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FORM 10-Q
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 Forfor the quarterly period ended September 30, 1996March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 Forfor the transition period from ...................................
to ...................................
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Commission file number: (1-13888)
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UCAR INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWAREDelaware 06-1385548
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization) Identification Number)
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39 OLD RIDGEBURY ROAD, J-4, DANBURY, CONNECTICUTOld Ridgebury Road 06817-0001
- ------------------------------------------------ ----------Danbury, Connecticut (Zip Code)
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 207-7700
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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 [ X ][X] No [ ]
As of September 30, 1996, 46,497,915March 31, 1997, 46,856,521 shares of common stock, par value $.01 per
share, were outstanding.
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
------------------------------------------------------------
Consolidated Balance Sheets as of September 30, 1996March 31, 1997
and December 31, 1995............................................1996.......................................... Page 3
Consolidated Statements of Operations for the Three Months
Ended September 30, 1996ended March 31, 1997 and 1995 and for the Nine Months Ended
September 30, 1996 and 1995......................................1996.................................. Page 4
Consolidated Statements of Cash Flows for the NineThree Months
Ended September 30, 1996ended March 31, 1997 and 1995................................1996.................................. Page 5
Consolidated Statement of Stockholders' Equity (Deficit) for the
NineThree Months Ended September 30, 1996.............................ended March 31, 1997.............................. Page 76
Notes to Consolidated Financial Statements........................Statements....................... Page 87
Item 2. Management's Discussion and Analysis of Financial Condition
----------------------------------------------------------------------------------------------------------------------------------------
and Results of Operations...................................Operations................................ Page 1211
-------------------------
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K..........................8-K......................... Page 1816
------------------------------------------
SIGNATURE..............................................................SIGNATURE............................................................ Page 1917
INDEX TO EXHIBITS......................................................EXHIBITS.................................................... Page E-1
PART I. FINANCIAL INFORMATION
ITEMItem 1. FINANCIAL STATEMENTSFinancial Statements
- ----------------------------
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance SheetsCONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share data )
September 30,data)
March 31, December 31,
ASSETS 1997 1996 1995
---- ----
(Unaudited)
Current assets:CURRENT ASSETS:
Cash and cash equivalents.........................equivalents........................... $ 9177 $ 5395
Notes and accounts receivable..................... 176 180receivable....................... 203 185
Inventories:
Raw materials and supplies..................... 35 28supplies........................ 39 39
Work in process................................ 97 78process................................... 120 100
Finished goods................................. 39 30goods.................................... 41 37
------- ------
171 136200 176
Prepaid expenses.................................. 37 34expenses.................................... 25 27
------- ------
Total current assets...................... 475 403assets....................... 505 483
------- ------
Property, plant and equipment....................... 1,036 1,013equipment......................... 1,190 1,087
Less: accumulated depreciation...................... 656 635depreciation........................ 694 653
------- ------
Net fixed assets.......................... 380 378assets........................... 496 434
------- ------
Company carried at equity........................... 16equity............................. 20 18
Other assets........................................ 42 65assets.......................................... 45 53
------- ------
Total assets..............................assets............................... $ 9131,066 $ 864988
======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:CURRENT LIABILITIES:
Accounts payable..................................payable.................................... $ 4663 $ 5667
Short-term debt................................... 37 31debt..................................... 64 53
Payments due within one year on long-term debt.... 1debt...... 6 1
Accrued income and other taxes.................... 42 50taxes...................... 29 37
Other accrued liabilities......................... 78 90liabilities........................... 80 91
------- ------
Total current liabilities................. 204 228liabilities.................. 242 249
------- ------
Long-term debt...................................... 596 636debt........................................ 599 581
Other long-term obligations......................... 132 137obligations.......................... 143 138
Deferred income taxes............................... 17 20taxes................................. 33 16
Minority stockholders' equity in consolidated entities.......................................... 4 5
Common stock subject to "puts"...................... - 8
Less: related loans to management.................. - (3)entities 14 6
------- ------
Stockholders' equity (deficit)STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, - par value $.01;$.01, 10,000,000 shares
authorized, - 10,000,000 shares; issued - none.............none issued........................... - -
Common stock, - par value $.01;$.01, 100,000,000 shares
authorized, - 100,000,000 shares;46,856,521 shares issued - 46,497,915
shares.......................................at March 31,
1997, 46,614,724 shares issued at
December 31, 1996 ................................ - -
Additional paid-in capital.......................... 496 485502 498
Cumulative foreign currency translation adjustment.. (115)(120) (116)
Retained earnings (deficit)......................... (421) (536)(347) (384)
------- ------
Total stockholders' equity (deficit)........ (40) (167)....... 35 (2)
------- ------
Total liabilities and stockholders' equity
(deficit).......................... .............................. $ 9131,066 $ 864988
======= ======
See accompanying Notes to Consolidated Financial Statements.
3
PART I (Cont.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in millions, except per share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
Net sales .................................................................... $ 227 $ 220 $ 711 $ 657
Cost of sales ................................................................ 141 136 436 411
-------- -------- -------- --------
Gross profit ................................................................. 86 84 275 246
Research and development ..................................................... 2 2 6 5
Selling, administrative and other expenses ................................... 21 39 66 87
Restructuring costs .......................................................... - - - 30
Other (income) expense (net) ................................................. - (2) 1 (4)
-------- -------- -------- --------
Operating profit ........................................................ 63 45 202 128
Interest expense ............................................................. 16 26 47 75
-------- -------- -------- --------
Income before provision for income taxes ................................ 47 19 155 53
Provision for income taxes ................................................... 14 8 52 60
-------- -------- -------- --------
Income (loss) of consolidated entities .................................. 33 11 103 (7)
Less: minority stockholders' share of income ................................. - 1 - 4
Plus: UCAR share of net income from company carried at equity ................ 2 3 5 5
-------- -------- -------- --------
Income (loss) before extraordinary charge and cumulative
effect of change in accounting principles ............................. 35 13 108 (6)
Extraordinary charge, net of tax ............................................. - 16 - 18
-------- -------- -------- --------
Income (loss) before cumulative effect of change in
accounting principles ................................................. 35 (3) 108 (24)
Cumulative effect on prior years of change in accounting for inventories ..... - - 7 -
-------- -------- -------- --------
Net income (loss) ..................................................... $ 35 $ (3) $ 115 $ (24)
======== ======== ======== ========
Primary net income per common share (Note 7) (Pro forma in 1995):
Income before cumulative effect of change in accounting principles ........ $ 0.72 $ 0.58 $ 2.22 $ 1.22
Cumulative effect on prior years of change in accounting for inventories... - - 0.15 -
-------- -------- -------- --------
Primary net income per share .......................................... $ 0.72 $ 0.58 $ 2.37 $ 1.22
======== ======== ======== ========
Weighted average common shares outstanding
(Pro forma in 1995) (in thousands) .................................. 48,619 48,759 48,405 48,693
======== ======== ======== ========
PART I (CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share data)
(Unaudited)
Three Months
Ended March 31,
---------------
1997 1996
---- ----
Net sales ................................................... $ 238 $ 243
Cost of sales ............................................... 150 150
------ ------
Gross profit ................................................ 88 93
Research and development .................................... 2 2
Selling, administrative and other expenses .................. 23 22
Other (income) expense (net) ................................ 1 1
------ ------
Operating profit ..................................... 62 68
Interest expense ............................................ 15 16
------ ------
Income before provision for income taxes ............. 47 52
Provision for income taxes .................................. 12 19
------ ------
Income of consolidated entities ...................... 35 33
Less: minority stockholders' share of income ................ - -
Plus: UCAR share of net income from company
carried at equity ......................................... 2 2
------ ------
Income before cumulative effect of
change in accounting principle .................... 37 35
Cumulative effect on prior years of change in accounting
for inventories ........................................... - 7
------ ------
Net income ........................................... $ 37 $ 42
====== ======
PRIMARY NET INCOME PER COMMON SHARE:
Income before cumulative effect of change in
accounting principle .................................... $ 0.76 $ 0.73
Cumulative effect on prior years of change in
accounting for inventories .............................. - 0.15
------- -------
Primary net income per share ........................ $ 0.76 $ 0.88
====== ======
Weighted average common shares outstanding
(in thousands) ..................................... 48,788 48,191
====== ======
See accompanying Notes to Consolidated Financial Statements.
4
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash FlowsCONSOLIDATED STATEMENTS OF CASH FLOWS
Increase in Cash and Cash Equivalents
(Dollars in millions)
(Unaudited)
NineThree Months
Ended September 30,
-------------------March 31,
---------------
1997 1996 1995
---- ----
Cash flow from operating activities:CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) ......................................................................................... $ 11537 $ (24)
Extraordinary charge, net of tax ......................... - 1842
Cumulative effect on prior years of change in
accounting for inventories .......................................................... - (7)
-
Non-cash (credits) charges to net income (loss):income:
Depreciation ........................................... 28 30............................................ 11 10
Deferred income taxes .................................. 17 (8)
Restructuring costs .................................... - 30
Vesting of performance stock options ................... - 19................................... 5 11
Other non-cash charges ................................. 10.................................. 1 3
Working capital * ........................................ (53) (12).......................................... (49) (45)
Long-term assets and liabilities ......................... (5) 9
----- -----
Net cash provided by operating activities ............ 105 63
----- -----
Cash flow from investing activities:........................... 3 (6)
---- ----
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES ... 8 8
---- ----
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures ..................................... (37) (44)....................................... (11) (11)
Purchase of minority shares in subsidiary ................ (3) (53)subsidiaries ................................... (55) (2)
Redemption/sale of assets .................................................................. 4 1
2
----- -----
Net cash used in investing activities ................ (39) (95)
----- -----
Cash flow from financing activities:---- ----
NET CASH USED IN INVESTING ACTIVITIES ................. (62) (12)
---- ----
CASH FLOW FROM FINANCING ACTIVITIES:
Short-term debt .......................................... 6 (13)............................................ 11 (2)
Long-term debt borrowings ................................ 2 960.................................. 49 -
Long-term debt reductions ................................ (42) (477)
Financing costs .......................................... (1) (64).................................. (26) -
Sale of common stock net....................................... 3 -
Financing costs ............................................ (2) -
Tax benefit arising from exercise of loans to management ......... 7 427
Cash distribution to stockholders ........................ - (756)
----- -----employee stock options 1 1
---- ----
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ... 36 (1)
---- ----
Net cash (used in) provided by financing activities .. (28) 77
----- -----
Net increasedecrease in cash and cash equivalents ................. 38 45
Effect of exchange rate changes on
cash and cash equivalents ............................... - (3)................... (18) (5)
Cash and cash equivalents at beginning of period ...................... 95 53 60
----- -----
Cash and cash equivalents at end of period ................ $ 91 $ 102
===== =====
(Continued)
5
PART I (Cont.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
Nine Months
Ended September 30,
-------------------
1996 1995
---- ----
Supplemental disclosures of cash flow information:CASH AND CASH EQUIVALENTS AT END OF PERIOD .................. $ 77 $ 48
==== ====
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Net cash paid during the periods for:
Interest expense ................................................................................ $ 4621 $ 6021
Income taxes ........................................... 39 26............................................. 12 4
*Net change in working capital by component (excluding
cash and cash equivalents, deferred income taxes
and short-term debt):
(Increase) decrease in current assets:
Notes and accounts receivable:
Sale of receivables .............................................................. $ 35 $ -5
Other changes .................................... (2) (11)...................................... - (21)
Inventories .......................................... (25) (11)............................................ (5) (15)
Prepaid expenses and other current assets ............ 4 -
Increase (decrease).............. (4) 6
Decrease in payables and accruals ............ (33) 10......................... (45) (20)
---- ----
Working capital .................................. $(53) $(12)WORKING CAPITAL .................................... $ (49) $ (45)
==== ====
See accompanying Notes to Consolidated Financial Statements.
65
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity (Deficit)
Nine Months Ended September 30, 1996CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Dollars in millions)
(Unaudited)
Cumulative
Foreign
Additional Currency Retained Total
Common Paid-in Translation Earnings Stockholders'
Stock Capital Adjustment (Deficit) Equity (Deficit)
----- ------- ---------- --------- ----------------
Balance at DecemberBALANCE AT DECEMBER 31, 1995...................1996............... $ - $ 485498 $ (116) $ (536)(384) $ (167)(2)
Exercise of employee stock options.............options......... - 43 - - 43
Tax benefit arising from exercise
of employee stock options...................options............... - 3 - - 3
Reclassification of:
Common stock subject to "puts"............. - 8 - - 8
Related loans to management................ - (3) - - (3)
Registration cost of offering................. - (1) - - (1)
Translation adjustments.......................1 - - 1
Translation adjustments.................... - 1- (4) - (4)
Net income....................................income................................. - - - 115 115
-----37 37
------ ------- ----- -------
Balance at September 30, 1996.................------ ------ ------ ------
BALANCE AT MARCH 31, 1997.................. $ - $ 496502 $ (115)(120) $ (421)(347) $ (40)
=====35
====== ======= ======= =======
====== ====== ====== ======
See accompanying Notes to Consolidated Financial Statements.
7
6
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Cont.)
(Unaudited)
(1) INTERIM FINANCIAL PRESENTATION
The interim Consolidated Financial Statements are unaudited; however, in
the opinion of management, they have been prepared in accordance with
Rule 10-01 of Regulation S-X adopted by the Securities and Exchange
Commission ("Commission") and reflect all adjustments (all of which are
of a normal, recurring nature) which are necessary for a fair statement
of the financial condition, results of operations, cash flows and changes
in stockholders' equity (deficit) for the periods presented. Results of
operations for the ninethree months ended September 30, 1996March 31, 1997 are not necessarily
indicative of the results that may be expected for the entire fiscal year ending
December 31, 1996.1997.
As used in these Notes, references to "UCAR" mean UCAR International
Inc., to "Global" mean UCAR Global Enterprises Inc., a direct,
wholly-owned subsidiary of UCAR, and to the "Company" mean UCAR and its
subsidiaries (including Global), collectively. Separate financial
statements of Global are not presented because they would not be material
to holders of senior subordinated notes. The Company's investment in EMSA
(Pty.) Ltd. ("EMSA"), a 50%-owned company, is carried on the equity basis
and its proportional share of the net income of EMSA is reported under
the caption "UCAR share of net income from company carried at equity". At
September 30, 1996,March 31, 1997, retained earnings (deficit) included $37$41 million
representing UCAR's share of the undistributed earnings (prior to foreign
currency translation adjustment) of EMSA.
(2) UCAR GLOBAL ENTERPRISES INC.
UCAR has no material assets, liabilities or operations other than those
that result from its ownership of 100% of the outstanding common stock of
Global.
The following is a summary of the consolidated assets and liabilities of
Global and its subsidiaries at September 30, 1996 and December 31, 1995
and their consolidated results of operations for the three month and nine
month periods ended September 30, 1996 and 1995:
September 30,operations:
March 31, December 31,
1997 1996 1995
---- ----
(Dollars in millions)
Assets:
Current assets ............................assets.......................... $ 475505 $ 403483
Non-current assets ........................ 438 461assets...................... 561 505
------ ------
Total assets ...........................assets......................... $ 9131,066 $ 864988
====== ======
Liabilities:
Current liabilities .......................liabilities...................... $ 204 228242 $ 249
Non-current liabilities ................... 745 793liabilities.................. 775 735
------ ------
Total liabilities ......................liabilities.................... $ 949 $1,0211,017 $ 984
====== ======
Minority stockholders' equity in
consolidated entities ..................entities.................. $ 414 $ 56
====== ======
87
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Cont.)
(Unaudited)
Three Months
Nine Months
Ended September 30, Ended September 30,
------------------- -------------------March 31,
---------------
1997 1996 1995 1996 1995
---- ----
---- ----
(Dollars in millions)
Net sales ............................sales..................................... $ 227238 $ 220 $ 711 $ 657243
Gross profit ......................... 86 84 275 246profit.................................. 88 93
Income (loss) before extraordinary
charge and cumulative effect of
change in accounting principles ....principles........... 37 35 13 108 (6)
Net income (loss) .................... 35 (3) 115 (24).................................. 37 42
(3) CHANGE IN ACCOUNTING FOR INVENTORIES
Effective January 1, 1996, the Company changed its method of determining
LIFO inventories. The new methodology provides specifically identified
parameters for defining new items within the LIFO pool which the Company
believes improves the accuracy of costing those items.
The Company recorded income of $7 million (after related income taxes of
$4 million) as the cumulative effect on prior years of this change in
accounting for inventories. The Company believes this change will not
materially impact the Company's ongoing results of operations.
(4) INCOME TAXES
In connection withACQUISITION OF SUBSIDIARIES
On January 2, 1997, the leveraged recapitalizationCompany acquired 70% of the Company in
January 1995outstanding shares of
Carbone Savoie S.A.S. ("Recapitalization"Carbone Savoie"), certain foreign subsidiaries borroweda wholly-owned subsidiary of a
competitor, for a purchase price of $33 million. Carbone Savoie is the
leading worldwide manufacturer of carbon cathodes which are consumed in
the production of aluminum.
On February 1, 1997, the Company, through a newly-formed 70%-owned
subsidiary, UCAR Elektroden GmbH ("UCAR Elektroden"), purchased the
graphite electrode business of Elektrokohle Lichtenberg AG ("EKL") in
Berlin, Germany. The 30% minority interest in UCAR Elektroden is held by
a private German company. The aggregate purchase price paid by UCAR
Elektroden for the EKL assets was $15 million, consisting of $3 million
for equipment and repatriated funds$12 million for working capital.
The acquisitions were accounted for as purchases. Accordingly, the
purchase price has been allocated to the United States. Inassets purchased and the
three months ended
March 31, 1995,liabilities assumed based upon the Company recorded a tax liability of $37 million in
connection therewith.
(5) RESTRUCTURING COSTS
The Company recorded restructuring costs of $30 million in the three
months ended March 31, 1995 to write-off fixed assets of $22 million and
accrue $8 million of related shutdown costs in connection with a project
to close certain high cost manufacturing operations and to add modern
lower cost manufacturing operationsfair values at the Company's North American
graphite electrode plants.
9date of
acquisition.
8
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Cont.)
(Unaudited)
(5) AMENDMENTS TO CREDIT FACILITIES
On March 19, 1997, the Company's senior secured bank credit facilities
(the "Senior Bank Facilities") were amended to reduce the interest rates
on amounts outstanding under the Senior Bank Facilities, to increase the
amount available under its revolving credit facility to $250 million from
$100 million and to change the covenants to allow more flexibility in
uses of free cash flow for acquisitions, capital expenditures and stock
repurchases. The rates applicable to the Senior Bank Facilities were
reduced from an adjusted LIBOR plus a margin ranging from 1.00% - 2.00%
to an adjusted LIBOR plus a margin ranging from 0.75% - 1.50% .
(6) STOCK REPURCHASE PROGRAM
On February 10, 1997, UCAR's Board of Directors authorized a program to
repurchase up to $100 million of common stock at prevailing prices from
time to time in the open market or otherwise depending on market
conditions and other factors, without any established minimum or maximum
time period or number of shares.
(7) OTHER (INCOME) EXPENSE - NET
The following is an analysis of other (income) expense (net):
Three Months
Nine Months
Ended September 30, Ended September 30,
------------------- -------------------March 31,
---------------
1997 1996 1995 1996 1995
---- ----
---- ----
(Dollars in millions)
Foreign currency adjustments...........adjustments.... $ -2 $ 31
Interest income................. (2) (2)
Other........................... 1 2
----- -----
$ 1 $ (1)
Interest1
===== =====
(8) INCOME TAXES
In the three months ended March 31, 1997 and 1996, the Company paid $12
million and $4 million, respectively, to various taxing authorities and
recognized $12 million and $19 million, respectively, in tax expense. In
the three months ended March 31, 1997, income ....................... (2) (6) (7) (19)
Loss on sales and disposals of assets.. - - 1 1
Brazilian monetary correction ......... - - - 2
Bank feestax expense was lower than
the amount computed by applying the United States Federal income tax rate
primarily due to Recapitalization ..... 1 - 1 7
Other ................................. 1 1 5 6
---- ---- ---- ----
$ - $ (2) $ 1 $ (4)
==== ===== ==== ====
(7)tax credits in the United States from research and
development expenses and tax benefits recognized in Italy and Spain
associated with capital expenditures and fixed asset revaluations,
respectively.
9
PART I (CONT.)
UCAR INTERNATIONAL INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Cont.)
(Unaudited)
(9) EARNINGS PER SHARE
Primary Net Income Per Share
Primary net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during the period.
The weighted average number of common shares outstanding includes common
stock equivalents calculated in accordance with the "treasury stock
method," wherein the net proceeds from the exercise thereof are assumed
to be used to repurchase outstanding shares of common stock at the
average market price for the period. Fully diluted earnings per share is
not significantly different than primary net income per share and,
therefore, has not been presented.
Pro Forma Net Income Per Share
For the unaudited pro forma net income per share data presented on the
Consolidated Statements of Operations, historical net loss for the three
month and nine month periods ended September 30, 1995 has been adjusted
as if the Recapitalization and the Company's initial public offering
("Initial Offering"), redemption of senior subordinated notes
("Redemption") and refinancing of credit facilities ("Refinancing") had
occurred as of January 1, 1995 and to exclude the extraordinary charge
and the non-recurring effects of the Recapitalization and the Initial
Offering. The weighted average number of common shares outstanding
reflects(10) SUBSEQUENT EVENTS
On April 8, 1997, 6,411,227 shares of common stock outstanding after the Initial Offering,
includingof UCAR were sold by
Blackstone Capital Partners II Merchant Banking Fund L.P. and its
affiliates (collectively, "Blackstone") in a secondary public offering
(the "1997 Secondary Offering"). Concurrently therewith, UCAR repurchased
1,300,000 of shares of common stock equivalents calculated in accordance withof UCAR from Blackstone (the
"Blackstone Share Repurchase") for $48 million, which constituted part of
its previously announced stock repurchase program. After the "treasury stock method," wherein1997
Secondary Offering and the net proceeds fromBlackstone Share Repurchase, Blackstone owned
approximately 3% of the exercise
thereof are assumed to be used to repurchase outstanding shares of common stock at $25.80 (the averagestock. UCAR did not
sell any shares in, or receive any proceeds from, the 1997 Secondary
Offering.
On April 22, 1997, the Company purchased the shares of EMSA held by
Samancor Limited, the Company's joint venture partner in this 50%-owned
affiliate. The purchase price was approximately $75 million, plus
expenses. The acquisition will be accounted for the threeas a purchase.
10
PART I (Cont.(CONT.)
UCAR INTERNATIONAL INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Cont.)
(Unaudited)
months ended September 30, 1995) and $24.42 (the average price for the
nine months ended September 30, 1995).
The following table is a summary of the pro forma adjustments to net loss
for the periods presented:
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1995 1995
---- ----
(Dollars in millions)
Net loss as reported in the Consolidated Financial Statements ............ $ (3) $(24)
Pro forma effects of the Recapitalization (after tax):
Compensation expense related to the Company's long
term incentive compensation plan................................. - 1
Senior subordinated credit facility expense.......................... - 4
Net adjustment to interest........................................... - (3)
Taxes due to Recapitalization ....................................... - 37
Pro forma effects of the Initial Offering and Redemption (after tax):
Accelerated vesting of performance stock options
and matching shares.............................................. 12 12
Net adjustment to interest........................................... 2 9
Extraordinary charge................................................. 16 18
Pro forma effects of the Refinancing (after tax):
Net adjustment to interest........................................... 2 6
---- ----
Pro forma net income...................................................... $ 29 $ 60
==== ====
11
PART I (Cont.)
UCAR INTERNATIONAL INC.
ITEMItem 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
-------------
GENERALThis Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Actual results,
events and circumstances could differ materially from those set forth in such
statements due to various factors. Such factors include the possibility that
announced additions to electric arc furnace steel production capacity may not
occur, increased electric arc furnace steel production may not occur or result
in increased demand or higher prices for graphite electrodes, acquired
manufacturing capacity may not be fully utilized, technological advances
expected by the Company (as defined herein) may not be achieved, changing
economic and competitive conditions, other technological developments and other
risks and uncertainties, including those set forth in the Company's other
filings with the Securities and Exchange Commission.
As used herein, references to "UCAR" mean UCAR International Inc., to "Global"
mean UCAR Global Enterprises Inc., a direct, wholly-owned subsidiary of UCAR,
and to the "Company" mean UCAR and its subsidiaries (including Global),
collectively.
On January 26,All references to "Home Markets" mean North America, Western Europe, Brazil,
Mexico and South Africa and to "Free World" mean worldwide, excluding China, the
former Soviet Union, India and Eastern Europe (other than the former East
Germany).
GENERAL
In 1995, the Company consummated (i) a leveraged recapitalization ("Recapitalization"as a result of
which Blackstone Capital Partners II Merchant Banking Fund L.P. and its
affiliates (collectively, "Blackstone"). On August 15, 1995, UCAR completed became the owners of approximately 69%
of the then outstanding shares of common stock (the "Recapitalization"), (ii) an
initial public offering ("Initial Offering") of its common stock par value $.01 per share
("Common Stock"(the "Initial Offering"). On September 11, 1995, the Company acquired substantially all, (iii) a
redemption of the outstanding common stock of its Brazilian subsidiary, UCAR Carbon S.A.,
held by public shareholders in Brazil. On September 15, 1995, the Company
redeemed $175 million aggregate principal amount of Senior Subordinated Notes
("Subordinatedsenior subordinated notes (the
"Subordinated Notes") at a redemption price equal to 110% of the aggregate
principal amount thereof, plus accrued interest thereon of approximately $4 million
("Redemption"thereon (the "Redemption"). On October 19, 1995, the Company refinanced, (iv) a refinancing of its then existing credit
facilities ("Recapitalization(the "Recapitalization Bank Facilities") and entered intowith new credit facilities
("Senior(the "Senior Bank Facilities") at more favorable interest rates and with more
favorable covenants.covenants and (v) the acquisition of substantially all of the shares
of its Brazilian subsidiary owned by public shareholders in Brazil for an
aggregate purchase price was $52 million, plus expenses of $3 million.
Subsequent to 1995, the Company acquired additional shares from such Brazilian
shareholders for $3 million. The acquisitions were accounted for as purchases.
In March 1996, Blackstone and certain other stockholders of UCAR sold an aggregate of 16,675,000certain shares of
Common Stockcommon stock in a secondary public offering ("(the "1996 Secondary Offering").
InAfter the Secondary Offering, Blackstone Capital Partners II Merchant Banking Fund
L.P. and its affiliates (collectively, "Blackstone"), Chemical Equity Associates
and certain members of management sold approximately 15,449,000 shares, 826,000
shares and 400,000 shares, respectively. After the1996 Secondary Offering, Blackstone owned approximately 20% of the
then outstanding shares of Common Stock.common stock. UCAR did not sell any shares in, the Secondary Offering and did not receiveor
received any proceeds from, the shares sold by the selling stockholders.1996 Secondary Offering. Approximately 193,000
of the shares sold by management consisted of shares issued upon the exercise of vestedemployee
stock options concurrently with the 1996 Secondary Offering, and the CompanyUCAR received
proceeds of approximately $1.5 million from the exercise of such options.
11
In November 1996, the Company acquired 90% of the equity of UCAR Grafit OAO
("UCAR Grafit"). The aggregate investment was $50 million. In the three months
ended March 31, 1997, the Company acquired 70% of the equity of Carbone Savoie
S.A.S. ("Carbone Savoie") for a purchase price of $33 million and, through a
newly-formed 70%-owned subsidiary, UCAR Elektroden GmbH ("UCAR Elektroden"),
acquired the graphite electrode business of Elektrokohle Lichtenberg AG ("EKL")
in Berlin, Germany, for an aggregate purchase price of $15 million. In addition,
the Company increased its investment in UCAR Grafit by $6 million. Subsequent to
March 31, 1997, the Company acquired the outstanding shares of EMSA (Pty.) Ltd.,
its 50%-owned affiliate ("EMSA"), held by the Company's joint venture partner in
South Africa. These acquisitions, which were financed from existing cash
balances, cash flow from operations, short-term borrowings and borrowings under
its revolving credit facility, were accounted for as purchases.
On February 10, 1997, UCAR's Board of Directors authorized a program to
repurchase up to $100 million of common stock at prevailing prices from time to
time in the open market or otherwise depending on market conditions and other
factors, without any established minimum or maximum time period or number of
shares. On April 8, 1997, Blackstone sold certain shares of common stock in a
secondary public offering (the "1997 Secondary Offering"). Concurrently with the
1997 Secondary Offering, the Company repurchased 1,300,000 shares of common
stock from Blackstone for $48 million, which repurchase constituted part of the
previously announced stock repurchase program (the "Blackstone Share
Repurchase"). After the 1997 Secondary Offering and the Blackstone Share
Repurchase, Blackstone owned approximately 3% of the outstanding shares of
common stock, which shares were retained for distribution to or for sale for the
account of Blackstone partners. UCAR did not sell any shares in, or received any
proceeds from, the 1997 Secondary Offering. UCAR financed and intends to finance
such repurchases from existing cash balances, cash flow from operations,
short-term borrowings and borrowings under its revolving credit facility.
RESULTS OF OPERATIONS
Three Month and Nine Month Periods Ended September 30, 1996Months ended March 31, 1997 as Compared to Three Month and Nine Month Periods Ended September 30, 1995Months ended March 31,
1996
Net sales of $227$238 million in the thirdfirst quarter of 1997 ("1997 First Quarter")
represent a 2% decrease from net sales of $243 million in the first quarter of
1996 ("1996 ThirdFirst Quarter")
represent a 3% increase over. The decrease in net sales of $220 millionwas largely attributable
to an 11% decrease in the third quarter of
1995 ("1995 Third Quarter"). Graphite electrode sales were $166 million in the
1996 Third Quarter as compared to $165 million in the 1995 Third Quarter. While
net sales of graphite electrodes remained flat, the volume of graphite electrodes sold declined 6%due to 49,000 metric tonscontinued
softness in electric arc furnace steel production in Western Europe,
specifically Italy, Spain and France. The rest of the world generally showed
continued strength in demand for graphite electrodes. Net sales of graphite
electrodes decreased 12% to $162 million in the 1997 First Quarter as compared
to $184 million in the 1996 Third Quarter from
52,000 metric tons in the 1995 ThirdFirst Quarter. This decline was primarily due to
a reduction in shipments in Western Europe and in some export markets as
customers drew down on inventories previously built-up as a result of a
reduction in steel shipments. The average selling price of graphite
electrodes (in dollars and net of changes in currency exchangeexchanges rates) for
12
PART I (Cont.)
UCAR INTERNATIONAL INC.
the Company's graphite electrodes rose by 4% per metric tonincreased
1.2% in the 1996 Third1997 First Quarter as compared to the 1995 Third1996 First Quarter. Net sales
of graphite specialtyaluminum industry products increased approximately $15 million as a result of
the acquisition of Carbone Savoie. Net sales of all other product groups in the
1997 First Quarter were comparable to those in the 1996 ThirdFirst Quarter.
12
Gross profit for the 1997 First Quarter increased 15%declined 5% to $30$88 million, or 37.0% of
net sales, from $26$93 million, or 38.3% of net sales, in the 1996 First Quarter.
The decline in gross profit was largely the result of the lower volume of
graphite electrodes sold as well as the dilutive effect of newly acquired
businesses, which presently have lower gross margins than the Company's other
businesses. Excluding the impact of the acquired businesses, the gross margin
for the 1997 First Quarter would have been approximately 38.6% of net sales.
Selling, administrative and other expenses was stable at $23 million in the 1995 Third Quarter. This increase was primarily due1997
First Quarter as compared to strong demand in
all its product lines and a 6% price increase (in dollars) which became
effective on January 1, 1996. Net sales of carbon specialty products were $22 million in the 1996 Third Quarter as compared to $21 million in the 1995 ThirdFirst Quarter. Net sales of Grafoil(Registered) were $9 million in the 1996 Third
Quarter as compared to $7 million in the 1995 Third Quarter. Strong demand for
Grafoil(Registered) gaskets in the transportation industry was the main reason
for the increase.
Net sales in the nine months ended September 30, 1996 (the "1996 Period") were
$711 million, an increase of 8% over net sales of $657 million in the nine
months ended September 30, 1995 (the "1995 Period"). Net sales of graphite
electrodes were $519 million in the 1996 Period as compared to $492 million in
the 1995 Period. The volume of graphite electrodes sold declined by 5,700 metric
tons, or 4%, in the 1996 Period as compared to the 1995 Period, primarily for
the reason described above. The average selling price (in dollars and net of
changes in currency exchange rates) for the Company's graphite electrodes rose
by 7% per metric ton in the 1996 Period as compared to the 1995 Period. Net
sales of graphite specialty products in the 1996 Period increased 19% to $94
million from $79 million in the 1995 Period, due to both increased demand and
selling price. Net sales of carbon specialty products increased 20% to $71
million in the 1996 Period from $59 million in the 1995 Period. This increase
was due primarily to the 6% price increase described above. Net sales of
Grafoil(Registered) were $27 million in the 1996 Period as compared to $26
million in the 1995 Period.
Cost of sales increased 4% to $141 million in the 1996 Third Quarter from $136
million in the 1995 Third Quarter. This increase was primarily due to the
increased volume of carbon specialty and graphite specialty products sold. In
the 1996 Period, cost of sales increased 6% to $436 million from $411 million in
the 1995 Period, also due primarily to the increased volume of carbon specialty
and graphite specialty products sold.
As a result of the changes described above, the Company's gross profit margin
decreased to 37.9% in the 1996 Third Quarter from 38.2% in the 1995 Third
Quarter. In the 1996 Period, gross profit margin increased to 38.7% from 37.4%
in the 1995 Period.
Selling, administrative and other expenses decreased to $21 million in the 1996
Third Quarter from $39 million in the 1995 Third Quarter. For the 1996 Period,
selling, administrative and other expenses decreased to $66 million from $87
million in the 1995 Period. These decreases are primarily due to the fact that
there was an $18 million expense in the 1995 Third Quarter as a result of the
accelerated vesting of performance stock options and restricted matching stock
while there was no such charge in the 1996 Period.
Restructuring costs of $30 million were incurred in the 1995 Period in
connection with a project, approved by UCAR's Board of Directors in January
1995, which involved the closure of certain high cost manufacturing operations
and the addition of modern lower cost manufacturing operations at the Company's
North American graphite electrode plants ("Rationalization Project"). The
Rationalization
13
PART I (Cont.)
UCAR INTERNATIONAL INC.
Project is expected to yield approximately $23 million in annual cost savings,
with approximately $20 million expected to be realized in 1996 and the full $23
million expected to be realized in 1997 (in each case, as compared to 1994).
These restructuring costs include fixed asset write-offs of $22 million and $8
million of facility closing expenses and environmental clean-up costs. Except
for the Rationalization Project, no restructuring costs were incurred in the
1995 Period or the 1996 Period.
Other (income) expense (net) was nil in the 1996 Third Quarter as compared to
income of $2 million in the 1995 Third Quarter. This change was primarily due to
a $4 million decrease in interest income and a $3 million increase in exchange
gains on transactions denominated in foreign currencies. Certain hedge
transactions have been implemented to mitigate the currency exposure for the
Company on a global basis. Other (income) expense (net) for the 1996 Period wasstable at $1 million of expense as compared to incomein each of $4 million for the
1995 Period.
The major changes between1997 First Quarter and the 1996 Period and the 1995 Period were a $12 million
decrease in interest income and a $6 million expense in the 1995 Period
associated with a back-up senior subordinated credit facility provided by
Chemical Bank in connection with the Recapitalization.First Quarter.
Operating profit in the 1996 Third1997 First Quarter was $63$62 million (27.8%(26.1% of net sales)
as compared to $45$68 million (20.5%(28.0% of net sales) in the 1995 Third1996 First Quarter. InThe
decrease was mainly due to the 1996 Period, operating profit was $202 million (28.4%lower volume of net sales) as
compared to $128 million (19.5% of net sales) in the 1995 Period. Excluding the
restructuringgraphite electrodes sold and
increased costs of $30 million, the nonrecurring expense of $6 million associated with the senior subordinated credit facility, the $18 million
included in selling, administrative and other expenses as result of accelerated
vesting of performance stock options and restricted matching stock and the $2
million included in other expenses due to accelerated payments under the
Company's long term incentive compensation plan which were accelerated as a
result of the Recapitalization, operating profit in the 1995 Period would have
been $184 million (28.0% of net sales).recent acquisitions.
Interest expense decreased to $15 million in the 1997 First Quarter from $16
million in the 1996 Third Quarter from $26
million in the 1995 ThirdFirst Quarter. The average outstanding total debt balance in
the 1996 Third1997 First Quarter was $634$653 million as compared to $866$669 million in the 1995
Third1996
First Quarter, and the average annual interest rate in the 1996 Third1997 First Quarter
was 9.7%9.01% as compared to 11.3% in the 1995 Third Quarter. Interest expense
decreased to $47 million9.63% in the 1996 Period as compared to $75 million in the
1995 Period. The average outstanding total debt was $649 million and the average
annual interest rate was 9.6% in the 1996 Period as compared to an average
outstanding total debt of $855 million and an average annual interest rate of
10.8% in the 1995 Period.First Quarter.
The provision for income taxes was $14$12 million in the 1997 First Quarter as
compared to $19 million in the 1996 ThirdFirst Quarter. In the 1997 First Quarter,
as
compared to $8 million inincome tax expense was lower than the 1995 Third Quarter. The increase wasamount computed by applying the United
States Federal income tax rate primarily due to higher pre-tax income, partially offset by reductions of deferred tax valuation allowances. The provision for income taxes was $52 millioncredits in the 1996
Period as compared to $60 millionUnited States
from research and development expenses and tax benefits recognized in the 1995 Period. The decrease was primarily
due to the fact that there were taxes of approximately $37 million in the 1995
PeriodItaly and
Spain associated with the Recapitalization which were not incurred in the 1996
Period, partially offset by the effect of higher pre-tax income.
14
PART I (Cont.)
UCAR INTERNATIONAL INC.capital expenditures and fixed asset revaluations,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's sources of funds have consisted principally of invested capital,
operating cash flow and debt financing from affiliates, banks and institutional
investors. The Company's uses of those funds (other than for operations) have
consisted principally of debt reduction, capital expenditures, distributions to
or repurchases of equity from stockholders (in connection with the
Recapitalization and the Blackstone Stock Repurchase), acquisition of
controlling interests in new companies or businesses and acquisition of minority
stockholders' shares of consolidated subsidiaries. Acquisitions and repurchases
under UCAR's stock purchase program have been and are expected to be financed
from existing cash balances, cash flow from operations, short-term borrowings
and borrowings under its revolving credit facility.
13
Debt Financing and Amendments to Credit Facilities
At September 30, 1996,March 31, 1997, the Company had total debt of $634$669 million and stockholders'
equity of $35 million as compared to $668total debt of $635 million and a
stockholders' deficit of $2 million at December 31, 1995. The Company had a stockholders' deficit of
$401996. At March 31, 1997,
cash and cash equivalents were $77 million at September 30, 1996 as compared to $167$95 million at
December 31, 1995.1996. On March 19, 1997, the Senior Bank Facilities were amended to
reduce the interest rates on amounts outstanding under the Senior Bank
Facilities, to increase the amount available under the revolving credit facility
to $250 million from $100 million and to change the covenants to allow more
flexibility in uses of free cash flow for acquisitions, capital expenditures and
stock repurchases.
Inventory Levels and Working Capital
Inventory levels at any specified date are affected by increases in inventories
of raw materials to meet anticipated increases in sales of finished products,
customer buy-ins and other factors affecting net sales from quarter to quarter.
Inventory levels increased to $171$200 million at September 30, 1996March 31, 1997 from $136$176 million
at December 31, 1995.1996. This increase was primarily due to an $11 million
LIFO accounting method change, a $4 million temporary build-upconsisted mainly of inventory in
North America due to the Rationalization Project and a $20 million increase of inventory in Europe as a result of a reduction in graphite electrode shipments
in Western Europe and some export markets described above.recently
acquired businesses.
The Company's working capital increased to $271$263 million at September 30, 1996March 31, 1997 from
$175$234 million at December 31, 1995. The1996, primarily as a result of the addition of $19
million of working capital of recently acquired businesses, an increase was primarily due to the
increaseof $16
million in inventory described above,short-term borrowings and current portion of long-term debt and a
decrease of $24$31 million in currentaccrued income taxes and other accrued liabilities,
mainly due to payments of income taxes and a $38 million increase in cash and cash equivalents.incentive programs. Cash and cash
equivalents at September 30, 1996March 31, 1997 included $40$44 million in cash held by the Company's
Brazilian subsidiary.
Capital Expenditures
Capital expenditures aggregated $37$11 million in each of the 1997 First Quarter
and the 1996 First Quarter. The Company expects capital expenditures in 1997 to
total approximately $75 million to $80 million (including $4approximately $11
million for the Rationalization Project) in the 1996 Period as compared to $44 million
(including $19Company's previously announced focused factory project and
technology improvement projects and $15 million for capital improvements
relating to facilities held by recently acquired businesses). Except for the
Rationalization Project) infocused factory project, most of the 1995 Period.
CapitalCompany's capital expenditures have been,
and willare expected to be, made during 1996 to maintain existing facilities and equipment,
to achieve cost savings and to improve operating efficiency (including the Rationalization Project and other restructuring and
reengineering projects). The Company expects capital expenditures in 1996 to
total approximately $60 million (including expenditures relating to the
Rationalization Project which were pre-funded as part of the Recapitalization).
Capital expenditures for environmental protection have not been and are not
expected to be a significant factor with respect to the Company's capital
expenditures as a whole.
Acquisitions
On September 11, 1996, the Company announced its intention to pursue the
purchase of a controlling interest in Graphite PLC, which operates a graphite
electrode business in Viazma, Russia. The Company intends to purchase Graphite
PLC through a tender offer to its major shareholders, which include members of
the board of directors and employees of Graphite PLC. It is anticipated that the
transaction will be completed by December 31, 1996. The total estimated
investment is $50 million and includes
15
PART I (Cont.)
UCAR INTERNATIONAL INC.
the purchase of shares, a working capital infusion, the assumption of certain
short-term debt and other expenses.
On May 21, 1996, the Company announced its intention to pursue the purchase of
70% of the outstanding shares of Carbone Savoie, S.A., a wholly-owned subsidiary
of a competitor and a manufacturer of carbon cathode blocks. While the final
purchase price will not be determined until after satisfactory completion of due
diligence, it is estimated that the purchase price will not exceed 200 million
French Francs.
Both acquisitions are subject to satisfaction of a number of conditions,
including receipt of governmental approvals. The Company intends to finance both
acquisitions from existing cash, cash flow from operations and borrowings under
its revolving credit facility.efficiencies.
Restrictions on Dividends and Distributions
Under the Senior Bank Facilities UCARas amended on March 19, 1997, Global and GlobalUCAR
are generally permitted to pay dividends to their respective stockholders and
repurchase common stock only in an annualaggregate cumulative amount upsubsequent to
the
greaterMarch 19, 1997 equal to a percentage, ranging from 50% to 65% based on certain
financial tests, of $15 million or a specified percentage ofcumulative adjusted consolidated net income.
The indenture relatingincome subsequent to
December 31, 1996 (provided that (i) in any event, dividends and repurchases
aggregating up to $15 million are permitted in any twelve-month period and (ii)
dividends and repurchases that were permitted during the Subordinated Notes restricts the payment ofperiod from October 19,
1995 through December 31, 1996 but not paid or made (not
14
exceeding $45,000,000) may be paid or made during 1997 in addition to dividends
by Global to UCARand repurchases otherwise permitted in 1997). In addition, if (a) at the time of such proposed dividend,certain financial
tests are not met, total dividends and repurchases in any year may not exceed
$65,000,000. In addition, Global is unablepermitted to meet certain indebtedness incurrence and income tests or (b) the
total amount of the dividend paid exceeds specified aggregate limits based on
consolidated net income and net proceeds from asset and stock sales and certain
other transactions. Such restrictions are not applicablepay dividends to dividendsUCAR (i) in
respect of UCAR's administrative fees and expenses and (ii) for the specific
purpose of the purchase or redemption by UCAR of capital stock held by present
or former officers of the Company up to $5 million per year or $25 million in
the aggregate. In general, amounts which are permitted to be paid as dividends
in a year but are not so paid may be paid in subsequent years. The Subordinated
Note Indenture also limits the payment of dividends by Global to UCAR.
CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1996, the Company changed its method of determining LIFO
inventories. The new methodology provides specifically identified parameters for
defining new items within the LIFO pool which the Company believes improves the
accuracy of costing those items. The Company recorded income of $7 million
(after related income taxes of $4 million) as the cumulative effect on prior
years of this change in accounting for inventories. The Company believes this
change will not materially impact the Company's ongoing results of operations.
In October 1995,February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") 123, "Accounting for Stock-Based
Compensation"128, "Earnings per Share" which is
effective for years beginningfinancial statements for both interim and annual periods ending
after December 15, 1995.1997. SFAS 123 permits a fair value based method128 requires presentation of accountingbasic and diluted
per-share amounts for employee stock
compensation plans. It also allows a company to continue to use the intrinsic
value method of accounting prescribed by Accounting Principles Board Opinion No.
25, "Accountingincome from continuing operations and for Stock Issued to Employees" ("APB 25"). Companies electing to
continue to use the accounting prescribed by
16
PART I (Cont.)
UCAR INTERNATIONAL INC.
APB 25 must make pro forma disclosures of net income and net income per share as
if the fair value based method of accounting defined in SFAS 123 had been
applied.income. The
Company intends to continue the method of accounting for
stock-based compensation prescribed by APB 25; accordingly,does not expect the adoption of SFAS
123 will have no effect on the Company with the exception of expanded
disclosures required under SFAS 123.
17this pronouncement to materially impact
earnings per share.
15
PART II. OTHER INFORMATION
UCAR INTERNATIONAL INC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) EXHIBITS
The exhibits listed in the following table have been filed as part of this
Quarterly Report on Form 10-Q.
Exhibit
Number Description of Exhibit
- ------ ----------------------
10.28(a) Third Amendment to2.33 Stock Repurchase Agreement among UCAR International Inc. Compensation Deferral
Program effective, Blackstone
Capital Partners II Merchant Banking Fund L.P., Blackstone Offshore
Capital Partners II L.P., Blackstone Family Investment Partnership II
L.P. and Chase Equity Associates, L.P.
10.1 Credit Agreement dated as of January 1, 1996
10.41(b) First Amendment toOctober 19, 1995 among UCAR International
Inc., UCAR Global Enterprises Inc., the other Credit Parties named
therein, the Lenders named therein, the Fronting Banks named therein
and The Chase Manhattan Bank, as Administrative Agent and Collateral
Agent, as amended and restated as of March 19, 1997
10.6 Effectiveness Agreement dated as of March 19, 1997 among UCAR
Carbon Retirement Plan effective
February 25, 1991
10.41(c) Third Amendment to such Retirement Plan effective,International Inc., UCAR Global Enterprises Inc., the Lenders listed
therein, the Fronting Banks listed therein and The Chase Manhattan
Bank, as Administrative Agent and Collateral Agent (except, as to
paragraph 2,Exhibit A thereto, see Exhibit 10.1 to this Quarterly Report on Form
10-Q for the quarter ended March 31, 1997)
10.9 Reaffirmation Agreement dated as of January 26, 1995 and as to paragraphs 1 and
3-5, as of January 1,March 19, 1997 10.50(a) Second Amendment toamong UCAR
International Inc. Benefits Protection
Trust effective, UCAR Global Enterprises Inc., the Subsidiary
Guarantors listed therein, the Foreign Subsidiaries referred to therein
and The Chase Manhattan Bank, as of January 1, 1996Administrative Agent and Collateral
Agent
11 Statement re: computation of per share earnings
27 Financial Data Schedule
(b) Reports on FormREPORTS ON FORM 8-K
No Report on Form 8-K was filed during the quarter for which this Quarterly
Report on Form 10-Q is filed.
1816
UCAR INTERNATIONAL INC.
SIGNATURE
Pursuant to the requirement 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.
UCAR INTERNATIONAL INC.
Date: October 31, 1996April 30, 1997 By: /s/ William P. Wiemels
----------------------
William P. Wiemels
Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
1917
UCAR INTERNATIONAL INC.
INDEX TO EXHIBITS
Exhibit No. Description
Page
10.28(a) Third Amendment to2.33 Stock Repurchase Agreement among UCAR International Inc. Compensation
Deferral Program effective, Blackstone
Capital Partners II Merchant Banking Fund L.P., Blackstone Offshore
Capital Partners II L.P., Blackstone Family Investment Partnership II
L.P. and Chase Equity Associates, L.P.
10.1 Credit Agreement dated as of January 1, 1996............ E-2
10.41(b) First Amendment toOctober 19, 1995 among UCAR International
Inc., UCAR Global Enterprises Inc., the other Credit Parties named
therein, the Lenders named therein, the Fronting Banks named therein
and The Chase Manhattan Bank, as Administrative Agent and Collateral
Agent, as amended and restated as of March 19, 1997
10.6 Effectiveness Agreement dated as of March 19, 1997 among UCAR
Carbon Retirement Plan
effective February 25, 1991................................. E-4
10.41(c) Third Amendment to such Retirement Plan effective,International Inc., UCAR Global Enterprises Inc., the Lenders listed
therein, the Fronting Banks listed therein and The Chase Manhattan
Bank, as Administrative Agent and Collateral Agent (except, as to
paragraph 2,Exhibit A thereto, see Exhibit 10.1 to this Quarterly Report on Form
10-Q for the quarter ended March 31, 1997)
10.9 Reaffirmation Agreement dated as of January 26, 1995 and as to paragraphs 1
and 3-5, as of January 1, 1997.............................. E-6
10.50(a) Second Amendment toMarch 19, 1997 among UCAR
International Inc. Benefits
Protection Trust effective, UCAR Global Enterprises Inc., the Subsidiary
Guarantors listed therein, the Foreign Subsidiaries referred to
therein and The Chase Manhattan Bank, as of January 1, 1996............ E-8Administrative Agent and
Collateral Agent
11 Statement re: computation of per share earnings............. E-11earnings
27 Financial Data Schedule..................................... E-12Schedule
E-1