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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): AUGUST 18, 2003
GRAFTECH INTERNATIONAL LTD.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-13888 06-1385548
(State or Other (Commission File Number) (I.R.S. Employee
Jurisdiction of Incorporation) Identification Number)
BRANDYWINE WEST, 1521 CONCORD PIKE, SUITE 301, WILMINGTON, DELAWARE 19803
(Address of Principal Executive Offices, including Zip Code)
Registrant's Telephone Number, including Area Code: 302-778-8227
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS AND REQUIRED REGULATION FD DISCLOSURE.
GrafTech International Ltd. (the "Company") is filing this Report to
reclassify certain financial information at December 31, 2001 and 2002 and for
each of the years in the three periods ended December 31, 2000, 2001 and 2002 to
give effect to changes in accounting for reportable segments, discontinued
operations and the adoption of SFAS No. 145. Such information is contained in
Exhibits 99.1, 99.2 and 99.3 and is hereby incorporated by reference into this
Report.
These changes have been previously disclosed either in the our Annual
Report on Form 10-K for the year ended December 31, 2002 or Quarterly Report on
Form 10-Q for the quarter ended March 31, 2003 or June 30, 2003. The
reclassifications do not change previously reported consolidated net income,
basic or diluted earnings per share, consolidated total assets or liabilities,
or consolidated cash flows from operating activities, investing activities or
financial activities. Except as otherwise described herein, the Company has not
amended or restated any other information included in its Annual Report on Form
10-K for the year ended December 31, 2002.
CHANGE IN REPORTABLE SEGMENTS. In 2002, the Company's businesses were
organized around two operating divisions, the Graphite Power Systems Division,
which included the graphite electrode and cathode businesses, and the Advanced
Energy Technology Division, which included the natural graphite, advanced
synthetic graphite and advanced carbon materials businesses. In accordance with
Statement of Financial Accounting Standards ("SFAS") No. 131, "Segment
Reporting," the Company segregated its businesses into the two reportable
segments which corresponded with its two operating divisions.
In 2003, the Company further refined the organization of its businesses
into the following three lines of business:
o a synthetic graphite line of business called Graphite Power
Systems, which primarily serves the steel, aluminum, semiconductor
and transportation industries and includes graphite electrodes,
cathodes and other advanced synthetic graphite materials;
o a natural graphite line of business called Advanced Energy
Technology, which primarily serves the transportation, power
generation, electronics and chemical industries and includes fuel
cell, electronic thermal management and sealant products and
services; and
o a carbon materials line of business called Advanced Carbon
Materials, which primarily serves the silicon metal and
ferro-alloy industries and includes carbon electrodes and
refractories.
In accordance with SFAS No. 131, the Company segregated its businesses
into the following new segments: Synthetic Graphite, which consists of the
synthetic graphite line of business; and Other, which consists of the natural
graphite and advanced carbon materials lines
of business. The Company began reporting financial information using these new
segments in its Quarterly Report on Form 10-Q for the quarter ended March 31,
2003.
As required by SFAS No. 131, consolidated financial statements
published by the Company in the future will reflect modifications to its
reportable segments resulting from this organizational change, including
reclassification of all comparable prior period segment information.
TREATMENT OF DISCONTINUED OPERATIONS. As part of the Company's ongoing
asset sale program, the Company sold its non-strategic composite tooling
business based in Irvine, California in June 2003 for approximately $17 million
(including an approximately $2 million working capital adjustment). We received
$15 million in cash prior to June 30, 2003. As a result, under SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," the composite
tooling business is reflected as a discontinued operation in the Consolidated
Financial Statements. We have reflected prior year results of the composite
tooling business as a discontinued operation on the Consolidated Statements of
Operations and reclassified the assets and liabilities of the business
separately on the Consolidated Balance Sheets.
ADOPTION OF SFAS NO. 145. Effective January 1, 2003, the Company
adopted SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13, and Technical Corrections," relating to SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt." Previously, accounting
principles generally accepted in the U.S. required that gains and losses from
extinguishment of debt be classified as an extraordinary item, net of related
income tax effect. Based on SFAS No. 145, gains and losses from extinguishment
of debt are classified as extraordinary items only if they meet the criteria of
APB 30, "Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." The
provisions of APB 30 distinguish transactions that are part of an entity's
recurring operations from those that are unusual or infrequent or that meet the
criteria for classification as an extraordinary item. As such, those that do not
meet the criteria of APB 30 are included in the statement of operations before
income (loss) before provisions (benefits) for income taxes, minority interest
and extraordinary items. Items presented in prior periods that do not meet the
criteria in APB 30 for classification as an extraordinary item must be
reclassified. The effect of the adoption was to require reclassification of
write-offs of capitalized bank charges and other debt extinguishment costs
resulting from the prepayment of associated bank debt in the amount of
approximately $21 million and $4 million for the years ended December 31, 2000
and 2002, respectively, from extraordinary items to other (income) expense, net.
The corresponding provisions for taxes have been adjusted accordingly in the
amount of approximately $8 million and $1 million for the years ended December
31, 2000 and 2002, respectively.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRAFTECH INTERNATIONAL LTD.
Date: August 18, 2003 By: /s/ Corrado F. De Gasperis
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Corrado F. De Gasperis
Vice President, Chief Financial Officer
and Chief Information Officer
EXHIBIT INDEX
23.1 Consent of KPMG LLP
23.2 Consent of Deloitte & Touche LLP
99.1 Amended and Restated Selected Financial Data, comprising Item 6
of GrafTech International Ltd.'s Annual Report on Form 10-K for
the year ended December 31, 2002.
99.2 Amended and Restated Management's Discussion and Analysis of
Financial Condition and Results of Operations, comprising Item 7
of GrafTech International Ltd.'s Annual Report on Form 10-K for the
year ended December 31, 2002.
99.3 Amended and Restated Financial Statements and Supplementary
Data, comprising Item 8 of GrafTech International Ltd.'s Annual
Report on Form 10-K for the year ended December 31, 2002.