Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 1-13888 | |
Entity Registrant Name | GRAFTECH INTERNATIONAL LTD. | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 27-2496053 | |
Entity Address, Street | 982 Keynote Circle | |
Entity Address, City | Brooklyn Heights, | |
Entity Address, State | OH | |
Entity Address, Zip Code | 44131 | |
City Area Code | 216 | |
Local Phone Number | 676-2000 | |
Title of each class | Common stock, $0.01 par value per share | |
Trading Symbol(s) | EAF | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 256,807,900 | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000931148 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 172,807 | $ 134,641 |
Accounts and notes receivable, net of allowance for doubtful accounts of $7,898 as of September 30, 2023 and $8,019 as of December 31, 2022 | 97,328 | 145,574 |
Inventories | 378,970 | 447,741 |
Prepaid expenses and other current assets | 64,253 | 87,272 |
Total current assets | 713,358 | 815,228 |
Property, plant and equipment | 894,262 | 869,168 |
Less: accumulated depreciation | 383,018 | 350,022 |
Net property, plant and equipment | 511,244 | 519,146 |
Deferred income taxes | 23,315 | 11,960 |
Goodwill | 171,117 | 171,117 |
Other assets | 64,111 | 86,727 |
Total assets | 1,483,145 | 1,604,178 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 54,935 | 103,156 |
Long-term debt, current maturities | 127 | 124 |
Accrued income and other taxes | 8,441 | 40,592 |
Other accrued liabilities | 100,605 | 89,349 |
Related party payable - Tax Receivable Agreement | 5,137 | 4,631 |
Total current liabilities | 169,245 | 237,852 |
Long-term debt | 924,375 | 921,803 |
Other long-term obligations | 51,309 | 50,822 |
Deferred income taxes | 43,554 | 45,065 |
Related party payable - Tax Receivable Agreement long-term | 5,784 | 10,921 |
Stockholders’ equity: | ||
Preferred stock, par value $0.01, 300,000,000 shares authorized, none issued | 0 | 0 |
Common stock, par value $0.01, 3,000,000,000 shares authorized, 256,807,900 and 256,597,342 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 2,568 | 2,566 |
Additional paid-in capital | 748,903 | 745,164 |
Accumulated other comprehensive loss | (17,612) | (8,070) |
Accumulated deficit | (444,981) | (401,945) |
Total stockholders’ equity | 288,878 | 337,715 |
Total liabilities and stockholders’ equity | $ 1,483,145 | $ 1,604,178 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 7,898 | $ 8,019 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued (in shares) | 256,807,900 | 256,597,342 |
Common stock, shares, outstanding (in shares) | 256,807,900 | 256,597,342 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net sales | $ 158,992 | $ 303,840 | $ 483,355 | $ 1,033,731 |
Cost of goods sold | 157,603 | 170,171 | 427,464 | 562,881 |
Gross profit | 1,389 | 133,669 | 55,891 | 470,850 |
Research and development | 1,295 | 1,014 | 3,683 | 2,617 |
Selling and administrative expenses | 18,231 | 18,578 | 58,933 | 57,862 |
Operating (loss) income | (18,137) | 114,077 | (6,725) | 410,371 |
Other expense (income), net | 153 | (598) | 1,261 | (1,358) |
Interest expense | 15,719 | 6,424 | 42,432 | 25,035 |
Interest income | (1,144) | (241) | (1,758) | (2,197) |
(Loss) income before (benefit) provision for income taxes | (32,865) | 108,492 | (48,660) | 388,891 |
(Benefit) provision for income taxes | (10,244) | 15,041 | (10,819) | 56,260 |
Net (loss) income | $ (22,621) | $ 93,451 | $ (37,841) | $ 332,631 |
Basic (loss) income per common share: | ||||
Net (loss) income per share (usd per share) | $ (0.09) | $ 0.36 | $ (0.15) | $ 1.28 |
Weighted average common shares outstanding (shares) | 257,090,113 | 256,848,575 | 256,987,778 | 259,415,295 |
Diluted (loss) income per common share: | ||||
Net (loss) income per share (usd per share) | $ (0.09) | $ 0.36 | $ (0.15) | $ 1.28 |
Weighted average common shares outstanding (shares) | 257,090,113 | 256,853,454 | 256,987,778 | 259,424,885 |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | $ (8,035) | $ (13,311) | $ (463) | $ (24,911) |
Commodities, interest rate and foreign currency derivatives, net of tax (expense) benefit of $1,218, $369, $3,123 and $(2,659), respectively | (2,906) | (2,426) | (9,079) | 5,980 |
Other comprehensive loss, net of tax | (10,941) | (15,737) | (9,542) | (18,931) |
Comprehensive (loss) income | $ (33,562) | $ 77,714 | $ (47,383) | $ 313,700 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 2 |
Commodities, interest rate and foreign currency derivatives, tax | $ 1,218 | $ 369 | $ 3,123 | $ (2,659) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flow from operating activities: | ||
Net (loss) income | $ (37,841) | $ 332,631 |
Adjustments to reconcile net (loss) income to cash provided by operations: | ||
Depreciation and amortization | 43,053 | 41,708 |
Deferred income tax (benefit) provision | (10,297) | 11,216 |
Non-cash stock-based compensation expense | 3,809 | 1,666 |
Non-cash interest expense | 10,249 | (3,103) |
Other adjustments | (3,278) | 230 |
Net change in working capital | 64,833 | (101,622) |
Change in related party Tax Receivable Agreement | (4,631) | (3,828) |
Change in long-term assets and liabilities | 1,372 | (4,293) |
Net cash provided by operating activities | 67,269 | 274,605 |
Cash flow from investing activities: | ||
Capital expenditures | (48,287) | (45,281) |
Proceeds from the sale of fixed assets | 220 | 161 |
Net cash used in investing activities | (48,067) | (45,120) |
Cash flow from financing activities: | ||
Interest rate swap settlements | 27,453 | 3,762 |
Debt issuance and modification costs | (8,133) | (2,232) |
Proceeds from the issuance of long-term debt, net of original issuance discount | 438,552 | 0 |
Principal payments on long-term debt | (433,708) | (110,000) |
Repurchase of common stock | 0 | (60,000) |
Payments for taxes related to net share settlement of equity awards | (129) | (230) |
Proceeds from exercise of stock options | 0 | 225 |
Dividends paid to non-related party | (3,854) | (5,843) |
Dividends paid to related party | (1,280) | (1,919) |
Principal payments under finance lease obligations | (20) | 0 |
Net cash provided by (used in) financing activities | 18,881 | (176,237) |
Net change in cash and cash equivalents | 38,083 | 53,248 |
Effect of exchange rate changes on cash and cash equivalents | 83 | (1,368) |
Cash and cash equivalents at beginning of period | 134,641 | 57,514 |
Cash and cash equivalents at end of period | 172,807 | 109,394 |
* Net change in working capital due to changes in the following components: | ||
Accounts and notes receivable, net | 48,007 | 22,229 |
Inventories | 69,258 | (146,501) |
Prepaid expenses and other current assets | 4,974 | 1,690 |
Income taxes payable | (31,356) | (20,226) |
Accounts payable and accruals | (43,391) | 35,373 |
Interest payable | 17,341 | 5,813 |
Net change in working capital | 64,833 | (101,622) |
Net cash paid during the periods for: | ||
Interest | 1,470 | 22,998 |
Income taxes | 36,471 | 63,446 |
Capital expenditures in accounts payable | $ (19,098) | $ 1,256 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Dividends paid to related party | Dividends paid to non-related party | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Accumulated Deficit Dividends paid to related party | Accumulated Deficit Dividends paid to non-related party |
Beginning balance (shares) at Dec. 31, 2021 | 263,255,708 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 23,402 | $ 2,633 | $ 761,412 | $ (7,444) | $ (733,199) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | 124,183 | 124,183 | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | 14,800 | 14,800 | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (1,837) | (1,837) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | 7,022 | 7,022 | |||||||
Total other comprehensive (loss) income | 19,985 | 19,985 | |||||||
Repurchase of common stock (shares) | (3,035,830) | ||||||||
Repurchase of common stock | (30,000) | $ (31) | (8,530) | (21,439) | |||||
Stock-based compensation | 465 | 465 | |||||||
Options exercised (shares) | 25,000 | ||||||||
Options exercised | 225 | 225 | |||||||
Payment for taxes related to net share settlement of equity awards (in shares) | (22,293) | ||||||||
Payments for taxes related to net share settlement of equity awards | (230) | (63) | (167) | ||||||
Dividends paid | $ (640) | $ (1,985) | $ (640) | $ (1,985) | |||||
Ending balance (shares) at Mar. 31, 2022 | 260,222,585 | ||||||||
Ending balance at Mar. 31, 2022 | 135,405 | $ 2,602 | 753,509 | 12,541 | (633,247) | ||||
Beginning balance (shares) at Dec. 31, 2021 | 263,255,708 | ||||||||
Beginning balance at Dec. 31, 2021 | 23,402 | $ 2,633 | 761,412 | (7,444) | (733,199) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | 332,631 | ||||||||
Other Comprehensive Income (Loss) | |||||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | $ (24,911) | ||||||||
Repurchase of common stock (shares) | (6,662,421) | ||||||||
Ending balance (shares) at Sep. 30, 2022 | 256,597,342 | ||||||||
Ending balance at Sep. 30, 2022 | $ 271,001 | $ 2,566 | 744,519 | (26,375) | (449,709) | ||||
Beginning balance (shares) at Mar. 31, 2022 | 260,222,585 | ||||||||
Beginning balance at Mar. 31, 2022 | 135,405 | $ 2,602 | 753,509 | 12,541 | (633,247) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | 114,997 | 114,997 | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | (2,498) | (2,498) | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (2,059) | (2,059) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | (18,622) | (18,622) | |||||||
Total other comprehensive (loss) income | (23,179) | (23,179) | |||||||
Repurchase of common stock (shares) | (3,626,591) | ||||||||
Repurchase of common stock | (30,000) | $ (36) | (10,191) | (19,773) | |||||
Stock based compensation (in shares) | 1,348 | ||||||||
Stock-based compensation | 573 | 573 | |||||||
Dividends paid | (639) | (1,932) | (639) | (1,932) | |||||
Ending balance (shares) at Jun. 30, 2022 | 256,597,342 | ||||||||
Ending balance at Jun. 30, 2022 | 195,225 | $ 2,566 | 743,891 | (10,638) | (540,594) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | 93,451 | 93,451 | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | 1,658 | 1,658 | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (4,084) | (4,084) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | (13,311) | (13,311) | |||||||
Total other comprehensive (loss) income | (15,737) | (15,737) | |||||||
Stock-based compensation | 628 | 628 | |||||||
Dividends paid | (640) | (1,926) | (640) | (1,926) | |||||
Ending balance (shares) at Sep. 30, 2022 | 256,597,342 | ||||||||
Ending balance at Sep. 30, 2022 | 271,001 | $ 2,566 | 744,519 | (26,375) | (449,709) | ||||
Beginning balance (shares) at Dec. 31, 2022 | 256,597,342 | ||||||||
Beginning balance at Dec. 31, 2022 | 337,715 | $ 2,566 | 745,164 | (8,070) | (401,945) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | (7,369) | (7,369) | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | (241) | (241) | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (2,336) | (2,336) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | 4,623 | 4,623 | |||||||
Total other comprehensive (loss) income | 2,046 | 2,046 | |||||||
Stock based compensation (in shares) | 104,533 | ||||||||
Stock-based compensation | 796 | $ 1 | 795 | ||||||
Payment for taxes related to net share settlement of equity awards (in shares) | (23,577) | ||||||||
Payments for taxes related to net share settlement of equity awards | (129) | (68) | (61) | ||||||
Dividends paid | (640) | (1,926) | (640) | (1,926) | |||||
Ending balance (shares) at Mar. 31, 2023 | 256,678,298 | ||||||||
Ending balance at Mar. 31, 2023 | 330,493 | $ 2,567 | 745,891 | (6,024) | (411,941) | ||||
Beginning balance (shares) at Dec. 31, 2022 | 256,597,342 | ||||||||
Beginning balance at Dec. 31, 2022 | 337,715 | $ 2,566 | 745,164 | (8,070) | (401,945) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | (37,841) | ||||||||
Other Comprehensive Income (Loss) | |||||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | $ (463) | ||||||||
Repurchase of common stock (shares) | 0 | ||||||||
Ending balance (shares) at Sep. 30, 2023 | 256,807,900 | ||||||||
Ending balance at Sep. 30, 2023 | $ 288,878 | $ 2,568 | 748,903 | (17,612) | (444,981) | ||||
Beginning balance (shares) at Mar. 31, 2023 | 256,678,298 | ||||||||
Beginning balance at Mar. 31, 2023 | 330,493 | $ 2,567 | 745,891 | (6,024) | (411,941) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | (7,851) | (7,851) | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | 2,513 | 2,513 | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (6,109) | (6,109) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | 2,949 | 2,949 | |||||||
Total other comprehensive (loss) income | (647) | (647) | |||||||
Stock based compensation (in shares) | 117,170 | ||||||||
Stock-based compensation | 1,385 | $ 1 | 1,384 | ||||||
Payment for taxes related to net share settlement of equity awards (in shares) | (48) | ||||||||
Dividends paid | $ (640) | $ (1,928) | $ (640) | $ (1,928) | |||||
Ending balance (shares) at Jun. 30, 2023 | 256,795,420 | ||||||||
Ending balance at Jun. 30, 2023 | 320,812 | $ 2,568 | 747,275 | (6,671) | (422,360) | ||||
Increase (Decrease) in Stockholders' Equity [Rollforward] | |||||||||
Net (loss) income | (22,621) | (22,621) | |||||||
Other Comprehensive Income (Loss) | |||||||||
Commodity, interest rate and foreign currency derivatives income, net of tax | (611) | (611) | |||||||
Commodity derivative and interest rate swap reclassification adjustments, net of tax | (2,295) | (2,295) | |||||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $2, respectively | (8,035) | (8,035) | |||||||
Total other comprehensive (loss) income | (10,941) | (10,941) | |||||||
Stock based compensation (in shares) | 12,480 | ||||||||
Stock-based compensation | 1,628 | 1,628 | |||||||
Ending balance (shares) at Sep. 30, 2023 | 256,807,900 | ||||||||
Ending balance at Sep. 30, 2023 | $ 288,878 | $ 2,568 | $ 748,903 | $ (17,612) | $ (444,981) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Commodity, interest rate and foreign currency derivative income, tax | $ 80 | $ (146) | $ 67 | $ (794) | $ 347 | $ (4,181) |
Commodity, interest rate and foreign currency derivative reclassification adjustments, tax | 1,138 | 1,098 | 886 | 1,163 | 287 | 519 |
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 | $ 1 | $ 1 |
Dividends paid to related party | ||||||
Dividends paid (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |
Dividends paid to non-related party | ||||||
Dividends paid (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies A. Organization GrafTech International Ltd. (the “Company” or “GrafTech”) is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace (“EAF”) steel and other ferrous and non-ferrous metals. References herein to “GTI,” “we,” “our,” or “us” refer collectively to the Company and its subsidiaries. On August 15, 2015, GTI became an indirect wholly owned subsidiary of Brookfield. In April 2018, the Company completed its initial public offering (“IPO”) of 38,097,525 shares of its common stock held by Brookfield at a price of $15.00 per share. The Company did not receive any proceeds related to the IPO. The Company’s common stock is listed on the New York Stock Exchange under the symbol “EAF.” Brookfield has since distributed a portion of its GrafTech common stock to the owners in the Brookfield consortium and sold shares of GrafTech common stock in public and private transactions, resulting in a reduction of Brookfield's ownership of outstanding shares of GrafTech common stock to 24.9% as of September 30, 2023 and December 31, 2022. The Company’s only reportable segment, Industrial Materials, is comprised of its two major product categories: graphite electrodes and petroleum needle coke products. Petroleum needle coke is our key raw material used in the production of graphite electrodes. The Company's vision is to provide highly engineered graphite electrode products, services and solutions to EAF operators. B. Basis of Presentation The interim condensed 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 and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The December 31, 2022 Consolidated Balance Sheet data included herein was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 14, 2023, but does not include all disclosures required by GAAP in audited financial statements. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the accompanying notes, contained in the Company's Annual Report on Form 10-K. The unaudited condensed consolidated financial statements reflect all adjustments (all of which are of a normal, recurring nature) which management considers necessary for a fair presentation of our financial statements for the interim periods presented. The results for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. C. New Accounting Standards Recently Adopted Accounting Standards In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires disclosures intended to enhance the transparency of supplier finance programs. The amendments in this ASU require buyers in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. The Company adopted this guidance on January 1, 2023 and the adoption did not have a material impact on its financial position, results of operations, cash flows or disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following table provides information about disaggregated revenue by type of product and contract, including our take or pay contracts with initial terms of three to five years (“LTA”) and short-term agreements and spot sales (“non-LTA”): Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) Graphite Electrodes - LTAs $ 66,344 $ 212,087 $ 212,579 $ 683,858 Graphite Electrodes - Non-LTAs 88,629 79,710 246,726 296,954 By-products and other 4,019 12,043 24,050 52,919 Total Revenues $ 158,992 $ 303,840 $ 483,355 $ 1,033,731 Contract Balances Substantially all of the Company’s receivables relate to contracts with customers. Accounts receivables are recorded when the right to consideration becomes unconditional. Payment terms on invoices range from 30 to 120 days depending on the customary business practices of the jurisdictions in which we do business. Certain short-term and longer-term sales contracts require up-front payments prior to the Company’s fulfillment of any performance obligation. These contract liabilities are recorded as current or long-term deferred revenue, depending on the lag between the pre-payment and the expected delivery of the related products. Additionally, deferred revenue or contract assets originate from contracts where the allocation of the transaction price to the performance obligations based on their relative stand-alone selling prices results in the timing of revenue recognition being different from the timing of the invoicing. In this case, deferred revenue is amortized into revenue based on the transaction price allocated to the remaining performance obligations and contract assets are realized through the contract invoicing. Contract assets are included in “Prepaid expenses and other current assets,” on the Condensed Consolidated Balance Sheets. We did not have any contract asset balances as of September 30, 2023 or December 31, 2022. Current deferred revenue is included in “Other accrued liabilities” on the Condensed Consolidated Balance Sheets. The following table provides our contract liability balances as of September 30, 2023 and December 31, 2022: September 30, December 31, 2022 (Dollars in thousands) Current deferred revenue $ 25,122 $ 27,878 The amount of revenue recognized in 2023 that was included in the December 31, 2022 current deferred revenue balance was $10.0 million. The decrease in the current deferred revenue balance since December 31, 2022 is due to revenue recognized in the current year, partially offset by customer prepayments. The current deferred revenue balance includes cashed bank guarantees related to outstanding arbitration proceedings the outcome of which will determine the timing of revenue recognition. Transaction Price Allocated to the Remaining Performance Obligations The following table presents estimated revenues expected to be recognized in the corresponding period below related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of reporting period. The revenue associated with our LTAs is expected to be approximately as follows for the full years of 2023 and 2024: 2023 2024 (Dollars in millions) Estimated LTA revenue $245-$255 $100-$135 (1) (1) Includes expected termination fees from a few customers that have failed to meet certain obligations under their LTAs. We recorded $212.6 million of LTA revenue in the nine months ended September 30, 2023, and we expect to record approximately $32.0 million to $42.0 million of LTA revenue for the remainder of 2023. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The goodwill balance was $171.1 million as of September 30, 2023 and December 31, 2022. The following table summarizes intangible assets with determinable useful lives by major category, which are included in "Other assets" on our Condensed Consolidated Balance Sheets: September 30, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net (Dollars in thousands) Trade names $ 22,500 $ (17,161) $ 5,339 $ 22,500 $ (15,869) $ 6,631 Technology and know-how 55,300 (44,982) 10,318 55,300 (42,371) 12,929 Customer-related intangibles 64,500 (35,734) 28,766 64,500 (32,513) 31,987 Total finite-lived intangible assets $ 142,300 $ (97,877) $ 44,423 $ 142,300 $ (90,753) $ 51,547 |
Debt and Liquidity
Debt and Liquidity | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Liquidity | Debt and Liquidity The following table presents our long-term debt: September 30, 2023 December 31, 2022 (Dollars in thousands) 2018 Term Loan Facility $ — $ 433,708 2020 Senior Secured Notes 500,000 500,000 2023 Senior Secured Notes 450,000 — Other debt 266 268 Unamortized debt discount and issuance costs (25,764) (12,049) Total debt 924,502 921,927 Less: Long-term debt, current portion (127) (124) Long-term debt $ 924,375 $ 921,803 The fair value of our debt was approximately $811.5 million and $843.2 million as of September 30, 2023 and December 31, 2022, respectively. The fair values were determined using Level 2 quoted market prices for the same or similar debt instruments. 2018 Term Loan and 2018 Revolving Credit Facility In February 2018, the Company entered into a credit agreement (as amended, the “2018 Credit Agreement”), which provided for (i) a $2,250 million senior secured term facility (the “2018 Term Loan Facility”) after giving effect to the June 2018 amendment (the “First Amendment”) that increased the aggregate principal amount of the 2018 Term Loan Facility from $1,500 million to $2,250 million and (ii) a $330 million senior secured revolving credit facility after giving effect to the May 2022 amendment that increased the revolving commitments under the 2018 Credit Agreement by $80 million from $250 million (the “2018 Revolving Credit Facility”). GrafTech Finance Inc. (“GrafTech Finance”) was the sole borrower under the 2018 Term Loan Facility while GrafTech Finance, GrafTech Switzerland SA (“Swissco”) and GrafTech Luxembourg II S.à r.l. (“Luxembourg Holdco” and, together with GrafTech Finance and Swissco, the “Co-Borrowers”) are co-borrowers under the 2018 Revolving Credit Facility. The 2018 Revolving Credit Facility matures on May 31, 2027. The net proceeds from the 2023 Senior Secured Notes (as defined below) were used to repay outstanding borrowings under our 2018 Term Loan Facility. As of September 30, 2023 and December 31, 2022, the availability under our 2018 Revolving Credit Facility was $112.3 million and $327.0 million, respectively. As any borrowings under the 2018 Revolving Credit Facility remain subject to compliance with the financial covenant thereunder, our operating performance as of September 30, 2023 resulted in a reduction of the availability under the facility. As of September 30, 2023 and December 31, 2022, there were no borrowings outstanding on the 2018 Revolving Credit Facility and there was $3.2 million and $3.0 million of letters of credit drawn against the 2018 Revolving Credit Facility as of each date, respectively. The 2018 Revolving Credit Facility bears interest, at our option, at a rate equal to either (i) the Adjusted Term SOFR Rate and Adjusted EURIBOR Rate (each, as defined in the 2018 Credit Agreement), plus an applicable margin initially equal to 3.00% per annum or (ii) the ABR Rate, plus an applicable margin initially equal to 2.00% per annum, in each case with two 25 basis point step downs based on achievement of certain senior secured first lien net leverage ratios. In addition, we are required to pay a quarterly commitment fee on the unused commitments under the 2018 Revolving Credit Facility in an amount equal to 0.25% per annum. The 2018 Revolving Credit Facility is guaranteed by each of our domestic subsidiaries, subject to certain customary exceptions, and by GrafTech Luxembourg I S.à r.l., a Luxembourg société à responsabilité limitée and an indirect wholly owned subsidiary of GrafTech, Luxembourg HoldCo, and Swissco (collectively, the “Guarantors”) with respect to all obligations under the 2018 Revolving Credit Facility of each of our foreign subsidiaries that is a Controlled Foreign Corporation (within the meaning of Section 956 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)). Any obligations under the 2018 Revolving Credit Facility are secured, subject to certain exceptions, by: (i) a pledge of no more than 65% of the equity securities of each domestic Guarantor and of each other direct, wholly owned domestic subsidiary of GrafTech and any Guarantor, (ii) a pledge on no more than 65% of the equity interests of each subsidiary that is a Controlled Foreign Corporation (within the meaning of Section 956 of the Code), and (iii) security interests in, and mortgages on, personal property and material real property of each domestic Guarantor, subject to permitted liens and certain exceptions specified in the 2018 Revolving Credit Facility. The obligations of each foreign subsidiary of GrafTech that is a Controlled Foreign Corporation under the 2018 Revolving Credit Facility are secured by (i) a pledge of all of the equity securities of each Guarantor that is a Controlled Foreign Corporation and of each direct, wholly owned subsidiary of any Guarantor that is a Controlled Foreign Corporation, and (ii) security interests in certain receivables and personal property of each Guarantor that is a Controlled Foreign Corporation, subject to permitted liens and certain exceptions specified in the 2018 Revolving Credit Facility. The 2018 Revolving Credit Facility contains customary representations and warranties and customary affirmative and negative covenants applicable to GrafTech and restricted subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, fundamental changes, dispositions, and dividends and other distributions. The 2018 Revolving Credit Facility contains a financial covenant that requires GrafTech to maintain a senior secured first lien net leverage ratio not greater than 4.00 to 1.00 when the aggregate principal amount of borrowings under the 2018 Revolving Credit Facility and outstanding letters of credit issued under the 2018 Revolving Credit Facility (except for undrawn letters of credit in an aggregate amount equal to or less than $35.0 million), taken together, exceed 35% of the total amount of commitments under the 2018 Revolving Credit Facility. The 2018 Revolving Credit Facility also contains customary events of default. We were in compliance with all of our debt covenants as of September 30, 2023 and December 31, 2022. 2020 Senior Secured Notes In December 2020, GrafTech Finance issued $500 million aggregate principal amount of 4.625% senior secured notes due 2028 (the “2020 Senior Secured Notes”) in a private offering. The 2020 Senior Secured Notes and related guarantees are secured on a pari passu basis by the collateral securing the 2018 Revolving Credit Facility and the 2023 Senior Secured Notes. All of the net proceeds from the 2020 Senior Secured Notes were used to partially repay borrowings under our 2018 Term Loan Facility. The 2020 Senior Secured Notes pay interest in arrears on June 15 and December 15 of each year, with the principal due in full on December 15, 2028. Prior to December 15, 2023, up to 40% of the 2020 Senior Secured Notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 104.625% of the principal amount thereof, together with accrued and unpaid interest, if any. The 2020 Senior Secured Notes may be redeemed, in whole or in part, at any time prior to December 15, 2023 at a price equal to 100% of the principal amount of the notes redeemed plus a premium together with accrued and unpaid interest, if any, to, but not including, the redemption date. Thereafter, the 2020 Senior Secured Notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The indenture governing the 2020 Senior Secured Notes (the “Indenture”) contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets. Pursuant to the Indenture, if our pro forma consolidated first lien net leverage ratio is no greater than 2.00 to 1.00, we can make restricted payments so long as no default or event of default has occurred and is continuing. If our pro forma consolidated first lien net leverage ratio is greater than 2.00 to 1.00, we can make restricted payments pursuant to certain baskets. The Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Finance, all outstanding 2020 Senior Secured Notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding 2020 Senior Secured Notes may declare all of the 2020 Senior Secured Notes to be due and payable immediately. We were in compliance with all of our debt covenants as of September 30, 2023 and December 31, 2022. 2023 Senior Secured Notes In June 2023, GrafTech Global Enterprises Inc. issued $450 million aggregate principal amount of 9.875% senior secured notes due 2028 (the “2023 Senior Secured Notes”), including $11.4 million of original issue discount. The 2023 Senior Secured Notes were issued at an issue price of 97.456% of the principal amount thereof in a private offering. The 2023 Senior Secured Notes and related guarantees are secured on a pari passu basis by the collateral securing the 2018 Revolving Credit Facility and the 2020 Senior Secured Notes. The net proceeds from the 2023 Senior Secured Notes were used to repay borrowings under our 2018 Term Loan Facility. The 2023 Senior Secured Notes pay interest in arrears on June 15 and December 15 of each year, with the principal due in full on December 15, 2028. Prior to December 15, 2025, up to 40% of the 2023 Senior Secured Notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 109.875% of the principal amount thereof, together with accrued and unpaid interest, if any. The 2023 Senior Secured Notes may be redeemed, in whole or in part, at any time prior to December 15, 2025 at a price equal to 100% of the principal amount of the notes redeemed plus a premium together with accrued and unpaid interest, if any, to, but not including, the redemption date. Thereafter, the 2023 Senior Secured Notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The indenture governing the 2023 Senior Secured Notes (the “2023 Indenture”) contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, incur or suffer to exist liens securing indebtedness, make certain investments, engage in certain transactions with affiliates, consummate certain asset sales and effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets. Pursuant to the 2023 Indenture, if our pro forma consolidated first lien net leverage ratio is no greater than 2.00 to 1.00, we can make restricted payments so long as no default or event of default has occurred and is continuing. If our pro forma consolidated first lien net leverage ratio is greater than 2.00 to 1.00, we can make restricted payments pursuant to certain baskets. The 2023 Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company or GrafTech Global Enterprises Inc., all outstanding 2023 Senior Secured Notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the trustee or the holders of at least 30% in principal amount of the then outstanding 2023 Senior Secured Notes may declare all of the 2023 Senior Secured Notes to be due and payable immediately. We were in compliance with all of our debt covenants as of September 30, 2023. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are comprised of the following: September 30, 2023 December 31, 2022 (Dollars in thousands) Inventories: Raw materials and supplies $ 147,530 $ 216,761 Work in process 188,620 192,821 Finished goods 42,820 38,159 Total $ 378,970 $ 447,741 |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2023 | |
Interest and Debt Expense [Abstract] | |
Interest Expense | Interest Expense The following table presents the components of interest expense: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) Interest incurred on debt $ 17,154 $ 10,458 $ 39,101 $ 32,743 Accretion of original issue discount 526 178 2,002 1,043 Amortization of debt issuance costs 740 642 3,883 2,818 Amortization of interest rate swap deferred gains (2,701) — (2,746) — Realized gain on termination of de-designated interest rate swap — (4,605) (6,918) (4,605) Unrealized (gain) loss on de-designated interest rate swap — (249) 7,110 (6,964) Total interest expense $ 15,719 $ 6,424 $ 42,432 $ 25,035 In June 2023, the net proceeds from the issuance of the 2023 Senior Secured Notes were used to repay the $433.7 million of principal outstanding on the 2018 Term Loan Facility. The repayment of the 2018 Term Loan Facility was accounted for as a debt extinguishment and triggered $1.2 million of accelerated accretion of the original issue discount and $1.9 million of accelerated amortization of debt issuance costs. The 2023 Senior Secured Notes were accounted for as new debt and the related discount and debt issuance costs were deferred. In connection with the repayment of the 2018 Term Loan Facility in June 2023, we terminated the outstanding interest rate swap contracts that were in place to fix the cash flows associated with the risk in variability in the one-month USD London Interbank Offered Rate (“USD LIBOR”) for the 2018 Term Loan Facility. As a result of the swaps termination, we recorded in interest expense realized gains of $6.9 million relative to our de-designated swap and we deferred realized gains of $13.5 million in accumulated other comprehensive income (“AOCI”) in connection with our designated swap. The gains deferred into AOCI for the designated swap will amortize into interest expense until August 2024, consistent with the term of the discontinued cash-flow hedging relationship. The 2023 Senior Secured Notes and the 2020 Senior Secured Notes carry fixed interest rates of 9.875% and 4.625%, respectively. The 2018 Term Loan Facility, which was paid off in its entirety in June 2023, had an effective interest rate of 7.38% as of December 31, 2022. During the nine months ended September 30, 2022, we made voluntary prepayments of $110.0 million under our 2018 Term Loan Facility. In connection with this, we recorded $0.5 million of accelerated accretion of the original issue discount and $0.8 million of accelerated amortization of the debt issuance cost. We did not make any voluntary prepayments under our 2018 Term Loan Facility in the third quarter of 2022. See Note 4, “Debt and Liquidity” for details of our debt and Note 9, “Fair Value Measurements and Derivative Instruments” for additional details on our interest rate swaps and embedded derivative. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Loss Contingency [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings We are involved in various investigations, lawsuits, claims, demands, labor disputes and other legal proceedings, including with respect to environmental and human exposure or other personal injury matters, arising out of or incidental to the conduct of our business. While it is not possible to determine the ultimate disposition of each of these matters and proceedings, we do not believe that their ultimate disposition will have a material adverse effect on our financial position, results of operations or cash flows. Additionally, we are involved in the following legal proceedings. We are involved in certain arbitrations as respondents/counterclaimants, pending before the International Chamber of Commerce with a few customers who, among other things, have failed to perform under their LTAs and in certain instances are seeking to modify or frustrate their contractual commitments to us. In particular, Aperam South America LTDA, Aperam Sourcing S.C.A., ArcelorMittal Sourcing S.C.A., and ArcelorMittal Brasil S.A. (collectively, the “Claimants”) initiated a single arbitration proceeding against two of the Company’s subsidiaries in the International Chamber of Commerce in June 2020. The Claimants argue, among other things, that they should no longer be required to comply with the terms of the LTAs that they signed due to an alleged drop in market prices for graphite electrodes in January 2020. Alternatively, the Claimants argue that they should not be required to comply with the LTAs that they signed due to alleged market circumstances at the time of execution. In June 2021, the Claimants filed their statement of claim, seeking approximately $61.0 million plus interest in monetary relief and/or reimbursement in respect of several fixed price LTAs that were executed between such subsidiaries and the Claimants in 2017 and 2018. On December 16, 2022, the Claimants revised their calculation of alleged damages to approximately $178.9 million including interest, with damages covering the period from the first quarter of 2020 through the end of the third quarter of 2022 and interest covering the period from June 2020 through December 16, 2022. In March 2023, an International Chamber of Commerce hearing was held before the party-appointed sole arbitrator with the Claimants, the Company, and witnesses in attendance. On March 31, 2023, the Claimants further revised their calculation of alleged damages to approximately $171.7 million including interest, for the period covering the first quarter of 2020 through 2022. In June 2023, the Claimants again revised their calculation of alleged damages to approximately $188.2 million, including interest, for the period covering the first quarter of 2020 through the first quarter of 2023. We believe we have valid defenses to these claims. We intend to vigorously defend them and enforce our rights under the LTAs. Pending litigation in Brazil has been brought by employees seeking to recover additional amounts and interest thereon under certain wage increase provisions applicable in 1989 and 1990 under collective bargaining agreements to which employers in the Bahia region of Brazil were a party (including our subsidiary in Brazil). Companies in Brazil have settled claims arising out of these provisions and, in May 2015, the litigation was remanded by the Brazilian Supreme Court in favor of the employees union. After denying an interim appeal by the Bahia region employers on June 26, 2019, the Brazilian Supreme Court finally ruled in favor of the employees union on September 26, 2019. The employers union has determined not to seek annulment of such decision. Separately, on October 1, 2015, a related action was filed by current and former employees against our subsidiary in Brazil to recover amounts under such provisions, plus interest thereon, which amounts together with interest could be material to us. If the Brazilian Supreme Court proceeding above had been determined in favor of the employers union, it would also have resolved this proceeding in our favor. In the first quarter of 2017, the state court initially ruled in favor of the employees. We appealed this state court ruling, and the appellate court issued a decision in our favor on May 19, 2020. The employees have further appealed and, on December 16, 2020, the court upheld the decision in favor of GrafTech Brazil. On February 22, 2021, the employees filed a further appeal and, on April 28, 2021, the court rejected the employees' appeal in favor of GrafTech Brazil. The employees filed a further appeal and on September 12, 2022, we filed our response in opposition. We intend to vigorously defend our position. As of September 30, 2023, we are unable to assess the potential loss associated with these proceedings as the claims do not currently specify the number of employees seeking damages or the amount of damages being sought. Product Warranties We generally sell products with a limited warranty. We accrue for known warranty claims if a loss is probable and can be reasonably estimated. We also accrue for estimated warranty claims incurred based on a historical claims charge analysis. Claims accrued but not yet paid and the related activity within the accrual for the nine months ended September 30, 2023, are presented below: (Dollars in thousands) Balance as of December 31, 2022 $ 820 Product warranty charges/adjustments 81 Payments and settlements (497) Balance as of September 30, 2023 $ 404 Related Party Tax Receivable Agreement On April 23, 2018, the Company entered into the tax receivable agreement ("Tax Receivable Agreement") that provides Brookfield, as the sole pre-IPO stockholder, the right to receive future payments from us for 85% of the amount of cash savings, if any, in U.S. federal income tax and Swiss tax that we and our subsidiaries realize as a result of the utilization of the pre-IPO tax assets. In addition, we will pay interest on the payments we will make to Brookfield with respect to the amount of these cash savings from the due date (without extensions) of our tax return where we realize these savings to the payment date. On April 10, 2023, the Tax Receivable Agreement was amended and restated to change the applicable interest rate from LIBOR plus 1.00% per year to the one-month period secured overnight financing rate administered by the Federal Reserve Bank of New York plus 1.10%. The term of the Tax Receivable Agreement commenced on April 23, 2018 and will continue until there is no potential for any future tax benefit payments. As of September 30, 2023, the total Tax Receivable Agreement liability was $10.9 million, of which $5.1 million was classified as current liability "Related party payable - Tax Receivable Agreement" on the Condensed Consolidated Balance Sheets and $5.8 million was classified as a long-term liability in "Related party payable - Tax Receivable Agreement long-term" on the Condensed Consolidated Balance Sheets. As of December 31, 2022, the total Tax Receivable Agreement liability was $15.5 million, of which $4.6 million was classified as a current liability and $10.9 million was classified as a long-term liability. Mexico Value-Added Tax (“VAT”) In July 2019, the Mexican Tax Authority (“MTA”) opened an audit of the VAT filings of GrafTech Comercial de Mexico S. de R.L. de C.V. (“GrafTech Commercial Mexico”) for the period of January 1 to April 30, 2019. In September 2021, the MTA issued a tax assessment, claiming improper use of a certain VAT exemption rule for purchases from a foreign affiliate. GrafTech Commercial Mexico filed an administrative appeal against the tax assessment with the MTA’s appeals office. In November 2022, the MTA’s appeals office concluded its review and confirmed the tax assessment. GrafTech Commercial Mexico believes that the purchases from a foreign affiliate are exempt from VAT back-up withholding and in December 2022, GrafTech Commercial Mexico filed a Claim for Nullity with the Chamber Specialized in exclusive resolution of substance of the Federal Court of Administrative Justice. On February 17, 2023, the MTA filed the response to the nullity petition. On May 31, 2023, the court held a hearing to determine the scope of the issues to be decided in the proceedings. At the court’s request GrafTech Commercial Mexico submitted formal pleadings on August 1, 2023. As of September 30, 2023, the tax assessment for the four month period under audit amounted to approximately $26.5 million, including penalties, inflation and interest. Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time. In March 2022, the MTA opened another audit of the VAT filings of GrafTech Commercial Mexico for the period January 1 to December 31, 2018. In the proposed assessment received in January 2023, the MTA is alleging the same improper use of certain VAT exemption rules on purchases from a foreign affiliate and has provided notice of its intent to assess approximately $51.0 million, including penalties, inflation and interest. In Mexico, each tax assessment requires a separate claim. In the first quarter of 2023, GrafTech Commercial Mexico requested a conclusive agreement with the Mexican ombudsman (“PRODECON”) to reach a settlement with the MTA. The MTA responded to GrafTech Commercial Mexico’s request on May 30, 2023. On August 2, 2023, GrafTech Commercial Mexico filed a motion exhibiting additional information and reaffirming its position. On September 22, 2023, the MTA responded to GrafTech Commercial Mexico’s motion. On October 2, 2023, GrafTech Commercial Mexico filed a motion before PRODECON requesting a formal meeting with the MTA. If the mediation process does not result in a satisfactory outcome, GrafTech Commercial Mexico intends to pursue administrative appeal procedures with the MTA to attempt to satisfactorily resolve this matter. The $51.0 million includes interest and inflation. Interest will continue to accrue up to five years from the date the corresponding VAT returns were filed and inflation will continue to accrue with the passage of time. GrafTech Commercial Mexico believes that its application of the VAT exemption rules is appropriate and, accordingly, does not believe that it is probable that it will incur a loss related to this matter for either of the two periods under the MTA’s audit. GrafTech Commercial Mexico intends to vigorously defend its position in these proceedings. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe compute and apply to ordinary income an estimated annual effective tax rate on a quarterly basis based on current and forecasted business levels and activities, including the mix of domestic and foreign results and enacted tax laws. The estimated annual effective tax rate is updated quarterly based on actual results and updated operating forecasts. Ordinary income refers to income before the provision for income taxes excluding significant, unusual or infrequently occurring items. The tax effect of an unusual or infrequently occurring item is recorded in the interim period in which it occurs as a discrete item of tax. The following table summarizes the provision (benefit) for income taxes: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) (Benefit) provision for income taxes $ (10,244) $ 15,041 $ (10,819) $ 56,260 Pre-tax (loss) income (32,865) 108,492 (48,660) 388,891 Effective tax rate 31.2 % 13.9 % 22.2 % 14.5 % The effective tax rate for the third quarter and first nine months of 2023 was higher than the U.S. statutory tax rate of 21% primarily due to worldwide earnings from various countries taxed at different rates and a tax benefit from the postponement of the U.S. foreign tax credit regulations effective date from 2022 to 2024. The effective tax rate for the third quarter and first nine months of 2022 was lower than the U.S. statutory tax rate of 21% primarily due to worldwide earnings from various countries taxed at different rates, which was partially offset by the net combined impact related to the U.S. taxation of global intangible low taxed income (“GILTI”) and Foreign Tax Credits (“FTCs”). We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. All U.S. federal tax years prior to 2019 are generally closed by statute or have been audited and settled with the applicable domestic tax authorities. Other jurisdictions are generally closed for years prior to 2018. We continue to assess the realization of our deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized through the generation of future taxable income. Appropriate consideration is given to all available evidence, both positive and negative, in assessing the need for a valuation allowance. Examples of positive evidence would include a strong earnings history, an event or events that would increase our taxable income through a continued reduction of expenses, and tax planning strategies that would indicate an ability to realize deferred tax assets. In circumstances where the significant positive evidence does not outweigh the negative evidence in regards to whether or not a valuation allowance is required, we have established and maintained valuation allowances on those net deferred tax assets. There were no material changes to our valuation allowances in the third quarter of 2023. |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value Measurements and Derivative Instruments | Fair Value Measurements and Derivative Instruments In the normal course of business, we are exposed to certain risks related to fluctuations in currency exchange rates, commodity prices and interest rates. We use various derivative financial instruments, primarily foreign currency derivatives, commodity derivative contracts, and interest rate swaps as part of our overall strategy to manage risks from these market fluctuations. Certain of our derivative contracts contain provisions that require us to provide collateral. Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not anticipate nonperformance by any of the counterparties to our instruments. Foreign currency derivatives We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency instruments, which include, but are not limited to, forward exchange contracts and purchased currency options, are used to hedge global currency exposures such as foreign currency denominated debt, receivables, payables, sales and purchases. Foreign currency forward and swap contracts are used to mitigate the foreign exchange risk of balance sheet items. These derivatives are fair value hedges. Gains and losses from these derivatives are recorded in cost of goods sold and they are largely offset by the financial impact of translating foreign currency-denominated payables and receivables. In the first quarter of 2022 and in the second and third quarters of 2023, we entered into foreign currency derivatives with maturities of one month to 12 months in order to protect against the risk that cash flows associated with certain sales and purchases denominated in a currency other than the U.S. dollar will be adversely affected by future changes in foreign exchange rates. These derivatives are designated as cash flow hedges. The resulting unrealized gains or losses from these derivatives are recorded in AOCI and subsequently, when realized, are reclassified to net sales or cost of goods sold in the Condensed Consolidated Statements of Operations when the hedged exposures affect earnings. Commodity derivative contracts From time to time, we enter into commodity derivative contracts for refined oil products. These contracts are entered into to protect against the risk that eventual cash flows related to these products will be adversely affected by future changes in prices. The unrealized gains or losses related to commodity derivative contracts designated as cash flow hedges are recorded in AOCI and subsequently, when realized, are reclassified to the Condensed Consolidated Statement of Operations when the hedged item impacts earnings, which is when the finished product is sold. The last of our commodity derivative contracts matured as of June 30, 2022 and we have not entered into any new contracts as of September 30, 2023. Interest rate swap contracts We have utilized interest rate swaps in the past to limit exposure to market fluctuations on our variable-rate debt. For each derivative agreement that is designated as a cash-flow hedge, the unrealized gain or loss is recorded in AOCI and, when realized, is recorded to interest expense. Upon discontinuance of a designated cash-flow hedging relationship, when interest payments are still probable of occurring, the fair value at the date of discontinuance is deferred into AOCI and amortized into interest expense based upon the term of the cash-flow hedging relationship. We entered into interest rate swap contracts that were "pay fixed, receive variable." Our risk management objective was to fix our cash flows associated with the risk of variability in the one-month USD LIBOR for a portion of our outstanding debt. It was expected that the swaps would fix the cash flows associated with the forecasted interest payments on our debt to an effective fixed interest rate of 4.2%, which could be lowered to 3.95% depending on credit ratings. Since their modification concurrent with the 2018 Term Loan Facility modification in the first quarter of 2021, the swaps contained an other-than-insignificant financing element. As such, they were considered hybrid instruments composed of a debt host and an embedded derivative and the associated cash (outflows)/inflows are classified as financing (use)/source of cash. The embedded derivative is treated as a cash-flow hedge. In the first quarter of 2022, in connection with the partial repayment of principal on our 2018 Term Loan Facility and our probability assessment of the variable-rate debt remaining outstanding through the term of the swaps, we de-designated one interest rate swap contract with a $250.0 million notional amount, maturing in the third quarter of 2024. The fair value of the embedded derivative at the de-designation date was a gain of $6.6 million and was recorded in AOCI and is being amortized into interest expense over the remaining life of the swap. In the third quarter of 2022, we redeemed $67.0 million of our $250.0 million notional amount de-designated interest rate swap. The change in fair value of the de-designated embedded derivative in the first nine months of 2023 resulted in a loss of $7.1 million, compared to a gain of $7.0 million in the first nine months of 2022, recorded in interest expense in the Condensed Consolidated Statements of Operations. In the second quarter of 2023, in connection with the repayment of the $433.7 million outstanding balance on our 2018 Term Loan Facility, we terminated our $183.0 million notional de-designated interest rate swap and our $250.0 million notional designated interest rate swap and received net cash of $20.4 million. The net cash received included a $23.1 million gain on the embedded derivatives, partially offset by a $2.8 million loss on the settlement of our debt host liability as of the termination date. As of December 31, 2022, the debt host liability was $3.8 million, with $2.3 million included in "Other accrued liabilities" and $1.5 million included in "Other long-term obligations" on the Condensed Consolidated Balance Sheets. As of September 30, 2023, a cumulative loss of $2.5 million related to the debt host liability was recorded in AOCI and will be amortized into interest expense using the effective interest method through August 2024. Out of the $23.1 million gain on the embedded derivatives, $6.9 million for the de-designated swap was recorded in interest expense and $16.2 million for the designated swap was recorded in AOCI and will be amortized into interest expense using the effective interest method through August 2024. All derivatives are recorded on the balance sheet at fair value. If the derivative is designated and effective as a cash flow hedge, changes in the fair value of the derivative are recognized in AOCI until the hedged item is recognized in earnings. The ineffective portion of a derivative's fair value, if any, is recognized in earnings immediately. If a derivative is not a hedge, changes in the fair value are adjusted through earnings. The fair values of the outstanding derivatives are recorded on the balance sheet as assets (if the derivatives are in a gain position) or liabilities (if the derivatives are in a loss position). The fair values will also be classified as short-term or long-term depending upon their maturity dates. The fair value of all of our derivatives was determined using Level 2 inputs. The notional amounts of our outstanding derivative instruments as of September 30, 2023 and December 31, 2022 were as follows: September 30, 2023 December 31, 2022 Notional Amount Notional Amount (Dollars in thousands) Derivative instruments designated as hedges: Foreign currency derivatives $ 21,264 $ — Interest rate swap contracts — 250,000 Derivative instruments not designated as hedges: Foreign currency derivatives $ 40,049 $ 70,420 Interest rate swap contracts — 183,000 The following table summarizes the fair value of our outstanding derivatives designated as hedges (on a gross basis) and balance sheet classification as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Fair Value Fair Value (Dollars in thousands) Prepaid and other current assets Interest rate swap contracts $ — $ 10,246 Total $ — $ 10,246 Other assets Interest rate swap contracts $ — $ 5,575 Total $ — $ 5,575 Other accrued liabilities Foreign currency derivatives $ (565) $ — Net (liability) asset $ (565) $ 15,821 As a result of the settlement of commodity derivative contracts and interest rate swaps, as of September 30, 2023, net realized pre-tax gains of $6.0 million and $12.6 million, respectively, were reported in AOCI and will be released to earnings within the next 12 months. As of September 30, 2023, net realized pre-tax gains of $0.1 million related to our foreign currency derivatives were reported in AOCI and will be released to earnings within the next 12 months. No ineffectiveness expense was recorded in the third quarter of 2023 or 2022 or in first nine months of 2023. In the first nine months of 2022, we recorded $0.8 million of ineffectiveness income to cost of goods sold in the Condensed Consolidated Statements of Operations related to the settlement of commodity derivative contracts. See the table below for amounts recognized on the effective portion of our commodity derivative contracts in the Condensed Consolidated Statement of Operations. The pre-tax realized (gains) losses on designated cash flow hedges are recognized in the Statements of Operations when the hedged item impacts earnings and were as follows for the periods ended September 30, 2023 and 2022: Amount of (Gain)/Loss Location of Realized (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Three Months 2023 2022 Derivatives designated as cash flow hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold $ 3,501 $ 762 Commodity derivative contracts Cost of goods sold (4,234) (5,018) Interest rate swap contracts Interest expense (2,700) (991) Amount of (Gain)/Loss Location of Realized (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Nine Months 2023 2022 Derivatives designated as cash flow hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold $ 5,541 $ 762 Commodity derivative contracts Cost of goods sold (11,521) (10,973) Interest rate swap contracts Interest expense (7,882) (532) Pretax gains and losses on non-designated derivatives recognized in earnings were as follows: Amount of (Gain)/Loss Location of (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Three Months Ended September 30, 2023 2022 Derivatives not designated as hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold, other expense (income), net $ 180 $ (144) Interest rate swap contracts Interest expense — (249) Amount of (Gain)/Loss Location of (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Nine Months Ended 2023 2022 Derivatives not designated as hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold, other expense (income), net $ 500 $ 299 Interest rate swap contracts Interest expense (2,957) (6,964) The following table summarizes the fair value of our outstanding derivatives not designated as hedges (on a gross basis) and balance sheet classification as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Fair Value Fair Value (Dollars in thousands) Prepaid and other current assets Interest rate swap contracts $ — $ 7,492 Foreign currency derivatives 516 92 Other assets Interest rate swap contracts — 4,071 Other accrued liabilities Foreign currency derivatives (84) (282) Net asset $ 432 $ 11,373 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The balance in our Accumulated other comprehensive loss is set forth in the following table: September 30, 2023 December 31, 2022 (Dollars in thousands) Foreign currency translation adjustments, net of tax $ (29,817) $ (29,354) Commodity, interest rate, and foreign currency derivatives, net of tax 12,205 21,284 Total accumulated other comprehensive loss $ (17,612) $ (8,070) |
(Loss) Earnings per Share
(Loss) Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Share | (Loss) Earnings per Share During the nine months ended September 30, 2023, we did not repurchase any shares of our common stock. In the nine months ended September 30, 2022, we repurchased and subsequently retired 6,662,421 shares of our common stock for $60.0 million under our common stock repurchase program. The following table presents a reconciliation of the numerator and denominator of basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2023 and 2022: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands, except per share amounts) Numerator for basic and diluted (loss) earnings per share: Net (loss) income $ (22,621) $ 93,451 $ (37,841) $ 332,631 Denominator: Weighted average common shares outstanding for basic calculation 257,090,113 256,848,575 256,987,778 259,415,295 Add: Effect of equity awards — 4,879 — 9,590 Weighted average common shares outstanding for diluted calculation 257,090,113 256,853,454 256,987,778 259,424,885 Basic (loss) earnings per share $ (0.09) $ 0.36 $ (0.15) $ 1.28 Diluted (loss) earnings per share $ (0.09) $ 0.36 $ (0.15) $ 1.28 Basic (loss) earnings per share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding, which included 282,891 and 257,953 shares of participating securities in the three and nine months ended September 30, 2023, respectively, and 251,233 and 222,181 shares of participating securities in the three and nine months ended September 30, 2022, respectively. Diluted (loss) earnings per share is calculated by dividing net (loss) income by the sum of the weighted average number of common shares outstanding plus the additional common shares that would have been outstanding if potentially dilutive securities had been issued. The weighted average common shares outstanding for the diluted (loss) earnings per share calculation for the three and nine months ended September 30, 2023 excludes the dilutive effect of approximately 68,991 and 36,148 shares, respectively, primarily related to restricted stock units, as their inclusion would have been anti-dilutive due to the Company's net loss. Additionally, the weighted average common shares outstanding for the diluted (loss) earnings per share calculation excludes consideration of 3,306,665 and 3,135,380 equivalent shares for the three and nine months ended September 30, 2023, respectively, and 2,436,019 and 2,227,682 equivalent shares for the three and nine months ended September 30, 2022, respectively, as their effect would have been anti-dilutive. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Human Resources and Compensation Committee of our Board of Directors granted 519,482 stock options, 665,417 restricted stock units (“RSUs”) and 542,743 performance stock units (“PSUs”) to our employees during the first nine months of 2023 under our Omnibus Equity Incentive Plan. Our electing non-employee directors received 91,082 deferred share units (“DSUs”) and 154,609 RSUs and deferred RSUs during the nine months ended September 30, 2023 under our Omnibus Equity Incentive Plan. The weighted average exercise price per share and weighted average fair value per share of the stock options granted in the nine months ended September 30, 2023 was $5.51 and $3.01, respectively. We estimated the fair value of the stock options using the following assumptions in our Black-Scholes model: Dividend yield 0.73% Expected volatility 58.16% Risk-free interest rate 4.04% Expected term (in years) 6.0 years We measure the fair value of grants of RSUs and DSUs based on the closing market price of a share of our common stock on the date of the grant. The weighted average fair value per share was $5.58 for RSUs granted to employees, $4.24 for RSUs and deferred RSUs granted to non-employee directors and $4.52 for DSUs granted during the nine months ended September 30, 2023. We measure the fair value of grants of PSUs using a monte carlo valuation. The weighted average fair value of the PSUs granted in the nine months ended September 30, 2023 was $7.30 per share and will be expensed over a vesting period of three years. The final payout to holders of PSUs will be based upon the Company's total shareholder return relative to a peer group's performance measured at the end of each performance period. In the three months ended September 30, 2023 and 2022, we recognized $1.6 million and $0.6 million, respectively, of stock-based compensation expense. The majority of the expense, $1.5 million and $0.5 million, respectively, was recorded in selling and administrative expense in the Condensed Consolidated Statements of Operations, with the remaining expense recorded in cost of goods sold. In the nine months ended September 30, 2023 and 2022, we recognized $3.8 million and $1.7 million, respectively, of stock-based compensation expense. The majority of the expense, $3.5 million and $1.6 million, respectively, was recorded in selling and administrative expense in the Condensed Consolidated Statements of Operations, with the remaining expense recorded in cost of goods sold. As of September 30, 2023, the unrecognized compensation cost related to the unvested portion of all stock-based awards was approximately $11.9 million and is expected to be recognized over the remaining vesting period of the respective grants. |
Supplementary Balance Sheet Det
Supplementary Balance Sheet Detail | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Supplementary Balance Sheet Detail | Supplementary Balance Sheet Detail Supplier Finance Program (“SFP”) Obligations GrafTech Mexico S.A. De C.V. (“GrafTech Mexico”) participates in an electronic vendor voucher payment program supported by the Mexican Government through one of its national banks, whereby suppliers can factor their invoices through a financial intermediary. This program gives GrafTech Mexico’s suppliers the option to settle trade receivables by obtaining payment from the financial intermediary prior to the invoice due date for a discounted amount. GrafTech Mexico’s responsibility is limited to making payment on the terms originally negotiated with its supplier, regardless of whether the supplier elects to receive early payment. The range of payment terms GrafTech Mexico negotiates with its suppliers is consistent, irrespective of whether a supplier participates in the program. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net (loss) income | $ (22,621) | $ (7,851) | $ (7,369) | $ 93,451 | $ 114,997 | $ 124,183 | $ (37,841) | $ 332,631 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed 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 and in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The December 31, 2022 Consolidated Balance Sheet data included herein was derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 14, 2023, but does not include all disclosures required by GAAP in audited financial statements. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the accompanying notes, contained in the Company's Annual Report on Form 10-K. The unaudited condensed consolidated financial statements reflect all adjustments (all of which are of a normal, recurring nature) which management considers necessary for a fair presentation of our financial statements for the interim periods presented. The results for the interim periods are not necessarily indicative of results which may be expected for any other interim period or for the full year. |
New Accounting Standards | New Accounting Standards Recently Adopted Accounting Standards In September 2022, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations , which requires disclosures intended to enhance the transparency of supplier finance programs. The amendments in this ASU require buyers in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The amendments should be applied retrospectively to each period in which a balance sheet is presented, except for disclosure of rollforward information, which should be applied prospectively. The Company adopted this guidance on January 1, 2023 and the adoption did not have a material impact on its financial position, results of operations, cash flows or disclosures. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides information about disaggregated revenue by type of product and contract, including our take or pay contracts with initial terms of three to five years (“LTA”) and short-term agreements and spot sales (“non-LTA”): Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) Graphite Electrodes - LTAs $ 66,344 $ 212,087 $ 212,579 $ 683,858 Graphite Electrodes - Non-LTAs 88,629 79,710 246,726 296,954 By-products and other 4,019 12,043 24,050 52,919 Total Revenues $ 158,992 $ 303,840 $ 483,355 $ 1,033,731 |
Contract with Customer, Contract Liability | Current deferred revenue is included in “Other accrued liabilities” on the Condensed Consolidated Balance Sheets. The following table provides our contract liability balances as of September 30, 2023 and December 31, 2022: September 30, December 31, 2022 (Dollars in thousands) Current deferred revenue $ 25,122 $ 27,878 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The revenue associated with our LTAs is expected to be approximately as follows for the full years of 2023 and 2024: 2023 2024 (Dollars in millions) Estimated LTA revenue $245-$255 $100-$135 (1) (1) Includes expected termination fees from a few customers that have failed to meet certain obligations under their LTAs. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets with Determinable Useful Lives by Major Category | The following table summarizes intangible assets with determinable useful lives by major category, which are included in "Other assets" on our Condensed Consolidated Balance Sheets: September 30, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net (Dollars in thousands) Trade names $ 22,500 $ (17,161) $ 5,339 $ 22,500 $ (15,869) $ 6,631 Technology and know-how 55,300 (44,982) 10,318 55,300 (42,371) 12,929 Customer-related intangibles 64,500 (35,734) 28,766 64,500 (32,513) 31,987 Total finite-lived intangible assets $ 142,300 $ (97,877) $ 44,423 $ 142,300 $ (90,753) $ 51,547 |
Debt and Liquidity (Tables)
Debt and Liquidity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The following table presents our long-term debt: September 30, 2023 December 31, 2022 (Dollars in thousands) 2018 Term Loan Facility $ — $ 433,708 2020 Senior Secured Notes 500,000 500,000 2023 Senior Secured Notes 450,000 — Other debt 266 268 Unamortized debt discount and issuance costs (25,764) (12,049) Total debt 924,502 921,927 Less: Long-term debt, current portion (127) (124) Long-term debt $ 924,375 $ 921,803 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are comprised of the following: September 30, 2023 December 31, 2022 (Dollars in thousands) Inventories: Raw materials and supplies $ 147,530 $ 216,761 Work in process 188,620 192,821 Finished goods 42,820 38,159 Total $ 378,970 $ 447,741 |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Interest and Debt Expense [Abstract] | |
Schedule of Interest Expense | The following table presents the components of interest expense: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) Interest incurred on debt $ 17,154 $ 10,458 $ 39,101 $ 32,743 Accretion of original issue discount 526 178 2,002 1,043 Amortization of debt issuance costs 740 642 3,883 2,818 Amortization of interest rate swap deferred gains (2,701) — (2,746) — Realized gain on termination of de-designated interest rate swap — (4,605) (6,918) (4,605) Unrealized (gain) loss on de-designated interest rate swap — (249) 7,110 (6,964) Total interest expense $ 15,719 $ 6,424 $ 42,432 $ 25,035 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Loss Contingency [Abstract] | |
Schedule of Product Warranties Accrual | Claims accrued but not yet paid and the related activity within the accrual for the nine months ended September 30, 2023, are presented below: (Dollars in thousands) Balance as of December 31, 2022 $ 820 Product warranty charges/adjustments 81 Payments and settlements (497) Balance as of September 30, 2023 $ 404 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Taxes | The following table summarizes the provision (benefit) for income taxes: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands) (Benefit) provision for income taxes $ (10,244) $ 15,041 $ (10,819) $ 56,260 Pre-tax (loss) income (32,865) 108,492 (48,660) 388,891 Effective tax rate 31.2 % 13.9 % 22.2 % 14.5 % |
Fair Value Measurements and D_2
Fair Value Measurements and Derivative Instruments (Tables) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts of our outstanding derivative instruments as of September 30, 2023 and December 31, 2022 were as follows: September 30, 2023 December 31, 2022 Notional Amount Notional Amount (Dollars in thousands) Derivative instruments designated as hedges: Foreign currency derivatives $ 21,264 $ — Interest rate swap contracts — 250,000 Derivative instruments not designated as hedges: Foreign currency derivatives $ 40,049 $ 70,420 Interest rate swap contracts — 183,000 | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the fair value of our outstanding derivatives designated as hedges (on a gross basis) and balance sheet classification as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Fair Value Fair Value (Dollars in thousands) Prepaid and other current assets Interest rate swap contracts $ — $ 10,246 Total $ — $ 10,246 Other assets Interest rate swap contracts $ — $ 5,575 Total $ — $ 5,575 Other accrued liabilities Foreign currency derivatives $ (565) $ — Net (liability) asset $ (565) $ 15,821 | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The pre-tax realized (gains) losses on designated cash flow hedges are recognized in the Statements of Operations when the hedged item impacts earnings and were as follows for the periods ended September 30, 2023 and 2022: Amount of (Gain)/Loss Location of Realized (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Three Months 2023 2022 Derivatives designated as cash flow hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold $ 3,501 $ 762 Commodity derivative contracts Cost of goods sold (4,234) (5,018) Interest rate swap contracts Interest expense (2,700) (991) Amount of (Gain)/Loss Location of Realized (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Nine Months 2023 2022 Derivatives designated as cash flow hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold $ 5,541 $ 762 Commodity derivative contracts Cost of goods sold (11,521) (10,973) Interest rate swap contracts Interest expense (7,882) (532) | |
Derivatives Not Designated as Hedging Instruments | The following table summarizes the fair value of our outstanding derivatives not designated as hedges (on a gross basis) and balance sheet classification as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Fair Value Fair Value (Dollars in thousands) Prepaid and other current assets Interest rate swap contracts $ — $ 7,492 Foreign currency derivatives 516 92 Other assets Interest rate swap contracts — 4,071 Other accrued liabilities Foreign currency derivatives (84) (282) Net asset $ 432 $ 11,373 | |
Pretax Gains (Losses) on Derivative Contracts Not Designated as Hedging Instruments Not Recognized in Earnings | Pretax gains and losses on non-designated derivatives recognized in earnings were as follows: Amount of (Gain)/Loss Location of (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Three Months Ended September 30, 2023 2022 Derivatives not designated as hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold, other expense (income), net $ 180 $ (144) Interest rate swap contracts Interest expense — (249) Amount of (Gain)/Loss Location of (Gain)/Loss Recognized in the Condensed Consolidated Statement of Operations Nine Months Ended 2023 2022 Derivatives not designated as hedges: (Dollars in thousands) Foreign currency derivatives Cost of goods sold, other expense (income), net $ 500 $ 299 Interest rate swap contracts Interest expense (2,957) (6,964) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | The balance in our Accumulated other comprehensive loss is set forth in the following table: September 30, 2023 December 31, 2022 (Dollars in thousands) Foreign currency translation adjustments, net of tax $ (29,817) $ (29,354) Commodity, interest rate, and foreign currency derivatives, net of tax 12,205 21,284 Total accumulated other comprehensive loss $ (17,612) $ (8,070) |
(Loss) Earnings per Share (Tabl
(Loss) Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Calculation of our Basic and Diluted Earnings per share Calculation | The following table presents a reconciliation of the numerator and denominator of basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2023 and 2022: Three Months Nine Months 2023 2022 2023 2022 (Dollars in thousands, except per share amounts) Numerator for basic and diluted (loss) earnings per share: Net (loss) income $ (22,621) $ 93,451 $ (37,841) $ 332,631 Denominator: Weighted average common shares outstanding for basic calculation 257,090,113 256,848,575 256,987,778 259,415,295 Add: Effect of equity awards — 4,879 — 9,590 Weighted average common shares outstanding for diluted calculation 257,090,113 256,853,454 256,987,778 259,424,885 Basic (loss) earnings per share $ (0.09) $ 0.36 $ (0.15) $ 1.28 Diluted (loss) earnings per share $ (0.09) $ 0.36 $ (0.15) $ 1.28 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | We estimated the fair value of the stock options using the following assumptions in our Black-Scholes model: Dividend yield 0.73% Expected volatility 58.16% Risk-free interest rate 4.04% Expected term (in years) 6.0 years |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) | Sep. 30, 2023 majorProductCategory | Dec. 31, 2022 | Apr. 26, 2018 $ / shares shares |
Schedule of Equity Method Investments [Line Items] | |||
Shares, issued | shares | 38,097,525 | ||
Sale of stock, price per share | $ / shares | $ 15 | ||
Number of major product categories | majorProductCategory | 2 | ||
Brookfield | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 24.90% | 24.90% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [line Items] | ||||
Net sales | $ 158,992 | $ 303,840 | $ 483,355 | $ 1,033,731 |
Long-term Contract with Customer | ||||
Disaggregation of Revenue [line Items] | ||||
Net sales | 66,344 | 212,087 | 212,579 | 683,858 |
Short-term Contract with Customer | ||||
Disaggregation of Revenue [line Items] | ||||
Net sales | 88,629 | 79,710 | 246,726 | 296,954 |
By-products and other | ||||
Disaggregation of Revenue [line Items] | ||||
Net sales | $ 4,019 | $ 12,043 | $ 24,050 | $ 52,919 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Contract with Customer, Asset, before Allowance for Credit Loss | $ 0 | $ 0 |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable payment terms | 30 days | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable payment terms | 120 days |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Current and Deferred Contracts) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred Revenue | $ 25,122 | $ 27,878 |
Revenue recognized | $ 10,000 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Performance Obligation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Total Revenues | $ 158,992 | $ 303,840 | $ 483,355 | $ 1,033,731 |
Long-term Contract with Customer | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Total Revenues | 66,344 | $ 212,087 | 212,579 | $ 683,858 |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 245,000 | $ 245,000 | ||
Estimated LTA revenue, period | 1 year | 1 year | ||
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 32,000 | $ 32,000 | ||
Estimated LTA revenue, period | 3 months | 3 months | ||
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 100,000 | $ 100,000 | ||
Estimated LTA revenue, period | 2 years | 2 years | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 255,000 | $ 255,000 | ||
Estimated LTA revenue, period | 1 year | 1 year | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 42,000 | $ 42,000 | ||
Estimated LTA revenue, period | 3 months | 3 months | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Estimated LTA revenue | $ 135,000 | $ 135,000 | ||
Estimated LTA revenue, period | 2 years | 2 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Schedule of Changes in the Carrying Value of Goodwill) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 171,117 | $ 171,117 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Schedule of Intangible Assets with Determinable Useful Lives by Major Category) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 142,300 | $ 142,300 |
Accumulated Amortization | (97,877) | (90,753) |
Net Carrying Amount | 44,423 | 51,547 |
Trade names | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 22,500 | 22,500 |
Accumulated Amortization | (17,161) | (15,869) |
Net Carrying Amount | 5,339 | 6,631 |
Technology and know-how | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 55,300 | 55,300 |
Accumulated Amortization | (44,982) | (42,371) |
Net Carrying Amount | 10,318 | 12,929 |
Customer-related intangibles | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 64,500 | 64,500 |
Accumulated Amortization | (35,734) | (32,513) |
Net Carrying Amount | $ 28,766 | $ 31,987 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 2.2 | $ 2.5 | $ 7.1 | $ 7.7 |
Expected amortization, remainder of year | 2.1 | 2.1 | ||
Expected amortization, year one | 8 | 8 | ||
Expected amortization, year two | 7.3 | 7.3 | ||
Expected amortization, year three | 6.7 | 6.7 | ||
Expected amortization, year four | 6.1 | 6.1 | ||
Expected amortization, year five | $ 5.5 | $ 5.5 |
Debt and Liquidity (Summary of
Debt and Liquidity (Summary of Long-Term Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 26, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Unamortized debt discount and issuance costs | $ (25,764) | $ (12,049) | |
Total debt | 924,502 | 921,927 | |
Less: Long-term debt, current portion | (127) | (124) | |
Long-term debt | 924,375 | 921,803 | |
2018 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 0 | $ 433,700 | 433,708 |
Secured Notes | 2020 Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 500,000 | 500,000 | |
Secured Notes | 2023 Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 450,000 | 0 | |
Other debt | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 266 | $ 268 |
Debt and Liquidity (Narrative)
Debt and Liquidity (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Inputs, Level 3 | ||
Debt Instrument [Line Items] | ||
Fair Value of Debt | $ 811,500 | $ 843,200 |
Debt and Liquidity (2018 Term L
Debt and Liquidity (2018 Term Loan and 2018 Revolving Credit Facility) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | May 30, 2022 | Feb. 28, 2018 | |
2018 Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,250,000,000 | $ 2,250,000,000 | $ 1,500,000,000 | ||
Equity Interest Pledge | 65% | 65% | |||
Ratio of Indebtedness to Net Capital | 4 | 4 | |||
Borrowing Threshold | $ 35,000,000 | $ 35,000,000 | |||
Borrowing Threshold Percentage | 35% | 35% | |||
2018 Term Loan Facility | Adjusted LIBO Rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 3% | ||||
2018 Term Loan Facility | Revolving Credit Facility | Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 112,300,000 | $ 112,300,000 | $ 327,000,000 | ||
2018 Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit | 0 | 0 | 0 | ||
Letters of Credit Outstanding, Amount | 3,200,000 | $ 3,200,000 | $ 3,000,000 | ||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||||
2018 Revolving Credit Facility | Adjusted LIBO Rate | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||||
Debt Instrument, Basis Spread on Variable Rate, Decrease Upon Achievement Of Specific Credit Ratings | 0.25% | ||||
2018 Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 330,000,000 | $ 330,000,000 | $ 250,000,000 | ||
Line of Credit Facility, Increase (Decrease), Net | $ 80,000,000 |
Debt and Liquidity (2020 Senior
Debt and Liquidity (2020 Senior Secured Notes) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
2023 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Event Of Default, Percentage Of Debt Held | 30% |
2020 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Event Of Default, Percentage Of Debt Held | 30% |
Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Face Amount | $ 500 |
Debt Instrument, Interest Rate, Stated Percentage | 4.625% |
Secured Notes | 2023 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 9.875% |
Debt Instrument, Covenant, Restricted Payments Allowable With No Default Or Event Of Default, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 |
Debt Instrument, Covenant, Restricted Payments Allowable Pursuant To Certain Baskets, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 |
Secured Notes | 2020 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 4.625% |
Debt Instrument, Covenant, Restricted Payments Allowable With No Default Or Event Of Default, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 |
Debt Instrument, Covenant, Restricted Payments Allowable Pursuant To Certain Baskets, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 |
Secured Notes | Debt Instrument, Redemption, Period One | |
Debt Instrument [Line Items] | |
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 40% |
Debt Instrument, Redemption Price, Percentage | 104.625% |
Secured Notes | Debt Instrument, Redemption, Period One | 2023 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Redemption Price, Percentage | 109.875% |
Debt Instrument, Redemption Price, Premium Applicable, Percentage | 100% |
Secured Notes | Debt Instrument, Redemption, Period One | 2020 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Debt Instrument, Redemption Price, Premium Applicable, Percentage | 100% |
Debt and Liquidity (2023 Senior
Debt and Liquidity (2023 Senior Secured Notes) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Debt Instrument, Issue Price | $ 0.97456 | |
Secured Notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | |
Secured Notes | Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 40% | |
Debt Instrument, Redemption Price, Percentage | 104.625% | |
2023 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | $ 11,400,000 | |
Debt Instrument, Event Of Default, Percentage Of Debt Held | 30% | |
2023 Senior Secured Notes | Secured Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 450,000,000 | $ 0 |
Debt Instrument, Interest Rate, Stated Percentage | 9.875% | |
Debt Instrument, Covenant, Restricted Payments Allowable With No Default Or Event Of Default, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 | |
Debt Instrument, Covenant, Restricted Payments Allowable Pursuant To Certain Baskets, Pro Forma Consolidated First Lien Net Leverage Ratio, Maximum | 2 | |
2023 Senior Secured Notes | Secured Notes | Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Redemption Price, Percentage | 109.875% | |
Debt Instrument, Redemption Price, Premium Applicable, Percentage | 100% |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventories: | ||
Raw materials and supplies | $ 147,530 | $ 216,761 |
Work in process | 188,620 | 192,821 |
Finished goods | 42,820 | 38,159 |
Total | $ 378,970 | $ 447,741 |
Interest Expense (Components of
Interest Expense (Components of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Interest and Debt Expense [Abstract] | |||||
Interest incurred on debt | $ 17,154 | $ 10,458 | $ 39,101 | $ 32,743 | |
Accretion of original issue discount | 526 | 178 | 2,002 | 1,043 | |
Amortization of debt issuance costs | 740 | 642 | 3,883 | 2,818 | |
Amortization of interest rate swap deferred gains | (2,701) | 0 | (2,746) | 0 | |
Realized gain on termination of de-designated interest rate swap | 0 | $ (6,900) | (4,605) | (6,918) | (4,605) |
Unrealized (gain) loss on de-designated interest rate swap | 0 | (249) | 7,110 | (6,964) | |
Total interest expense | $ 15,719 | $ 6,424 | $ 42,432 | $ 25,035 |
Interest Expense (Narrative) (D
Interest Expense (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 26, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.20% | 4.20% | |||||
Repayments of Long-term Debt | $ 433,708 | $ 110,000 | |||||
Accretion of original issue discount on 2018 Term Loan Facility | $ 526 | $ 178 | 2,002 | 1,043 | |||
Amortization of debt issuance costs and modification costs | 740 | 642 | 3,883 | 2,818 | |||
Realized gain on termination of de-designated interest rate swap | 0 | $ 6,900 | $ 4,605 | 6,918 | 4,605 | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Period Increase (Decrease) | $ 13,500 | ||||||
2018 Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 7.38% | ||||||
Repayments of Long-term Debt | 110,000 | ||||||
Accretion of original issue discount on 2018 Term Loan Facility | 1,200 | 500 | |||||
Amortization of debt issuance costs and modification costs | $ 1,900 | $ 800 | |||||
Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | 4.625% | |||||
Secured Notes | 2023 Senior Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.875% | 9.875% | |||||
Long-term debt, gross | $ 450,000 | $ 450,000 | $ 0 | ||||
Secured Notes | 2020 Senior Secured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | 4.625% | |||||
Long-term debt, gross | $ 500,000 | $ 500,000 | 500,000 | ||||
2018 Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, gross | $ 0 | $ 0 | $ 433,700 | $ 433,708 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2023 USD ($) | Dec. 16, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2020 USD ($) | Mar. 31, 2019 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Loss Contingencies | ||||||||
Related party tax agreement percent of savings | 85% | |||||||
Due to Related Party, Basis Spread on Variable Rate | 0.0100 | |||||||
value added tax assessment, amount | $ 26,500 | $ 51,000 | ||||||
Related party payable - Tax Receivable Agreement long-term | $ 5,784 | $ 10,921 | ||||||
Related party payable - Tax Receivable Agreement | 5,137 | 4,631 | ||||||
Related Party Payable - Tax Receivable Agreement | $ 10,900 | $ 15,500 | ||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||
Loss Contingencies | ||||||||
Due to Related Party, Basis Spread on Variable Rate | 0.0110 | |||||||
Fixed Price LTAs | ||||||||
Loss Contingencies | ||||||||
Relief/reimbursement sought | $ 171,700 | $ 178,900 | $ 188,200 | $ 61,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Product Warranties Accrual) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) | |
Balance as of December 31, 2022 | $ 820 |
Product warranty charges/adjustments | 81 |
Payments and settlements | (497) |
Balance as of September 30, 2023 | $ 404 |
Income Taxes (Summary of Provis
Income Taxes (Summary of Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
(Benefit) provision for income taxes | $ (10,244) | $ 15,041 | $ (10,819) | $ 56,260 |
Pre-tax (loss) income | $ (32,865) | $ 108,492 | $ (48,660) | $ 388,891 |
Effective tax rates (percentage) | 31.20% | 13.90% | 22.20% | 14.50% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 31.20% | 13.90% | 22.20% | 14.50% |
U.S. statutory rate | 21% | 21% | 21% | 21% |
Provision for income taxes | $ (10,244) | $ 15,041 | $ (10,819) | $ 56,260 |
Fair Value Measurements and D_3
Fair Value Measurements and Derivative Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 26, 2023 | Jun. 23, 2023 | Jun. 22, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | |
Derivative | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.20% | 4.20% | ||||||||
Repayments of Long-term Debt | $ 433,708 | $ 110,000 | ||||||||
Gain (Loss) on Fair Value Hedge Ineffectiveness, Net | $ 800 | |||||||||
Derivative, Loss on Derivative | 7,100 | |||||||||
Derivative, Gain on Derivative | 7,000 | |||||||||
Derivative, Cash Received on Hedge | $ 20,400 | |||||||||
Embedded Derivative, Gain on Embedded Derivative | 23,100 | |||||||||
Realized gain on termination of de-designated interest rate swap | $ 0 | 6,900 | 4,605 | 6,918 | 4,605 | |||||
Loss on Debt Host | 2,800 | |||||||||
Loss on debt host in AOCI | 2,500 | 2,500 | ||||||||
Embedded Derivative Gain in AOCI | $ 16,200 | $ 6,600 | ||||||||
2018 Term Loan Facility | ||||||||||
Derivative | ||||||||||
Long-term debt, gross | 0 | 0 | $ 433,700 | $ 433,708 | ||||||
Not Designated as Hedging Instrument | ||||||||||
Derivative | ||||||||||
Derivative, Fair Value, Net | 432 | 432 | 11,373 | |||||||
Interest rate swap contract | ||||||||||
Derivative | ||||||||||
Notional Amount | 250,000 | 250,000 | $ 250,000 | |||||||
Amount of derivative cash flow hedge to be recognized in the next 12 months | (12,600) | |||||||||
Interest rate swap contract | Not Designated as Hedging Instrument | ||||||||||
Derivative | ||||||||||
Notional Amount | 0 | 67,000 | 0 | 67,000 | $ 250,000 | $ 183,000 | 183,000 | |||
Commodity Contract | ||||||||||
Derivative | ||||||||||
Amount of derivative cash flow hedge to be recognized in the next 12 months | (6,000) | |||||||||
Gain (Loss) on Fair Value Hedge Ineffectiveness, Net | 0 | $ 0 | 0 | $ 800 | ||||||
Foreign currency derivatives | ||||||||||
Derivative | ||||||||||
Amount of derivative cash flow hedge to be recognized in the next 12 months | 100 | |||||||||
Foreign currency derivatives | Not Designated as Hedging Instrument | ||||||||||
Derivative | ||||||||||
Notional Amount | 40,049 | 40,049 | 70,420 | |||||||
Foreign currency derivatives | Other Current Liabilities | Not Designated as Hedging Instrument | ||||||||||
Derivative | ||||||||||
Derivative liability fair value | $ (84) | $ (84) | (282) | |||||||
Separated Host Financial Instrument, Fair Value Option | ||||||||||
Derivative | ||||||||||
Derivative liability fair value | 3,800 | |||||||||
Separated Host Financial Instrument, Fair Value Option | Other Current Liabilities | ||||||||||
Derivative | ||||||||||
Derivative liability fair value | 2,300 | |||||||||
Separated Host Financial Instrument, Fair Value Option | Other Noncurrent Liabilities | ||||||||||
Derivative | ||||||||||
Derivative liability fair value | $ 1,500 | |||||||||
Scenario, Plan | ||||||||||
Derivative | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.95% | 3.95% |
Fair Value Measurements and D_4
Fair Value Measurements and Derivative Instruments (Notional Amounts) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 23, 2023 | Jun. 22, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 |
Foreign currency derivatives | Designated as Hedging Instrument | ||||||
Derivative | ||||||
Notional Amount | $ 21,264 | $ 0 | ||||
Foreign currency derivatives | Not Designated as Hedging Instrument | ||||||
Derivative | ||||||
Notional Amount | 40,049 | 70,420 | ||||
Interest rate swap contract | ||||||
Derivative | ||||||
Notional Amount | $ 250,000 | $ 250,000 | ||||
Interest rate swap contract | Designated as Hedging Instrument | ||||||
Derivative | ||||||
Notional Amount | 0 | 250,000 | ||||
Interest rate swap contract | Not Designated as Hedging Instrument | ||||||
Derivative | ||||||
Notional Amount | $ 0 | $ 250,000 | $ 183,000 | $ 183,000 | $ 67,000 |
Fair Value Measurements and D_5
Fair Value Measurements and Derivative Instruments (Balance Sheet Classification) (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value | ||
Derivative, Fair Value, Net | $ (565) | $ 15,821 |
Prepaid and other current assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 10,246 |
Prepaid and other current assets | Interest rate swap contract | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 10,246 |
Other assets | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 5,575 |
Other assets | Interest rate swap contract | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | 0 | 5,575 |
Accrued Liabilities | Foreign currency derivatives | ||
Derivatives, Fair Value | ||
Derivative Asset, Fair Value, Gross Asset | $ (565) | $ 0 |
Fair Value Measurements and D_6
Fair Value Measurements and Derivative Instruments (Impact in the Statement of Operations) (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Foreign currency derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of (Gain)/Loss Recognized | $ 3,501 | $ 762 | $ 5,541 | $ 762 |
Commodity derivative contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of (Gain)/Loss Recognized | (4,234) | (5,018) | (11,521) | (10,973) |
Interest rate swap contract | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of (Gain)/Loss Recognized | $ (2,700) | $ (991) | $ (7,882) | $ (532) |
Fair Value Measurements and D_7
Fair Value Measurements and Derivatives Instruments (Not Designated as Hedges) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value | |||||
Derivative, Fair Value, Net | $ 432 | $ 432 | $ 11,373 | ||
Interest rate swap contract | |||||
Derivatives, Fair Value | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | $ (249) | (2,957) | $ (6,964) | |
Foreign currency derivatives | |||||
Derivatives, Fair Value | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 180 | $ (144) | 500 | $ 299 | |
Prepaid and other current assets | Interest rate swap contract | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value | |||||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | 7,492 | ||
Prepaid and other current assets | Foreign currency derivatives | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value | |||||
Derivative Asset, Fair Value, Gross Asset | 516 | 516 | 92 | ||
Other assets | Interest rate swap contract | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value | |||||
Derivative Asset, Fair Value, Gross Asset | 0 | 0 | 4,071 | ||
Other Current Liabilities | Foreign currency derivatives | Not Designated as Hedging Instrument | |||||
Derivatives, Fair Value | |||||
Derivative liability fair value | $ (84) | $ (84) | $ (282) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Loss | ||
Foreign currency translation adjustments, net of tax | $ (29,817) | $ (29,354) |
Commodity, interest rate, and foreign currency derivatives, net of tax | 12,205 | 21,284 |
Total accumulated other comprehensive loss | $ (17,612) | $ (8,070) |
(Loss) Earnings per Share (Deta
(Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Shares repurchased and retired (shares) | 0 | 6,662,421 | ||||||
Repurchase of common stock | $ 60,000 | |||||||
Net (loss) income | $ (22,621) | $ (7,851) | $ (7,369) | $ 93,451 | $ 114,997 | $ 124,183 | $ (37,841) | $ 332,631 |
Weighted average common shares outstanding for basic calculation (shares) | 257,090,113 | 256,848,575 | 256,987,778 | 259,415,295 | ||||
Add: Effect of equity awards (shares) | 0 | 4,879 | 0 | 9,590 | ||||
Weighted average common shares outstanding for diluted calculation (shares) | 257,090,113 | 256,853,454 | 256,987,778 | 259,424,885 | ||||
Basic (loss) earnings per share (usd per share) | $ (0.09) | $ 0.36 | $ (0.15) | $ 1.28 | ||||
Diluted (loss) earnings per share (usd per share) | $ (0.09) | $ 0.36 | $ (0.15) | $ 1.28 | ||||
Out of the Money | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Incremental common shares attributable to participating nonvested shares (shares) | 282,891 | 251,233 | 257,953 | 222,181 | ||||
Anti-dilutive shares (shares) | 3,306,665 | 2,436,019 | 3,135,380 | 2,227,682 | ||||
In the Money | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Anti-dilutive shares (shares) | 68,991 | 36,148 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of options granted (in shares) | 519,482 | ||||
Weighted average exercise price on options granted (in dollars per share) | $ 5.51 | ||||
Grant date fair value per unit (in dollars per share) | $ 3.01 | ||||
Stock-based compensation expense | $ 1,600 | $ 600 | $ 3,809 | $ 1,666 | |
Stock-based compensation expense not yet recognized | $ 11,900 | $ 11,900 | |||
Award vesting period | 3 years | ||||
Brookfield | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity method investment, ownership percentage | 24.90% | 24.90% | 24.90% | ||
Selling, General and Administrative Expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,500 | $ 500 | $ 3,500 | $ 1,600 | |
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 665,417 | ||||
Granted (weighted average share price) | $ 5.58 | ||||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 542,743 | ||||
Granted (weighted average share price) | $ 7.30 | ||||
DSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 91,082 | ||||
Granted (weighted average share price) | $ 4.52 | ||||
RSUs and Deferred RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted (in shares) | 154,609 | ||||
Granted (weighted average share price) | $ 4.24 |
Stock-Based Compensation (Black
Stock-Based Compensation (Black-Scholes Assumptions) (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Dividend yield | 0.73% |
Expected volatility | 58.16% |
Risk-free interest rate | 4.04% |
Expected term (in years) | 6 years |
Supplementary Balance Sheet D_2
Supplementary Balance Sheet Detail (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Supplier finance program obligation current | $ 7,400,000 | $ 0 |