GRAFTECH INTERNATIONAL LTD Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

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The company

We are a leading manufacturer of high-quality graphite electrode products
essential to the production of EAF steel and other ferrous and non­ferrous
metals. We believe that we have the most competitive portfolio of low­cost
ultra-high power graphite electrode manufacturing facilities in the industry,
including three of the highest capacity facilities in the world. We are the only
large scale graphite electrode producer that is substantially vertically
integrated into petroleum needle coke, a key raw material for graphite electrode
manufacturing.

The environmental and economic benefits of electric arc furnace steelmaking position both this industry and the graphite electrode industry for continued long-term growth.

We believe GrafTech's leadership position, strong cash flows, advantaged low
cost structure and vertical integration are sustainable competitive advantages.
The services and solutions we provide will position our customers and us for a
better future.

Trade update and outlook

GrafTech reported solid results in the second quarter of 2022 with sales volume
of 42 thousand metric tons ("MT"), consisting of LTA volume of 24 thousand MT at
a weighted-average realized price of $9,600 per MT and non-LTA volume of 18
thousand MT at a weighted-average realized price of $6,000 per MT.

Consistent with our expectations, the non-LTA prices for graphite electrodes
delivered and recognized in revenue in the second quarter of 2022 were
comparable with our first quarter 2022 average. As we proceed through the
remainder of the year, we expect our weighted-average non-LTA pricing for the
second half to be comparable to the pricing realized in the first half of 2022.

In addition, our costs in the second quarter of 2022 increased 21% compared to
the second quarter of 2021, driven by recent global inflationary pressures,
particularly for third party needle coke, energy and freight. In addition, our
costs increased 7% compared to the first quarter of 2022. We expect costs to
increase at a similar rate in the third quarter.

The production volume in the second quarter of 2022 increased by 1% compared to the second quarter of 2021.

Globally, steel market capacity utilization rates were as follows:

                                                     Q2 2022     Q1 2022     Q2 2021
Global (ex-China) capacity utilization rate(1)         68%         69%      

73%

WE steel market capacity utilization rate(2) 81% 80%

82%


(1) Source: World Steel Association, Metal Expert and GrafTech analysis, as of
July 2022
(2) Source: American Iron and Steel Institute, as of July 2022


Estimated shipments of graphite electrodes under our long-term agreements for 2022 to 2024 have been updated as follows:

                                        2022            2023             2024
Estimated LTA volume(1)                90-100          23-30             12-15
Estimated LTA revenue(2)             $860-$960       $200-$255       $130-$165(3)


(1) In thousands of MT
(2) In millions
(3) Includes expected termination fees from a few customers that have failed to
meet certain obligations under their LTAs

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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

The majority of the LTAs are defined as pre-determined fixed annual volume
contracts while a small portion are defined with a specified volume range. For
the years 2023 and through 2024, the contractual revenue amounts above are based
upon the minimum volume for those contracts with specified ranges. The actual
revenue realized from these contracted volumes may vary in timing and total due
to contract non-performance, force majeure notices, arbitrations, credit risk
associated with certain customers facing financial challenges and customer
demand related to contracted volume ranges. As it relates to the conflict
between Ukraine and Russia, we have provided force majeure notices with respect
to certain impacted LTAs. Certain of our LTA counterparties have challenged the
force majeure notices, but we will continue to enforce our contractual rights.
In the event of a force majeure, the LTAs provide our counterparties with the
right to terminate the LTA if the force majeure event continues for more than
six months after the delivery of the force majeure notice, with no continuing
obligations of either party. The estimates of LTA revenue as set forth above in
the immediately preceding table reflects (i) our current view of the validity of
such force majeure notices and (ii) our current expectations of termination fees
from our customers who have failed to meet certain obligations under their LTAs.

Capital structure and capital allocation

As of June 30, 2022, GrafTech had cash and cash equivalents of $55.8 million and
total debt of approximately $920.5 million. We continue to make progress in
reducing our long-term debt, repaying $40.0 million in the second quarter of
2022, for a total debt repayment of $110.0 million in the first half of 2022. We
continue to expect our primary use of cash for the balance of 2022 to be debt
repayment. We also have $99.0 million available under our stock repurchase
authorization.

We repurchased 3.6 million shares of our common stock in the second quarter of
2022 for an aggregate of $30.0 million. This brings our share repurchases for
the first half of 2022 to 6.7 million shares for an aggregate of $60.0 million
under our common stock repurchase authorization.

We continue to expect capital expenditures for the full year to be in the range of $70.0
at $80.0 million for 2022.

Key indicators used by management to measure performance

In addition to measures of financial performance presented in our Condensed
Consolidated Financial Statements in accordance with generally accepted
accounting principles in the United States ("GAAP"), we use certain other
financial measures and operating metrics to analyze the performance of our
Company. Our "non-GAAP" financial measures consist of EBITDA, adjusted EBITDA,
adjusted net income and adjusted earnings per share, which help us evaluate
growth trends, establish budgets, assess operational efficiencies and evaluate
our overall financial performance. Our key operating metrics consist of sales
volume, production volume, production capacity and capacity utilization.













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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

                             Key financial measures

                                                   For the Three Months Ended          For the Six Months
                                                            June 30,                     Ended June 30,
(in thousands, except per share data)                  2022          2021               2022         2021
Net sales                                          $  363,646    $ 330,750          $ 729,891    $ 635,147
Net income                                            114,997       28,165            239,180      126,964
Earnings per share(1)                                    0.44         0.11               0.92         0.47
EBITDA(2)                                             157,972       68,017            325,500      221,742
Adjusted net income(2)                                115,102      114,487            241,022      214,367
Adjusted earnings per share(1)(2)                        0.44         0.43               0.92         0.80
Adjusted EBITDA(2)                                    158,196      159,903            327,796      314,948


(1) Earnings per share represents diluted earnings per share. Adjusted earnings
per share represents adjusted diluted earnings per share.
(2) Non-GAAP financial measure; see below for information and reconciliations of
EBITDA, adjusted EBITDA and adjusted net income to net income and adjusted EPS
to EPS, the most directly comparable financial measures calculated and presented
in accordance with GAAP.

                             Key operating measures

In addition to measures of financial performance presented in accordance with
GAAP, we use certain operating metrics to analyze the performance of our
Company. The key operating metrics consist of sales volume, production volume,
production capacity and capacity utilization. These metrics align with
management's assessment of our revenue performance and profit margin, and will
help investors understand the factors that drive our profitability.

Sales volume reflects the total volume of graphite electrodes sold for which
revenue has been recognized during the period. For a discussion of our revenue
recognition policy, see "-Critical accounting policies-Revenue recognition" in
our Annual Report on Form 10-K. Sales volume helps investors understand the
factors that drive our net sales.

Production volume reflects graphite electrodes produced during the period. Production capacity reflects the maximum production volume expected during the period based on the product mix and planned maintenance shutdowns. Actual production may vary. Capacity utilization reflects production volume as a percentage of production capacity. Production volume, production capacity, and capacity utilization help us understand our production efficiency, assess cost of sales, and consider how to approach our contract initiative.

                                                       For the Three Months Ended June               For the Six Months
                                                                     30,                               Ended June 30,
(in thousands, except utilization)                          2022            2021                   2022              2021
Sales volume (MT)(1)                                           42.3            42.8                    85.6              79.8
Production volume (MT)(2)                                      43.9            43.5                    90.0              79.5
Total production capacity (MT)(3)(4)                           58.0            58.0                   116.0             116.0
Total capacity utilization(4)(5)                                 76  %           75  %                   78  %             69  %
Production capacity excluding St. Marys (MT)(3)(6)             51.0            51.0                   102.0             102.0
Capacity utilization excluding St. Marys(5)(6)                   86  %           85  %                   88  %             78  %


(1) Sales volume reflects only graphite electrodes manufactured by us.
(2) Production volume reflects graphite electrodes we produced during the
period.
(3) Production capacity reflects expected maximum production volume during the
period depending on product mix and expected maintenance outage. Actual
production may vary.
(4) Includes graphite electrode facilities in Calais, France; Monterrey, Mexico;
Pamplona, Spain; and St. Marys, Pennsylvania.
(5) Capacity utilization reflects production volume as a percentage of
production capacity.
(6) In the first quarter of 2018, our St. Marys, Pennsylvania facility began
graphitizing a limited amount of electrodes sourced from our Monterrey, Mexico
facility.

Non-GAAP financial measures

In addition to providing results that are determined in accordance with GAAP, we
have provided certain financial measures that are not in accordance with GAAP.
EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are non-
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                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

GAAP financial measures. We define EBITDA, a non­GAAP financial measure, as net
income or loss plus interest expense, minus interest income, plus income taxes
and depreciation and amortization. We define adjusted EBITDA as EBITDA plus any
pension and other post-employment benefit ("OPEB") plan expenses, adjustments
for public offerings and related expenses, non­cash gains or losses from foreign
currency remeasurement of non­operating assets and liabilities in our foreign
subsidiaries where the functional currency is the U.S. dollar, stock-based
compensation expense, non-cash fixed asset write-offs, related party payable -
Tax Receivable Agreement adjustments and Change in Control charges that were
triggered as a result of the ownership of our largest stockholder falling below
30% of our total outstanding shares. Adjusted EBITDA is the primary metric used
by our management and our Board of Directors to establish budgets and
operational goals for managing our business and evaluating our performance.

We monitor adjusted EBITDA as a supplement to our GAAP measures, and believe it
is useful to present to investors, because we believe that it facilitates
evaluation of our period­to­period operating performance by eliminating items
that are not operational in nature, allowing comparison of our recurring core
business operating results over multiple periods unaffected by differences in
capital structure, capital investment cycles and fixed asset base. In addition,
we believe adjusted EBITDA and similar measures are widely used by investors,
securities analysts, ratings agencies, and other parties in evaluating companies
in our industry as a measure of financial performance and debt­service
capabilities.

Our use of adjusted EBITDA has limitations as an analytical tool, and you should
not consider it in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:

•Adjusted EBITDA does not reflect variations or cash requirements for our working capital requirements;

•adjusted EBITDA does not reflect our cash expenditures for capital equipment or
other contractual commitments, including any capital expenditure requirements to
augment or replace our capital assets;

•Adjusted EBITDA does not reflect interest expense or cash requirements to service interest or principal repayments on our debt;

•Adjusted EBITDA does not reflect tax payments which may represent a reduction in the cash available to us;

•Adjusted EBITDA does not reflect charges related to our pension and OPEB plans;

•adjusted EBITDA does not take into account public offerings and related expenses;

•adjusted EBITDA does not reflect the non­cash gains or losses from foreign
currency remeasurement of non­operating assets and liabilities in our foreign
subsidiaries where the functional currency is the U.S. dollar;

•Adjusted EBITDA does not reflect stock-based compensation expense;

•adjusted EBITDA does not reflect the non-monetary amortization of fixed assets;

•adjusted EBITDA does not reflect adjustments to be paid to a related party – Agreement on tax receivables;

•adjusted EBITDA does not reflect change of control costs; and

•Other companies, including companies in our industry, may calculate EBITDA and Adjusted EBITDA differently, reducing its usefulness as a comparative measure.

We define adjusted net income, a non­GAAP financial measure, as net income or
loss and exclude the items used to calculate adjusted EBITDA, less the tax
effect of those adjustments. We define adjusted EPS, a non­GAAP financial
measure, as adjusted net income divided by the weighted average diluted common
shares outstanding during the period. We believe adjusted net income and
adjusted EPS are useful to present to investors because we believe that they
assist investors' understanding of the underlying operational profitability of
the Company.

In evaluating EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS, you
should be aware that in the future, we will incur expenses similar to the
adjustments in the reconciliations presented below other than the Change in
Control charges. Our presentations of EBITDA, adjusted EBITDA, adjusted net
income and adjusted EPS, should not be construed as suggesting that our future
results will be unaffected by these expenses or any unusual or non­recurring
items. When evaluating our performance, you should consider EBITDA, adjusted
EBITDA, adjusted net income and adjusted EPS,
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

as well as other measures of financial performance and liquidity, including our net income and EPS, respectively, and other GAAP measures.

The following tables reconcile our key non-GAAP financial measures to the most directly comparable GAAP measures:

Reconciliation of net income to adjusted net income

                                                           For the Three Months
                                                              Ended June 30,                   For the Six Months Ended June 30,
                                                          2022              2021                     2022               2021
                                                                    (Dollars in thousands, except per share data)
Net income                                          $      114,997    $     

$28,165 $239,180 $126,964

Diluted income per common share:
Net income per share                                $         0.44    $        0.11          $            0.92    $        0.47
Weighted average shares outstanding                    258,845,588      267,807,944                260,734,273      267,765,378

Adjustments, pre-tax:
Pension and OPEB plan expenses(1)                              553              430                      1,104              861
Public offerings and related expenses(2)                       100              241                        100              663
Non-cash (gains) losses on foreign currency
remeasurement(3)                                            (1,002)           2,255                        234            1,907
Stock-based compensation expense(4)                            573              550                      1,038            1,318
Non-cash fixed asset write-off (5)                               -              313                          -              313
Related party payable - Tax Receivable Agreement
adjustment(6)                                                    -                -                       (180)              47
Change in Control LTIP award(7)                                  -           73,384                          -           73,384
Change in Control stock-based compensation
acceleration(7)                                                  -           14,713                          -           14,713

Total non-GAAP adjustments pre-tax                             224           91,886                      2,296           93,206
Income tax impact on non-GAAP adjustments(8)                   119            5,564                        454            5,803
Adjusted net income                                 $      115,102    $     114,487          $         241,022    $     214,367


(1)Net periodic benefit cost for our pension and OPEB plans.
(2)Legal, accounting, printing and registration fees associated with public
offerings and related expenses.
(3)Non-cash (gains) losses from foreign currency remeasurement of non-operating
assets and liabilities of our non-U.S. subsidiaries where the functional
currency is the U.S. dollar.
(4)Non-cash expense for stock-based compensation grants.
(5)Non-cash write-off of fixed assets.
(6)Non-cash expense adjustment for future payment to our sole pre-IPO
stockholder for tax assets that are expected to be utilized.
(7)In the second quarter of 2021, we incurred Change in Control charges as a
result of the ownership of our largest shareholder, Brookfield, moving below 30%
of our shares outstanding.
(8)The tax impact on the non-GAAP adjustments is affected by their tax
deductibility and the applicable jurisdictional tax rates.

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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

Reconciliation of EPS to Adjusted EPS

                                                       For the Three Months          For the Six Months Ended
                                                          Ended June 30,                     June 30,
                                                         2022         2021               2022         2021

EPS                                                 $      0.44    $   0.11          $     0.92    $   0.47
Adjustments per share:
Pension and OPEB plan expenses(1)                             -           -                   -           -
Public offerings and related expenses(2)                      -           -                   -           -
Non-cash (gains) losses on foreign currency
remeasurement(3)                                              -        0.01                   -        0.01
Stock-based compensation expense(4)                           -           -                   -        0.01
Non-cash fixed asset write-off (5)                            -           -                   -           -
Related party payable - Tax Receivable Agreement
adjustment(6)                                                 -           -                   -           -
Change in control LTIP award(7)                               -        0.27                   -        0.27
Change in control stock-based compensation
acceleration(7)                                               -        0.06                   -        0.06
Total non-GAAP adjustments pre-tax per share                  -        0.34                   -        0.35
Income tax impact on non-GAAP adjustments per
share(8)                                                      -        0.02                   -        0.02
Adjusted EPS                                        $      0.44    $   0.43          $     0.92    $   0.80


(1)Net periodic benefit cost for our pension and OPEB plans.
(2)Legal, accounting, printing and registration fees associated with public
offerings and related expenses.
(3)Non-cash (gains) losses from foreign currency remeasurement of non-operating
assets and liabilities of our non-U.S. subsidiaries where the functional
currency is the U.S. dollar.
(4)Non-cash expense for stock-based compensation grants.
(5)Non-cash write-off of fixed assets.
(6)Non-cash expense adjustment for future payment to our sole pre-IPO
stockholder for tax assets that are expected to be utilized.
(7)In the second quarter of 2021, we incurred Change in Control charges as a
result of the ownership of our largest shareholder, Brookfield, moving below 30%
of our shares outstanding.
(8)The tax impact on the non-GAAP adjustments is affected by their tax
deductibility and the applicable jurisdictional tax rates.

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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

                                                    For the Three Months Ended        For the Six Months Ended
Reconciliation of Net Income to Adjusted EBITDA              June 30,                         June 30,
                                                        2022          2021               2022          2021
                                                                      (Dollars in thousands)
Net income                                          $  114,997    $  28,165          $  239,180    $ 126,964
Add:

Depreciation and amortization                           14,012       16,292              28,446       32,831
Interest expense                                         9,399       15,994              18,611       38,161
Interest income                                         (1,858)        (199)             (1,956)        (236)
Income taxes                                            21,422        7,765              41,219       24,022
EBITDA                                                 157,972       68,017             325,500      221,742
Adjustments:
Pension and OPEB plan expenses(1)                          553          430               1,104          861

Public offerings and related expenses(2)                   100          241                 100          663
Non-cash (gains) losses on foreign currency
remeasurement(3)                                        (1,002)       2,255                 234        1,907
Stock-based compensation expense(4)                        573          550               1,038        1,318
Non-cash fixed asset write-off (5)                           -          313                   -          313
Related party payable - Tax Receivable Agreement
adjustment(6)                                                -            -                (180)          47

Change in Control LTIP award(7)                              -       73,384                   -       73,384
Change in Control stock-based compensation
acceleration(7)                                              -       14,713                   -       14,713

Adjusted EBITDA                                     $  158,196    $ 159,903          $  327,796    $ 314,948


(1)Net periodic benefit cost for our pension and OPEB plans.
(2)Legal, accounting, printing and registration fees associated with the public
offerings and related expenses.
(3)Non-cash losses (gains) from foreign currency remeasurement of non-operating
assets and liabilities of our non-U.S. subsidiaries where the functional
currency is the U.S. dollar.
(4)Non-cash expense for stock-based compensation grants.
(5)Non-cash write-off of fixed assets.
(6)Non-cash expense adjustment for future payment to our sole pre-IPO
stockholder for tax assets that are expected to be utilized.
(7)In the second quarter of 2021, we incurred Change in Control charges as a
result of the ownership of our largest shareholder, Brookfield, moving below 30%
of our shares outstanding.


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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

Operating results

The three months ended June 30, 2022 Compared to the three months ended June 30, 2021

The tables presented in our period-over-period comparisons summarize our
Condensed Consolidated Statements of Operations and illustrate key financial
indicators used to assess the consolidated financial results. Throughout this
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in this Report ("MD&A"), insignificant changes may be deemed not
meaningful and are generally excluded from the discussion.

                                                    For the Three Months Ended June
                                                                  30,                        Increase/
                                                        2022                2021             Decrease             % Change
                                                         (Dollars in thousands)

Net sales                                           $  363,646          $ 330,750          $   32,896                    10  %
Cost of sales                                          201,496            201,867                (371)                    -  %
   Gross profit                                        162,150            128,883              33,267                    26  %
Research and development                                   723              1,018                (295)                  (29) %
Selling and administrative expenses                     18,030             75,783             (57,753)                  (76) %
   Operating income                                    143,397             52,082              91,315                   175  %
Other (income) expense, net                               (563)               357                (920)                    N.M.

Interest expense                                         9,399             15,994              (6,595)                  (41) %
Interest income                                         (1,858)              (199)             (1,659)                  834  %
Income before provision for income taxes               136,419             35,930             100,489                   280  %
Provision for income taxes                              21,422              7,765              13,657                   176  %
Net income                                          $  114,997          $  28,165          $   86,832                   308  %


N.M. = Not Meaningful.

Net sales. Net sales of $363.6 million in the second quarter of 2022 increased
$32.9 million, or 10%, compared to the second quarter of 2021, reflecting
improved pricing on volume derived from non-LTA sales, partially offset by a
shift in the mix of our business to non-LTAs from LTAs. Prices for non-LTA
business reset on January 1, 2022 and our weighted-average realized price
increased 46% compared to the weighted-average realized price for the second
quarter of 2021.

Cost of sales. Cost of sales decreased $0.4 million from $201.9 million in the
three months ended June 30, 2021 to $201.5 million in the three months ended
June 30, 2022. Cost of sales in the second quarter of 2021 was impacted by a
one-time Long-term Incentive Plan ("LTIP") charge of $30.7 million resulting
from a Change in Control after our largest stockholder's ownership of our common
stock was reduced below 30% of our outstanding common stock. Absent this
one-time charge in the second quarter of 2021, cost of sales would have
increased, primarily driven by a 21% increase in our year over year costs, due
to recent global inflationary pressures, particularly for carbon-based inputs,
energy and freight.

Selling and administrative expenses. Selling and administrative expenses
decreased $57.8 million, or 76%, from $75.8 million in the three months ended
June 30, 2021 to $18.0 million in the three months ended June 30, 2022. Selling
and administrative expenses in the second quarter of 2021 included charges from
the aforementioned Change in Control of $42.6 million of one-time LTIP expense
and $12.9 million of one-time accelerated stock-based compensation expense.
Absent these charges, selling and administrative expenses would have decreased
slightly compared to the second quarter of 2021.

Interest expense. Interest expense decreased $6.6 million, or 41%, from $16.0
million in the three months ended June 30, 2021 to $9.4 million in the three
months ended June 30, 2022 primarily due to reductions to our variable-rate debt
over the past year, as well as a $2.8 million mark-to-market gain recognized in
the second quarter of 2022 due to the de-designation of one of our $250.0
million interest rate swaps.
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

Provision for income taxes. The following table summarizes the provision for
income taxes:

                                          For the Three Months Ended June 30,
                                         2022                                   2021
                                                (Dollars in thousands)

   Provision for income taxes   $           21,422                           $ 7,765
   Pre-tax income                          136,419                            35,930
   Effective tax rate                         15.7    %                         21.6  %



The effective tax rate for the three months ended June 30, 2022 was 15.7%. This
rate differs from the U.S. statutory 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 GILTI and
FTCs.

The effective tax rate for the three months ended June 30, 2021 was 21.6%. This
rate differs from the U.S. statutory rate of 21% primarily due to worldwide
earnings from various countries taxed at lower rates, which was partially offset
by the net combined impact related to the U.S. taxation of GILTI and FTCs. A
portion of the one-time Change in Control charges recorded in the second quarter
of 2021 were not deductible and contributed to a relatively higher effective tax
rate.

The provision for income taxes increased from $7.8 million for the three months
ended June 30, 2021 to $21.4 million for the three months ended June 30, 2022.
This change is primarily due to an increase in pre-tax income, partially offset
by a decrease in the effective tax rate due to the mix of worldwide earnings
from various countries taxed at different rates and U.S. taxation of GILTI.

The six months ended June 30, 2022 Compared to the half-year ended June 30, 2021

The tables presented in our period-over-period comparisons summarize our
Consolidated Statements of Operations and illustrate key financial indicators
used to assess the consolidated financial results. Throughout our MD&A,
insignificant changes may be deemed not meaningful and are generally excluded
from the discussion.

                                                         For the Six Months
                                                           Ended June 30,                     Increase/
                                                       2022                  2021             Decrease             % Change
                                                       (Dollars in thousands)

Net sales                                       $    729,891             $ 635,147          $   94,744                    15  %
Cost of sales                                        392,710               348,263              44,447                    13  %

   Gross profit                                      337,181               286,884              50,297                    18  %
Research and development                               1,603                 1,987                (384)                  (19) %
Selling and administrative expenses                   39,284                95,936             (56,652)                  (59) %
   Operating income                                  296,294               188,961             107,333                    57  %
Other (income) expense, net                             (760)                   50                (810)                    N.M.
Interest expense                                      18,611                38,161             (19,550)                  (51) %
Interest income                                       (1,956)                 (236)              1,720                  (729) %
Income before provision for income taxes             280,399               150,986             129,413                    86  %
Provision for income taxes                            41,219                24,022              17,197                    72  %

Net income                                      $    239,180             $ 126,964          $  112,216                    88  %


N.M. = Not Meaningful.

Net sales. Net sales of $729.9 million in the first half of 2022 increased $94.7
million, or 15%, compared to the first half of 2021, driven primarily by an
increase in our non-LTA prices. Prices for non-LTA business reset on January 1,
2022 and

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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

our weighted-average realized price for the first six months of 2022 increased
45% compared to the weighted-average realized price for the first six months of
2021. In addition, stronger demand for our products in the first half of 2022
resulted in a 8% increase in sales volume compared to the first half of 2021.

Cost of sales. Cost of sales increased $44.4 million, or 13%, from $348.3
million in the six months ended June 30, 2021 to $392.7 million in the six
months ended June 30, 2022. This increase was primarily due to an 18% increase
in our costs, driven by recent global inflationary pressures, particularly for
carbon-based inputs, energy and freight, as well as the 8% increase in sales
volume of manufactured electrodes. Cost sales for the first half of 2021
included $30.7 million of one-time LTIP charges resulting from the Change in
Control.

Selling and administrative expenses. Selling and administrative expenses
decreased from $95.9 million in the six months ended June 30, 2021 to $39.3
million in the six months ended June 30, 2022 primarily due to the
aforementioned one-time Change in Control charges recorded in the first half of
2021 of $42.6 million of LTIP expense and $12.9 million of accelerated
stock-based compensation expense. Absent these charges, selling and
administrative expenses would have decreased slightly compared to the first half
of 2021.

Interest expense. Interest expense decreased $19.6 million from $38.2 million in
the six months ended June 30, 2021 to $18.6 million in the same period of 2022,
primarily due to lower interest rates and lower average borrowings. In addition,
interest expense in the first six months of 2022 included a $6.7 million
mark-to-market gain due to the de-designation of one of our $250.0 million
interest rate swaps.

Provision for income taxes. The following table summarizes the provision for
income taxes:

                                                                       For the Six Months Ended June 30,
                                                                            2022                   2021
                                                                             (Dollars in thousands)
Provision for income taxes                                           $        41,219           $  24,022
Income before provision for income taxes                                     280,399             150,986
Effective tax rate                                                              14.7   %            15.9  %


The effective tax rate for the six months ended June 30, 2022 was 14.7%. This
rate differs from the U.S. statutory rate of 21% primarily due to worldwide
earnings from various countries taxed at different rates, partially offset by
the net combined impact related to the U.S. taxation of GILTI and FTCs.

For the six months ended June 30, 2021, the effective tax rate of 15.9% differs
from the U.S. statutory rate of 21% primarily due to worldwide earnings from
various countries taxed at different rates, partially offset by the net combined
impact related to the U.S. taxation of GILTI and FTCs.

The provision for income taxes increased from $24.0 million for the six months
ended June 30, 2021 to $41.2 million for the six months ended June 30, 2022.
This change is primarily related to an increase in pre-tax income, partially
offset by a decrease in effective tax rate due to the mix of worldwide earnings
from various countries taxed at different rates and the U.S. taxation of GILTI.


Effects of changes in exchange rates

When the currencies of non-U.S. countries in which we have a manufacturing
facility decline (or increase) in value relative to the U.S. dollar, this has
the effect of reducing (or increasing) the U.S. dollar equivalent cost of sales
and other expenses with respect to those facilities. In certain countries in
which we have manufacturing facilities, and in certain export markets, we sell
in currencies other than the U.S. dollar. Accordingly, when these currencies
increase (or decline) in value relative to the U.S. dollar, this has the effect
of increasing (or reducing) net sales. The result of these effects is to
increase (or decrease) operating and net income.

Many of the non-U.S. countries in which we have a manufacturing facility have
been subject to significant economic and political changes, which have
significantly impacted currency exchange rates. We cannot predict changes in
currency
                                       33
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

exchange rates in the future or whether such changes will have net positive or negative impacts on our net sales, cost of sales or net income.

The impact of these changes in the average exchange rates of other currencies
against the U.S. dollar on our net sales were decreases of $3.7 million and $5.5
million for the second quarter and first six months of 2022, respectively,
compared to the same periods of 2021. The impact of these changes on our cost of
sales was a decrease of $6.7 million and $12.0 million for the second quarter
and first six months of 2022, respectively, compared to the same periods of
2021.

We have in the past and may in the future use various financial instruments to
manage certain exposures to risks caused by currency exchange rate changes, as
described under "Part I, Item 3-Quantitative and Qualitative Disclosures about
Market Risk."

Cash and capital resources

Our sources of funds have consisted principally of cash flow from operations and
debt, including our credit facilities (subject to continued compliance with the
financial covenants and representations). Our uses of those funds (other than
for operations) have consisted principally of dividends, capital expenditures,
scheduled debt repayments, optional debt repayments, share repurchases and other
obligations. Disruptions in the U.S. and international financial markets could
adversely affect our liquidity and the cost and availability of financing to us
in the future.

We believe that we have adequate liquidity to meet our needs for at least the
next twelve months and for the foreseeable future thereafter. As of June 30,
2022, we had liquidity of $381.6 million, consisting of $325.8 million of
availability under our 2018 Revolving Credit Facility (subject to continued
compliance with the financial covenants and representations) and cash and cash
equivalents of $55.8 million. We had long-term debt of $920.4 million and
short-term debt of $0.1 million as of June 30, 2022. As of December 31, 2021, we
had liquidity of $304.2 million consisting of $246.7 million available under our
2018 Revolving Credit Facility (subject to continued compliance with the
financial covenants and representations) and cash and cash equivalents of $57.5
million. We had long-term debt of $1.0 billion and short-term debt of $0.1
million as of December 31, 2021.

As of June 30, 2022 and December 31, 2021, $52.1 million and $49.1 million,
respectively, of our cash and cash equivalents were located outside of the U.S.
We repatriate funds from our foreign subsidiaries through dividends. All of our
subsidiaries face the customary statutory limitation that distributed dividends
cannot exceed the amount of retained and current earnings. In addition, for our
subsidiary in South Africa, the South Africa Central Bank imposes that certain
solvency and liquidity ratios remain above defined levels after the dividend
distribution, which historically has not materially affected our ability to
repatriate cash from this jurisdiction. The cash and cash equivalents balances
in South Africa were $1.6 million and $0.5 million as of June 30, 2022 and
December 31, 2021, respectively. Upon repatriation to the U.S., the foreign
source portion of dividends we receive from our foreign subsidiaries are not
subject to U.S. federal income tax because the amounts were either previously
taxed or are exempted from tax by Section 245A of the Internal Revenue Service
Code (the "Code").

Cash flow and plans to manage liquidity. Our cash flow typically fluctuates
significantly between quarters due to various factors. These factors include
customer order patterns, fluctuations in working capital requirements, timing of
tax and interest payments and other factors. Cash from operations is expected to
remain at positive sustained levels.

Debt structure

We had total availability under the 2018 Revolving Credit Facility of $325.8
million as of June 30, 2022 and $246.7 million as of December 31, 2021. The June
30, 2022 balance consisted of the $330.0 million limit reduced by $4.2 million
of outstanding letters of credit and the December 31, 2021 balance consisted of
the $250.0 million limit reduced by $3.3 million of outstanding letters of
credit.
                                       34
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

2018 Term Loan and 2018 Revolving Credit Facility

In February 2018, the Company entered into the 2018 Credit Agreement, which
provides for (i) the $2.3 billion 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 $1.5 billion to $2.3
billion and (ii) the $330 million 2018 Revolving Credit Facility after giving
effect to the May 2022 amendment that increased the revolving commitments under
the 2018 Credit Agreement by $80.0 million from $250.0 million. GrafTech Finance
is 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 Term Loan Facility and the 2018 Revolving Credit Facility mature on
February 12, 2025 and May 31, 2027, respectively.

The 2018 Term Loan Facility bears interest, at our option, at a rate equal to
either (i) the Adjusted LIBO Rate (as defined in the 2018 Credit Agreement),
plus an applicable margin equal to 3.00% per annum following an amendment in
February 2021 (the "Second Amendment") that decreased the Applicable Rate (as
defined in the 2018 Credit Agreement) by 0.50% for each pricing level or (ii)
the ABR Rate (as defined in the 2018 Credit Agreement), plus an applicable
margin equal to 2.00% per annum following the Second Amendment, in each case
with one step down of 25 basis points based on achievement of certain public
ratings of the 2018 Term Loan Facility. The Second Amendment also decreased the
interest rate floor from 1.0% to 0.50% for the 2018 Term Loan Facility.

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 Senior Secured Credit Facilities are 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
Credit Agreement of each of our foreign subsidiaries that is a Controlled
Foreign Corporation (within the meaning of Section 956 of the Code).

All obligations under the 2018 Credit Agreement are secured, subject to certain
exceptions, by: (i) a pledge of all 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 Credit
Agreement. 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 Credit Agreement.

The 2018 Term Loan Facility amortizes at a rate of $112.5 million a year payable
in equal quarterly installments, with the remainder due at maturity. The
Co-Borrowers are permitted to make voluntary prepayments at any time without
premium or penalty. GrafTech Finance is required to make prepayments under the
2018 Term Loan Facility (without payment of a premium) with (i) net cash
proceeds from non-ordinary course asset sales (subject to customary reinvestment
rights and other customary exceptions and exclusions), and (ii) commencing with
the Company's fiscal year ended December 31, 2019, 75% of Excess Cash Flow (as
defined in the 2018 Credit Agreement), subject to step-downs to 50% and 0% of
Excess Cash Flow based on achievement of a senior secured first lien net
leverage ratio greater than 1.25 to 1.00 but less than or equal to 1.75 to 1.00
and less than or equal to 1.25 to 1.00, respectively. Scheduled quarterly
amortization payments of the 2018 Term Loan Facility during any calendar year
reduce, on a dollar-for-dollar basis, the amount of the required Excess Cash
Flow prepayment for such calendar year, and the aggregate amount of Excess Cash
Flow prepayments for any calendar year reduce subsequent quarterly amortization
payments of the 2018 Term Loan Facility as directed by GrafTech Finance. As of
June 30, 2022, we have satisfied all required amortization installments through
the maturity date.
                                       35
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

The 2018 Credit Agreement 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 Credit Agreement 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 Credit Agreement
also contains customary events of default. We were in compliance with all of our
debt covenants as of June 30, 2022 and December 31, 2021.


2020 Senior Secured Notes

In December 2020, GrafTech Finance issued $500 million aggregate principal
amount of the 2020 Senior Secured Notes at an issue price of 100% of the
principal amount thereof in a private offering to qualified institutional buyers
in accordance with Rule 144A under the Securities Act of 1933 (the "Securities
Act") and to non-U.S. persons outside the United States under Regulation S under
the Securities Act.

The 2020 Senior Secured Notes were issued pursuant to the Indenture among
GrafTech Finance, as issuer, the Company, as a guarantor, the other subsidiaries
of the Company named therein as guarantors and U.S. Bank National Association,
as trustee and notes collateral agent.

The 2020 Senior Secured Notes are guaranteed on a senior secured basis by the
Company and all of its existing and future direct and indirect U.S. subsidiaries
that guarantee, or borrow under, the credit facilities under its 2018 Credit
Agreement. The 2020 Senior Secured Notes are secured on a pari passu basis by
the collateral securing the term loans under the 2018 Credit Agreement. GrafTech
Finance, the Company and the other guarantors granted a security interest in
such collateral, consisting of substantially all of their respective assets, as
security for the obligations of GrafTech Finance, the Company and the other
guarantors under the 2020 Senior Secured Notes and the Indenture pursuant to a
collateral agreement, dated as of December 22, 2020 (the "Collateral
Agreement"), among GrafTech Finance, the Company, the other subsidiaries of the
Company named therein as grantors and U.S. Bank National Association, as
collateral agent.

The 2020 Senior Secured Notes bear interest at the rate of 4.625% per annum,
which accrues from December 22, 2020 and is payable in arrears on June 15 and
December 15 of each year, commencing on June 15, 2021. The 2020 Senior Secured
Notes will mature on December 15, 2028, unless earlier redeemed or repurchased,
and are subject to the terms and conditions set forth in the Indenture.

GrafTech Finance may redeem some or all of the 2020 Senior Secured Notes at the
redemption prices and on the terms specified in the Indenture. If the Company or
GrafTech Finance experiences specific kinds of changes in control or the Company
or any of its restricted subsidiaries sells certain of its assets, then GrafTech
Finance must offer to repurchase the 2020 Senior Secured Notes on the terms set
forth in the Indenture.

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. 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.

All of the proceeds from the 2020 senior secured notes were used to repay a portion of our 2018 term loan facility.

Uses of liquidity

In July 2019, our Board of Directors authorized a program to repurchase up to
$100.0 million of our outstanding common stock. In November 2021, our Board of
Directors authorized the repurchase of an additional $150.0 million of stock
                                       36
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

repurchases under this program. We may purchase shares from time to time on the
open market, including under Rule 10b5-1 and/or Rule 10b-18 plans. The amount
and timing of repurchases are subject to a variety of factors including
liquidity, stock price, applicable legal requirements, other business objectives
and market conditions. During the second quarter of 2022, we repurchased 3.6
million shares of our common stock for an aggregate of $30.0 million. In the
first six months of 2022, we repurchased 6.7 million shares of our common stock
for an aggregate of $60.0 million. As of June 30, 2022, we had $99.0 million
remaining under our stock repurchase authorization.

We currently pay a quarterly dividend of $0.01 per share, or $0.04 on an
annualized basis. There can be no assurance that we will pay dividends in the
future in these amounts or at all. Our Board of Directors may change the timing
and amount of any future dividend payments or eliminate the payment of future
dividends in its sole discretion, without any prior notice to our stockholders.
Our ability to pay dividends will depend upon many factors, including our
financial position and liquidity, results of operations, legal requirements,
restrictions that may be imposed by the terms of our current and future credit
facilities and other debt obligations and other factors deemed relevant by our
Board of Directors.

During 2021, we reduced our long-term debt principal by $400.0 million. During
the second quarter and first six months of 2022, we repaid an additional $40.0
million and $110.0 million, respectively, of principal of our 2018 Term Loan
Facility. For the remainder of 2022, we continue to expect our primary use of
cash to be debt repayment. We also have $99.0 million available under our stock
repurchase authorization.

Potential uses of our liquidity include dividends, share repurchases, capital
expenditures, scheduled debt repayments, optional debt repayments, and other
general purposes. An improving economy, while resulting in improved results of
operations, could increase our cash requirements to purchase inventories, make
capital expenditures and fund payables and other obligations until increased
accounts receivable are converted into cash. A downturn, including any recession
or potential resurgence of the COVID-19 pandemic, could significantly and
negatively impact our results of operations and cash flows, which, coupled with
increased borrowings, could negatively impact our credit ratings, our ability to
comply with debt covenants, our ability to secure additional financing and the
cost of such financing, if available.

In order to seek to minimize our credit risks, we may reduce our sales of, or
refuse to sell (except for prepayment, cash on delivery or under letters of
credit or parent guarantees), our products to some customers and potential
customers. Our unrecovered trade receivables worldwide have not been material
during the last two years individually or in the aggregate.

We manage our capital expenditures by taking into account quality, plant
reliability, safety, environmental and regulatory requirements, prudent or
essential maintenance requirements, global economic conditions, available
capital resources, liquidity, long-term business strategy and return on invested
capital for the relevant expenditures, cost of capital and return on invested
capital of the Company as a whole and other factors.   Capital expenditures
totaled $29.3 million in the six months ended June 30, 2022. We continue to
expect full-year capital expenditures to be in the range of $70.0 to $80.0
million for 2022.

In the event that operating cash flows fail to provide sufficient liquidity to
meet our business needs, including capital expenditures, any such shortfall
would need to be made up by increased borrowings under our 2018 Revolving Credit
Facility, to the extent available.
                                       37
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                                PART I (CONT'D)
                  GRAFTECH INTERNATIONAL LTD. AND SUBSIDIARIES

  Cash Flows

The following table summarizes our treasury activities:

                                              For the Six Months
                                                Ended June 30,
                                             2022           2021
                                                (in thousands)
Cash flow provided by (used in):
Operating activities                      $ 206,439      $ 208,755
Investing activities                        (29,209)       (25,833)
Financing activities                       (178,866)      (214,612)

Net change in cash and cash equivalents $(1,636) ($31,690)

Operational activities

Cash provided by operating activities totaled $206.4 million in the first six
months of 2022 compared to $208.8 million in the prior-year period. The decrease
in operating cash flow was primarily due to an increase in cash used for working
capital. Cash flow used for inventories was $104.7 million in the first six
months of 2022 compared to providing $7.8 million in the first six months of
2021, driven by increases in both costs and quantities in the first six months
of 2022. Cash flow used for accounts receivable decreased $10.4 million versus
the prior-year period due to increased sales in the first six months of 2022.
Partially offsetting these decreases was the non-recurrence of cash outflows of
$62.0 million for the Change in Control payments made in the first half of 2021,
reductions of $25.6 million for the combined impact of cash paid for our Tax
Receivable Agreement and interest and a $12.9 million increase in adjusted
EBITDA.

Investing activities

Net cash used in investing activities was $29.2 million in the six months ended
June 30, 2022 compared to $25.8 million in the six months ended June 30, 2021.
The increase is primarily due to increased capital expenditures.

Fundraising activities

Net cash used in financing activities was $178.9 million for the first six
months of 2022 compared to $214.6 million for the first six months of 2021. The
decrease was primarily due to $90.0 million of less debt repayments in the first
six months of 2022 compared to the first six months of 2021, partially offset by
$60.0 million of stock repurchases made in the first six months of 2022.

Related party transactions

We have engaged in transactions with affiliates or related parties during the
first half of 2022 and we expect to continue to do so in the future. These
transactions include ongoing obligations under the Tax Receivable Agreement,
Stockholders Rights Agreement and Registration Rights Agreement, each with
Brookfield.

Description of our financing structure

We discuss our financing structure in more detail in Note 4 “Debt and Liquidity” of the Notes to the Condensed Consolidated Financial Statements.

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