GRAFTECH INTERNATIONAL LTDEAF

GRAFTECH INTERNATIONAL LTD Goodwill & Intangibles Disclosure

10-KFiled Feb 13, 20262 min read
Intangible Assets and Goodwill
Intangible Assets
The following table summarizes intangible assets with determinable useful lives by major category which are included in "Other assets" on our Consolidated Balance Sheets:
 
December 31, 2025
December 31, 2024
(in thousands)CostAccumulated
Amortization		NetCostAccumulated
Amortization		Net
Trade names$22,500 $(18,986)$3,514 $22,500 $(18,226)$4,274 
Technology55,300 (50,969)4,331 55,300 (48,613)6,687 
Customer relationships64,500 (45,295)19,205 64,500 (41,063)23,437 
$142,300 $(115,250)$27,050 $142,300 $(107,902)$34,398 

Amortization expense of intangible assets was $7.3 million, $8.0 million and $9.2 million in 2025, 2024 and 2023, respectively. Estimated annual amortization expense for the next five years will approximate $6.7 million in 2026, $6.1 million in 2027, $5.5 million in 2028, $4.9 million in 2029 and $2.9 million in 2030.

Goodwill

In 2023, the Company performed a quantitative assessment of the fair value of the reporting unit, using a combination of the income approach and the market approach (Level 3 in the fair value hierarchy) from a market participant’s perspective for its annual goodwill impairment testing. The valuation of the Graphite Electrode reporting unit was performed with cash flows that were adjusted to present this reporting unit as purchasing petroleum needle coke entirely from third parties at anticipated market prices.
The income approach was based on discounted projected debt-free cash flows for the Graphite Electrode reporting unit. The forecast of cash flows included several assumptions regarding future sales growth, revenues, earnings before interest, taxes, depreciation and amortization (“EBITDA”), capital expenditures and working capital changes. In addition to the estimates of future cash flows, the income approach involves the determination of the discount rate based upon market participant’s assumptions.
The market approach fair value was based on valuation multiples that were applied to the Graphite Electrode reporting unit’s actual and projected EBITDA. The multiples were derived under the guideline public company method from analyzing market multiples of EBITDA for a group of comparable public companies. The techniques used in the Company’s assessment incorporate a number of assumptions that the Company believes to be reasonable and to reflect known market conditions at the measurement date.
Key assumptions relate to customer demand and sales growth, graphite electrode and needle coke pricing trends, operating costs and capital expenditures. Assumptions in estimating future cash flows are subject to a degree of judgment.
The testing determined that the fair value of the Graphite Electrode reporting unit was less than its carrying amount by more than the amount of goodwill. As a result, we recorded a full impairment charge of $171.1 million, which was recorded in Goodwill impairment charges in the Consolidated Statements of Operations. The goodwill impairment was caused primarily by reduced sales of graphite electrodes due to softening demand and the deterioration of the electrode spot pricing.

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 14, 2025
2023Feb 14, 2024
2022Feb 14, 2023
2021Feb 22, 2022
2020Feb 23, 2021

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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