Good morning. My name is Sadia, and I will be your conference operator today. At this time, I would like to welcome everyone to the GrafTech Third Quarter 2012 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to your host Ms. Kelly Taylor. Ma'am, you may begin.

Thank you, Sadia. Good morning. And welcome to GrafTech International's third quarter 2012 conference call. On the call today is GrafTech's Chief Executive Officer, Craig Shular; and our Chief Financial Officer, Lindon Robertson. We issued our earnings release this morning. If you did not receive a copy, please contact [Marie Nor] at 216-676-2160 and she’ll be happy to fax or email a copy to you. As a reminder, some of the matters discussed during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Please note the cautionary language about our forward-looking statements contained in our press release. That same language applies to this call. Also, to the extent that we discuss any non-GAAP financial measures, you will find reconciliations in our press release, which is posted on our website at www.graftech.com in the Investor Relations Section. For your reference, a replay of the call is available on our website. At this time, I’d like to turn the call over to Craig.

Thank you, Kelly. Good morning, everyone. And thank you for joining GrafTech's call today. Today we’ll take you to our third quarter highlights and then open it up to questions. In Q3, sales came in at $321 million, EBITDA was $65 million, net income was $30 million or $0.22 per share. Our results came at the high end of expectations due to one continued growth and improved performance of our Engineered Solutions segment and then secondly, continued tight cost management in response to a weakening global economy. We’ve reduced our headcount by over 8% since the beginning of the year in addition to cutting discretionary spending and CapEx. Net debt was $604 million, the year-to-date increase was a largely result of our 10 million share buyback substantially completed in the second quarter. Turning to the segments, Industrial Material sales were $260 million and operating income came in at $37 million. Operating income declined due to lower volumes and rising cost across the segment partially offset by higher realized pricing. During the quarter as a result of anticipated rising raw material cost we announced price increases to our customers for needle coke and graphite electrodes. In September we announced an increase of approximately 15% year-over-year from our current pricing for normal premium grade needle coke. In early October, we also announced an 8% increase to our current prevailing prices for standard-sized melter grade graphite electrodes. While we do not expect a material impact to our results this year from these price increases as the majority of our 2012 business is substantially booked, they potentially position us in 2013 to better manage margins and rising costs. In our Engineered Solutions segment sales increased 39% to $61 million and operating income doubled to $6 million or 10% of sales. Our Engineered Solutions segment…

(Operator Instructions) Your first question comes from Luke Folta with Jefferies.

Good morning, Luke. How are you today?

Not bad. Great. How are you?

Superb. Thank you.

First question on needle coke. Have you seen a price announcement yet from our competitor Philips as it relates to what you might be paying for the needle coke next year? And then just as a follow-up, now we’re hearing petro coke out of Japan have some capacity offline, curious to know if that impacts your electrode operations in anyway or that’s having any impact on the Seadrift book building process for next year?

Well, let’s knock off the petro coke, yeah, they’re one of the key producers in the world, so any issues that they have would potentially affect the global market for our company, specifically in regards any issue that petro cokes may or may not have no impact on us, so nothing there. As far as looking forward look on needle coke, its way too early really to think about 2013, book building process is just getting underway in needle coke. So, I think to look at pricing or where that may comes is very premature, obviously there is many moving variables, so one begin just the oil price, oil prices have moved all over, they’ve been down recently, time will tell what that ends up and then obviously the global economic environment is a real variable. So too early to talk about needle coke. I think at our Q4 call at the end of February we’ll be better positioned to talk about the book and the outlook at that time Luke.

Okay. But, so far Philips is not given any indication where it’s going to be shooting?

It’s too early.

Okay. Okay. All right. Second one, can you talk about where production rates are, it would be helpful to hear kind of the evolution of production rates throughout the course of ’12 and how you expect utilization rates to trend into the first part of ’13? And also, I’m really more focused on kind of what happens the unit cost in 2013 as a result?

Well, let’s start with the graphite electrode business. In the last quarter we talked about brining down the op levels to kind of 60%, 65% for the second half of this year and we’ve done exactly that. So, it’s followed exactly what we’ve said, so they’ve been running 60% to 65%, probably closer to 60% in this environment. So, they would be at the lower end of that range and so we’ve slowed down our operating rates in graphite electrodes. We’ve taken out cost. We’ve unfortunately had to lay off a number of team mates around the world, salary and hourly adjusting for the realities of the global marketplace. So, GE is tracking exactly what we said 60% or 65% op level. We’re probably closer to 60% then we are 65%. Needle coke we said last quarter we’d get that down around 80% and that’s right where that’s running Luke, we’re right down around 80% and again, that just reflects the reality of the global marketplace. This second half is slowing down. We’ve talked about it in our prior calls. I think you see it from our steel customers. And then looking forward to 2013 really to early to talk about any specifics whether it be GE, Graphite Electrodes or needle coke. But what I will say is based on everything we see from economic numbers around the world, everything we hear from our customers around the world. We are preparing for and expecting a very challenging year next year. So, we are doing what we do on all other cycles. We get ahead of it. We cut cost and you’ll see us continued on that path to be very, very competitive and very, very lean and efficient as we move through 2013.

Okay. Can you give us an estimate for what you think the inventory reduction will be between now and years end?

Well, I can’t give you a specific number other than, it is headed down, we will be taking out of inventory and we will have a lower number at the end of the year than what we currently showed you at the end of nine months. You recall that our strategy was well-delineated that, we would run at a higher operating rate in the first part of the year, we said we would build inventory and then that would allow us to do some right-sizing, drive out some cost and that running at a higher rate at the first part of the year, let us hit kind of some of the sweet spots in the operating cost side of it in some of our facilities. So, inventory will be lower at the end of the year. We don’t have a specific guidance and I there say that we will continue to cut cost over the fourth quarter. So I would expect we’ll probably have a lower headcount by year end and improve cost structure, just reacting to what we see in the marketplace.

Okay. Substantially lower you would think, I mean, you don’t want to give a number, but I mean, is it going to be something just slightly or certainly a big decline that you expect?

No. I would take -- you look at our cash flow guidance. I think with the cash flow in fact we moved to the upper end of the range and we feel good about that cash flow guidance number. So, I think you can infer there that we will be pulling a significant quantity out of inventory for our strategy. And I would say going into next year, we’ll have some inventory to work out also for our strategy and that just allows us to get to the right size in our operating platform. For us, what we find is many times rather than go down gradually, we rather do some step changes at various facilities. It’s better for our cost structure. So when we have a team, we’ll run it hard, maximize what that team can do. And then we may build some inventory, and then we’ll step down the cost in a quick move. And unfortunately layoff some of our teammates, but we’ll drive out cost and then we’ll run at a much lower operating rate, but we’ll run full and utilize everything we can at that lower rate very efficiently.

Okay. Craig, I have one more question for you and I’ll turn it over. On Engineered Solutions, my sense is that you guys are getting penalized for the amount of CapEx that’s going into that business without being or awarded with the offsetting incomes that or returns that that business is going to generate over time. Can you help put things into perspective for us in the sense of how much you spent this year over the last couple of years in expanding capacity in Engineered Solutions, and if you can give any milestones or targets of what you think that could result as far as earnings into next year or longer term, I think that would be a huge help?

Very good. Well, as you see Engineered Solutions had a very solid quarter. This business, if I walk you back a number of years, was about $85 million business and lost money. And so this business has come a long way. Last three years, as we said it’s got compounded growth there of 22%. So here we say, this year we’ll do $220 million, all time record. And I think the item of note that $220 million probably contains $30 million, $35 million less solar sales than a normal solar sale market we have. So, we expect solar to come back probably in 2014. So really that $220 million is probably more like a $270 million, if solar was running at a more normal rate. So, I think the good news is, ES has filled the hole that solar left and more than filled it, and it’s filled it up with advanced consumer electronic applications. It’s doing a lot in LED lighting and LED furnaces. A lot of the solar solutions and products we’ve developed worked very nicely in LED furnaces, they are very similar application and that’s starting to pickup some of the slack. So if I was there to take a look at this business over the next few years, actually, here we are $220 million. Really there is another $40 million or so a solar that will come into that portfolio likely when solar returns. So, it’s really -- it’s approaching a $300 million business here. So, we have a line of sight to about $300 million business in the next couple of years. And when I look out five years, our goal is to get this to be at $500 million plus business with double-digit returns. We got a 10% return as you see in Q3…

Okay. Adhering the 90%, but you are spending a lot of money this year on that business. So, I would assume that there is some new capacity there that. Is all of the capacity that you have are currently working on including that 90% number? I mean there is got to be something incremental.

Yeah. There is some incremental. Remember this capacity is all -- their furnaces and so many different products can go through this capacity, these graphite furnaces and some of the process we go through. All of our products go through similar furnaces. So the furnaces in many cases are interchangeable across the ES product line. And so you’re correct, some of it is giving us some sprint capacity for future growth, some of it’s giving us some capability for some new products we have coming through the pipeline.

Okay. All right. Thanks. Great.

Thank you.

Your next question comes form [Joe Krawczak] from Longbow.

Good morning, Joe. How are you today?

Good. How are you?

Excellent. Thank you.

All right. First question, kind of building up your and Luke’s discussion, you’ve mentioned hitting that 10% margin. I’m wondering if that’s the right run rate to use in the Engineered Solutions segment moving forward or if you could potentially see a return to that low-teens level?

Well, our goal is to get obviously into the mid-teens level that’s where we’re targeting. So, I think as you see, volumes continue to come up. You see, as continue to grow some of these double-digit segments. You start to see solar comeback, our target would be the mid-teens for this business. This business ultimately when we’re three, five years down the road, should be our best margin business. It will be our fastest growing, and it will be the best margins in our portfolio.

Okay. So, mid-teens likely in that 2014 period, I guess in 2013, where could you see thing is going prior to the return of solar?

Yeah. 2013, I think you’ll see us building on the success that you see here in the second half of this year. So, 2013, I think will look more like this year, I think good sales growth and you’ll see kind of the 10%, maybe a little bit better than that next year.

Okay. Great. And then secondly on electrode pricing, I know its early but, just curious what kind of reaction you’ve gotten from your customers as far as following the increased announcement, whether or not you’ve gotten any indications of pre-buying or any sort of pushback?

Yeah. Joe, it’s very early in the process. So just in fact, just a few customers are starting their bidding process as we speak. So, I think it’s way too early to really make much commentary on it. Obviously, it will depend on where cost and our competitors see cost coming next year. And that of course is still moving around, as we said earlier on the call on needle coke and oil is moving around lots of the feedstocks and needle coke and moving an awful lot. So, I think just with the variation and the volatility in the global economy, the raw material costs are moving a lot. Some of the other competitors in this space, they have in some cases higher cost structures than ours. So, I think really we’ve got a cost structure come in and ultimately the marketplace is going to determine where these prices finally land.

Sure. Okay. And then lastly, the macro uncertainty and some of the things that you’ve alluded to during the conversation, do you anticipate that kind of causing a lag in the book, in this year’s electrode bookings similar to what we saw last year and kind of how far out did you see that extending relative to the typical timing?

Joe, I don’t see it being as delayed as last year. What I do see is that it is starting to offer a little later, so here we are just starting now and that might be -- even at 60 days kind of behind the first start-up. So it is literally just getting started in the last couple weeks. So, I see it being delayed but not as much as last year. And the reason it’s being delayed this year is just our customer’s uncertainty to the future. They have such limited line of site and their books are so short, many of them engaged. And then obviously, many of them have been going through furnace closures, layoffs, a number of our customers around the world are now losing money. So they are going through rationalization reviews. I would expect some customers, for instance, it’s started to taken a two-week shutdown in December, may take three of four weeks shutdown. We are hearing a lot of noise at different locations. And that’s just the reality of the marketplace, Joe. So, I see the book going slower this year not as slow as last year, but it will probably be until the end of February, our Q4 call until we really have a decent line of site.

Okay. Thanks. I really appreciate it.

Thank you, sir.

Your next question comes from Michael Gambardella of J.P. Morgan.

Good morning, Mike.

Good morning, Craig. If you look back at the company, the total company over last decade, it seems like you’ve spent more every year in CapEx and depreciation and that’s been accelerating that ratio of CapEx to depreciation over last few years. I know one of the other callers mentioned about the excessive amount or maybe not excessive to you, but a lot of CapEx you’ve spent in recent years in Engineered Solutions. But just overall on a company-wide basis, I mean the CapEx to depreciation ratio being far above one in the case of last year or three over three times, I mean what you’re seeing in terms of returns on that investment.

Let me pass that over to Lindon here in a moment. But, Mike, if I look over that 10-year period, obviously the front end of that was a huge turnaround in rationalization of so many facilities. And then we went through many years where there just was no money and we barely kept our facilities running. And then obviously, we improved the balance sheet, we got many credit upgrades. In fact, at one point we even went debt free. So we’re in a ability -- we’re in a position to invest in our facilities, improve productivity of other facilities. We made four great acquisitions and then the acquisitions two of them, especially the first two St. Mary’s and Seadrift require some attention. They had been probably capital constrained, they’ve been held up by private equity and like a lot of private equity investments, it’s a quick turnaround. It’s not about the next five years, it’s about the next five months. And so we’ve brought them up to speed. We’ve cut scrap rates, we’ve improved safety and improved productivity and Seadrift, we had breakthrough in super premium. So, we’ve made investments that really have improved the business model made us more competitive.

But have you’ve seen the hard core returns there on the profitability recently?

I think we’ll see all of it. I mean, remember we’re in a very tough time in the global economy. So you see this year is going to be our fourth best ever, okay. But I think when you’re really going to appreciate it is when the economy start to show some recovery. Then you’re really going to see what the platform can run because it’s been prepared to do that rather than one on a shoe string with breakdowns and unreliability, poor quality et cetera. So, you see capitals come in and I think we’ve performed well in very difficult environments but the underlining is it’s been very difficult environments and once we get back to a better economy and a better marketplace we’ll have higher operating rates. I mean we’re running at 60% operating rate right now and still making good money in a very difficult environment. But I think you’ll really appreciate it and really see the returns when we get back to a better environment. I think any of our customer base, any of our competitors if you look at their returns in this environment, I mean everyone’s returns are down because the environment is so poor.

I mean can you get an 8% electro price increase next year operating at 60%?

Well, the time will tell. Like I said there is so many risk factors. The big one is we don’t know the cost structure right. Now oil has made a nice move down, okay. Well time will tell where that finally ends up and so its way too early to talk about that. I don’t know Mike its that much risk on the table. Global economy, oil prices, cost structure competitors. So, it’s too early to tell and if you ask me I really don’t know. If we can get a price increase next year, the marketplace will determine that. Let me toss over to Lindon just on. He’s got over a year with us now and he knows our capital program. He goes through every proposal IRR and obviously we scrutinize and scrap that in detail.

Hi, Mike. I think it’s a great question because as you pointed out the CapEx has exceeded the depreciation level over the last couple of years. And as we’ve discussed, most the growth CapEx is going into ES business. So, the business that Craig has talked fair amount about already in the Q&A is pointing to where do we believe in that investment. And the rigor that we put around this is quite strong. First and foremost we were -- we’ve got the whole company focused including upper to our Board but and helping to make our decisions on capital but also internally in our business segments on ROIC and so when you drive the team on that, I tell you that my segment leaders know how much profit in the year it takes through that ROIC needle will point and how much CapEx it takes to move it a point. And so a very sensitive to this CapEx. Now, the key point is once you start a project what kind of discipline do you put into it to make sure that one, the projects stays on track and secondly if anything happens in the interim how do you adjust that project and so we put milestones in each project and understand when we start something significant in terms of a timeline that we have milestones for review to make sure that we don’t want to change track. And as you’ve seen this year, we brought our guidance down substantially this year on the CapEx to conserve and to change some of those projects in light of the environment that we saw developed from getting the year to this point. So I give you assurance that in the IRR review and business case review project-by-project, we keep these things tied…

On the ES, you talked about some of your goals, $300 million, $500 million on the top-line, what about some near-terms goals on the bottom-line for ES?

Yeah. I would just highlight that last quarter we highlighted that we would be at the double-digit level by the end of this year. And we achieved that this quarter. As Craig pointed out we’re in this margin expansion. And so we’re not going to state that it ever did below 10%. There might be fourth quarter we’re not guiding on specific segment but our expectation going in to next year as you’re going to see margin expansion in this space. And you’ll see it over that five-year horizon that we’ve referenced. And so don’t -- I would not expect that we go backwards from this point. I wouldn’t expect that there is a little seasonality in the consumer electronic space. So, you’re going to see probably something that look similar to this quarter, I’m going to guess plus or minus this next quarter without specifically guiding it. But as we step in to next year we expect that the aggregate 2013 is going to produce favorable growth as well as margin expansion.

And then just last question, Craig did I hear you right, were you saying that for 2013, you thought any kind of weakness on the steel side would be offset by smartphones and I mean just how much business do you do in smartphone,

No, I’m not saying that obviously the steel portfolio for us is much larger. All I’m saying is that ES has segments that continue to do well when steel cycle is down. So it can be a nice offset, partially obviously because it’s a such a stronger business. But that consumer segment, the advanced consumer electronics, I mean, is one of the largest in ES. And if you recall all through the ‘09 recession, smartphone sales went up. And so some of those areas, readers, some of the latest TVs et cetera, they tend to do still pretty well when steel is cycling downward. In all, what we’re saying is that’s not a bad thing to have in our portfolio.

But I mean can you give us an idea how big that is in the portfolio?

Well…

Just either top line or….

Yeah, stay out of the 220, its more than 30% of the sales.

Is that just smartphone are you saying or consumer electronics?

Advanced consumer electronic segments.

Okay.

So it’s bigger than 30%, 40% of it. It’s a -- it’s growing so fast.

All right. Thank you.

You’re very welcome.

Your next question comes form Tim Hayes with Davenport and Company.

Good morning Tim. How are you today? Tim Hayes - Davenport & Company: I am good. How are you?

Great. Thank you. Tim Hayes - Davenport & Company: Two questions, what was the timing of the share buy backs during the quarter? Was all that in Q3 in July or did some of that occur after that?

No, most of it was Q2 and then a little bit came in July and then it was done. Tim Hayes - Davenport & Company: And then you have a new program in place, correct?

We have a new 10 million authorization in place and then what the, the way it works like all companies, management team will approach the Board to get approval to use some of that. So we put a new place, new 10 million in place yeah. Tim Hayes - Davenport & Company: Could you bought back shares after July 31 and I was curious if so why or why not buyback since the price was roughly at the level that you’ve been making some aggressive share purchases -- repurchases in the prior quarters?

Yeah. We have a program in place. So, we don’t have a constraint. So, answer to your first question yes. So, the programs in place we could have, we did not. Tim Hayes - Davenport & Company: Okay.

And all I would say is we look at so many factors like other company is doing in a decision like that. And obviously we’re watching very closely to global economies. Tim Hayes - Davenport & Company: Okay.

And from our vantage point, every quarter this year, steel has become more challenging, you see it in my customers numbers for sure. The second half of this year, we all recall World Steel Association is beginning -- second half is going to be better. It means they’ve come on and say no, that’s just not going to happen. It’s probably going to be weaker. And so, what we are doing is being very, very prudent as we entered 2013. And obviously share buyback is one of the possibilities. But, it’s something we weigh against all kinds of alternatives as well as the global economy. Tim Hayes - Davenport & Company: Okay. And then second question is sort of a goal came back to or eventually get in the mid-teens margins for the ES segment? How much of that is predicated on solar returning to more normal levels, I guess we have some concerns that perhaps that market may not?

Yeah, well big part of that is solar obviously as well as continued growth in the areas, we served today. So, we spend a lot of -- we spend a lot of time in the solar market. We’ve been in it from the beginning. And I’ll tell you what we see, what a lot of solar analysis see, third-parties. We expect 2014 to start to see a pickup there. Remembered it’s not just new starts, there is also a consumable we serve. And so, it has a consumable element and installation packages in the solar furnaces that we serve. And so Tim we would expect 2014 we’ll start to see solar start to come back. And so that’s definitely a part of it and time will tell obviously there is risk to that like you’ve highlighted but our sense is the drive on these green energies will continue one from the governments and from the various geographies. And then two one of the things that I think a lot of folks miss is we’ve been from the beginning in the solar business. And we’ve seen how the technologies improved and the conversion of sunlight to energy and the ratio and what not. And so there is technology improvement curve taking place there. And so I think ‘14, ‘15, ‘16, you’ll see solar become even low across more viable and it will continue on that technology curve. Tim Hayes - Davenport & Company: Very good. Thank you.

Thank you sir.

Your next question comes from Mark Parr with KeyBanc.

Good morning, Mark. How are you today?

Hey, good morning. Most of my questions have been answered and I appreciate all the candor. And I certainly would suggest that the global environment remains highly constrained. I want to congratulate you from the good, for the good progress that you are making despite the macro challenges and the proactive way that you’re really focusing on the economic realities out there.

Thank you, Mark.

I had a couple of questions. One thing that we’ve talked about the ability of Seadrift to manufacture the super premium material. They are at the trade -- they are I think initially there was a trade off associated with the amount of capacity that it took, the run time, it took a longer time to run the super premium. And so I’m just curious if there are any goals you have or any benchmarks that you’ve been able to get to as far as the tie-up of extra capacity to create the super premium needle coke at Seadrift?

Yeah. Mark, you’re correct. Super premium takes a bit longer to make the normal premium and our team down there has done a great job, not only with the breakthrough of being able to make a great super premium. But they’ve also upgraded the quality of their normal premium. And so we’ve had a lot of feedback from customers around the world complimenting ours on the improvement of their normal premium as well as the performance of the super premium. I spent a few weeks where I was down in Seadrift in fact for a week on a Lean Kaizen with our teammates there. And that team is working very hard on productivity improvements across the Board and one of them would be this exact area you’re talking about Mark in increasing yield out of normal premium and super premium and this team through Kaizen and Lean Six Sigma work has had excellent progress on that front. And so, Mark, I expect over time, yes. We will make normal premium and super premium faster than we ever have they’re getting yield improvements out of the equipment as we speak. They’ve done almost 40 Kaizen’s year-to-date this year. And this was a team we started with that did not have a Lean Six Sigma program so we got Black Belts in place, we got a great team work at it. And like I said the way we work at GrafTech our top 80 leaders have to be on two or one week Kaizen’s every year and my week one of my weeks happen to be at Seadrift. So, they’re working very hard on productivity improvement. And they are already getting yield improvements out of the Seadrift Coke. I would say the yields this year will be higher than any year they have had since they started that coker.

Okay. That’s good news and I’m glad you’re making progress. Just secondly, one other question related to the ES and also its interesting, you go back a couple of years ago and nobody ever asked questions about ES and now there is a lot of discussion, which I think is very interesting, definitely a change. But could you is there anymore color you can give as far as 2013 outlook. You’ve clearly committed capital. You’re going to be putting in ability to produce a lot more for the future. I mean do you expect a 20% growth rate next year and where anything in particular you can tell us as far as how that growth is going to unfold in terms of which product areas or what we should try to look out for -- to feel either better or worse about how that growth prospect is unfolding for next year?

Very good. What we can say about our ES business next year and remember all of this is in the context of a very volatile global economy with a lot of downside risk at the IMF has highlighted in the global economy. But I would we would expect and target our ES business to have double-digit growth next year above the 10% margin that you saw us deliver this quarter. And the segments that it will be attacking hard and we expect to be significant will be smartphones, e-readers, flat screen TVs, so all that that would be our kind of consumer, advanced consumer electronics base. And then also this whole area of LED lighting, although LED raw materials are made in a sapphire furnace and that sapphire furnace is very similar to a furnace that the solar silicon is made in, but the only difference is in this place to one of our strengths and why ES and our technology so important is, the sapphire furnace in fact is even harder then the solar furnace. And so it’s a more difficult application. And you’re seeing more and more sapphire furnace as you’re seeing good growth in LED. So, I think LED next year will be another important area for us. And then I think in '14 as we say we’ll start to see some solar coming back, right. And I think '14 was solar starting to come back we are going to be north of 300 million in sales and double-digit margins.

Okay. Well, good luck on that. And good luck on the pricing negotiations say for needle coke and electrodes in the fourth quarter.

Thank you, sir. Have a good day.

Your next question comes from Ray Rund with Shaker Investments.

Good morning, Ray. How are you today?

Fine. Thank you. Thanks for taking my questions.

Our pleasure.

I was just wondering if you could remind us, what your sales of needle coke look like as a percent of your total Industrial Material segment.

Ray, it’s not an item we guide too. So, it’s a -- although sales are part of our IM segment and so it’s an item that we break down mainly for competitive reasons. None of our competitors give their specific sales numbers either.

As a remainder the primary acquisition purpose was for integration into our business. So, we are one of the primary consumers of that coke and then we also have third-party sales. So if we were to start breaking that sales equation out, it would be a little bit, it would be difficult to draw meaning from that because we’re one of the biggest consumers of that.

I see. So, perhaps another way of asking question to get the information I'm interest and it is, our outside sales is significant portion of the production at Seadrift. And I noticed that you’ve been raising your needle coke prices, is this going to have a significant effect on the profitability?

Ray, that was outside of third-party sales are a very important portion. So, they are significant to Seadrift and to the results out of Seadrift. Seadrift would sell in all the geographies around the world where needle coke is utilized, Europe, China, et cetera.

Okay. Thank you very much.

Thank you, sir. Have a good day.

Your next question comes from [Rob Polley with Simon Capital].

Good morning, Rob. How are you today?

I’m okay. How are you?

Oh! Great. Thank you.

I just wanted to get it back maybe to the question, because it’s still a little bit confusing and it gets asked every conference call on CapEx. And maybe you can just takeaway the mystery and outline for us, what’s the -- break the CapEx into the two businesses Engineered Solutions and Industrial Materials, because Craig the answer to Mike’s question, you a new kind of emphasized more the IM side. But then Lindon talked about growth CapEx being only an Engineered Solution. So, maybe you could just sort of like break it out even for the last five years. The difference in CapEx between Engineered Solutions and the electrode business and then even better, what would be considered maintenance and what would be considered growth?

So, Rob. This is Lindon, I’ll take that. The one we’ve not given that kind of information all over the last five years. But let me just explain and re-visit what we have described in and what maybe we can add as insight. In general, as we’ve described before this year, you could expect that the maintenance CapEx in aggregate is in the range of at close 75 to 85 now, because since we brought our CapEx down, since our past discussions on this will be the maintenance range and growth of about 40 to 50. So, that’s the aggregate split of our CapEx. And what we’ve described is that the growth CapEx largely, almost entirely largely targeted at the ES business. We’ve got a little bit on cost improvement and things of that nature in Seadrift, quality improvements, but most of this driven on ES. Now, if you look back, I think you recognized that are CapEx had expanded a one year ago. And we described that publicly that that primary driver of that expansion was in the ES segments. And so, even if you look at one year ago, I think you could draw similar picture from those trends in any given year. The maintenance CapEx for our aggregate business could range from a 70 million to 100 million.

But what the maintenance CapEx and yes, because is 14, 15 growth CapEx and yes, this is going to be some maintenance CapEx and yes.

Now, there is maintenance CapEx.

What was that number?

We’ve not disclosed that and…

What’s the…

And I don’t see that is productive for this at this point. We’ll consider that it in future disclosures. But the key point is the investment is driving the growth in this business equation right now is or the types of investments that we’ve discussed that being the growth CapEx behind our thermal management solutions and things that are servicing advanced consumer electronics in large part. We also have some behind the furnace capabilities and solar and LED and other spaces. So I -- now the growth CapEx, we’ve had a fairly consistent track overtime. And so, I think the guidance of 70 to 100 is the right expectation in any given year for us to have in that space.

And I am sorry, in which space?

In our aggregate maintenance category.

Right. But you’re not willing to tell us how much goes to ES or how much to the electric business…

No. And frankly its going to vary based on the year and the utilization of the plants. And so I think at the meaningful level that level of understanding for the GrafTech installations and plants is the right range to have. And you see, as I noted earlier in the call or in the question that even in this year we’ve been able to bring down maintenance just other we brought down more out of growth CapEx, but we brought some maintenance down this year, because operating and some of the plants are down lower. So, it’s going to have a variation in both sides of our business.

No. I think it is relevant to know the total CapEx spend in Engineered Solutions, because even if they have a portion of that maintenance CapEx. You’re talking about I don’t know could be anywhere between $70 million, $80 million of CapEx being spent in Engineered Solutions and if the goal is to get to $300 million of revenues in a couple of years and 15% margins, we’re spending way, way in excess in CapEx than we are getting an income? May be I am wrong may be just we’re not spending that much of maintenance but it just…

Well, I understand your point. But you have to keep in mind that IM business represents 85% round numbers of our topline and just I’ll point out that, we’ve got six electrodes plants in four different continents. We’ve got a Seadrift plant. So, I can assure you that ES maintenance isn’t the lion share of this that’s the small.

No. I’m sure, it’s in the lion share, but even if it’s a small percentage it’s still, we’re still that we don’t have any sort of line of sight even based on their margins that you laid out in the revenues that you laid out for the Engineered Solutions earning more than what you’re spending in CapEx.

I understand your point.

Thanks.

Your final question comes from [David Bradbury with Courage Capital].

Good morning, David. How are you today?

All my questions -- I’m good. My questions have been answered. Thank you.

Thank you, David.

You have no further questions at this time, sir.

Thank everyone for their interest in GrafTech and we look forward to talking to you at our Q4 call at the end of February. Thank you very much. Have a good week.