Graftech International Ltd. · NYSE:EAF
Graftech International — Q4 2010 Earnings Presentation
14 slides from Graftech International's earnings presentation, Feb 22, 2011
Slide 1: Accounting for the Acquisitions of Seadrift Coke L.P. and C/G Electrodes LLC
Exhibit 99.2 Accounting for the Acquisitions of Seadrift Coke L.P. and C/G Electrodes LLC February 22, 2011
Slide 2: Forward Looking Statement
Forward Looking Statement NOTE ON FORWARD-LOOKING STATEMENTS: This presentation and related discussions may contain forward-looking statements about such matters as: our outlook for 2011; the impact of acquired businesses; growth prospects; the markets we serve, our profitability, cash flow, and liq
Slide 3: Executive Summary
Executive Summary • Strategic rationale and business case for acquisitions of Seadrift and C/G (St. Marys) remain strong and has already resulted in value creation for GrafTech. • Integration of the assets is progressing as planned. Our assessment of operational, tax and working capital synergies po
Slide 4: Acquisitions Significantly Strengthen GrafTech Business Model
Acquisitions Significantly Strengthen GrafTech Business Model • The combination of GrafTech, Seadrift and St. Marys will allow us to be the best positioned graphite electrode supplier in the world: Largest producer of graphite electrodes globally Only graphite electrode producer backward integrated
Slide 5: Purchase Price Accounting Principles
Purchase Price Accounting Principles Purchase price accounting requires consideration to be assigned to fair value of assets acquired and liabilities assumed in the acquisition, with the difference being goodwill. • Fair value adjustments resulted in a step-up of the values of tangible assets includ
Slide 6: Purchase Price Accounting: Final Consideration
Purchase Price Accounting Final Consideration (Dollars in thousands, except per share) (Unaudited) GTI common shares issued 24,000 Price per share (1) $ 19.47 Fair value of common shares issued $467,280 Zero Coupon Five-Year Senior Subordinated Promissory Notes (2) 142,598 Cash 249,444 Consideration
Slide 7: Purchase Price Accounting: Fair Value Adjustments
Purchase Price Accounting Fair Value Adjustments (Dollars in thousands) (Unaudited) Book Value Fair Value Cash $ 8,240 $ 8,240 Accounts Receivable 23,729 23,079 Inventory (FIFO) 76,261 82,665 Property, plant and equipment 109,202 280,710 Intangible Assets - 158,200 Goodwill - 489,244 Accounts Payabl
Slide 8: Purchase Price Accounting: Inventory Step-Up
Purchase Price Accounting Inventory Step-Up (Dollars in thousands) (Unaudited) Fair Value Step-up Q4 P&L Impact 2011 P&L Impact Inventory Step-Up $6,404 $1,691 $4,713 • Inventory is recorded at fair value at the date of closing. • Finished goods and work in process have been stepped-up from carrying
Slide 9: Purchase Price Accounting: PP&E Step-Up
Purchase Price Accounting Property, Plant & Equipment (PP&E) Step-Up (Dollars in thousands) (Unaudited) Fair Value Step-Up Q4 P&L Impact 2011 P&L Impact PP&E Step-Up $171,508 $562 $5,810 • PP&E is recorded at fair value at the date of closing. • Straight line deprecation based on average asset usefu
Slide 10: Purchase Price Accounting: Amortization of Intangible Assets
Purchase Price Accounting Amortization of Intangible Assets (Dollars in thousands) (Unaudited) Fair Value Q4 Amortization 2011 Amortization Customer Relationships $107,500 $1,258 $15,001 Technology and Know-How 42,800 498 5,973 Trade Names 7,900 124 1,473 $158,200 $1,880 $22,447 • Amortization calcu
Slide 11: Intercompany Sales – Seadrift to GrafTech/St. Marys
Intercompany Sales – Seadrift to GrafTech/St. Marys Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Intercompany I/C Sale I/C Sale I/C Sale I/C Sale Margin Margin Margin Margin Margin Margin Margin Margin sales to Graftech I/C Sale I/C Sale I/C Sale I/C Sale Margin Margin Margin Margin Margin Margin
Slide 12: Summary of Acquisition Impact: Q4 2010
Summary of Acquisition Impact: Q4 2010 Seadrift and St. Marys will be included in our Industrial Materials segment Q4 2010 Adjustments* • Intercompany sales of $1.2 million, intercompany profit elimination of $0.5 million • Inventory step-up resulted in $1.7 million increase in cost of goods sold ex
Slide 13: Modeling the Pro Forma Business: 2011
Modeling the Pro Forma Business: 2011 • Intercompany sales from Seadrift to GrafTech/St. Marys will not be recognized until an electrode is sold (approximately 4 month lag), at which point intercompany profit will be eliminated (estimated 2011 impact of approximately $12 million to $14 million) • In
Slide 14: Questions?
Questions? Upcoming Earnings Contact Us • Q4 2010 Earnings Release Phone: 216.676.2000 - February 24, 2011 Fax: 216.676.2202 Email: kelly.taylor@graftech.com Internet: www.graftech.com 14
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