UCAR Announces $275 Million of Future Cost Savings and Asset Sales; Will Seek Name Change to GrafTech International Ltd.

Business Editors

WILMINGTON, Del.--(BUSINESS WIRE)--Jan. 9, 2002

UCAR International Inc. (NYSE:UCR) today announced the adoption of a new major restructuring plan targeting three-year cumulative cost savings of $200 million through 2004 and $75 million of pretax, cash proceeds from the sale of non-strategic assets, as summarized below:

(Pretax dollars in millions)     2002     2003     2004     Cumulative
                                 ----     ----     ----     ----------
Recurring Annual Cost Savings     $45      $75      $80           $200
Cash Proceeds from Asset Sales    $25      $50      $ -            $75
                                  ---      ---      ---            ---
      Total Benefits              $70     $125      $80           $275
                                  ===     ====      ===           ====

Gil Playford, Chairman of UCAR, commented, "We continue to aggressively reduce our graphite electrode production costs by closing higher cost facilities and redeploying that capacity to our larger, lower cost, strategically located facilities. Since the end of 1998, we have reduced our average graphite electrode production cost by 15 percent. We believe that this new plan will enable us to reduce that average by an additional 15 percent by 2004. We believe that our graphite electrode production cost structure is and will continue to be the lowest of all major producers. We have also identified several key initiatives to significantly reduce other manufacturing and corporate overhead costs, taxes and interest and generate cash to improve our balance sheet and fund growth in our Advanced Energy Technology (AET) Division."

The new plan requires approximately $20 million of cash exit costs and could result in $20-30 million of non-cash asset write-downs.

The Company has completed all major activities associated with the global restructuring and rationalization plan announced in September 1998 and enhanced in October 1999, and that plan is now completed. The Company delivered total recurring annual cost savings of $126 million by the end of 2001 under that plan. The cost savings under the new plan are additive to those achieved by the end of 2001 under the previous plan.

Key elements of the new plan include:

-- Plant rationalization - The Company will mothball its graphite electrode
capacity (26,000 metric tons annually) in Caserta, Italy. The mothballing is
expected to be completed during the first half of 2002. The previously
announced shutdown of the Company's U.S. graphite electrode capacity (40,000
metric tons annually) was completed in the 2001 third quarter. The U.S.
shutdown reduced annual capacity to 210,000. The Company continues to improve
productivity and plant capacity at its strategically located low cost plants,
maintaining annual graphite electrode capacity at about 210,000 metric tons.
The benefits of these activities are included in the Graphite Power Systems
(GPS) Division's cost of sales savings in the table below.

-- Other cost of sales and overhead cost savings - The Company is pursuing
several key savings initiatives, including benefit plan redesign and global
work process improvements. The Company is redesigning and implementing changes
in its U.S. benefit plans for active and retired employees. The Company is also
implementing work process changes, including consolidating and streamlining
order fulfillment, purchasing, finance and accounting and human resource
processes, along with identifying and implementing outsourcing opportunities,
targeted for completion by the end of 2003.

-- Corporate legal and tax restructuring - The Company is restructuring the
organization of its corporate subsidiaries, consistent with the operational
realignment of its two divisions, GPS and AET. Implementation is expected to be
completed in the 2002 first quarter and result in significant tax savings as
set forth in the table below. This should also result in an effective income
tax rate for 2002 of 35 percent, down from the previously reported rate of 45
percent in 2001.

-- Asset sales - The Company intends to sell real estate, non-strategic
businesses and certain other non-strategic assets over the next two years.
Estimated pre-tax, cash proceeds from these sales are expected to total $75
million by the end of 2003. The non-strategic businesses contributed net sales
of approximately $25 million in 2001.

Summary of Targeted Annual Cost Savings
(Pretax dollars in millions)
                        2002          2003           2004   Cumulative
                        ----          ----           ----   ----------
Cost of sales:
    GPS              $    24       $    43        $    43     $    110
    AET                    4             4              4           12
                      ------        ------              -      -------
Total cost of sales       28            47             47          122
Overhead costs             9            10             11           30
Interest expense
  savings due to
  the new plan             2             8             12           22
Tax expense                6            10             10           26
                     -------       -------        -------     --------

       Total savings  $   45        $   75         $   80       $  200
                      ======        ======         ======       ======

Mr. Playford continued, "The cost savings and proceeds from asset sales should generate additional cash, strengthening the balance sheet and increasing funds available for investing in the high growth potential of our AET Division. The continued improvement in our GPS Division's cost position helps mitigate the effect of the depressed steel industry on gross margin and significantly improves our competitive position to benefit from any recovery in the global economy. We expect 2001 fourth quarter earnings to be comparable to the 2001 third quarter, excluding the non-recurring charges mentioned above. We also expect cash flow available to reduce debt to be positive in the 2001 fourth quarter and, as a result, net debt levels to be lower than at the end of the 2001 third quarter. In 2002, we expect continued challenging business conditions, with some improvement in graphite electrode sales volume during the second half. We currently believe that average graphite electrode prices in 2002, particularly in North America, will be lower than 2001 levels. In 2002, cost savings from our new program will be realized primarily over the second half of the year."

"As part of the Company's vision to be a graphite technology based, energy solutions company, we intend to seek, at our annual stockholders meeting, a formal name change to GrafTech International Ltd., which will continue to own the GPS and AET Divisions. We will continue to use the UCAR trademark and trade name in connection with our electrode businesses and Graftech Inc., our flexible graphite business, will remain a subsidiary."

In conjunction with this release, you are invited to listen to our conference call being held today at l0:00 a.m. EDT. The dial-in number is 1-303-262-2130 for both domestic and international. If you are unable to listen to the live call, the call will be archived and available for replay within one day of the original broadcast on our website at www.ucar.com under the Investor Relations section.

UCAR International Inc. is one of the world's largest manufacturers and providers of high quality natural and synthetic graphite and carbon based products and services, offering energy solutions to industry-leading customers worldwide engaged in the manufacture of steel, aluminum, silicon metal, automotive products and electronics. We have 13 manufacturing facilities in 8 countries and are the leading manufacturer in all of our major product lines. We produce graphite electrodes that are consumed primarily in the production of steel in electric arc furnaces, the steel making technology used by all "mini-mills," and for refining steel in ladle furnaces. We also produce carbon electrodes that are consumed in the manufacture of silicon metal and cathodes that are used in the production of aluminum. Our subsidiary, Graftech Inc., produces flexible graphite that is used in high temperature fluid sealing and gasket applications and is the basis for highly engineered products and solutions in fuel cell, electronics and thermal management applications. For additional information on UCAR, call 1-302-778-8227 or visit our website at www.ucar.com. For additional information on Graftech, call 1-216-529-3777 or visit its website at www.graftech.com. For information on our technology licensing and technical services business, visit www.HT2.com.

Cost savings targeted or estimated under the new plan are based on a comparison to 2001, assuming historical production levels. Historical cost savings are based on a comparison, with respect to interest expense and taxes, to 1998 and, for all other costs, to the 1998 fourth quarter (annualized).

NOTE: This news release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about such matters as: future production and sales of steel, aluminum, fuel cells, electronic devices and other products that incorporate our products or that are produced using our products; future prices and sales of and demand for graphite electrodes and our other products; future operational and financial performance of various businesses; strategic plans; impacts of regional and global economic conditions; restructuring, realignment, strategic alliance, supply chain, technology development and collaboration, investment, acquisition, operating, tax planning, rationalization, financial and capital projects; legal matters and related costs; consulting fees and related projects; asset sales; and future costs, working capital, revenues, business opportunities, values, debt levels, cash flows, cost savings and reductions, margins, earnings and growth. We have no duty to update these statements. Actual future events and circumstances (including future performance, results and trends) could differ materially from those set forth in these statements due to various factors. These factors include: the possibility that global or regional economic conditions affecting our products may not improve or may worsen; the possibility that announced additions to capacity for producing steel in electric arc furnaces or announced reductions in graphite electrode manufacturing capacity may not occur; the possibility that increased production of steel in electric arc furnaces or reductions in graphite electrode manufacturing capacity may not result in stable or increased demand for or price or sales volume of graphite electrodes; the possibility that economic or technological developments may adversely affect growth in the use of graphite cathodes in lieu of carbon cathodes in the aluminum smelting process; the possibility of delays in or failure to achieve widespread commercialization of proton exchange membrane, or "PEM," fuel cells which use natural graphite materials and components and that manufacturers of PEM fuel cells may obtain those materials or components used in them from other sources; the possibility of delays in or failure to achieve successful development and commercialization of new or improved electronic thermal management or other products; the occurrence of unanticipated events or circumstances relating to antitrust investigations or lawsuits or to lawsuits initiated by us against our former parents; the possibility that expected savings from our various cost reduction efforts will not be fully realized; the occurrence of unanticipated events or circumstances relating to strategic or to restructuring, realignment, strategic alliance, supply chain, technology development and collaboration, investment, acquisition, operating, tax planning, rationalization, financial or capital projects; changes in interest or currency exchange rates, in competitive conditions or in inflation affecting our raw material, energy or other costs; the possibility that changes in financial performance may affect our compliance with financial covenants under our debt facilities; the possibility that we may not complete asset sales when we anticipate or for the proceeds we anticipate, or at all; the possibility of our failure to satisfy conditions or milestones to our strategic alliances with Jilin Carbon, Pechiney, Ballard, Conoco or others; and other risks and uncertainties, including those detailed in our filings with the SEC. The statements contained in this news release shall not be deemed to constitute an admission as to any liability in connection with any claim or lawsuit. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities. References to street or analyst earnings estimates mean those published by First Call, a service of the Thomson Financial Network.