Revenue From Contracts with Customers

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Disaggregation of Revenue

The following table provides information about disaggregated revenue by type of product and contract:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(Dollars in thousands)
Graphite Electrodes - LTAs	$	229,290	$	253,589	$	471,771	$	499,154
Graphite Electrodes - Non-LTAs	109,194		65,204		217,244		112,459
By-products and other	25,162		11,957		40,876		23,534
Total Revenues	$	363,646	$	330,750	$	729,891	$	635,147

The Graphite Electrodes revenue categories include only graphite electrodes manufactured by GrafTech.

Contract Balances

Substantially all of the Company's receivables relate to contracts with customers. Accounts receivables are recorded when the right to consideration becomes unconditional. Payment terms on invoices range from 30 to 120 days depending on the customary business practices of the jurisdictions in which we do business.

Certain short-term and longer-term sales contracts require up-front payments prior to the Company’s fulfillment of any performance obligation. These contract liabilities are recorded as current or long-term deferred revenue, depending on the lag between the pre-payment and the expected delivery of the related products. Additionally, deferred revenue or contract assets originate from contracts where the allocation of the transaction price to the performance obligations based on their relative stand-alone selling prices results in the timing of revenue recognition being different from the timing of the invoicing. In this case, deferred revenue is amortized into revenue based on the transaction price allocated to the remaining performance obligations and contract assets are realized through the contract invoicing.

Contract assets which are included in "Prepaid expenses and other current assets," on the Condensed Consolidated Balance Sheets were $0.3 million as of June 30, 2022 and $1.2 million as of December 31, 2021.

The following table provides information about deferred revenue from contracts with customers. Current deferred revenue is included in "Other accrued liabilities" and long-term deferred revenue is included in "Other long-term obligations" on the Condensed Consolidated Balance Sheets:

	Current Deferred Revenue		Long-Term Deferred Revenue
	(Dollars in thousands)
Balance as of December 31, 2021	$	9,840	$	4,303
Revenue recognized (included in 12.31.2021 balance)	(2,221)		—
Increases due to net cash received, not yet recognized	14,913		7,177
Reclassifications between long-term and current	143		(143)
Foreign currency impact	24		—
Balance as of June 30, 2022	$	22,699	$	11,337

Transaction Price Allocated to the Remaining Performance Obligations

The following table presents estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of reporting period. The estimated revenues do not include contracts with original duration of one year or less. The revenue associated with our LTAs is expected to be approximately as follows:

	2022	2023	2024
	(Dollars in millions)
Estimated LTA revenue	$860-$960	$200- $255	$130-$165(1)

(1) Includes expected termination fees from a few customers that have failed to meet certain obligations under their LTAs.

We recorded $229.3 million and $471.8 million of LTA revenue in the three and six months ended June 30, 2022, respectively, and we expect to record approximately $388.0 million to $488.0 million of LTA revenue for the remainder of 2022.

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.