Exhibit 99.2
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIESUNAUDITED
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
GrafTech International Ltd., together with its subsidiaries UCAR SNC and UCAR Holdings (collectively “GrafTech”) and Alcan France (formerly, Pechiney), a wholly-owned subsidiary of Alcan Inc. (“Alcan”), were parties to a joint venture in the cathode business, Carbone Savoie. On December 5, 2006, GrafTech sold its 70% equity interest in Carbone Savoie and other assets used in and liabilities related to its cathodes business to Alcan France.
The unaudited pro forma condensed consolidated balance sheet gives effect to the closing of the transaction as if the sale had been consummated on September 30, 2006. The unaudited pro forma condensed consolidated statements of operations give effect to the closing of the transaction as if the sale had been consummated at the beginning of the nine month period ended September 30, 2006 and the 12 month period ended December 31, 2005, respectively. The unaudited pro forma condensed consolidated financial information may be subject to further adjustments. The following unaudited pro forma financial information is based upon and should be read in conjunction with the historical consolidated financial statements and related notes thereto of Graftech International Ltd. And Subsidiaries (the “Company”).
GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
| ASSETS | At September 30, 2006 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 18,710 | $ | 120,000 | (A) | $ | 18,710 | |||||||
| (120,000 | ) | (D) | ||||||||||||
| Accounts and notes receivable | 144,357 | (16,892 | ) | (B) | 127,465 | |||||||||
| Inventories | 275,664 | (31,958 | ) | (B) | 243,706 | |||||||||
| Prepaid expenses and other current assets | 16,065 | (533 | ) | (B) | 15,532 | |||||||||
| Total current assets | 454,796 | (49,383 | ) | 405,413 | ||||||||||
| Property, plant and equipment | 1,039,181 | (126,499 | ) | (B) | 912,682 | |||||||||
| Less: accumulated depreciation | 685,608 | (47,894 | ) | (B) | 637,714 | |||||||||
| Net property, plant and equipment | 353,573 | (78,605 | ) | 274,968 | ||||||||||
| Deferred income taxes | 14,603 | - | 14,603 | |||||||||||
| Goodwill | 19,287 | (10,386 | ) | (C) | 8,901 | |||||||||
| Other assets | 31,451 | (628 | ) | (B) | 30,823 | |||||||||
| Assets held for sale | 1,807 | - | 1,807 | |||||||||||
| Total assets | $ | 875,517 | $ | (139,002 | ) | $ | 736,515 | |||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | 64,219 | (8,535 | ) | (B) | 55,684 | |||||||||
| Interest payable | 6,926 | - | 6,926 | |||||||||||
| Short-term debt | 603 | - | 603 | |||||||||||
| Accrued income and other taxes | 33,437 | (2,796 | ) | (B) | 30,641 | |||||||||
| Other accrued liabilities | 96,660 | (5,705 | ) | (B) | 90,955 | |||||||||
| Total current liabilities | 201,845 | (17,036 | ) | 184,809 | ||||||||||
| Long-term debt: | ||||||||||||||
| Principal value | 687,537 | (120,000 | ) | (D) | 567,537 | |||||||||
| Fair value adjustments for hedge instruments | 6,674 | - | 6,674 | |||||||||||
| Unamortized bond premium | 1,312 | - | 1,312 | |||||||||||
| Total long-term debt | 695,523 | (120,000 | ) | 575,523 | ||||||||||
| Other long-term obligations | 89,259 | (5,938 | ) | (B) | 83,321 | |||||||||
| Deferred income taxes | 46,289 | (15,124 | ) | (B) | 31,165 | |||||||||
| Minority stockholders' equity in consolidated entities | 28,271 | (24,283 | ) | (B) | 3,988 | |||||||||
| Total stockholders' deficit | (185,670 | ) | 43,379 | (E) | (142,291 | ) | ||||||||
| Total liabilities and stockholders' deficit | $ | 875,517 | $ | (139,002 | ) | $ | 736,515 | |||||||
| (A) | To reflect initial net cash proceeds from the sale. |
| (B) | To reflect the elimination of the assets sold and liabilities assumed by the buyer in connection with the sale. |
| (C) | To reflect the elimination of goodwill associated with the cathode business. |
| (D) | To reflect the projected reduction of long-term debt from the use of cash proceeds of the sale. |
| (E) | To reflect the estimated pro forma gain on the sale. The actual gain on the sale will be different than the pro forma gain due to changes in the balance sheet between September 30, 2006 and December 5, 2006. The estimated pro forma gain is based on management’s best estimate and is subject to change upon further analysis of the agreement. |
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| For the nine months ended September 30, 2006 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||
| Net sales | $ | 709,945 | $ | (89,994 | ) | (A) | $ | 619,951 | ||||||
| Cost of sales | 516,936 | (75,321 | ) | (A) | 441,615 | |||||||||
| Gross profit | 193,009 | (14,673 | ) | 178,336 | ||||||||||
| Research and development | 9,749 | (1,583 | ) | (A) | 8,166 | |||||||||
| Selling and administrative | 84,064 | (7,351 | ) | (A) | 76,713 | |||||||||
| Restructuring charges | 7,694 | -- | 7,694 | |||||||||||
| Impairment loss on long-lived assets | 8,788 | -- | 8,788 | |||||||||||
| Antitrust investigations and related lawsuits and claims | 2,513 | -- | 2,513 | |||||||||||
| Other expense, net | 4,458 | (1,192 | ) | (A) | 3,266 | |||||||||
| Interest expense | 43,045 | (7,292 | ) | (B) | 35,753 | |||||||||
| Interest income | (409 | ) | $ | (37 | ) | (A) | $ | (446 | ) | |||||
| $ | 159,902 | (17,455 | ) | 142,447 | ||||||||||
| Income (loss) from continuing operations before provision for income taxes and minority stockholders’ share of subsidiaries’ income (loss) | $ | 33,107 | (2,782 | ) | 35,889 | |||||||||
| Provision for income taxes | 19,290 | (722 | ) | (A) | 20,012 | |||||||||
| Minority stockholder’s share of income (loss) | (237 | ) | (253 | ) | (A) | 16 | ||||||||
| Income (loss) - continuing operations | $ | 14,054 | $ | (1,807 | ) | $ | 15,861 | |||||||
| Basic income (loss) per common share: | ||||||||||||||
| Net income (loss) per share | $ | 0.14 | $ | (0.02 | ) | $ | 0.16 | |||||||
| Weighted average common shares outstanding (in thousands) | 97,953 | 97,953 | 97,953 | |||||||||||
| Diluted income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | 0.14 | $ | (0.02 | ) | $ | 0.16 | |||||||
| Weighted average common shares outstanding (in thousands) | 98,423 | 98,423 | 98,423 | |||||||||||
| (A) | To reflect the elimination of the operations of the Company’s cathodes business, including the costs and related benefits of 466 employees which were assumed by the Buyer with the sale.. |
| (B) | To reflect the estimated reduction of interest expense associated with our projected return of long-term debt. |
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| At December 31, 2005 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||
| Net sales | $ | 886,699 | $ | (113,671 | ) | (A) | $ | 773,028 | ||||||
| Cost of sales | 654,342 | (100,527 | ) | (A) | 553,815 | |||||||||
| Gross profit | 232,357 | (13,144 | ) | 219,213 | ||||||||||
| Research and development | 9,437 | (2,032 | ) | (A) | 7,405 | |||||||||
| Selling and administrative | 100,439 | (11,051 | ) | (A) | 89,388 | |||||||||
| Restructuring charges | 9,729 | (185 | ) | (A) | 9,544 | |||||||||
| Impairment loss on long-lived assets | 2,904 | -- | 2,904 | |||||||||||
| Antitrust investigations and related lawsuits and claims | -- | -- | -- | |||||||||||
| Other expense, net | 18,020 | 1,918 | (A) | 19,938 | ||||||||||
| Interest expense | 52,716 | (9,034 | ) | (B) | 43,682 | |||||||||
| Interest income | (1,200 | ) | $ | (106 | ) | (A) | $ | (1,306 | ) | |||||
| $ | 192,045 | (20,490 | ) | 171,555 | ||||||||||
| Income (loss) from continuing operations before provision for income taxes and minority stockholders’ share of subsidiaries’ income (loss) | $ | 40,312 | (7,346 | ) | 47,658 | |||||||||
| Provision for income taxes | 165,813 | (2,242 | ) | (A) | 168,055 | |||||||||
| Minority stockholder’s share of income (loss) | (321 | ) | (358 | ) | (A) | 37 | ||||||||
| Income (loss) - continuing operations | $ | (125,180 | ) | $ | (4,746 | ) | $ | (120,434 | ) | |||||
| Basic income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | (1.28 | ) | $ | (0.05 | ) | $ | (1.23 | ) | |||||
| Weighted average common shares outstanding (in thousands) | 97,689 | 97,689 | 97,689 | |||||||||||
| Diluted income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | (1.28 | ) | $ | (0.05 | ) | $ | (1.23 | ) | |||||
| Weighted average common shares outstanding (in thousands) | 97,689 | 97,689 | 97,689 | |||||||||||
| (A) | To reflect the elimination of the operations of the Company’s cathodes business, including the costs and related benefits of 466 employees, which were assumed by the Buyer with the sale. |
| (B) | To reflect the estimated reduction of interest expense associated with projected reduction of long-term debt. |
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| At December 31, 2004 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||
| Net sales | $ | 847,701 | $ | (105,446 | ) | (A) | $ | 742,255 | ||||||
| Cost of sales | 638,186 | (85,239 | ) | (A) | 552,947 | |||||||||
| Gross profit | 209,515 | (20,207 | ) | 189,308 | ||||||||||
| Research and development | 8,040 | (2,096 | ) | (A) | 5,944 | |||||||||
| Selling and administrative | 89,369 | (8,074 | ) | (A) | 81,295 | |||||||||
| Restructuring charges | (548 | ) | -- | (548 | ) | |||||||||
| Impairment loss on long-lived assets | -- | -- | -- | |||||||||||
| Antitrust investigations and related lawsuits and claims | (10,901 | ) | -- | (10,901 | ) | |||||||||
| Other expense, net | 21,189 | 240 | (A) | 21,429 | ||||||||||
| Interest expense | 39,178 | (7,446 | ) | (B) | 31,732 | |||||||||
| Interest income | (1,161 | ) | $ | (44 | ) | (A) | $ | (1,205 | ) | |||||
| $ | 145,166 | (17,420 | ) | 127,746 | ||||||||||
| Income (loss) from continuing operations before provision for income taxes and minority stockholders' share of subsidiaries' income (loss) | $ | 64,349 | 2,787 | 61,562 | ||||||||||
| Provision for income taxes | 46,310 | 1,422 | (A) | 44,888 | ||||||||||
| Minority stockholder's share of income (loss) | 998 | 993 | (A) | 5 | ||||||||||
| Income (loss) - continuing operations | $ | 17,041 | $ | (372 | ) | $ | 16,669 | |||||||
| Basic income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | 0.18 | $ | -- | $ | 0.18 | ||||||||
| Weighted average common shares outstanding (in thousands) | 96,548 | 96,548 | 96,548 | |||||||||||
| Diluted income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | 0.17 | $ | -- | $ | 0.17 | ||||||||
| Weighted average common shares outstanding (in thousands) | 98,150 | 98,150 | 98,150 | |||||||||||
| (A) | To reflect the elimination of the operations of the Company’s cathodes business, including the costs and related benefits of 466 employees, which were assumed by the Buyer with the sale. |
| (B) | To reflect the estimated reduction of interest expense associated with our strategy to reduce long-term debt. |
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GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| At December 31, 2003 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As Reported | Pro Forma Adjustment | Pro Forma | ||||||||||||
| Net sales | $ | 712,337 | $ | (93,465 | ) | (A) | $ | 618,872 | ||||||
| Cost of sales | 544,196 | (71,404 | ) | (A) | 472,792 | |||||||||
| Gross profit | 168,141 | (22,061 | ) | 146,080 | ||||||||||
| Research and development | 10,410 | (1,803 | ) | (A) | 8,607 | |||||||||
| Selling and administrative | 85,546 | (7,570 | ) | (A) | 77,976 | |||||||||
| Restructuring charges | 19,765 | -- | 19,765 | |||||||||||
| Impairment loss on long-lived assets | 6,991 | -- | 6,991 | |||||||||||
| Antitrust investigations and related lawsuits and claims | 32,073 | -- | 32,073 | |||||||||||
| Other expense, net | (12,060 | ) | (1,781 | ) | (A) | (13,841 | ) | |||||||
| Interest expense | 45,141 | (9,025 | ) | (B) | 36,116 | |||||||||
| Interest income | (351 | ) | $ | (40 | ) | (A) | $ | (391 | ) | |||||
| $ | 187,515 | (20,219 | ) | 167,296 | ||||||||||
| Income (loss) from continuing operations before provision for | ||||||||||||||
| income taxes and minority stockholders' share of | ||||||||||||||
| subsidiaries' income (loss) | $ | (19,374 | ) | 1,842 | (21,216 | ) | ||||||||
| Provision for income taxes | 4,695 | 1,265 | (A) | 3,430 | ||||||||||
| Income (loss) from continuing operations | (24,069 | ) | 577 | (24,646 | ) | |||||||||
| Less minority stockholder's share of income (loss) | 1,245 | (1,362 | ) | (A) | (117 | ) | ||||||||
| Income (loss) from continuing operations | (25,314 | ) | (785 | ) | (24,529 | ) | ||||||||
| Income from discontinued operations, net of tax | 1,037 | -- | 1,037 | |||||||||||
| Income (loss) - continuing operations | $ | (24,277 | ) | $ | (785 | ) | $ | (23,492 | ) | |||||
| Basic income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | (0.36 | ) | $ | (0.01 | ) | $ | (0.35 | ) | |||||
| Weighted average common shares outstanding (in thousands) | 67,981 | 67,981 | 67,981 | |||||||||||
| Diluted income (loss) per common share: | ||||||||||||||
| Income (loss) per share - continuing operations | $ | 0.36 | $ | (0.01 | ) | $ | (0.35 | ) | ||||||
| Weighted average common shares outstanding (in thousands) | 67,981 | 67,981 | 67,981 | |||||||||||
| (A) | To reflect the elimination of the operations of the Company’s cathodes business, including the costs and related benefits of 466 employees, which were assumed by the Buyer with the sale. |
| (B) | To reflect the estimated reduction of interest expense associated with our strategy to reduce long-term debt. |
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