Total Liabilities and Stockholders' Equity |  | $ | 1,119,619 |  |  | $ | 1,337,255 |  |  | $ | 829,138 |  |  | $ | (1,863,991 | ) |  | $ | 1,422,021 |
CONDENSED CONSOLIDATING BALANCE SHEETS
As of September 30, 2016
(in thousands)
|  |  |  |  |  |  |  | Consolidating |  |
|  |  |  |  |  | Non- |  | Entries and |  |
|  | Parent |  | Guarantors |  | Guarantors |  | Eliminations |  | Consolidated
ASSETS |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 1,266 |  |  | $ | 10,881 |  |  | $ | — |  |  | $ | 12,147 |
Accounts receivable - affiliates |  | 51,592 |  |  | 1,729 |  |  | 19,372 |  |  | (72,693 | ) |  | — |
Accounts receivable - trade |  | — |  |  | 7,579 |  |  | 67,034 |  |  | — |  |  | 74,613 |
Inventories |  | — |  |  | 46,972 |  |  | 119,711 |  |  | — |  |  | 166,683 |
Prepaid and other current assets |  | — |  |  | 9,155 |  |  | 13,637 |  |  | — |  |  | 22,792 |
Current assets of discontinued operations |  | — |  |  | 82,738 |  |  | 18,068 |  |  | (5,920 | ) |  | 94,886 |
Total current assets |  | 51,592 |  |  | 149,439 |  |  | 248,703 |  |  | (78,613 | ) |  | 371,121 |
Investment in affiliates |  | 914,173 |  |  | 623,611 |  |  | — |  |  | (1,537,784 | ) |  | — |
Property, plant and equipment |  | — |  |  | 198,577 |  |  | 334,340 |  |  | — |  |  | 532,917 |
Deferred income taxes |  | — |  |  | — |  |  | 20,324 |  |  | — |  |  | 20,324 |
Goodwill |  | — |  |  | 70,399 |  |  | 100,718 |  |  | — |  |  | 171,117 |
Notes receivable - affiliate |  | — |  |  | 56,235 |  |  | — |  |  | (56,235 | ) |  | — |
Other assets |  | — |  |  | 71,126 |  |  | 72,005 |  |  | — |  |  | 143,131 |
Total Assets |  | $ | 965,765 |  |  | $ | 1,169,387 |  |  | $ | 776,090 |  |  | $ | (1,672,632 | ) |  | $ | 1,238,610 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |
Accounts payable - affiliate |  | $ | 269 |  |  | $ | 70,960 |  |  | $ | 1,464 |  |  | $ | (72,693 | ) |  | $ | — |
Accounts payable - trade |  | — |  |  | 8,711 |  |  | 33,271 |  |  | — |  |  | 41,982 |
Short-term debt |  | — |  |  | 5,824 |  |  | 641 |  |  | — |  |  | 6,465 |
Accrued income and other taxes |  | — |  |  | 1,467 |  |  | 4,110 |  |  | — |  |  | 5,577 |
Rationalizations |  | — |  |  | 195 |  |  | 15 |  |  | — |  |  | 210 |
Other accrued liabilities |  | 7,225 |  |  | 5,879 |  |  | 16,365 |  |  | — |  |  | 29,469 |
Liabilities of discontinued operations |  | — |  |  | 15,504 |  |  | 7,369 |  |  | (5,920 | ) |  | 16,953 |
Total current liabilities |  | 7,494 |  |  | 108,540 |  |  | 63,235 |  |  | (78,613 | ) |  | 100,656 |
Long-term debt - affiliate |  | 48,822 |  |  | — |  |  | 7,413 |  |  | (56,235 | ) |  | — |
Long-term debt - third party |  | 272,542 |  |  | 90,656 |  |  | 934 |  |  | — |  |  | 364,132 |
Other long-term obligations |  | — |  |  | 55,091 |  |  | 34,090 |  |  | — |  |  | 89,181 |
Deferred income taxes |  | — |  |  | 249 |  |  | 46,618 |  |  | — |  |  | 46,867 |
Long-term liabilities of discontinued operations |  | — |  |  | 678 |  |  | 189 |  | — |  | — |  | — |  | 867 |
Stockholders' equity |  | 636,907 |  |  | 914,173 |  |  | 623,611 |  |  | (1,537,784 | ) |  | 636,907 |
Total Liabilities and Stockholders' Equity |  | $ | 965,765 |  |  | $ | 1,169,387 |  |  | $ | 776,090 |  |  | $ | (1,672,632 | ) |  | $ | 1,238,610 |
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Period January 1 through August 14, 2015 (Predecessor)
(in thousands)
|  |  |  |  |  |  |  | Consolidating |  |
|  |  |  |  |  | Non- |  | Entries and |  |
|  | Parent |  | Guarantors |  | Guarantors |  | Eliminations |  | Consolidated
Sales - affiliates |  | $ | — |  |  | $ | 117,366 |  |  | $ | 52,683 |  |  | $ | (170,049 | ) |  | $ | — |
Sales - third party |  | — |  |  | 80,243 |  |  | 259,664 |  |  | — |  |  | 339,907 |
Net sales |  | — |  |  | 197,609 |  |  | 312,347 |  |  | (170,049 | ) |  | 339,907 |
Cost of sales |  | — |  |  | 180,983 |  |  | 294,067 |  |  | (170,049 | ) |  | 305,001 |
Gross profit |  | — |  |  | 16,626 |  |  | 18,280 |  |  | — |  |  | 34,906 |
Research and development |  | — |  |  | 3,377 |  |  | — |  |  | — |  |  | 3,377 |
Selling and administrative expenses |  | 6,750 |  |  | 31,513 |  |  | 26,120 |  |  | — |  |  | 64,383 |
Impairments |  | — |  |  | 35,381 |  |  | — |  |  | — |  |  | 35,381 |
Rationalizations |  | — |  |  | (68 | ) |  | 82 |  |  | — |  |  | 14 |
Operating income (loss) |  | (6,750 | ) |  | (53,577 | ) |  | (7,922 | ) |  | — |  |  | (68,249 | )
Other expense (income), net |  | — |  |  | 889 |  |  | 532 |  |  | — |  |  | 1,421 |
Interest expense - affiliate |  | 3 |  |  | 372 |  |  | — |  |  | (375 | ) |  | — |
Interest expense - third party |  | 24,366 |  |  | 1,574 |  |  | 271 |  |  | — |  |  | 26,211 |
Interest income - affiliate |  | (372 | ) |  | (3 | ) |  | — |  |  | 375 |  |  | — |
Interest income - third party |  | — |  |  | — |  |  | (363 | ) |  | — |  |  | (363 | )
Loss from continuing operations before provision for income taxes |  | (30,747 | ) |  | (56,409 | ) |  | (8,362 | ) |  | — |  | ` | (95,518 | )
Provision for income taxes |  | — |  |  | 384 |  |  | 6,068 |  |  | — |  |  | 6,452 |
Equity in loss from continuing operations of subsidiary |  | (71,223 | ) |  | (14,430 | ) |  | — |  |  | 85,653 |  |  | — |
Net (loss) income from continuing operations |  | (101,970 | ) |  | (71,223 | ) |  | (14,430 | ) |  | 85,653 |  |  | (101,970 | )
Loss from discontinued operations, net of tax |  | — |  |  | (13,430 | ) |  | (5,249 | ) |  | — |  |  | (18,679 | )
Equity in loss from discontinued operations of subsidiary |  | (18,679 | ) |  | (5,249 | ) |  | — |  |  | 23,928 |  |  | — |
Net (loss) income from discontinued operations |  | (18,679 | ) |  | (18,679 | ) |  | (5,249 | ) |  | 23,928 |  |  | (18,679 | )
Net loss |  | $ | (120,649 | ) |  | $ | (89,902 | ) |  | $ | (19,679 | ) |  | $ | 109,581 |  |  | $ | (120,649 | )
Statements of Comprehensive Income (Loss) |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (120,649 | ) |  | $ | (89,902 | ) |  | $ | (19,679 | ) |  | $ | 109,581 |  |  | $ | (120,649 | )
Other comprehensive loss |  | (26,674 | ) |  | (26,674 | ) |  | (28,041 | ) |  | 54,715 |  |  | (26,674 | )
Comprehensive loss |  | $ | (147,323 | ) |  | $ | (116,576 | ) |  | $ | (47,720 | ) |  | $ | 164,296 |  |  | $ | (147,323 | )
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Period January 1 through August 14, 2015 (Predecessor)
(in thousands)
|  |  |  |  |  |  | Consolidating |  |
|  |  |  |  | Non- |  | Entries and |  |
| Parent |  | Guarantors |  | Guarantors |  | Eliminations |  | Consolidated
Net cash (used in) provided by operating activities: | $ | (4,017 | ) |  | $ | 34,418 |  |  | $ | 25,632 |  |  | $ | (27,710 | ) |  | $ | 28,323 |
Cash flow from investing activities: |  |  |  |  |  |  |  |  |
Repayments from (loans to) affiliates | 36,204 |  |  | (21,343 | ) |  | — |  |  | (14,861 | ) |  | — |
Capital expenditures | — |  |  | (20,572 | ) |  | (11,729 | ) |  | — |  |  | (32,301 | )
Payments for derivative instruments | — |  |  | (7,595 | ) |  | (668 | ) |  | — |  |  | (8,263 | )
Proceeds from sale of fixed assets | — |  |  | 397 |  |  | 249 |  |  | — |  |  | 646 |
Net cash provided by (used in) investing activities | 36,204 |  |  | (49,113 | ) |  | (12,148 | ) |  | (14,861 | ) |  | (39,918 | )
Cash flow from financing activities: |  |  |  |  |  |  |  |  |
Loans from (Repayments to) affiliates | 21,343 |  |  | (36,204 | ) |  | — |  |  | 14,861 |  |  | — |
Dividends to affiliates | — |  |  | — |  |  | (27,710 | ) |  | 27,710 |  |  | — |
Short-term debt, net | — |  |  | 14,002 |  |  | 4,509 |  |  | — |  |  | 18,511 |
Revolving Facility borrowings | — |  |  | 126,000 |  |  | 34,000 |  |  | — |  |  | 160,000 |
Revolving Facility reductions | — |  |  | (87,000 | ) |  | (12,000 | ) |  | — |  |  | (99,000 | )
Repayment of Senior Subordinated Notes | (200,000 | ) |  | — |  |  | — |  |  | — |  |  | (200,000 | )
Issuance of Preferred Shares | 150,000 |  |  | — |  |  | — |  |  | — |  |  | 150,000 |
Principal payments on long term debt | — |  |  | (89 | ) |  | — |  |  | — |  |  | (89 | )
Proceeds from exercise of stock options | 32 |  |  | — |  |  | — |  |  | — |  |  | 32 |
Purchase of treasury shares | (63 | ) |  | — |  |  | — |  |  | — |  |  | (63 | )
Revolver facility refinancing | — |  |  | (5,037 | ) |  | (31 | ) |  | — |  |  | (5,068 | )
Other | (3,499 | ) |  | — |  |  | — |  |  | — |  |  | (3,499 | )
Net cash (used in) provided by financing activities | (32,187 | ) |  | 11,672 |  |  | (1,232 | ) |  | 42,571 |  |  | 20,824 |
Net change in cash and cash equivalents | — |  |  | (3,023 | ) |  | 12,252 |  |  | — |  |  | 9,229 |
Effect of exchange rate changes on cash and cash equivalents | — |  |  | — |  |  | (1,746 | ) |  | — |  |  | (1,746 | )
Cash and cash equivalents at beginning of period | — |  |  | 5,503 |  |  | 12,047 |  |  | — |  |  | 17,550 |
Cash and cash equivalents at end of period | $ | — |  |  | $ | 2,480 |  |  | $ | 22,553 |  |  | $ | — |  |  | $ | 25,033 |

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- Definition The entire disclosure for condensed financial statements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=18733093&loc=d3e5614-111684 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 10 -Paragraph f -Article 3 + Details
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