Contingencies

Legal Proceedings

We are involved in various investigations, lawsuits, claims, demands, environmental compliance programs and other legal proceedings arising out of or incidental to the conduct of our business. While it is not possible to determine the ultimate disposition of each of these matters, we do not believe that their ultimate disposition will have a material adverse effect on our financial position, results of operations or cash flows.

Litigation has been pending in Brazil brought by employees seeking to recover additional amounts under certain wage increase provisions applicable in 1989 and 1990 under collective bargaining agreements to which employers in the Bahia region of Brazil were a party (including our subsidiary in Brazil), plus interest thereon. Prior to October 1, 2015, we were not party to such litigation. Companies in Brazil have recently settled claims arising out of these provisions and, in May 2015, the litigation was remanded, in favor of the employees, by the Brazil Supreme Court to the lower courts for further proceedings which included procedural aspects of the case, such as admissibility of instruments filed by the parties. We cannot predict the outcome of such litigation. On October 1, 2015, an action was filed by current and former employees against our subsidiary in Brazil to recover amounts under such provisions, plus interest thereon, which amounts together with interest could be material to us. We intend to vigourously defend such action.

On October 8, 2014, the General Superintendent of the Administrative Council of Economic Defense in Brazil (“CADE”) announced that the agency would be continuing an investigation of anticompetitive activity allegedly affecting the Brazilian market from 1992 to 1998. The investigation was originally commenced in 2002 and was essentially been dormant for many years. The investigation purportedly relates to violations of antitrust laws that were previously investigated in from 1997 to 2002 by the U.S. Department of Justice, the European Commission, and other countries in connection with the sale of graphite electrodes. Those antitrust investigations and related lawsuits and claims have long been resolved and all fines and settlements timely paid many years ago. On May 14, 2015, the Public Prosecutors’ Office published its legal opinion recommending that the case be dismissed based on (i) the interim statute of limitation and (ii) the lack of effect of the cartel on the Brazilian market, and the CADE Commissioners unanimously terminated the case on or about October 14, 2015. No penalties were assessed against us, and we have been advised that this decision is not capable of appeal.

Product Warranties

We generally sell products with a limited warranty. We accrue for known warranty claims if a loss is probable and can be reasonably estimated. We also accrue for estimated warranty claims incurred based on a historical claims charge analysis. Product warranties were not impacted by purchase price accounting adjustments. Claims accrued but not yet paid and the related activity within the reserve for 2014 and 2015 are as follows:



	(Dollars in Thousands)
Balance as of December 31, 2014	$	923
Product warranty charges/adjustments	576
Payments and settlements	(557		)
Balance as of December 31, 2015	$	942