x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
Title of each class
|
Name of exchange on which registered
|
Common stock, par value $0.01 per share
|
New York Stock Exchange
|
Securities to be registered pursuant to Section 12(g) of the Act:
None
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Item
|
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Page
|
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PART I
|
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1.
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1A.
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1B.
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2.
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3.
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4.
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PART II
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5.
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6.
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7.
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7A.
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8.
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9.
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9A.
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9B.
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PART III
|
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10.
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11.
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12.
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13.
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14.
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PART IV
|
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15.
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Page
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|
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INDEX TO FINANCIAL STATTEMENT SCHEDULES
|
|
All other financial statement schedules have been omitted because they are not applicable, the required matter is not present, or the required information has been otherwise supplied in the financial statements or the notes thereto.
|
|
|
Item 1.
|
BUSINESS
|
Item 1A.
|
RISK FACTORS
|
•
|
changes in and reinterpretations of the laws, regulations and enforcement priorities of the countries in which we sell our products;
|
•
|
responsibility to comply with anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions;
|
•
|
trade protection laws, policies and measures and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, imposition of new tariffs and duties and import and export licensing requirements;
|
•
|
product damage or losses incurred during shipping;
|
•
|
potentially negative consequences from changes in or interpretations of tax laws;
|
•
|
political instability and actual or anticipated military or political conflicts;
|
•
|
economic instability, inflation, recessions and interest rate and currency exchange rate fluctuations;
|
•
|
uncertainties regarding non-U.S. judicial systems, rules and procedures; and
|
•
|
minimal or limited protection of intellectual property in some countries.
|
•
|
unscheduled maintenance outages;
|
•
|
prolonged power failures;
|
•
|
equipment failure;
|
•
|
a chemical spill or release;
|
•
|
explosion of a boiler or other pressure vessel;
|
•
|
fires, floods, windstorms, earthquakes, hurricanes or other catastrophes;
|
•
|
terrorism or threats of terrorism; and
|
•
|
other operational problems.
|
•
|
requiring a substantial portion of our cash flow from operations to make interest payments on this debt;
|
•
|
making it more difficult to satisfy debt service and other obligations;
|
•
|
increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing;
|
•
|
increasing our vulnerability to general adverse economic and industry conditions;
|
•
|
reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
|
•
|
placing us at a competitive disadvantage to our competitors that may not be as highly leveraged with debt; and
|
•
|
limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase common stock.
|
•
|
the inability of our stockholders to call a special meeting;
|
•
|
rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
|
•
|
the right of our board to issue preferred stock without stockholder approval;
|
•
|
the division of our board of directors into three classes of directors, with each class serving a staggered three-year term, and this classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult;
|
•
|
a provision that stockholders may only remove directors with cause;
|
•
|
the ability of our directors, and not stockholders, to fill vacancies on our board of directors; and
|
•
|
the requirement that the affirmative vote of stockholders holding at least 80 percent of our voting stock is required to amend certain provisions in our amended and restated certificate of incorporation and our amended and restated
|
•
|
Prior to the Separation, the Company’s business was operated by Rayonier as a segment of its broader corporate organization, rather than as an independent company. Rayonier or one of its affiliates performed various corporate functions for the Company, such as accounting, information technology and finance. The Company’s historical financial results reflect allocations of corporate expenses from Rayonier for such functions and are likely to be less than the expenses the Company would have incurred had it operated as a separate publicly traded company. The Company will need to make significant investments to replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which the Company no longer has access as a result of its separation from Rayonier. These initiatives to develop the Company’s independent ability to operate without access to Rayonier’s existing operational and administrative infrastructure will be costly to implement. The
|
•
|
Prior to the Separation, the Company was able to use Rayonier’s size and purchasing power in procuring various goods and services and shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Although the Company has entered into a transition service agreement with Rayonier, this arrangement may not fully capture the benefits the Company previously enjoyed as a result of being integrated with Rayonier and may result in the Company paying higher charges than in the past for these services. As a separate, independent company, the Company may be unable to obtain goods and services at the prices and terms obtained prior to the Separation, which could decrease the Company’s overall profitability; and
|
•
|
The cost of capital for the Company’s business may be higher than Rayonier’s cost of capital prior to the Separation.
|
•
|
entering into any transaction resulting in the acquisition of 40 percent or more of our stock or substantially all of our assets, whether by merger or otherwise;
|
•
|
merging, consolidating, or liquidating;
|
•
|
issuing equity securities beyond certain thresholds;
|
•
|
repurchasing its capital stock; and
|
•
|
ceasing to actively conduct its business.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
|
|
|
Capacity
|
|
Owned/Leased
|
Cellulose Specialties Facilities
|
Jesup, Georgia
|
|
520,000 metric tons of cellulose specialties
|
|
Owned
|
|
Fernandina Beach, Florida
|
|
155,000 metric tons of cellulose specialties
|
|
Owned
|
|
Jesup, Georgia
|
|
Research Facility
|
|
Owned
|
|
|
|
|
|
|
Wood Chipping Facilities
|
Offerman, Georgia
|
|
800,000 short green tons of wood chips
|
|
Owned
|
|
Eastman, Georgia
|
|
350,000 short green tons of wood chips
|
|
Owned
|
|
Barnesville, Georgia
|
|
350,000 short green tons of wood chips
|
|
Owned
|
|
Quitman, Georgia
|
|
200,000 short green tons of wood chips
|
|
Owned
|
|
Jarratt, Virginia
|
|
250,000 short green tons of wood chips
|
|
Owned
|
|
|
|
|
|
|
Corporate and Other
|
Jacksonville, Florida
|
|
Corporate Headquarters
|
|
Leased
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
|
Dividends
|
||||||
2014
|
|
|
|
|
|
||||||
Fourth Quarter
|
$
|
33.65
|
|
|
$
|
21.37
|
|
|
$
|
0.07
|
|
Third Quarter
|
$
|
44.18
|
|
|
$
|
28.65
|
|
|
$
|
0.07
|
|
Second Quarter (commencing June 27, 2014)
|
$
|
37.77
|
|
|
$
|
36.17
|
|
|
$
|
—
|
|
|
6/27/2014
|
|
9/27/2014
|
|
12/31/2014
|
Rayonier Advanced Materials
|
$100
|
|
$83
|
|
$61
|
S&P Small Cap 600
|
$100
|
|
$95
|
|
$103
|
S&P 500 Materials Index
|
$100
|
|
$102
|
|
$99
|
Item 6.
|
SELECTED FINANCIAL DATA
|
(millions of dollars except per share amounts)
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
958
|
|
|
$
|
1,047
|
|
|
$
|
1,095
|
|
|
$
|
1,021
|
|
|
$
|
884
|
|
Gross margin
|
224
|
|
|
333
|
|
|
380
|
|
|
323
|
|
|
232
|
|
|||||
Operating income
|
63
|
|
|
289
|
|
|
342
|
|
|
283
|
|
|
201
|
|
|||||
Net income
|
32
|
|
|
220
|
|
|
242
|
|
|
214
|
|
|
159
|
|
|||||
Diluted earnings per share of common stock
|
0.75
|
|
|
5.21
|
|
|
5.74
|
|
|
5.07
|
|
|
3.77
|
|
|||||
Dividends declared per share of common stock
|
0.14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,304
|
|
|
$
|
1,120
|
|
|
$
|
921
|
|
|
$
|
665
|
|
|
$
|
568
|
|
Property, plant and equipment, net
|
843
|
|
|
846
|
|
|
681
|
|
|
433
|
|
|
358
|
|
|||||
Total debt
|
945
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stockholders’ (deficit) equity
|
(62
|
)
|
|
968
|
|
|
725
|
|
|
474
|
|
|
397
|
|
|||||
Statement of Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
$
|
188
|
|
|
$
|
258
|
|
|
$
|
305
|
|
|
$
|
258
|
|
|
$
|
408
|
|
Cash used for investing activities
|
(90
|
)
|
|
(251
|
)
|
|
(305
|
)
|
|
(131
|
)
|
|
(93
|
)
|
|||||
Cash used for financing activities
|
(31
|
)
|
|
(7
|
)
|
|
—
|
|
|
(127
|
)
|
|
(314
|
)
|
|||||
Capital expenditures
|
(75
|
)
|
|
(96
|
)
|
|
(105
|
)
|
|
(97
|
)
|
|
(98
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA (a)
|
$
|
149
|
|
|
$
|
363
|
|
|
$
|
402
|
|
|
$
|
339
|
|
|
$
|
258
|
|
(a)
|
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is not defined by U.S. Generally Accepted Accounting Principles (“GAAP”). See Item 7
— Management’s Discussion and Analysis of Financial Condition and Results of Operations — Performance and Liquidity Indicators
for a reconciliation of EBITDA to net income.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Wood costs represent approximately
26 percent
of the per metric ton cost of sales. We purchase approximately
1.6 million
short green tons of hardwood chips and
2.5 million
short green tons of softwood chips per year. Weather conditions and demand in the wood products and pulp and paper markets can affect the cost of wood.
|
•
|
Chemical costs represent approximately
17 percent
of the per metric ton cost of sales. Chemicals, including caustic soda (sodium hydroxide), sulfuric acid, sodium chlorate and various specialty chemicals are purchased under negotiated supply agreements with third parties.
|
•
|
Energy costs represent approximately
6 percent
of the per metric ton costs of sales. The great majority of our energy is produced through the burning of lignin and other residual biomass in recovery and power boilers located at our plants. The plants also require fuel oil, natural gas and electricity to supplement their energy requirements.
|
|
Impact on:
|
||
Change in Assumption
|
Pension Expense
|
|
Projected Benefit
Obligation
|
50 bp decrease in discount rate
|
+ 1.2 million
|
|
+ 28.3 million
|
50 bp increase in discount rate
|
- 1.1 million
|
|
- 25.4 million
|
50 bp decrease in long-term return on assets
|
+ 0.7 million
|
|
|
50 bp increase in long-term return on assets
|
- 0.7 million
|
|
|
Financial Information (in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Net Sales
|
|
|
|
|
|
||||||
Cellulose specialties
|
$
|
844
|
|
|
$
|
930
|
|
|
$
|
935
|
|
Commodity products and other
|
114
|
|
|
117
|
|
|
160
|
|
|||
Total Net Sales
|
958
|
|
|
1,047
|
|
|
1,095
|
|
|||
|
|
|
|
|
|
||||||
Cost of Sales
|
734
|
|
|
714
|
|
|
715
|
|
|||
Gross Margin
|
224
|
|
|
333
|
|
|
380
|
|
|||
Selling and general expenses
|
40
|
|
|
36
|
|
|
36
|
|
|||
Other operating expense
|
121
|
|
|
8
|
|
|
2
|
|
|||
Operating Income
|
63
|
|
|
289
|
|
|
342
|
|
|||
Interest, net
|
(22
|
)
|
|
—
|
|
|
—
|
|
|||
Income Before Income Taxes
|
41
|
|
|
289
|
|
|
342
|
|
|||
Income Tax Expense
|
(9
|
)
|
|
(69
|
)
|
|
(100
|
)
|
|||
Net Income
|
$
|
32
|
|
|
$
|
220
|
|
|
$
|
242
|
|
|
|
|
|
|
|
||||||
Other Data
|
|
|
|
|
|
||||||
Sales Prices ($ per metric ton)
|
|
|
|
|
|
||||||
Cellulose specialties
|
$
|
1,762
|
|
|
$
|
1,913
|
|
|
$
|
1,859
|
|
Commodity products
|
692
|
|
|
684
|
|
|
720
|
|
|||
Sales Volumes (thousands of metric tons)
|
|
|
|
|
|
||||||
Cellulose specialties
|
479
|
|
|
486
|
|
|
503
|
|
|||
Commodity products
|
148
|
|
|
157
|
|
|
214
|
|
|||
|
|
|
|
|
|
||||||
Gross Margin %
|
23.4
|
%
|
|
31.8
|
%
|
|
34.7
|
%
|
|||
Operating Margin %
|
6.6
|
%
|
|
27.6
|
%
|
|
31.2
|
%
|
|||
Effective Tax Rate %
|
21.8
|
%
|
|
23.9
|
%
|
|
29.3
|
%
|
|
2013
|
|
Changes Attributable to (a):
|
|
2014
|
||||||||||||||
Operating Income (in millions)
|
Price
|
|
Volume
|
|
Cost/Mix
|
|
|||||||||||||
Operating Income
|
$
|
289
|
|
|
$
|
(73
|
)
|
|
$
|
(6
|
)
|
|
$
|
(147
|
)
|
|
$
|
63
|
|
Operating Margin %
|
27.6
|
%
|
|
(5.4
|
)%
|
|
(0.3
|
)%
|
|
(15.3
|
)%
|
|
6.6
|
%
|
(a)
|
Computed based on contribution margin.
|
|
2012
|
|
Changes Attributable to (a):
|
|
2013
|
||||||||||||||
Operating Income (in millions)
|
Price
|
|
Volume
|
|
Cost/Mix
|
|
|||||||||||||
Operating Income
|
$
|
342
|
|
|
$
|
18
|
|
|
$
|
(48
|
)
|
|
$
|
(23
|
)
|
|
$
|
289
|
|
Operating Margin %
|
31.2
|
%
|
|
1.1
|
%
|
|
(2.5
|
)%
|
|
(2.2
|
)%
|
|
27.6
|
%
|
(a)
|
Computed based on contribution margin.
|
|
As of December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash and cash equivalents (a)
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Availability under the Revolving Credit Facility (b)
|
222
|
|
|
—
|
|
|
—
|
|
|||
Total debt (c)
|
945
|
|
|
—
|
|
|
—
|
|
|||
Stockholders’ (deficit) equity
|
(62
|
)
|
|
968
|
|
|
725
|
|
|||
Total capitalization (total debt plus equity)
|
883
|
|
|
968
|
|
|
725
|
|
|||
Debt to capital ratio
|
107
|
%
|
|
—
|
%
|
|
—
|
%
|
(a)
|
Cash and cash equivalents consisted of cash, money market deposits, and time deposits with original maturities of 90 days or less.
|
(b)
|
Availability under the revolving credit facility is reduced by stand-by letters of credit of approximately
$28 million
.
|
(c)
|
See
Note 6
—
Debt
for additional information.
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
188
|
|
|
$
|
258
|
|
|
$
|
305
|
|
Investing activities
|
(90
|
)
|
|
(251
|
)
|
|
(305
|
)
|
|||
Financing activities
|
(31
|
)
|
|
(7
|
)
|
|
—
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Net Income to EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income
|
$
|
32
|
|
|
$
|
220
|
|
|
$
|
242
|
|
|
$
|
214
|
|
|
$
|
159
|
|
Interest, net
|
22
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Income tax expense
|
9
|
|
|
69
|
|
|
100
|
|
|
69
|
|
|
41
|
|
|||||
Depreciation and amortization
|
86
|
|
|
74
|
|
|
61
|
|
|
56
|
|
|
58
|
|
|||||
EBITDA
|
149
|
|
|
363
|
|
|
402
|
|
|
339
|
|
|
258
|
|
|||||
One-time separation, legal costs and financial assurance
|
44
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Environmental reserve and impairment adjustments
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Insurance settlement
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pro Forma EBITDA
|
267
|
|
|
369
|
|
|
402
|
|
|
339
|
|
|
258
|
|
|||||
Corporate costs
|
24
|
|
|
17
|
|
|
17
|
|
|
15
|
|
|
14
|
|
|||||
Segment EBITDA
|
$
|
291
|
|
|
$
|
386
|
|
|
$
|
419
|
|
|
$
|
354
|
|
|
$
|
272
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Cash Flow from Operations to Adjusted Free Cash Flow Reconciliation
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flow from operations
|
$
|
188
|
|
|
$
|
258
|
|
|
$
|
305
|
|
|
$
|
258
|
|
|
$
|
408
|
|
Capital expenditures (a)
|
(75
|
)
|
|
(96
|
)
|
|
(105
|
)
|
|
(97
|
)
|
|
(98
|
)
|
|||||
AFMC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(205
|
)
|
|||||
Tax benefit due to exchange of AFMC for CBPC
|
—
|
|
|
(19
|
)
|
|
(12
|
)
|
|
(21
|
)
|
|
(24
|
)
|
|||||
Adjusted Free Cash Flow
|
$
|
113
|
|
|
$
|
143
|
|
|
$
|
188
|
|
|
$
|
140
|
|
|
$
|
81
|
|
(a)
|
Capital expenditures exclude strategic capital expenditures which are deemed discretionary by management. Strategic capital totaled
$13 million
for the purchase of timber deeds and
$2 million
for the purchase of land for the
year
ended
December 31, 2014
. Strategic capital totaled
$141 million
,
$201 million
, and
$43 million
for the CSE for the
years
ended
December 31, 2013
,
2012
and
2011
, respectively.
|
Contractual Financial Obligations (in millions)
|
Total
|
|
Payments Due by Period
|
||||||||||||||||
2015
|
|
2016-2017
|
|
2018-2019
|
|
Thereafter
|
|||||||||||||
Long-term debt, including current maturities
|
$
|
945
|
|
|
$
|
8
|
|
|
$
|
18
|
|
|
$
|
95
|
|
|
$
|
824
|
|
Interest payments on long-term debt (a)
|
329
|
|
|
38
|
|
|
75
|
|
|
74
|
|
|
142
|
|
|||||
Purchase obligations (b)
|
68
|
|
|
14
|
|
|
29
|
|
|
7
|
|
|
18
|
|
|||||
Purchase orders (c)
|
21
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Postretirement obligations
|
15
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
7
|
|
|||||
Operating leases — PP&E, offices (d)
|
5
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|||||
Total contractual cash obligations
|
$
|
1,383
|
|
|
$
|
84
|
|
|
$
|
127
|
|
|
$
|
180
|
|
|
$
|
992
|
|
(a)
|
Projected interest payments for variable-rate debt were calculated based on outstanding principal amounts and interest rates as of
December 31, 2014
.
|
(b)
|
Purchase obligations primarily consist of payments expected to be made on a natural gas transportation contract and purchases of wood chips.
|
(c)
|
Purchase orders represent noncancelable purchase agreements entered into in the normal course of business with various suppliers that specify a fixed or minimum quantity that we must purchase.
|
(d)
|
Operating leases primarily consist of the office lease for our corporate headquarters.
|
(in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Boiler MACT(a)
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Jesup plant consent order (b)
|
1
|
|
|
18
|
|
|
25
|
|
|||
Cellulose specialties expansion project (c)
|
—
|
|
|
19
|
|
|
16
|
|
|||
Other (d)
|
2
|
|
|
8
|
|
|
12
|
|
|||
Total
|
$
|
20
|
|
|
$
|
45
|
|
|
$
|
53
|
|
(a)
|
Represents spending required as a result of a regulation originally issued in 2012 (and later reissued after litigation), which imposes more stringent emissions limits on certain air pollutants from industrial boilers. We estimate the remaining cost of compliance with this new requirement to be approximately $30 to $35 million, with spending spread over the next two years.
|
(b)
|
Represents spending related to a 2008 Jesup plant consent order in which we agreed to implement certain capital improvements relating to the plant’s wastewater treatment. This consent order was amended in 2011 in connection with the CSE project.
|
(c)
|
Environmental compliance expenditures related to the CSE project, which was completed in June 2013.
|
(d)
|
Includes spending for improvements to our manufacturing process and pollution control systems to comply with the requirements of new or renewed air emission and waste water discharge permits, and other required improvements for our plants.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(1)
|
See
Index to Financial Statements
on page ii for a list of the financial statements filed as part of this report.
|
(2)
|
See
Schedule II — Valuation and Qualifying Accounts
. All other financial statement schedules have been omitted because they are not applicable, the required matter is not present or the required information has otherwise been supplied in the financial statements or the notes thereto.
|
(3)
|
See
Exhibit Index
for a list of the exhibits filed or incorporated herein as part of this report. Exhibits that are incorporated by reference to documents filed previously by the Company under the Securities Exchange Act of 1934, as amended, are filed with the SEC under File No. 1-6780.
|
|
RAYONIER ADVANCED MATERIALS INC.
|
|
|
By:
|
/s/ P
AUL
G. B
OYNTON
|
|
Paul G. Boynton
Chairman, President and Chief Executive Officer
|
|
February 27, 2015
|
|
|
By:
|
/s/ F
RANK
A. R
UPERTO
|
|
Frank A. Ruperto
Chief Financial Officer and Senior Vice President, Finance and Strategy
(Duly Authorized Officer and Principal Financial Officer)
|
|
February 27, 2015
|
|
2014
|
|
2013
|
|
2012
|
||||||
NET SALES
|
$
|
957,689
|
|
|
$
|
1,046,603
|
|
|
$
|
1,095,376
|
|
COST OF SALES
|
733,942
|
|
|
714,038
|
|
|
715,707
|
|
|||
GROSS MARGIN
|
223,747
|
|
|
332,565
|
|
|
379,669
|
|
|||
|
|
|
|
|
|
||||||
Selling and general expenses
|
39,969
|
|
|
35,778
|
|
|
35,684
|
|
|||
Other operating expense, net (Note 11)
|
120,823
|
|
|
8,164
|
|
|
2,003
|
|
|||
OPERATING INCOME
|
62,955
|
|
|
288,623
|
|
|
341,982
|
|
|||
Interest expense
|
(22,378
|
)
|
|
—
|
|
|
—
|
|
|||
Interest and miscellaneous (expense) income, net
|
(106
|
)
|
|
292
|
|
|
507
|
|
|||
INCOME BEFORE INCOME TAXES
|
40,471
|
|
|
288,915
|
|
|
342,489
|
|
|||
Income tax expense (Note 12)
|
(8,816
|
)
|
|
(69,148
|
)
|
|
(100,393
|
)
|
|||
NET INCOME
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
$
|
242,096
|
|
|
|
|
|
|
|
||||||
EARNINGS PER SHARE OF COMMON STOCK (Note 10)
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
$
|
5.74
|
|
Diluted earnings per share
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
$
|
5.74
|
|
|
|
|
|
|
|
||||||
DIVIDENDS DECLARED PER SHARE
|
$
|
0.14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
COMPREHENSIVE INCOME:
|
|
|
|
|
|
||||||
NET INCOME
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
$
|
242,096
|
|
OTHER COMPREHENSIVE (LOSS) INCOME
|
|
|
|
|
|
||||||
Net (loss) gain from pension and postretirement plans, net of income tax benefit (expense) of $15,944, ($14,353), and ($233)
|
(28,326
|
)
|
|
24,971
|
|
|
406
|
|
|||
Total other comprehensive (loss) income
|
(28,326
|
)
|
|
24,971
|
|
|
406
|
|
|||
COMPREHENSIVE INCOME
|
$
|
3,329
|
|
|
$
|
244,738
|
|
|
$
|
242,502
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
$
|
242,096
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
85,607
|
|
|
74,386
|
|
|
60,909
|
|
|||
Stock-based incentive compensation expense
|
8,738
|
|
|
6,230
|
|
|
8,227
|
|
|||
Amortization of capitalized debt costs
|
1,007
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(33,672
|
)
|
|
(31,161
|
)
|
|
(827
|
)
|
|||
Increase in liabilities for disposed operations
|
88,548
|
|
|
—
|
|
|
—
|
|
|||
Disposed operations impairment charge
|
7,184
|
|
|
—
|
|
|
—
|
|
|||
Amortization of losses and prior service costs from pension and postretirement plans
|
9,113
|
|
|
8,398
|
|
|
7,134
|
|
|||
Loss from sale/disposal of property, plant and equipment
|
2,123
|
|
|
2,390
|
|
|
2,319
|
|
|||
Other
|
(177
|
)
|
|
(636
|
)
|
|
(1,725
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
1,710
|
|
|
6,380
|
|
|
5,979
|
|
|||
Inventories
|
(11,503
|
)
|
|
(11,715
|
)
|
|
(12,118
|
)
|
|||
Accounts payable
|
(4,365
|
)
|
|
(2,763
|
)
|
|
(9,019
|
)
|
|||
Accrued liabilities
|
12,877
|
|
|
(1,077
|
)
|
|
736
|
|
|||
All other operating activities
|
(5,434
|
)
|
|
(12,161
|
)
|
|
1,502
|
|
|||
Expenditures for disposed operations
|
(5,659
|
)
|
|
—
|
|
|
—
|
|
|||
CASH PROVIDED BY OPERATING ACTIVITIES
|
187,752
|
|
|
258,038
|
|
|
305,213
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Capital expenditures
|
(74,791
|
)
|
|
(96,008
|
)
|
|
(105,406
|
)
|
|||
Purchase of timber deeds
|
(12,692
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of land
|
(1,528
|
)
|
|
—
|
|
|
—
|
|
|||
Jesup plant cellulose specialties expansion
|
—
|
|
|
(141,143
|
)
|
|
(201,359
|
)
|
|||
Other
|
(1,450
|
)
|
|
(13,516
|
)
|
|
1,513
|
|
|||
CASH USED FOR INVESTING ACTIVITIES
|
(90,461
|
)
|
|
(250,667
|
)
|
|
(305,252
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Issuance of debt
|
1,025,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of debt
|
(79,200
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(5,926
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the issuance of common stock
|
649
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits on stock-based compensation
|
266
|
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(15,432
|
)
|
|
—
|
|
|
—
|
|
|||
Common stock repurchased
|
(92
|
)
|
|
—
|
|
|
—
|
|
|||
Net payments (to) from Rayonier
|
(956,579
|
)
|
|
(7,371
|
)
|
|
39
|
|
|||
CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES
|
(31,314
|
)
|
|
(7,371
|
)
|
|
39
|
|
|||
|
|
|
|
|
|
||||||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
65,977
|
|
|
—
|
|
|
—
|
|
|||
Balance, beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, end of period
|
$
|
65,977
|
|
|
$
|
—
|
|
|
$
|
—
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash paid during the period:
|
|
|
|
|
|
||||||
Interest
|
$
|
19,567
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes
|
$
|
34,588
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital assets purchased on account
|
$
|
16,637
|
|
|
$
|
14,106
|
|
|
$
|
23,090
|
|
|
Sales by Product Line
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cellulose specialties
|
$
|
843,473
|
|
|
$
|
929,931
|
|
|
$
|
934,622
|
|
Commodity products and other
|
114,216
|
|
|
116,672
|
|
|
160,754
|
|
|||
Total Sales
|
$
|
957,689
|
|
|
$
|
1,046,603
|
|
|
$
|
1,095,376
|
|
|
Sales by Destination (a)
|
||||||||||||||||
|
2014
|
|
%
|
|
2013
|
|
%
|
|
2012
|
|
%
|
||||||
United States
|
$
|
422,648
|
|
|
44
|
|
$
|
437,048
|
|
|
42
|
|
$
|
406,948
|
|
|
37
|
China
|
255,954
|
|
|
27
|
|
281,407
|
|
|
27
|
|
235,987
|
|
|
22
|
|||
Japan
|
138,961
|
|
|
14
|
|
150,306
|
|
|
14
|
|
169,695
|
|
|
15
|
|||
Europe
|
93,957
|
|
|
10
|
|
79,138
|
|
|
7
|
|
181,505
|
|
|
17
|
|||
Latin America
|
5,510
|
|
|
1
|
|
60,477
|
|
|
6
|
|
52,508
|
|
|
5
|
|||
Other Asia
|
33,250
|
|
|
3
|
|
29,097
|
|
|
3
|
|
27,101
|
|
|
2
|
|||
Canada
|
—
|
|
|
—
|
|
971
|
|
|
—
|
|
3,735
|
|
|
—
|
|||
All other
|
7,409
|
|
|
1
|
|
8,159
|
|
|
1
|
|
17,897
|
|
|
2
|
|||
Total Sales
|
$
|
957,689
|
|
|
100
|
|
$
|
1,046,603
|
|
|
100
|
|
$
|
1,095,376
|
|
|
100
|
(a)
|
All sales to foreign countries are denominated in U.S. dollars.
|
|
Percentage of Sales
|
||||
|
2014
|
|
2013
|
|
2012
|
Eastman Chemical Company
|
31%
|
|
21%
|
|
21%
|
Nantong Cellulose Fibers, Co., Ltd.
|
18%
|
|
19%
|
|
17%
|
Daicel Corporation
|
15%
|
|
13%
|
|
14%
|
Celanese Acetate, LLC
|
0%
|
|
14%
|
|
14%
|
|
2014
|
|
2013
|
||||
Land and land improvements
|
$
|
15,411
|
|
|
$
|
13,456
|
|
Buildings
|
180,304
|
|
|
173,554
|
|
||
Machinery and equipment
|
1,777,299
|
|
|
1,749,410
|
|
||
Construction in progress
|
37,630
|
|
|
19,533
|
|
||
Total property, plant and equipment, gross
|
2,010,644
|
|
|
1,955,953
|
|
||
Accumulated depreciation
|
(1,167,269
|
)
|
|
(1,109,665
|
)
|
||
Total property, plant and equipment, net
|
$
|
843,375
|
|
|
$
|
846,288
|
|
|
2014
|
|
2013
|
||||
Finished goods
|
$
|
120,221
|
|
|
$
|
105,398
|
|
Work-in-progress
|
2,418
|
|
|
3,555
|
|
||
Raw materials
|
14,670
|
|
|
17,420
|
|
||
Manufacturing and maintenance supplies
|
2,900
|
|
|
2,333
|
|
||
Total inventory
|
$
|
140,209
|
|
|
$
|
128,706
|
|
|
December 31, 2014
|
||
Term A-1 Loan Facility borrowings maturing through 2019 at a variable interest rate of 1.67% (a)
|
$
|
106,973
|
|
Term A-2 Loan Facility borrowings maturing through 2021 at a variable interest rate of 1.25% (b)
|
287,843
|
|
|
Senior Notes due 2024 at a fixed interest rate of 5.50%
|
550,000
|
|
|
Total debt
|
944,816
|
|
|
Less: Current maturities of long-term debt
|
(8,400
|
)
|
|
Long-term debt
|
$
|
936,416
|
|
(a)
|
The Term A-1 Loan includes an unamortized issue discount of approximately
$0.3 million
at
December 31, 2014
. Upon maturity, the liability will be
$107.3 million
.
|
(b)
|
The Term A-2 Loan includes an unamortized issue discount of approximately
$0.7 million
at
December 31, 2014
. Upon maturity, the liability will be
$288.6 million
.
|
2015
|
$
|
8,400
|
|
2016
|
8,400
|
|
|
2017
|
9,775
|
|
|
2018
|
11,150
|
|
|
2019
|
84,025
|
|
|
Thereafter
|
824,050
|
|
|
Total Principal Payments
|
$
|
945,800
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
Asset (liability)
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
|
|
Level 1
|
|
Level 2
|
||||||||||||
Cash and cash equivalents
|
$
|
65,977
|
|
|
$
|
65,977
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current maturities of long-term debt
|
(8,400
|
)
|
|
—
|
|
|
(8,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fixed-rate long-term debt
|
(550,000
|
)
|
|
—
|
|
|
(453,063
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Variable-rate long-term debt
|
(386,416
|
)
|
|
—
|
|
|
(387,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Unrecognized components of employee benefit plans, net of tax
|
|
|
|
|
|
||||||
Balance, January 1
|
$
|
(39,699
|
)
|
|
$
|
(64,670
|
)
|
|
$
|
(65,076
|
)
|
Amounts reclassified from accumulated other comprehensive loss (a)
|
5,804
|
|
|
5,269
|
|
|
4,531
|
|
|||
Other comprehensive loss before reclassifications
|
(34,130
|
)
|
|
19,702
|
|
|
(4,125
|
)
|
|||
Net other comprehensive (loss) income
|
(28,326
|
)
|
|
24,971
|
|
|
406
|
|
|||
Net transfer from Rayonier (b)
|
(35,419
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, December 31
|
$
|
(103,444
|
)
|
|
$
|
(39,699
|
)
|
|
$
|
(64,670
|
)
|
(a)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See
Note 15
—
Employee Benefit Plans
for additional information.
|
(b)
|
Prior to the Separation, certain of the Company’s employees participated in employee benefit plans sponsored by Rayonier. The Company did not record an asset, liability or accumulated other comprehensive loss to recognize the funded status of the Rayonier plans on the Consolidated Balance Sheet until the Separation. See
Note 9
—
Stockholders' (Deficit) Equity
for additional information.
|
|
Common Stock
|
|
Retained
Earnings (Accumulated Deficit)
|
|
Transfers (to) from Rayonier, net
|
|
Accumulated Other
Comprehensive
Loss
|
|
Total Stockholders'
(Deficit) Equity
|
|||||||||||||||||
|
Shares
|
|
Par Value
|
|
Additional Paid in Capital
|
|
||||||||||||||||||||
Balance, December 31, 2011
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
954,031
|
|
|
$
|
(415,019
|
)
|
|
$
|
(65,076
|
)
|
|
$
|
473,936
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
242,096
|
|
|
—
|
|
|
—
|
|
|
242,096
|
|
||||||
Net gain from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
406
|
|
|
406
|
|
||||||
Net transfers from Rayonier
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,266
|
|
|
—
|
|
|
8,266
|
|
||||||
Balance, December 31, 2012
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,196,127
|
|
|
$
|
(406,753
|
)
|
|
$
|
(64,670
|
)
|
|
$
|
724,704
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
219,767
|
|
|
—
|
|
|
—
|
|
|
219,767
|
|
||||||
Net gain from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,971
|
|
|
24,971
|
|
||||||
Net transfers to Rayonier
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,141
|
)
|
|
—
|
|
|
(1,141
|
)
|
||||||
Balance, December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,415,894
|
|
|
$
|
(407,894
|
)
|
|
$
|
(39,699
|
)
|
|
$
|
968,301
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
31,655
|
|
|
—
|
|
|
—
|
|
|
31,655
|
|
||||||
Net loss from pension and postretirement plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,326
|
)
|
|
(28,326
|
)
|
||||||
Net transfers to Rayonier
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,001,509
|
)
|
|
(35,419
|
)
|
|
(1,036,928
|
)
|
||||||
Reclassification to additional paid-in capital at distribution date
|
—
|
|
|
—
|
|
|
53,696
|
|
|
(1,463,099
|
)
|
|
1,409,403
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock at the separation
|
42,176,565
|
|
|
422
|
|
|
(422
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock under incentive stock plans
|
440,364
|
|
|
4
|
|
|
645
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
649
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,695
|
|
||||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
—
|
|
|
266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
266
|
|
||||||
Repurchase of common stock
|
(610
|
)
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
||||||
Adjustments to tax assets and liabilities associated with the Distribution
|
—
|
|
|
—
|
|
|
3,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,294
|
|
||||||
Dividends ($0.14 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,926
|
)
|
|
—
|
|
|
—
|
|
|
(5,926
|
)
|
||||||
Balance, December 31, 2014
|
42,616,319
|
|
|
$
|
426
|
|
|
$
|
62,082
|
|
|
$
|
(21,476
|
)
|
|
$
|
—
|
|
|
$
|
(103,444
|
)
|
|
$
|
(62,412
|
)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Allocation of costs from Rayonier (a)
|
$
|
(35,279
|
)
|
|
$
|
(67,781
|
)
|
|
$
|
(64,382
|
)
|
Cash receipts received by Rayonier on Company’s behalf
|
472,780
|
|
|
1,073,275
|
|
|
1,122,697
|
|
|||
Cash disbursements made by Rayonier on Company’s behalf
|
(484,318
|
)
|
|
(1,006,635
|
)
|
|
(1,050,049
|
)
|
|||
Net distribution to Rayonier on separation
|
(906,200
|
)
|
|
—
|
|
|
—
|
|
|||
Net liabilities from transfer of assets and liabilities with Rayonier (b)
|
(83,911
|
)
|
|
—
|
|
|
—
|
|
|||
Net transfers (to) from Rayonier
|
(1,036,928
|
)
|
|
(1,141
|
)
|
|
8,266
|
|
|||
Non-cash adjustments:
|
|
|
|
|
|
||||||
Stock-based compensation
|
(3,562
|
)
|
|
(6,230
|
)
|
|
(8,227
|
)
|
|||
Net liabilities from transfer of assets and liabilities with Rayonier (b)
|
83,911
|
|
|
—
|
|
|
—
|
|
|||
Net payments (to) from Rayonier per the Condensed Consolidated Statements of Cash Flows, prior to separation
|
$
|
(956,579
|
)
|
|
$
|
(7,371
|
)
|
|
$
|
39
|
|
(a)
|
Included in the costs allocated to the Company from Rayonier are expense allocations for certain corporate functions historically performed by Rayonier and not allocated to its operating segments. See
Note 2
—
Related Party Transactions
.
|
(b)
|
As a result of the Separation, certain assets and liabilities were transferred to the Company that were not included in the historical financial statements for periods prior to the Separation. These non-cash capital contributions included:
|
•
|
$73.9 million
of disposed operations liabilities (See
Note 13
-
Liabilities for Disposed Operations
for additional information)
|
•
|
$73.8 million
of employee benefit plan liabilities (See
Note 15
-
Employee Benefit Plans
for additional information)
|
•
|
$67.4 million
of deferred tax assets (primarily associated with the liabilities above)
|
•
|
$3.6 million
of other liabilities, net
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
31,655
|
|
|
$
|
219,767
|
|
|
$
|
242,096
|
|
|
|
|
|
|
|
||||||
Shares used for determining basic earnings per share of common stock
|
42,166,629
|
|
|
42,176,565
|
|
|
42,176,565
|
|
|||
Dilutive effect of:
|
|
|
|
|
|
||||||
Stock options
|
47,073
|
|
|
—
|
|
|
—
|
|
|||
Performance and restricted shares
|
25,980
|
|
|
—
|
|
|
—
|
|
|||
Shares used for determining diluted earnings per share of common stock
|
42,239,682
|
|
|
42,176,565
|
|
|
42,176,565
|
|
|||
Basic earnings per share (not in thousands)
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
$
|
5.74
|
|
Diluted earnings per share (not in thousands)
|
$
|
0.75
|
|
|
$
|
5.21
|
|
|
$
|
5.74
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Stock options
|
229,001
|
|
|
—
|
|
|
—
|
|
Restricted stock
|
6,282
|
|
|
—
|
|
|
—
|
|
Total
|
235,283
|
|
|
—
|
|
|
—
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Environmental reserve adjustment (a)
|
$
|
70,129
|
|
|
$
|
—
|
|
|
$
|
—
|
|
One-time separation and legal costs
|
25,680
|
|
|
6,033
|
|
|
—
|
|
|||
Financial assurance costs for disposed operations resulting from separation from Rayonier (b)
|
18,419
|
|
|
—
|
|
|
—
|
|
|||
Impairment adjustment (c)
|
7,184
|
|
|
—
|
|
|
—
|
|
|||
Loss on sale or disposal of property, plant and equipment
|
2,123
|
|
|
2,390
|
|
|
2,319
|
|
|||
Insurance settlement
|
(2,881
|
)
|
|
—
|
|
|
—
|
|
|||
Miscellaneous expense (income)
|
169
|
|
|
(259
|
)
|
|
(316
|
)
|
|||
Total
|
$
|
120,823
|
|
|
$
|
8,164
|
|
|
$
|
2,003
|
|
(a)
|
The increase to liabilities is primarily due to a fourth quarter reserves adjustment of
$68.5 million
for the assessment, remediation and long-term monitoring and maintenance of the Company’s disposed operations. It reflects an increase to the Company’s estimates of required spending over the next
20 years
for these sites. See
Note 13
—
Liabilities for Disposed Operations
for additional information.
|
(b)
|
The Company is subject to certain legal requirements relating to the provision of annual financial assurance regarding environmental remediation and post closure care at certain disposed sites. To comply with these requirements, the Company purchased surety bonds from an insurer, with the Company’s repayment obligations (if the bonds are drawn upon) secured by the issuance of a letter of credit by the Company’s revolving credit facility lender. As a result of the Separation and the Company’s obligations to procure financial assurance annually for the foreseeable future, the Company recorded a corresponding increase to liabilities for disposed operations. See
Note 13
—
Liabilities for Disposed Operations
and
Note 17
—
Guarantees
for additional information.
|
(c)
|
During the fourth quarter of 2014, the Company determined certain pieces of property associated with its disposed operations should be assessed for impairment based on recent changes to remediation plans at four of its disposed operations sites. As a result, the Company concluded the land values were impaired and reduced the carrying value of those properties by
$7.2 million
. The current fair market value of the impaired assets was estimated using third party fair market values/appraisals and land comparables. See
Note 13
—
Liabilities for Disposed Operations
for additional information.
|
|
2014
|
|
2013
|
|
2012
|
||||||
Current
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
42,183
|
|
|
$
|
95,997
|
|
|
$
|
96,820
|
|
State and other
|
305
|
|
|
4,312
|
|
|
4,400
|
|
|||
|
42,488
|
|
|
100,309
|
|
|
101,220
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(34,301
|
)
|
|
(31,051
|
)
|
|
(1,747
|
)
|
|||
State and other
|
(641
|
)
|
|
(110
|
)
|
|
664
|
|
|||
|
(34,942
|
)
|
|
(31,161
|
)
|
|
(1,083
|
)
|
|||
Changes in valuation allowance
|
1,270
|
|
|
—
|
|
|
256
|
|
|||
Total
|
$
|
8,816
|
|
|
$
|
69,148
|
|
|
$
|
100,393
|
|
|
2014
|
|
2013
|
||||
Gross deferred tax assets:
|
|
|
|
||||
Pension, postretirement and other employee benefits
|
$
|
67,104
|
|
|
$
|
5,364
|
|
Tax credit carryforwards
|
15,740
|
|
|
45,429
|
|
||
Environmental reserves
|
56,508
|
|
|
—
|
|
||
Capitalized costs
|
14,042
|
|
|
12,773
|
|
||
State net operating losses
|
4,892
|
|
|
—
|
|
||
Total gross deferred tax assets
|
158,286
|
|
|
63,566
|
|
||
Less: Valuation allowance
|
(20,517
|
)
|
|
(24,588
|
)
|
||
Total deferred tax assets after valuation allowance
|
137,769
|
|
|
38,978
|
|
||
Gross deferred tax liabilities:
|
|
|
|
||||
Accelerated depreciation
|
(49,917
|
)
|
|
(63,578
|
)
|
||
Other
|
(1,030
|
)
|
|
(2,092
|
)
|
||
Total gross deferred tax liabilities
|
(50,947
|
)
|
|
(65,670
|
)
|
||
Net deferred tax asset (liability)
|
$
|
86,822
|
|
|
$
|
(26,692
|
)
|
Current portion of deferred tax asset
|
$
|
8,275
|
|
|
$
|
22,532
|
|
Noncurrent portion of deferred tax asset
|
78,547
|
|
|
—
|
|
||
Noncurrent portion of deferred tax liability
|
—
|
|
|
(49,224
|
)
|
||
Net deferred tax asset (liability)
|
$
|
86,822
|
|
|
$
|
(26,692
|
)
|
Item
|
Gross Amount
|
|
Expiration
|
||
State tax credits
|
$
|
24,215
|
|
|
2015 - 2023
|
State net operating losses
|
138,693
|
|
|
2015 - 2034
|
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at January 1,
|
$
|
4,767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Decreases related to prior year tax positions
|
(4,767
|
)
|
|
—
|
|
|
—
|
|
|||
Increases related to prior year tax positions
|
—
|
|
|
4,767
|
|
|
—
|
|
|||
Balance at December 31,
|
$
|
—
|
|
|
$
|
4,767
|
|
|
$
|
—
|
|
Taxing Jurisdiction
|
Open Tax Years
|
U.S. Internal Revenue Service
|
2008 - 2009, 2011 - 2014
|
State of Florida
|
2008 - 2009, 2011 - 2014
|
|
December 31,
|
||
|
2014
|
||
Balance, beginning of period
|
$
|
—
|
|
Net transfer of liabilities from Rayonier
|
73,840
|
|
|
Expenditures charged to liabilities
|
(5,659
|
)
|
|
Increase to liabilities
|
88,548
|
|
|
Balance, end of period
|
156,729
|
|
|
Less: Current portion
|
(7,241
|
)
|
|
Non-current portion
|
$
|
149,488
|
|
|
Liabilities Assumed at Separation
|
|
Expenditures
|
|
Increase
to
Liabilities
|
|
December 31,
2014
Liability
|
||||||||
Augusta, Georgia
|
$
|
10,838
|
|
|
$
|
(691
|
)
|
|
$
|
12,060
|
|
|
$
|
22,207
|
|
Spartanburg, South Carolina
|
10,902
|
|
|
(710
|
)
|
|
8,792
|
|
|
18,984
|
|
||||
East Point, Georgia
|
9,404
|
|
|
(612
|
)
|
|
6,805
|
|
|
15,597
|
|
||||
Baldwin, Florida
|
10,172
|
|
|
(640
|
)
|
|
14,996
|
|
|
24,528
|
|
||||
Other SWP sites
|
18,067
|
|
|
(1,578
|
)
|
|
5,311
|
|
|
21,800
|
|
||||
Total SWP
|
59,383
|
|
|
(4,231
|
)
|
|
47,964
|
|
|
103,116
|
|
||||
Port Angeles, Washington
|
8,100
|
|
|
(1,109
|
)
|
|
32,922
|
|
|
39,913
|
|
||||
All other sites
|
6,357
|
|
|
(319
|
)
|
|
7,662
|
|
|
13,700
|
|
||||
TOTAL
|
$
|
73,840
|
|
|
$
|
(5,659
|
)
|
|
$
|
88,548
|
|
|
$
|
156,729
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Selling and general expenses
|
$
|
7,763
|
|
|
$
|
5,006
|
|
|
$
|
7,561
|
|
Cost of sales
|
975
|
|
|
1,224
|
|
|
666
|
|
|||
Total stock-based compensation expense
|
$
|
8,738
|
|
|
$
|
6,230
|
|
|
$
|
8,227
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Expected volatility
|
40.1
|
%
|
|
39.0
|
%
|
|
39.3
|
%
|
|||
Dividend yield
|
4.2
|
%
|
|
3.4
|
%
|
|
3.6
|
%
|
|||
Risk-free rate
|
2.2
|
%
|
|
1.0
|
%
|
|
1.3
|
%
|
|||
Expected life (in years)
|
6.3
|
|
|
6.3
|
|
|
6.4
|
|
|||
Fair value per share of options granted
|
$
|
9.31
|
|
|
$
|
14.00
|
|
|
$
|
11.85
|
|
Fair value of options granted (in millions)
|
$
|
0.9
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
Stock Options
|
||||||||||||
|
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value
|
||||||
Outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards converted in connection with Separation
|
500,951
|
|
|
31.16
|
|
|
—
|
|
|
—
|
|
||
Granted
|
5,130
|
|
|
39.07
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(30,156
|
)
|
|
21.54
|
|
|
—
|
|
|
—
|
|
||
Forfeited or canceled
|
(9,910
|
)
|
|
37.73
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2014
|
466,015
|
|
|
$
|
31.73
|
|
|
6.0
|
|
|
$
|
312,852
|
|
Options vested and expected to vest
|
466,015
|
|
|
$
|
31.73
|
|
|
6.0
|
|
|
$
|
312,852
|
|
Options exercisable at December 31, 2014
|
316,513
|
|
|
$
|
28.25
|
|
|
4.9
|
|
|
$
|
312,852
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
(Amounts in millions)
|
|
|
|
|
|
||||||
Intrinsic value of options exercised (a)
|
$
|
0.3
|
|
|
$
|
0.8
|
|
|
$
|
3.6
|
|
Fair value of options vested
|
$
|
0.1
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
(a)
|
Intrinsic value of stock options exercised is based on the market price of the Company’s stock at
December 31, 2014
and of Rayonier's stock at
December 31, 2013
and
2012
.
|
|
2014
|
|
2013
|
|
2012
|
||||||
Restricted shares granted
|
172,894
|
|
|
10,200
|
|
|
600
|
|
|||
Weighted average price of restricted shares granted
|
$
|
41.51
|
|
|
$
|
56.00
|
|
|
$
|
44.34
|
|
(Amounts in millions)
|
|
|
|
|
|
||||||
Intrinsic value of restricted stock outstanding (a)
|
$
|
3.2
|
|
|
$
|
0.7
|
|
|
$
|
0.3
|
|
Fair value of restricted stock vested
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Intrinsic value of restricted stock outstanding is based on the market price of the Company’s stock at
December 31, 2014
, and of Rayonier’s stock at
December 31, 2013
and
2012
.
|
|
Restricted Stock
|
|||||
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
Awards converted in connection with Separation
|
145,201
|
|
|
42.43
|
|
|
Granted
|
27,693
|
|
|
36.71
|
|
|
Vested
|
(2,708
|
)
|
|
37.06
|
|
|
Forfeited
|
(25,101
|
)
|
|
41.17
|
|
|
Outstanding at December 31, 2014
|
145,085
|
|
|
$
|
41.66
|
|
•
|
Performance-based stock unit awards granted in 2012 (with a 2012-2014 performance period) remain subject to the same performance criteria as applied immediately prior to the Separation, except that total shareholder return at the end of the performance period will be based on the combined stock prices of Rayonier and the Company and any payment with respect to a Rayonier Advanced Materials performance share award will be made in shares of the Company’s common stock. The number of shares, if any, that are ultimately awarded is contingent upon the Company’s total shareholder return versus selected peer group companies. The conversion ratio for the 2012 performance share awards is between
0
and
200 percent
of target. The payout is based on a market condition and as such, the awards are valued using a Monte Carlo simulation model. The model generates the fair value of the award at the grant date, which is then amortized over the vesting period.
|
•
|
Performance-based stock unit awards granted in 2013 (with a 2013-2015 performance period) were canceled as of the distribution date and replaced with restricted stock awards of the Company that will vest
24 months
after the distribution date, generally subject to the holder’s continued employment.
|
•
|
Performance-based stock unit awards granted in 2014 (with a 2014-2016 performance period) were canceled and replaced with performance-based restricted stock of the Company and will be subject to the achievement of
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
Performance-Based Stock Units
|
|
Performance-Based Restricted Stock
|
|
Performance-Based Stock Units
|
|
Performance-Based Stock Units
|
||||||||
Common shares of stock reserved for performance shares
|
95,952
|
|
|
286,737
|
|
|
52,900
|
|
|
57,000
|
|
||||
Weighted average fair value of performance share units granted
|
$
|
42.27
|
|
|
$
|
40.41
|
|
|
$
|
58.99
|
|
|
$
|
56.36
|
|
(Amounts in millions)
|
|
|
|
|
|
|
|
||||||||
Intrinsic value of outstanding performance
share units (a)
|
$
|
1.1
|
|
|
$
|
3.2
|
|
|
$
|
3.6
|
|
|
$
|
4.8
|
|
Fair value of performance shares vested
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
2.5
|
|
Cash used to pay the minimum withholding tax requirements in lieu of receiving common shares
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
0.4
|
|
(a)
|
Intrinsic value of outstanding performance share units is based on the market price of the Company’s stock at
December 31, 2014
, and of Rayonier’s stock at
December 31, 2013
and
2012
.
|
|
Performance-Based Stock Units
|
|
Performance-Based Restricted Stock
|
||||||||||
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
||||||
Outstanding at January 1, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Awards converted in connection with Separation
|
49,811
|
|
|
42.27
|
|
|
146,732
|
|
|
39.67
|
|
||
Granted
|
—
|
|
|
—
|
|
|
17,860
|
|
|
46.51
|
|
||
Forfeited
|
(1,834
|
)
|
|
42.27
|
|
|
(21,223
|
)
|
|
39.67
|
|
||
Outstanding at December 31 2014
|
47,977
|
|
|
$
|
42.27
|
|
|
143,369
|
|
|
$
|
40.52
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Expected volatility
|
16.9
|
%
|
|
23.2
|
%
|
|
36.9
|
%
|
Risk-free rate
|
0.7
|
%
|
|
0.4
|
%
|
|
0.4
|
%
|
|
Pension
|
|
Postretirement
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Change in Projected Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligation at beginning of year
|
$
|
173,077
|
|
|
$
|
189,869
|
|
|
$
|
17,178
|
|
|
$
|
22,001
|
|
Service cost
|
4,099
|
|
|
2,790
|
|
|
798
|
|
|
941
|
|
||||
Interest cost
|
11,379
|
|
|
6,900
|
|
|
916
|
|
|
741
|
|
||||
Actuarial loss (gain)
|
45,171
|
|
|
(17,708
|
)
|
|
4,417
|
|
|
(2,244
|
)
|
||||
Plan amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,372
|
)
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
872
|
|
||||
Benefits paid
|
(13,468
|
)
|
|
(8,774
|
)
|
|
(1,309
|
)
|
|
(1,761
|
)
|
||||
Assumption of balance from parent at spin
|
189,098
|
|
|
—
|
|
|
4,568
|
|
|
—
|
|
||||
Projected benefit obligation at end of year
|
$
|
409,356
|
|
|
$
|
173,077
|
|
|
$
|
26,568
|
|
|
$
|
17,178
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
170,218
|
|
|
$
|
158,773
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
13,359
|
|
|
20,882
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
1,056
|
|
|
—
|
|
|
1,309
|
|
|
889
|
|
||||
Employee contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
872
|
|
||||
Benefits paid
|
(13,468
|
)
|
|
(8,774
|
)
|
|
(1,309
|
)
|
|
(1,761
|
)
|
||||
Other expense
|
(1,175
|
)
|
|
(663
|
)
|
|
—
|
|
|
—
|
|
||||
Assumption of balance from parent at spin
|
121,097
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
291,087
|
|
|
$
|
170,218
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status at End of Year:
|
|
|
|
|
|
|
|
||||||||
Net accrued benefit cost
|
$
|
(118,269
|
)
|
|
$
|
(2,859
|
)
|
|
$
|
(26,568
|
)
|
|
$
|
(17,178
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Amounts recognized in the Consolidated Balance Sheets consist of:
|
|
|
|
|
|
|
|
||||||||
Noncurrent assets
|
$
|
—
|
|
|
$
|
2,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(2,036
|
)
|
|
—
|
|
|
(1,463
|
)
|
|
(954
|
)
|
||||
Noncurrent liabilities
|
(116,233
|
)
|
|
(5,570
|
)
|
|
(25,105
|
)
|
|
(16,224
|
)
|
||||
Net amount recognized
|
$
|
(118,269
|
)
|
|
$
|
(2,859
|
)
|
|
$
|
(26,568
|
)
|
|
$
|
(17,178
|
)
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Net (losses) gains
|
$
|
(49,577
|
)
|
|
$
|
25,411
|
|
|
$
|
(5,234
|
)
|
|
$
|
(3,807
|
)
|
|
$
|
2,244
|
|
|
$
|
(1,262
|
)
|
Negative plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,372
|
|
|
—
|
|
(a)
|
Includes a reclassification to adjust for the effect of a negative plan amendment.
|
|
Pension
|
|
Postretirement
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Prior service cost
|
$
|
(4,527
|
)
|
|
$
|
(5,707
|
)
|
|
$
|
(32
|
)
|
|
$
|
(262
|
)
|
Net losses
|
(150,003
|
)
|
|
(52,751
|
)
|
|
(11,298
|
)
|
|
(7,585
|
)
|
||||
Negative plan amendment
|
—
|
|
|
—
|
|
|
3,293
|
|
|
3,787
|
|
||||
Deferred income tax benefit
|
56,206
|
|
|
21,337
|
|
|
2,917
|
|
|
1,482
|
|
||||
AOCI
|
$
|
(98,324
|
)
|
|
$
|
(37,121
|
)
|
|
$
|
(5,120
|
)
|
|
$
|
(2,578
|
)
|
|
2014
|
|
2013
|
||||
Projected benefit obligation
|
$
|
435,219
|
|
|
$
|
129,076
|
|
Accumulated benefit obligation
|
394,263
|
|
|
129,076
|
|
||
Fair value of plan assets
|
291,087
|
|
|
123,506
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
4,099
|
|
|
$
|
2,790
|
|
|
$
|
2,651
|
|
|
$
|
798
|
|
|
$
|
941
|
|
|
$
|
823
|
|
Interest cost
|
11,379
|
|
|
6,900
|
|
|
7,260
|
|
|
916
|
|
|
741
|
|
|
757
|
|
||||||
Expected return on plan assets
|
(18,333
|
)
|
|
(12,515
|
)
|
|
(12,660
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (a)
|
1,161
|
|
|
1,292
|
|
|
1,292
|
|
|
17
|
|
|
66
|
|
|
80
|
|
||||||
Amortization of losses
|
7,620
|
|
|
6,494
|
|
|
5,326
|
|
|
597
|
|
|
549
|
|
|
491
|
|
||||||
Amortization of negative plan amendment (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(282
|
)
|
|
(105
|
)
|
|
(55
|
)
|
||||||
Net periodic benefit cost (b)
|
$
|
5,926
|
|
|
$
|
4,961
|
|
|
$
|
3,869
|
|
|
$
|
2,046
|
|
|
$
|
2,192
|
|
|
$
|
2,096
|
|
(a)
|
Includes a reclassification in
2012
to adjust for the effect of a negative plan amendment.
|
(b)
|
A portion of the net periodic benefit cost is recorded in cost of goods sold in the Consolidated Statements of Income and Comprehensive Income.
|
|
Pension
|
|
Postretirement
|
||||
Amortization of loss
|
$
|
14,303
|
|
|
$
|
714
|
|
Amortization of prior service cost
|
750
|
|
|
17
|
|
||
Amortization of negative plan amendment
|
—
|
|
|
(282
|
)
|
||
Total amortization of AOCI loss
|
$
|
15,053
|
|
|
$
|
449
|
|
|
Pension
|
|
Postretirement
|
||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
Assumptions used to determine benefit obligations at December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.71
|
%
|
|
4.60
|
%
|
|
3.70
|
%
|
|
3.65
|
%
|
|
4.60
|
%
|
|
3.60
|
%
|
Rate of compensation increase
|
4.50
|
%
|
|
4.60
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Assumptions used to determine net periodic benefit cost for years ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.04
|
%
|
|
3.70
|
%
|
|
4.20
|
%
|
|
4.00
|
%
|
|
3.60
|
%
|
|
4.10
|
%
|
Expected long-term return on plan assets
|
8.50
|
%
|
|
8.50
|
%
|
|
8.50
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Rate of compensation increase
|
4.50
|
%
|
|
4.60
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|
Postretirement
|
||||
|
2014
|
|
2013
|
||
Health care cost trend rate assumed for next year
|
7.00
|
%
|
|
7.00
|
%
|
Rate to which the cost trend is assumed to decline (ultimate trend rate)
|
5.00
|
%
|
|
5.00
|
%
|
Year that ultimate trend rate is reached
|
2018
|
|
|
2017
|
|
|
1 Percent
|
||||||
Effect on:
|
Increase
|
|
Decrease
|
||||
Total of service and interest cost components
|
$
|
189
|
|
|
$
|
(156
|
)
|
Accumulated postretirement benefit obligation
|
1,804
|
|
|
(1,535
|
)
|
|
Percentage of Plan Assets
|
|
Target Allocation Range
|
||||
Asset Category
|
2014
|
|
2013
|
|
|||
Domestic equity securities
|
41
|
%
|
|
42
|
%
|
|
35-45%
|
International equity securities
|
23
|
%
|
|
26
|
%
|
|
20-30%
|
Domestic fixed income securities
|
28
|
%
|
|
25
|
%
|
|
25-29%
|
International fixed income securities
|
5
|
%
|
|
4
|
%
|
|
3-7%
|
Real estate fund
|
3
|
%
|
|
3
|
%
|
|
2-4%
|
Total
|
100
|
%
|
|
100
|
%
|
|
|
|
Fair Value at December 31, 2014
|
|
Fair Value at December 31, 2013
|
||||||||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Domestic equity securities
|
$
|
23,476
|
|
|
$
|
94,163
|
|
|
$
|
117,639
|
|
|
$
|
14,581
|
|
|
$
|
54,984
|
|
|
$
|
69,565
|
|
International equity securities
|
33,496
|
|
|
33,425
|
|
|
66,921
|
|
|
27,722
|
|
|
15,603
|
|
|
43,325
|
|
||||||
Domestic fixed income securities
|
—
|
|
|
79,193
|
|
|
79,193
|
|
|
—
|
|
|
42,421
|
|
|
42,421
|
|
||||||
International fixed income securities
|
12,767
|
|
|
—
|
|
|
12,767
|
|
|
7,533
|
|
|
—
|
|
|
7,533
|
|
||||||
Real estate fund
|
9,387
|
|
|
—
|
|
|
9,387
|
|
|
4,817
|
|
|
—
|
|
|
4,817
|
|
||||||
Short-term investments
|
1,038
|
|
|
4,142
|
|
|
5,180
|
|
|
437
|
|
|
2,120
|
|
|
2,557
|
|
||||||
Total
|
$
|
80,164
|
|
|
$
|
210,923
|
|
|
$
|
291,087
|
|
|
$
|
55,090
|
|
|
$
|
115,128
|
|
|
$
|
170,218
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||
2015
|
$
|
18,980
|
|
|
$
|
1,463
|
|
2016
|
19,792
|
|
|
1,507
|
|
||
2017
|
20,586
|
|
|
1,525
|
|
||
2018
|
21,307
|
|
|
1,716
|
|
||
2019
|
21,995
|
|
|
1,597
|
|
||
2020 - 2024
|
117,559
|
|
|
6,879
|
|
Financial Commitments
|
Maximum Potential Payment
|
||
Standby letters of credit (a)
|
$
|
27,889
|
|
Surety bonds (b)
|
55,652
|
|
|
Total financial commitments
|
$
|
83,541
|
|
(a)
|
The letters of credit primarily provide credit support for surety bonds issued to comply with financial assurance legal requirements relating to environmental remediation of disposed sites. The letters of credit will expire during
2015
and will be renewed as required.
|
(b)
|
Rayonier Advanced Materials purchases surety bonds primarily to comply with financial assurance legal requirements relating to environmental remediation and post closure care and to provide collateral for the Company’s workers’ compensation program. These surety bonds expire at various dates during
2015
and
2019
. They are expected to be renewed annually as required. See
Note 11
—
Other Operating Expense, Net
.
|
|
Operating Leases (a)
|
|
Purchase Obligations (b)
|
||||
2015
|
$
|
1,657
|
|
|
$
|
14,210
|
|
2016
|
1,182
|
|
|
14,004
|
|
||
2017
|
905
|
|
|
14,943
|
|
||
2018
|
497
|
|
|
4,216
|
|
||
2019
|
381
|
|
|
2,053
|
|
||
Thereafter
|
826
|
|
|
13,169
|
|
||
|
$
|
5,448
|
|
|
$
|
62,595
|
|
(a)
|
Operating leases include leases on buildings, machinery and equipment under various operating leases.
|
(b)
|
Purchase obligations primarily consist of payments expected to be made on a natural gas transportation contract and purchases of wood chips.
|
|
Quarters
|
|
Total Year
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|||||||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
243,499
|
|
|
$
|
212,531
|
|
|
$
|
253,695
|
|
|
$
|
247,964
|
|
|
$
|
957,689
|
|
Gross Margin
|
54,780
|
|
|
52,314
|
|
|
55,689
|
|
|
60,964
|
|
|
223,747
|
|
|||||
Operating Income
|
43,364
|
|
|
6,210
|
|
|
41,678
|
|
|
(28,297
|
)
|
|
62,955
|
|
|||||
Net Income
|
30,947
|
|
|
4,561
|
|
|
19,408
|
|
|
(23,261
|
)
|
|
31,655
|
|
|||||
Basic earnings per share (a)
|
0.73
|
|
|
0.11
|
|
|
0.46
|
|
|
(0.55
|
)
|
|
0.75
|
|
|||||
Diluted earnings per share (a)
|
0.73
|
|
|
0.11
|
|
|
0.46
|
|
|
(0.55
|
)
|
|
0.75
|
|
|||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales
|
$
|
285,165
|
|
|
$
|
254,189
|
|
|
$
|
225,523
|
|
|
$
|
281,726
|
|
|
$
|
1,046,603
|
|
Gross Margin
|
97,308
|
|
|
84,351
|
|
|
67,376
|
|
|
83,530
|
|
|
332,565
|
|
|||||
Operating Income
|
87,357
|
|
|
71,646
|
|
|
59,376
|
|
|
70,244
|
|
|
288,623
|
|
|||||
Net Income
|
80,003
|
|
|
48,998
|
|
|
39,966
|
|
|
50,800
|
|
|
219,767
|
|
|||||
Basic earnings per share (a)
|
1.90
|
|
|
1.16
|
|
|
0.95
|
|
|
1.20
|
|
|
5.21
|
|
|||||
Diluted earnings per share (a)
|
1.90
|
|
|
1.16
|
|
|
0.95
|
|
|
1.20
|
|
|
5.21
|
|
(a)
|
On
June 27, 2014
,
42,176,565
shares of the Company’s common stock were distributed to Rayonier shareholders in conjunction with the Separation. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, we have assumed this amount to be outstanding as of the beginning of each period prior to the Distribution presented in the calculation of weighted-average shares. Prior to the Separation, there were no dilutive shares since the Company had no outstanding equity awards.
|
Description
|
Balance
at
Beginning
of Year
|
|
Charged
to Cost
and
Expenses
|
|
Deductions
|
|
Balance
at End
of Year
|
||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2014
|
$
|
140
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
151
|
|
Year ended December 31, 2013
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||
Year ended December 31, 2012
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||
Deferred tax asset valuation allowance:
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2014
|
$
|
24,588
|
|
|
$
|
—
|
|
|
$
|
(4,071
|
)
|
|
$
|
20,517
|
|
Year ended December 31, 2013
|
1,201
|
|
|
23,387
|
|
(a)
|
—
|
|
|
24,588
|
|
||||
Year ended December 31, 2012
|
945
|
|
|
256
|
|
|
—
|
|
|
1,201
|
|
(a)
|
The increase in the valuation allowance during 2013 was primarily related to Georgia investment tax credits earned on the CSE project.
|
|
|
RAYONIER ADVANCED MATERIALS INC.
|
|
|
(Registrant)
|
|
|
|
|
By:
|
/s/ F
RANK
A. R
UPERTO
|
|
|
Frank A. Ruperto
Chief Financial Officer and
Senior Vice President, Finance and Strategy
(Duly Authorized Officer and Principal Financial Officer)
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ P
AUL
G. B
OYNTON
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
February 27, 2015
|
|
Paul G. Boynton
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ FRANK A. RUPERTO
|
|
Chief Financial Officer and Senior Vice President, Finance and Strategy
|
|
February 27, 2015
|
|
Frank A. Ruperto
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
C. David Brown, II
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
DeLyle W. Bloomquist
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Mark E. Gaumond
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
James F. Kirsch
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Lisa M. Palumbo
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
James H. Miller
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Thomas I. Morgan
|
|
|
|
|
|
*
|
|
Director
|
|
|
|
Ronald Townsend
|
|
|
|
|
|
|
|
|
|
|
*By:
|
/s/ F
RANK
A. R
UPERTO
|
|
|
|
|
|
Frank A. Ruperto
(Attorney-In-Fact)
|
|
|
|
February 27, 2015
|
Exhibit No.
|
Description
|
Location
|
10.9
|
Description of Rayonier Advanced Materials Inc. 2014 Performance Share Award Program*
|
Incorporated herein by reference to Exhibit 10.21 to the Registrant’s Form 10-Q filed on August 5, 2014
|
10.10
|
Agreement between Rayonier Advanced Materials Inc. and Paul G. Boynton Regarding Special Stock Grant, dated May 28, 2014*
|
Incorporated herein by reference to Exhibit 10.6 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014
|
10.11
|
Form of Rayonier Advanced Materials Inc. Incentive Stock Plan Restricted Stock Award Agreement*
|
Filed herewith
|
10.12
|
Form of Rayonier Advanced Materials Inc. Incentive Stock Plan Supplemental Terms Applicable to the 2015 Equity Award Grant*
|
Filed herewith
|
10.13
|
Rayonier Advanced Materials Inc. Non-Equity Incentive Plan*
|
Incorporated herein by reference to Exhibit 10.14 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014
|
10.14
|
Rayonier Advanced Materials Inc. Executive Severance Pay Plan*
|
Incorporated herein by reference to Exhibit 10.22 to the Registrant’s Form 10-Q/A filed on September 4, 2014
|
10.15
|
Trust Agreement for Rayonier Advanced Materials Inc. Legal Resources Trust*
|
Incorporated herein by reference to Exhibit 10.23 to the Registrant’s Form 10-Q/A filed on September 4, 2014
|
10.16
|
Rayonier Advanced Materials Inc. Excess Benefit Plan*
|
Incorporated herein by reference to Exhibit 10.24 to the Registrant’s Form 10-Q/A filed on September 4, 2014
|
10.17
|
Rayonier Advanced Materials Inc. Excess Savings and Deferred Compensation Plan*
|
Incorporated herein by reference to Exhibit 10.25 to the Registrant’s Form 10-Q/A filed on September 4, 2014
|
10.18
|
Form of Rayonier Advanced Materials Inc. Excess Savings and Deferred Compensation Plan Agreements*
|
Filed herewith
|
10.19
|
Retirement Plan for Salaried Employees of Rayonier Advanced Materials Inc.*
|
Incorporated herein by reference to Exhibit 10.26 to the Registrant’s Form 10-Q/A filed on September 4, 2014
|
10.20
|
Rayonier Advanced Materials Inc. Investment and Savings Plan for Salaried Employees*
|
Incorporated herein by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form S-8 filed on June 27, 2014
|
10.21
|
Form of Indemnification Agreement between Rayonier Advanced Materials Inc. and individual directors or officers*
|
Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014
|
10.22
|
Form of Rayonier Advanced Materials Inc. Outside Directors Compensation Program/Cash Deferral Option Agreement*
|
Filed herewith
|
10.23
|
Chemical Cellulose Agreement, effective as of January 1, 2012, by and between Rayonier Performance Fibers, LLC and Eastman Chemical Company
|
Incorporated herein by reference to Exhibit 10.7 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014
|
10.24
|
Amendment to Chemical Cellulose Agreement, effective as of January 1, 2012, by and between Rayonier Performance Fibers, LLC and Eastman Chemical Company
|
Incorporated herein by reference to Exhibit 10.8 to the Registrant’s Amendment No. 4 to the Registration Statement on Form 10 filed on May 29, 2014
|
|
|
|
KEY EMPLOYEE
___________________________________
Name: «Name»
Address: «Address»
«City», «State» «Zip»
|
RAYONIER ADVANCED MATERIALS INC.
By
Jay Posze
SVP, Human Resources
|
i.
|
in connection with the performance of your duties on behalf of the Company, committing an illegal act, including but not limited to embezzlement or misappropriation of Company funds, or your willful failure to comply with the material policies and procedures of the Company as determined by the Committee;
|
ii.
|
except for actions taken on behalf of the Company, directly or indirectly engaging in or assisting others in soliciting, persuading, hiring, recruiting, or attempting to persuade, solicit, hire or recruit, any person employed by or under contract with, the Company (or who was employed by or under contract with the Company in the six-month period prior to the date of any such prohibited contact); or
|
iii.
|
engaging in any business, services or activities whatsoever, whether as an employee, director, consultant, advisor, agent, partner or joint venturer, sole proprietor, investor or stockholder, for or on behalf of, a business or enterprise engaged in researching, developing, manufacturing, distributing, marketing and/or selling dissolving wood pulp, including specialty fibers used in chemical applications, anywhere in the world(the foregoing being referred to as the "
Non-Competition Restriction
"). The Non-Competition Restriction shall not apply, in each case, (1) to the extent of your status as a mere
|
(i)
|
with respect to Award Shares received by you,in the case of shares of stock, an amount equal to (a) the number of shares before taxes multiplied by the greater of (1) the closing price per share on the primary stock exchange on which the shares traded on the date you received them, or (2) if the shares have been sold, the selling price per share (and only in the case of the “buy and hold” exercise of an option awarded under the Plan,
less
the option strike price), plus (b) the Associated Return, and
|
(ii)
|
in the case of cash received by you as a result of the “cashless” exercise of options awarded under the Plan, an amount equal to the cash actually received by you before taxes in respect of the options exercised;
|
2015 Excess Base Salary and Bonus Deferral Agreement
|
(Due Date: December 15, 2014)
|
NAME (Last, First, Middle Initial)
|
|
«Last_Name», «FirstName», «Initial»
|
|
r
Lump Sum
|
r
Annual Installments for _________ years (not to exceed 15)
|
r
Lump Sum
|
r
Annual Installments for _________ years (not to exceed 15)
|
%
|
Name
|
Address
|
Social Security No.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rayonier Advanced Materials Outside Directors Compensation Program
2015 Cash Deferral Option Agreement
|
________%
or
$ _______
(choose one
)
|
and/or
|
________%
or
$ ______
(choose one
)
|
SECTION A.
|
PRIMARY BENEFICIARY(IES)
Check box(es) and complete percentage. If you have checked Box 3, complete the additional information requested
.
|
||
1. ____%
|
To my
Spouse at time of death
or, if none, the Alternate Beneficiary(ies) designated in Section B.
|
||
2. ____%
|
To my
Children
who survive me, in equal shares, or all to the one who survives me provided that, if any such child predeceases me leaving any descendants who survive me, such descendants shall receive, per stirpes, the share such deceased child would have received if surviving
.
|
||
3. ____%
|
To my
other Primary Beneficiary(ies)
who survive me
* in the indicated percentages
:
|
||
|
Name
|
Social Security No.
|
Percentage
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
|
|
Total __
100__ %
|
4. ____%
TOTAL _
100_
%
|
To my
Estate
|
||
SECTION B.
|
ALTERNATE BENEFICIARY(IES) Check one box.
If no box is checked, the Alternate Beneficiary is your Estate.
Any balance in my Account not distributed to the above shall be distributed as follows
:
|
||
|
To my
Children
who survive me, in equal shares, as provided in No. 2 above
|
||
|
To the following
Alternate Beneficiary(ies)
who survive me
* in the indicated percentages:
|
||
|
Name
|
Social Security No.
|
Percentage
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
________________________________
|
____________________
|
____________ %
|
|
|
|
Total __
100__ %
|
______________________________________________
|
_______________________________
Date
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
EARNINGS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes
|
$
|
40,471
|
|
|
$
|
288,915
|
|
|
$
|
342,489
|
|
|
$
|
283,052
|
|
|
$
|
200,552
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
22,697
|
|
|
6,302
|
|
|
7,470
|
|
|
1,119
|
|
|
272
|
|
|||||
Amortization of capitalized interest
|
1,037
|
|
|
1,208
|
|
|
190
|
|
|
60
|
|
|
47
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
(117
|
)
|
|
(6,144
|
)
|
|
(7,178
|
)
|
|
(903
|
)
|
|
(82
|
)
|
|||||
Earnings as defined
|
$
|
64,088
|
|
|
$
|
290,281
|
|
|
$
|
342,971
|
|
|
$
|
283,328
|
|
|
$
|
200,789
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
FIXED CHARGES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense and amortization of debt expense
|
$
|
22,378
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capitalized interest
|
117
|
|
|
6,144
|
|
|
7,178
|
|
|
903
|
|
|
82
|
|
|||||
Interest factor attributable to rental expense
|
202
|
|
|
158
|
|
|
292
|
|
|
216
|
|
|
190
|
|
|||||
Total Fixed Charges
|
$
|
22,697
|
|
|
$
|
6,302
|
|
|
$
|
7,470
|
|
|
$
|
1,119
|
|
|
$
|
272
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
2.82
|
|
|
46.06
|
|
|
45.91
|
|
|
253.20
|
|
|
738.19
|
|
Name of Subsidiary
|
State of Incorporation
|
Rayonier A.M. Products Inc.
|
Delaware
|
Rayonier Performance Fibers, LLC
|
Delaware
|
Dated:
|
January 28, 2015
|
|
/s/ C. DAVID BROWN, II
|
|
|
|
C. David Brown, II
|
Dated:
|
January 22, 2015
|
|
/s/ DE LYLE W. BLOOMQUIST
|
|
|
|
De Lyle W. Bloomquist
|
Dated:
|
January 23, 2015
|
|
/s/ MARK E. GAUMOND
|
|
|
|
Mark E. Gaumond
|
Dated:
|
January 18, 2015
|
|
/s/ JAMES F. KIRSCH
|
|
|
|
James F. Kirsch
|
Dated:
|
January 26, 2015
|
|
/s/ LISA M. PALUMBO
|
|
|
|
Lisa M. Palumbo
|
Dated:
|
February 3, 2015
|
|
/s/ JAMES H. MILLER
|
|
|
|
James H. Miller
|
Dated:
|
January 29, 2015
|
|
/s/ THOMAS I. MORGAN
|
|
|
|
Thomas I. Morgan
|
Dated:
|
January 27, 2015
|
|
/s/ RONALD TOWNSEND
|
|
|
|
Ronald Townsend
|
1.
|
I have reviewed this quarterly report on Form 10-K of Rayonier Advanced Materials Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ P
AUL
G. B
OYNTON
|
|
Paul G. Boynton
Chairman, President and Chief Executive Officer
|
|
Rayonier Advanced Materials Inc.
|
1.
|
I have reviewed this quarterly report on Form 10-K of Rayonier Advanced Materials Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ F
RANK
A. R
UPERTO
|
|
Frank A. Ruperto
Chief Financial Officer and
Senior Vice President, Finance and Strategy
|
|
Rayonier Advanced Materials Inc.
|
1.
|
The Annual Report on Form 10-K of Rayonier Advanced Materials Inc. (the "Company") for the period ended
December 31, 2014
(the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ P
AUL
G. B
OYNTON
|
|
/s/ F
RANK
A. R
UPERTO
|
Paul G. Boynton
|
|
Frank A. Ruperto
|
Chairman, President and Chief Executive Officer
|
|
Chief Financial Officer and
Senior Vice President, Finance and Strategy
|
Rayonier Advanced Materials Inc.
|
|
Rayonier Advanced Materials Inc.
|